Income Taxes (Tables)
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12 Months Ended |
Dec. 31, 2024 |
Income Tax Disclosure [Abstract] |
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Schedule of (loss) Income Before Income Tax |
Loss before income taxes consisted of the following:
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Year Ended December 31, |
2024 |
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2023 |
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2022 |
United States |
$ |
(5,016) |
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|
$ |
(8,904) |
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|
$ |
(7,586) |
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Foreign |
(16,645) |
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|
(88,061) |
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(173,028) |
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Loss before income taxes |
$ |
(21,661) |
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|
$ |
(96,965) |
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$ |
(180,614) |
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Schedule of Components of Income Tax Expense |
The components of the provision for (benefit from) income taxes consisted of the following:
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Year Ended December 31, |
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2024 |
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2023 |
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2022 |
Current: |
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Federal |
$ |
1,588 |
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$ |
1,496 |
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|
$ |
1,059 |
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State |
826 |
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|
649 |
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|
354 |
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Foreign |
424 |
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|
465 |
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(1,208) |
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Total |
2,838 |
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|
2,610 |
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|
205 |
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Deferred: |
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Federal |
1,654 |
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(2,305) |
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|
(2,325) |
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State |
(115) |
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|
467 |
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(126) |
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Foreign |
(48) |
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1,149 |
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(1,671) |
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Total |
1,491 |
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(689) |
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|
(4,122) |
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Provision for (benefit from) income taxes |
$ |
4,329 |
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|
$ |
1,921 |
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|
$ |
(3,917) |
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Schedule of Effective Income Tax Rate Reconciliation |
The provision for (benefit from) income taxes differs from the tax computed using the statutory U.S. federal income tax rate of 21% as a result of the following items:
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Year Ended December 31, |
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2024 |
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2023 |
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2022 |
Benefit from income taxes at U.S. statutory rate |
$ |
(4,549) |
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$ |
(20,363) |
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$ |
(37,929) |
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State income taxes, net of federal income tax benefit |
558 |
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|
512 |
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|
250 |
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Permanent differences |
618 |
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|
555 |
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|
266 |
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Foreign tax rate differential |
(1,532) |
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(8,220) |
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(14,900) |
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Equity-based compensation |
240 |
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|
1,082 |
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|
860 |
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Goodwill impairment |
— |
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21,444 |
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|
51,990 |
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Change in valuation allowance |
9,186 |
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6,987 |
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— |
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Change in tax basis of Culture Kings’ inventory and intangibles |
— |
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— |
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(2,233) |
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Intra-entity transfer of certain intellectual property rights |
— |
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— |
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(1,030) |
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Other |
(192) |
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(76) |
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(1,191) |
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Provision for (benefit from) income taxes |
$ |
4,329 |
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$ |
1,921 |
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$ |
(3,917) |
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Schedule of Deferred Tax Assets and Liabilities |
The components of net deferred tax assets were as follows:
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Year Ended December 31, |
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2024 |
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2023 |
Deferred tax assets: |
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Transaction costs |
$ |
341 |
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$ |
843 |
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Accruals and reserves |
6,175 |
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5,201 |
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Lease liabilities |
18,742 |
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11,391 |
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Asset retirement obligation |
— |
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165 |
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Inventory |
3,462 |
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2,427 |
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Foreign exchange gains / losses |
653 |
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|
878 |
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Interest limitation |
2,811 |
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|
1,034 |
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Loss carryforwards |
9,949 |
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10,472 |
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Other |
679 |
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|
387 |
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Subtotal |
42,812 |
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|
32,798 |
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Less: Valuation allowance |
(18,777) |
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(12,158) |
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Total deferred tax assets |
24,035 |
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|
20,640 |
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Deferred tax liabilities: |
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Property and equipment |
(754) |
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(749) |
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Intangible assets |
(5,069) |
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(6,850) |
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Right-of-use assets |
(18,066) |
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(11,472) |
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Asset retirement obligations |
(99) |
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— |
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Total deferred tax liabilities |
(23,988) |
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(19,071) |
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Net deferred tax assets |
$ |
47 |
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$ |
1,569 |
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