Company: CTLPP
Filing Date: 2025-05-08
Form Type: 10-Q
Source: 0001628280-25-023882
Chunk: 34

Company: CANTALOUPE, INC.
Filing Date: 2025-05-08
Form: 10-Q
Item: Part I, Item 1
Chunk 34
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 months ended March 31, 2025 and 2024 was $1.5 million and $1.6 million. 

The Company has awarded performance stock awards to certain executives which vest each year over a three-year period. These stock awards are also subject to the achievement of performance goals established by the Company's Board of Directors each fiscal year. During the three and nine months ended March 31, 2025, total expense recognized by the Company for these awards was $0.1 million and $0.2 million. The total expense recognized for the three months ended March 31, 2024 was immaterial on performance stock awards. The total expense recognized on performance stock awards for the nine months ended was $0.1 million. 

12. INCOME TAXES

The Company computes its interim period income tax provision using a forecasted estimated annual effective tax rate and adjusts for any discrete items arising during the interim period. The effective tax rate was negative for both the three and nine months ended March 31, 2025, due to the release of the valuation allowance described below. Excluding the impact of the valuation allowance release, the effective tax rate was 4.5% and 5.5% for the three and nine months ended March 31, 2025, respectively, and was based primarily on minimum state tax obligations.The Company assesses the realizability of deferred tax assets by considering both positive and negative evidence including forecasts of future taxable income. As of March 31, 2025, the Company concluded that it is more likely than not a portion of its deferred tax assets, primarily related to federal and state net operating loss carryforwards, will be realized. The Company therefore released $42.2 million of its valuation allowance associated with U.S. federal and certain state deferred tax assets. These U.S. federal and state deferred tax assets were created primarily as a result of net operating loss carryforwards from historical business operations. Key factors supporting the conclusion to release a portion of the valuation allowance in the third quarter included current fiscal year to date profitability, sustained cumulative profitability over the last three years and reasonable expectations of future period profitability both in the near and long term.  These factors, amongst others, provided adequate positive evidence in the third quarter to support the conclusion that sufficient taxable income will be generated in the future and a portion of the valuation allowance is no longer warranted. The Company continues to maintain a valuation allowance associated with certain state net operating loss carryforwards