Company: TRUE
Filing Date: 2025-02-20
Form Type: 10-K
Source: 0001327318-25-000006
Chunk: 151

Company: TrueCar, Inc.
Filing Date: 2025-02-20
Form: 10-K
Item: Item 7
Chunk 151
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 accounting, legal, and human resources functions. General and administrative expenses also include legal, accounting, and other third-party professional service fees, bad debt, gain or loss from lease exit, impairment of right-of-use assets and facilities costs.

Depreciation and Amortization. Depreciation consists primarily of depreciation expense recorded on property and equipment. Amortization expense consists primarily of amortization recorded on intangible assets, capitalized software costs, and leasehold improvements.

Interest Income. Interest income consists of interest earned on our cash, cash equivalents and restricted cash.

Other Income. Other income consists of a gain from the sale of a domain name.

Provision for (Benefit from) Income Taxes. We are subject to federal and state income taxes in the United States. We provided a full valuation allowance against our net deferred tax assets at December 31, 2024 and 2023, as it is more likely than not that some or all of our deferred tax assets will not be realized. As a result of the valuation allowance, our income tax expense (benefit) is significantly less than the federal statutory rate of 21%. Our provision for income taxes for the years ended December 31, 2024 and 2023 reflects state income tax expense. Our benefit from income taxes for the year ended December 31, 2022 primarily reflects the release of valuation allowance resulting from net deferred tax liabilities recorded in Digital Motors acquisition accounting providing a source of income in assessing realization of consolidated net deferred tax assets.

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We had federal net operating loss carryforwards of approximately $346.6 million and state net operating loss carryforwards of approximately $276.9 million at December 31, 2024. At December 31, 2024, we also had federal and state research and development credit carryforwards of approximately $1.1 million and $11.2 million respectively. Utilization of our net operating loss and tax credit carryforwards may be subject to annual limitations arising from ownership change limitations provided by Sections 382 and 383 of the Internal Revenue Code and similar state provisions. Such annual limitations could result in the expiration of the net operating loss and tax credit carryforwards before their utilization.

See Note 12 of our consolidated financial statements included herein for more information about our provision for income taxes.

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Results of Operations

The following table sets forth our selected consolidated statements of operations data for each of the periods indicated.

 Year Ended December 31, 202420232022