Equity Compensation Expense The Company values RSUs (the grant date fair value) based on the closing price of the Company’s Class A common stock on the date the grant is issued, and recognizes the expense related to this value on a straight-line basis over the vesting term. During 2022 and 2021 the Company recorded expense related to outstanding RSU grants of approximately $6.9 million and $0.6 million, respectively. During 2022 income tax benefits related to the vesting of RSUs were de minimus. There were no benefits related to income taxes during 2021. Unrecognized compensation expense as of December 31, 2022, was $11.8 million, to be recognized over a weighted average period of approximately 1.9 years. NOTE 15. INCOME TAXES As a result of the Company’s IPO and Reorganization, the Company became the sole managing member of RGF, and as a result, began consolidating the financial results of RGF. RGF is treated as a partnership for U.S. federal and most applicable state and local income tax purposes. As a partnership, RGF is not subject to U.S. federal and certain state and local income taxes. Any taxable income or loss generated by RGF is passed through to and included in the taxable income or loss of its members, including the Company, on a pro rata basis. Accordingly, the Company is subject to U.S. federal income taxes, in addition to state and local income taxes with respect to its allocable share of any taxable income or loss of RGF. The Company does not have any stand-alone income or loss apart from those of RGF. Income Tax Expense Consolidated net losses before income taxes, before taking into effect those earnings related to non-controlling interests, for the years ended December 31, 2022 and 2021 were $45.7 million and $67.1 million, respectively. Consolidated net losses after taking into effect earnings related to non-controlling interests, were $11.0 million and $10.1 million, for the years ended December 31, 2022 and 2021, respectively, all of which was attributable to domestic operations. During 2022 and 2021 the Company had provided no amounts related to current income taxes as a result of the net losses incurred. As such only deferred taxes were applicable for those periods, and as a result of the full valuation allowance applied to the deferred tax assets, there were no amounts related to income taxes recognized in the consolidated statement of operations for all periods presented. The Company’s effective tax rate includes a rate benefit attributable to the Company’s earnings which are not subject to corporate level taxes, due to the applicable income taxes that are the obligation of the non-controlling members of RGF. Thus, the effective tax rates on the portion of those losses attributable to the Company is 25.0% and 27.9% for the years ended December 31, 2022 and 2021, respectively, before taking into effect the valuation allowance. A reconciliation of the U.S. federal statutory rate to the effective tax rate is presented below: For the years ended December 31, 2022 2021 U.S.FederalStatutoryrate ................... 21.0% 21.0% State and local income taxes, net of federal benefit ................................. 4.0 6.9 Non-deductibleexpenses .................... 0.1 0.1 Non-controllinginterest ..................... (24.0) (24.0) Amounts excluded related to pre IPO operations .............................. — (3.9) Other .................................... — (0.01) Change in valuation allowance . . . . . . . . . . . . . . . . (1.09) (0.01) Effectivetaxrate........................... 0.0% 0.0% 74
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