PREPAID EXPENSES AND OTHER CURRENT ASSETS |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2025 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| PREPAID EXPENSES AND OTHER CURRENT ASSETS |
The components of prepaid expenses and other current assets are as follows:
Employee Retention Credit Receivable
The Coronavirus Aid, Relief, and Economic Security Act, passed in March 2020 and subsequently amended in 2021, allowed eligible employers to take credits on certain amounts of qualified wages if the Company experienced either a full or partial suspension of operations due to COVID related government orders. During the year ended December 31, 2023, the Company, with guidance from a third-party specialist, determined it was entitled to employee retention credit (“ERC”) claims for previous business interruptions related to COVID and filed for such claims with the Internal Revenue Service (“IRS”). As of December 31, 2024, the ERC claims were recorded as deferred income in Accrued expenses and other current liabilities, with an offsetting receivable amount in Prepaid expenses and other current assets within the consolidated balance sheet.
On February 11, 2025, the Company executed an agreement with an unrelated third party to sell certain ERC claims, and received $5,081 in net cash proceeds on February 14, 2025. If the Company does not receive an ERC claim, in whole or in part, the Company is required to repay a portion of the funds equal to the amount of the rejected claim plus interest of 10% accrued from the date of the agreement through the repayment date. The Company is entitled to receive a portion of any interest paid on its respective ERC claims through the transaction date. The factored claims are included in Other liabilities - non-current within the consolidated balance sheet as of June 30, 2025. Amounts will be recognized in the consolidated statements of operations when the claims are paid by the IRS. As of June 30, 2025, $1,958 is included in .
The Company retained $4,162 of ERC claims. The amount reflected in as of June 30, 2025, of $1,809 represents the portion of retained claims that have not yet been refunded by the IRS.
During the three and six months ended June 30, 2025, the Company received payments on retained claims from the IRS in the amount of $306 and $2,474, respectively, plus interest on such amounts, which were recorded in other income (expense), net in the consolidated statements of operations. In addition, during the three and six months ended June 30, 2025, the IRS paid $2,963 and $3,124, respectively, of factored claims plus interest on such amounts, which is also recorded in other income (expense), net in the consolidated statements of operations.
Assets Held for Sale
As of December 31, 2024, the Company determined that certain assets relating to one of its dispensaries located in Nevada, with total carrying value of $611, met the criteria to be classified as assets held for sale, and is included in Prepaid expenses and other current assets in the consolidated balance sheet. In May 2025, the Company sold the assets for a net gain of $2,243, which was recorded in the operating expenses in the consolidated statements of operations for the three and six months ended June 30, 2025.
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