Company: FWRG
Filing Date: 2025-04-08
Form Type: ARS
Source: 0001789940-25-000033
Chunk: 120

Company: First Watch Restaurant Group, Inc.
Filing Date: 2025-04-08
Form: ARS
Chunk 120
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ICA taxes on certain employees’ tips, (iii) impacts of executive stock-based compensation and (iv) non-deductible costs associated with the Secondary Offerings and the Registration Statement on Form S-3. FIRST WATCH RESTAURANT GROUP, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued) 80

The components of deferred tax assets and liabilities were as follows: (in thousands) DECEMBER 29, 2024 DECEMBER 31, 2023 Deferred income tax assets FICA tip credit $ 59,671 $ 49,946 State tax credits 48 — Net operating loss 17,462 22,964 Operating lease liabilities 155,540 123,718 Organizational costs 520 477 Interest limitation 416 383 Accrued compensation 2,781 2,758 Deferred revenues 492 522 Stock-based compensation 3,512 3,552 Research expenses 590 393 Interest rate swaps 146 221 Other 1,748 1,272 Valuation allowance (57,664) (48,111) Total deferred income tax assets 185,262 158,095 Deferred income tax liabilities Operating lease right-of-use assets (132,054) (104,810) Depreciation (48,303) (41,583) Intangible assets (37,123) (37,033) Total deferred income tax liabilities (217,480) (183,426) Net deferred income tax liabilities $ (32,218) $ (25,331) Tax Carryforwards The amount and expiration dates of tax carryforwards as of December 29, 2024 are as follows: (in thousands) EXPIRATION DATE AMOUNT Federal net operating loss carryforwards Indefinite $ 77,780 General business tax credits (carried forward 20 years) 2028 - 2044 $ 59,842 The Company also has state net operating loss carryforwards of $23.5 million. Section 382 of the Internal Revenue Code limits the ability of a company to utilize attribute carryforwards if there is a change in ownership of more than 50% of shareholders over a rolling three-year period. The Company experienced an ownership change in March 2024 associated with the Secondary Offerings. Management completed an analysis and concluded that no carryforwards will expire unused due to the application of Section 382. Certain federal loss carryforwards, state loss carryforwards and general business credits were accumulated from