v3.25.1
Provision for Income Taxes
 3 Months Ended
Mar. 31, 2025
Provision for Income Taxes [Abstract]  
Provision for Income Taxes

11) Provision for Income Taxes

 

The Company accounts for income taxes in accordance with FASB ASC Topic 740, Income Taxes. Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. Management evaluates all available evidence about future taxable income and other possible sources of realization of deferred tax assets. A valuation allowance is established to reduced tax assets to an amount that represents management’s best estimate of the amount of such deferred tax assets that more likely than not will be realized. To the extent the Company establishes a valuation allowance or increased the allowance in any given period, an expense is recognized within the provision for income taxes in the statement of income.

 

The Company recognizes the tax benefit from uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by the tax authorities, based on the technical merits of the position. The tax benefit is measured based on the largest benefit that has a greater than 50 percent likelihood of being realized upon ultimate settlement. The Company recognizes interest and penalties related to income tax matters as other expense in the statement of income. Based on management’s evaluations, there are no uncertain tax positions requiring recognition as of the date of these financial statements.

The components of the Company’s net deferred tax assets as of March 31, 2025, and December 31, 2024, were as follows (in thousands):

 

   March 31,
2025		   December 31,
2024		 
   (In thousands) 
Deferred tax assets:        
Net Operating loss carry-forward  $476   $1,439 
Add back:          
Stock-based compensation   (10)   (30)
Depreciation and amortization   3    (249)
Impairment expense   
-
    
—
 
Bad debt   
-
    (48)
Fair value of warrant   
-
    (43)
Gain on revaluation   
 
    
—
 
Other income   31    
-
 
Total deferred tax asset   500    1,069 
Less: valuation allowance  $(500)  $(1,069)
Deferred tax asset. net of valuation allowance   
—
    
—
 
Deferred tax liabilities   
—
    
—
 
Net deferred tax asset   
—
    
—
 

 

The Company’s current tax expense is nil.

 

The Company’s federal and state income tax returns are generally subject to possible examination by the taxing authorities until the expiration of the related statute of limitations on those tax returns which is generally three years from the original filing deadline. The Company regularly reviews its deferred tax assets for recoverability based on historical taxable income, projected future taxable income, the expected timing of the reversals of existing taxable temporary differences and tax planning strategies. The Company’s judgment regarding future profitability may change due to many factors, including future market conditions and the ability to successfully execute the business plans and/or tax planning strategies. Should there be a change in the ability to recover deferred tax assets, the Company’s income tax provision would increase or decrease in the period in which the assessment is changed.