|
Note 17. Income Taxes
Domestic and foreign income before provision for income tax (in thousands):
|
|
For the Years Ended January 31, |
|
|
|
2023 |
|
|
2022 |
|
Domestic |
|
$ |
(9,918 |
) |
|
$ |
3,152 |
|
Foreign |
|
|
- |
|
|
|
- |
|
Total |
|
$ |
(9,918 |
) |
|
$ |
3,152 |
|
The income tax provision contains the following components (in thousands):
|
|
For the Years Ended January 31, |
|
|
|
2023 |
|
|
2022 |
|
Current |
|
|
|
|
|
|
Federal |
|
$ |
112 |
|
|
$ |
362 |
|
State |
|
|
32 |
|
|
|
77 |
|
Foreign |
|
|
- |
|
|
|
- |
|
Total Current |
|
|
144 |
|
|
|
439 |
|
Deferred |
|
|
|
|
|
|
|
|
Federal |
|
|
(510 |
) |
|
|
327 |
|
State |
|
|
(108 |
) |
|
|
69 |
|
Foreign |
|
|
- |
|
|
|
- |
|
Total Deferred |
|
|
(618 |
) |
|
|
396 |
|
Total Provision |
|
$ |
(474 |
) |
|
$ |
835 |
|
The components of the net deferred tax liability are as follows (in thousands):
|
|
As of January 31, |
|
|
|
2023 |
|
|
2022 |
|
Net operating loss carryforward |
|
$ |
700 |
|
|
$ |
- |
|
Stock compensation |
|
|
1,069 |
|
|
|
406 |
|
Reserves |
|
|
11 |
|
|
|
- |
|
Total deferred tax assets |
|
|
1,780 |
|
|
|
406 |
|
Less valuation allowance |
|
|
(1,452 |
) |
|
|
- |
|
Net deferred tax asset |
|
|
328 |
|
|
|
406 |
|
|
|
|
|
|
|
|
|
|
Fixed assets |
|
|
(97 |
) |
|
|
(116 |
) |
Crypto fair value adjustment |
|
|
- |
|
|
|
(536 |
) |
Intangibles |
|
|
(231 |
) |
|
|
(371 |
) |
Total deferred tax liabilities |
|
|
(328 |
) |
|
|
(1,023 |
) |
|
|
|
|
|
|
|
|
|
Net deferred tax liability |
|
$ |
- |
|
|
$ |
(617 |
) |
|
|
|
|
|
|
|
|
|
Net Change in Valuation Allowance |
|
$ |
1,452 |
|
|
|
- |
|
A reconciliation of the income taxes at the federal statutory rate to the effective tax rate is as follows ($ in thousands):
|
|
For the Years Ended January 31, |
|
|
|
2023 |
|
|
2022 |
|
Income (loss) before taxes |
|
$ |
(9,918 |
) |
|
|
|
|
$ |
3,152 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Tax expense (benefit) at the statutory rate |
|
$ |
(2,083 |
) |
|
|
21.00 |
% |
|
$ |
662 |
|
|
|
21.00 |
% |
State income taxes, net of federal benefit |
|
|
(339 |
) |
|
|
3.40 |
% |
|
|
116 |
|
|
|
3.68 |
% |
Change in valuation allowance |
|
|
1,452 |
|
|
|
-14.60 |
% |
|
|
- |
|
|
|
0.00 |
% |
Non-deductible stock compensation |
|
|
75 |
|
|
|
-0.80 |
% |
|
|
- |
|
|
|
0.00 |
% |
Permanent differences |
|
|
277 |
|
|
|
-2.80 |
% |
|
|
69 |
|
|
|
2.19 |
% |
Return to Provision True Up |
|
|
144 |
|
|
|
-1.50 |
% |
|
|
(12 |
) |
|
|
-0.38 |
% |
Tax on Income |
|
$ |
(474 |
) |
|
|
4.70 |
% |
|
$ |
835 |
|
|
|
26.49 |
% |
The net operating loss carryforwards as of January 31, 2023 are as follows (in thousands):
|
|
Gross |
|
|
Tax-Effected |
|
Federal - definite |
|
$ |
- |
|
|
$ |
- |
|
Federal - indefinite |
|
|
2,751 |
|
|
|
578 |
|
Total Federal NOL |
|
|
2,751 |
|
|
|
578 |
|
|
|
|
|
|
|
|
|
|
State |
|
|
2,682 |
|
|
|
155 |
|
State difference |
|
|
- |
|
|
|
(33 |
) |
Total State NOL |
|
|
2,682 |
|
|
|
122 |
|
|
|
|
|
|
|
|
|
|
Total |
|
$ |
5,433 |
|
|
$ |
700 |
|
|
|
|
|
|
|
|
|
|
Net Operating Loss Summary by Jurisdiction |
|
|
|
|
|
|
|
|
Federal |
|
$ |
2,751 |
|
|
$ |
578 |
|
State |
|
|
2,682 |
|
|
|
122 |
|
Foreign |
|
|
- |
|
|
|
- |
|
Total |
|
$ |
5,433 |
|
|
$ |
700 |
|
The Company is in the process of filing back income tax returns from 2022 through the current year and subject to IRS examination for all years. The Company has reserved for any interest and penalty associated with the filings. Due to the non-filing of income tax returns, statutes of limitations on the potential examination of those income tax periods will continue to run until the returns are filed, at which time the statutes will begin. The Company expects to file all past due income tax returns within the next 12 months.
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