Company: CXDO
Filing Date: 2025-03-04
Form Type: 10-K
Source: 0001654954-25-002287
Chunk: 122

Company: Crexendo, Inc.
Filing Date: 2025-03-04
Form: 10-K
Item: Item 1
Chunk 122
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 deferred tax assets of $5,417 are realizable.  Therefore, a valuation allowance of $5,417 was recorded against our gross deferred tax asset balance as of December 31, 2024. We also have state NOL and research and development credit carryforwards of approximately $30,266 and $13, which expire on specified dates as set forth in the rules of the various states to which the carryforwards relate. The company has recorded a valuation allowance of $13 and $19 against the research and development credit carryforwards as of December 31, 2024 and 2023, respectively.

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Accounting guidance clarifies the accounting for uncertain tax positions and requires companies to recognize the impact of a tax position in their financial statements, if that position is more likely than not of being sustained on audit, based on the technical merits of the position. Although we believe our estimates are reasonable, there can be no assurance that the final tax outcome of these matters will not be different from that which we have reflected in our historical income tax provisions and accruals. Such a difference could have a material impact on our income tax provision and operating results in the period in which it makes such determination. The aggregate changes in the balance of unrecognized tax benefits during the years ended December 31, 2024 and 2023 were as follows (in thousands): Balance as of January 1, 2023 $- Reductions due to lapsed statute of limitations  - Balance as of December 31, 2023  - Reductions due to lapsed statute of limitations  - Balance as of December 31, 2024 $-  Estimated interest and penalties related to the underpayment or late payment of income taxes are classified as a component of income tax provision in the consolidated statements of operations. There were no accrued interest and penalties as of December 31, 2024 and 2023, respectively. Our U.S. federal income tax returns for fiscal 2021 through 2024 are open tax years. We also file in various states, with few exceptions, we are no longer subject to state income tax examinations by tax authorities for years prior to fiscal 2019.

16. Leases Lessee Accounting We determine if an agreement is a lease at inception. We lease office space, data center colocation space, other assets, and office equipment under operating leases. We lease data center equipment,