v3.25.2
Income Taxes
 6 Months Ended
Jun. 30, 2025
Income Tax Disclosure [Abstract]  
Income Taxes
 
9.
Income Taxes
The components of income (loss) before income taxes, as shown in the accompanying Financial Statements, consisted of the following for the three and six months ended June 30, 2025 and 2024:
 
    
Three Months Ended
June 30,
     
Six Months Ended
June 30,
  
    
2025
     
2024
     
2025
     
2024
  
    
(Amounts in thousands)
  
Income (loss) before income taxes:
            
Domestic
    $ (418 )     $ 615      $ (3,004 )     $ 299  
Foreign
      628        1,194        1,452        1,228  
  
 
 
     
 
 
     
 
 
     
 
 
  
Income (loss) before income taxes
    $ 210      $ 1,809      $ (1,552 )     $ 1,527  
  
 
 
     
 
 
     
 
 
     
 
 
  
The Company has foreign subsidiaries which generate revenues from
non-U.S.-based
clients. Additionally, these subsidiaries provide services to the Company’s U.S. operations. Accordingly, the Company allocates a portion of its income (loss) to these subsidiaries based on a “transfer pricing” model and reports such income (loss) as foreign in the above table.
The provision (benefit) for income taxes, as shown in the accompanying Financial Statements, consisted of the following for the three and six months ended June 30, 2025 and 2024:
 
    
Three Months Ended
June 30,
     
Six Months Ended
June 30,
  
    
2025
     
2024
     
2025
     
2024
  
    
(Amounts in thousands)
  
Current provision (benefit):
            
Federal
    $ 313      $ 100      $ (263 )     $ (124 ) 
State
      58        26        (48 )       (13 ) 
Foreign
      83        197        439        301  
  
 
 
     
 
 
     
 
 
     
 
 
  
Total current provision (benefit)
      454        323        128        164  
  
 
 
     
 
 
     
 
 
     
 
 
  
Deferred provision (benefit):
            
Federal
      (383 )       73        (361 )       96  
State
      (71 )       14        (67 )       19  
Foreign
      81        101        58        18  
  
 
 
     
 
 
     
 
 
     
 
 
  
Total deferred provision (benefit)
      (373 )       188        (370 )       133  
  
 
 
     
 
 
     
 
 
     
 
 
  
Change in valuation allowance
      (6 )       (93 )       (6 )       —   
  
 
 
     
 
 
     
 
 
     
 
 
  
Total provision (benefit) for income taxes
    $ 75      $ 418      $ (248 )     $ 297  
  
 
 
     
 
 
     
 
 
     
 
 
  
 
The reconciliation of income taxes computed using the statutory U.S. income tax rate and the provision (benefit) for income taxes for the three and six months ended June 30, 2025 and 2024 were as follows (amounts in thousands):
 
    
Three Months Ended
June 30, 2025
    
Three Months Ended
June 30, 2024
  
Income taxes computed at the federal statutory rate
    $ 44        21.0 %    $ 380        21.0 % 
State income taxes, net of federal tax benefit
      (13 )       (6.2 )      (9 )       (0.5 ) 
Excess tax expense (benefit) from stock options/restricted shares
      14        6.7       46        2.5  
Worthless stock deduction
      —         —        —         —   
Difference in income tax rate on foreign earnings/other
      36        17.1       94        5.2  
Change in valuation allowance
      (6 )       (2.9 )      (93 )       (5.1 ) 
  
 
 
     
 
 
    
 
 
     
 
 
  
   $ 75        35.7 %    $ 418        23.1 % 
  
 
 
     
 
 
    
 
 
     
 
 
  
 
    
Six Months Ended
June 30, 2025
    
Six Months Ended
June 30, 2024
  
Income taxes computed at the federal statutory rate
    $ (326 )       (21.0 )%    $ 321        21.0 % 
State income taxes, net of federal tax benefit
      (115 )       (7.4 )      (19 )       (1.3 ) 
Excess tax expense (benefit) from stock options/restricted shares
      (8 )       (0.5 )      131        8.6  
Worthless stock deduction
      —         —        (248 )       (16.2 ) 
Difference in income tax rate on foreign earnings/other
      207        13.3       112        7.3  
Change in valuation allowance
      (6 )       (0.4 )      —         —   
  
 
 
     
 
 
    
 
 
     
 
 
  
   $ (248 )       (16.0 )%    $ 297        19.4 % 
  
 
 
     
 
 
    
 
 
     
 
 
  
We evaluate deferred income taxes quarterly to determine if valuation allowances are required or should be adjusted. GAAP accounting guidance requires us to assess whether valuation allowances should be established against deferred tax assets based on all available evidence, both positive and negative using a “more likely than not” standard. Our assessment considers, among other things, the nature of cumulative losses; forecast of future profitability; the duration of statutory carry-forward periods and tax planning alternatives. At June 30, 2025, our valuation allowance was comprised of net operating losses in Ireland and the United Kingdom and totaled $446,000. During the quarter ended March 31, 2024, we secured a worthless stock deduction for our discontinued Singapore entity, which allowed us to recognize a current tax deduction during the 2024 period and accordingly reverse $162,000 of our valuation allowance balance. At December 31, 2024, our valuation allowance balance totaled $452,000.