Company: STGW
Filing Date: 2025-03-11
Form Type: 10-K
Source: 0000876883-25-000009
Chunk: 153

Company: Stagwell Inc
Filing Date: 2025-03-11
Form: 10-K
Item: Item 8
Chunk 153
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 more likely than not that we will not realize the benefit, we will reduce the carrying amount of the deferred tax asset with a valuation allowance and a corresponding reduction to the TRA liability. The amounts to be recorded for both the deferred tax assets and the liability under the TRA will be estimated at the time of any purchase or exchange as a reduction to shareholders’ equity, and the effects of changes in any of our estimates after this date will be included in net income or loss. Similarly, the effect of subsequent changes in the enacted tax rates will be included in net income or loss.In the first quarter of 2022, the Company had its first exchange of Paired Units for shares of Class A Common Stock and recorded its initial TRA liability. Further exchanges have been made in the subsequent quarters in 2022 and no further exchanges in 2023 or 2024. As of December 31, 2024, and 2023, the Company has recorded a TRA liability of $26.7 million and $26.9 million, respectively, and a deferred tax asset, net of amortization of $27.3 million and $29.0 million, respectively, in connection with the exchanges of the Paired Units and the projected obligations under the TRA.Stagwell Inc. itself has net operating loss carryforwards of $62.1 million relating to U.S. states which expire years 2025 through 2042 and indefinite net operating loss carryforwards of $4.5 million relating to U.S. states. Stagwell Inc. also has foreign and state tax credits of $6.7 million which expire between 2025 and 2034. Stagwell Inc.’s consolidated corporate subsidiaries also have net operating loss carryforwards which expire in years 2025 through 2044. These definite lived net operating loss carryforwards consist of $12.5 million relating to U.S. federal, $14.4 

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million relating to states and $44.4 million relating to non-U.S. The corporate subsidiaries also have indefinite net operating loss carryforwards which consist of $24.2 million relating to U.S. federal, and $2.0 million relating to U.S. states, and $69.3 million relating to non-U.S. The majority of the consolidated corporate subsidiaries’ U.S. tax attributes are subject to an annual limitation as a result of historic acquisitions which constituted a change of ownership as defined under Internal Revenue Code 382.The