Company: CTLPP
Filing Date: 2025-09-08
Form Type: 10-K
Source: 0001628280-25-041775
Chunk: 103

Company: CANTALOUPE, INC.
Filing Date: 2025-09-08
Form: 10-K
Item: Item 7
Chunk 103
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 of the assets acquired and the liabilities assumed is recorded as goodwill. When determining the fair value of assets acquired and liabilities assumed, we make significant estimates and assumptions, especially with respect to intangible assets. We engage a third-party valuation firm to assist in establishing the fair value of the acquired intangible assets. We may adjust certain fair value estimates deemed provisional as of the acquisition date during the measurement period upon which we may obtain additional information needed to identify and more accurately measure the consideration transferred, assets acquired, and liabilities assumed.

Income Taxes. The carrying values of deferred income tax assets and liabilities reflect the application of our income tax accounting policies in accordance with applicable accounting standards and are based on management’s assumptions and estimates regarding future operating results and levels of taxable income, as well as management’s judgment regarding the interpretation of the provisions of applicable accounting standards. The carrying values of liabilities for income taxes currently payable are based on management’s interpretations of applicable tax laws and incorporate management’s assumptions and judgments regarding the use of tax planning strategies in various taxing jurisdictions. 

We evaluate the recoverability of these deferred tax assets by assessing the adequacy of future expected taxable income from all sources, including reversal of taxable temporary differences, forecasted operating earnings and available tax planning strategies. These sources of income inherently rely heavily on estimates. We use our historical experience and our short and long-term business forecasts to provide insight. To the extent we do not consider it more likely than not that a deferred tax asset will be recovered, a valuation allowance is established.

As the Company has recently been profitable, significant judgment is involved in determining if and when the Company's valuation allowance could be released as well as the amount of the release (full or partial). Federal and state net operating loss carryforwards were reserved with a full valuation allowance for the years ended June 30, 2024 and 2023 because, based on the available evidence, the Company believed it is more likely than not that we would not be able to utilize those deferred tax assets in the future. During the year ended June 30, 2025, the Company determined that sufficient evidence existed to release our valuation allowance against federal and most state deferred tax assets. See Note 13 - Income Taxes. If the actual amounts of taxable income differ from our estimates, the amount of our valuation allowance could be materially impacted. 

Sales tax reserve. The Company has recorded estimated liabilities for current and historical sales taxes, which are included in accrued expenses in the Consolidated Balance Sheets. On a quarterly basis, the Company accrues interest on