COMMITMENTS AND CONTINGENCIES

9 Months Ended

Sep. 30, 2021

COMMITMENTS AND CONTINGENCIES

COMMITMENTS AND CONTINGENCIES

10.     COMMITMENTS AND CONTINGENCIES

Sales and Use Taxes - The Company has ongoing sales and use tax audits in various jurisdictions and may be subjected to varying interpretations of statute that could result in unfavorable outcomes. In accordance with ASC 450-20, Loss Contingencies, any probable and reasonable estimate of assessment costs have been included in accrued state, local and other taxes.

The Company received a state tax notification of audit results related to sales and use tax on July 12, 2021. The Company and its outside legal counsel continue to evaluate the perceived merits of the tax assessment. The Company believes the likelihood of a material loss related to this contingency is remote and cannot be reasonably estimated at this time. Therefore, no loss has been recorded and the Company currently does not believe the resolution of this claim will have a material impact on its consolidated financial position, results of operations or cash flows.

During the quarter, the Company recorded an estimated liability of $4.5 million to reflect the resolution of a long-term contractual dispute with a vendor which is disclosed as part of accrued insurance expense on the consolidated balance sheet; $3.3 million of the total amount has been included in cost of revenues and the remainder in interest expense.