| Schedule of Provision for (Benefit) From Income Taxes |
The (benefit) from provision for income taxes is set forth below:
|
|
|
|
|
|
|
|
|
|
|
|
| (in thousands) |
January 1, 2024 |
|
January 2, 2023 |
| Current: |
|
|
|
| U.S. Federal |
$ |
— |
|
|
$ |
— |
|
| State |
13 |
|
|
35 |
|
| Total current income tax expense |
$ |
13 |
|
|
$ |
35 |
|
| Deferred: |
|
|
|
| U.S. Federal |
(6,117) |
|
|
(10,002) |
|
| State |
(499) |
|
|
(1,469) |
|
| Total deferred income tax benefit |
(6,616) |
|
|
(11,471) |
|
| Valuation allowance |
6,538 |
|
|
11,341 |
|
Total deferred income tax benefit, net of valuation allowance |
(78) |
|
|
(130) |
|
Income tax benefit |
$ |
(65) |
|
|
$ |
(95) |
|
|
| Schedule of Reconciliation of Income Tax Rate |
The reconciliation of income tax computed at the U.S. federal statutory rate of 21% to the Company’s effective tax rate is set forth below:
|
|
|
|
|
|
|
|
|
|
|
|
| (in thousands) |
January 1, 2024 |
|
January 2, 2023 |
| Income tax provision at the U.S. federal statutory rate |
$ |
(6,462) |
|
|
$ |
(21,741) |
|
| Permanent differences |
1,434 |
|
|
870 |
|
| Share-based compensation |
(33) |
|
|
(463) |
|
| State income taxes, net of federal benefit |
(675) |
|
|
(1,640) |
|
| Change in warrant liability |
(3) |
|
|
(527) |
|
| Goodwill impairment |
— |
|
|
11,471 |
|
| True-up |
221 |
|
|
1,983 |
|
| Change in valuation allowance |
6,538 |
|
|
11,342 |
|
| Change in rate |
13 |
|
|
(249) |
|
| Tax credits |
(1,098) |
|
|
(1,141) |
|
Total income tax benefit |
$ |
(65) |
|
|
$ |
(95) |
|
|
| Schedule of Deferred Tax Assets (Liabilities) |
The components of the Company's deferred tax liabilities at January 1, 2024 and January 2, 2023 are set forth below:
|
|
|
|
|
|
|
|
|
|
|
|
| (in thousands) |
January 1, 2024 |
|
January 2, 2023 |
| Deferred tax assets (liabilities): |
|
|
|
| Allowance for doubtful accounts |
$ |
30 |
|
|
$ |
40 |
|
| Goodwill |
3,503 |
|
|
4,625 |
|
| Fixed Assets |
2,307 |
|
|
2,164 |
|
| Deferred franchise fees |
187 |
|
|
277 |
|
| Deferred rent |
— |
|
|
— |
|
| Stock compensation |
1,210 |
|
|
1,730 |
|
| Net operating losses, Federal |
17,116 |
|
|
13,649 |
|
| Net operating losses, State |
3,264 |
|
|
2,691 |
|
| Deferred payroll taxes |
— |
|
|
— |
|
| Interest expense |
7,309 |
|
|
5,351 |
|
| Lease liability |
14,128 |
|
|
13,104 |
|
| Tax credits |
2,951 |
|
|
1,854 |
|
| Other |
1,418 |
|
|
1,599 |
|
| Gross deferred tax assets |
53,423 |
|
|
47,084 |
|
| Valuation allowance |
(29,166) |
|
|
(22,629) |
|
| Net deferred tax assets |
24,257 |
|
|
24,455 |
|
| Intangible assets |
(13,571) |
|
|
(13,878) |
|
| Lease ROU asset |
(11,832) |
|
|
(11,800) |
|
| Fixed assets |
— |
|
|
— |
|
| Deferred tax liabilities |
(25,403) |
|
|
(25,678) |
|
Total net deferred tax liabilities |
$ |
(1,146) |
|
|
$ |
(1,223) |
|
|
|
|
|
|
| Schedule of Unrecognized Tax Benefits |
The following table summarizes the Company's unrecognized tax benefits at January 1, 2024 and January 2, 2023:
|
|
|
|
|
|
|
|
|
|
|
|
| (in thousands) |
January 1, 2024 |
|
January 2, 2023 |
| Beginning balance |
$ |
229 |
|
|
$ |
660 |
|
| Additions based on tax positions related to the current year |
— |
|
|
— |
|
| Additions for tax positions of prior years |
— |
|
|
— |
|
| Reductions for positions of prior years |
(229) |
|
|
(431) |
|
| Ending balance |
$ |
— |
|
|
$ |
229 |
|
|