v3.25.4
Income Taxes
 12 Months Ended
Dec. 31, 2025
Income Tax Disclosure [Abstract]  
Income Taxes
NOTE 21 – INCOME TAXES
The components of our income (loss) before income taxes for the years ended December 31, 2025 and 2024, are as follows:
For the Years Ended December 31,
dollars in thousands20252024
Domestic$3,199 $(15,566)
Foreign726 (763)
Income (loss) before income taxes$3,925 $(16,329)
The components of the current tax provision and deferred tax benefit for the years ended December 31, 2025 and 2024, are as follows:
For the Years Ended December 31,
dollars in thousands20252024
Current tax provision:
U.S. Federal$— $— 
State and local285 (47)
Foreign(127)427 
Total current tax provision$158 $380 
Deferred tax benefit:
U.S. Federal$— $(1,269)
State and local— 127 
Foreign(373)— 
Total deferred tax benefit$(373)$(1,142)
Income tax benefit$(215)$(762)
Effective rate of tax(5.5)%4.7 %
Effective Rate Reconciliation
The reconciliation between the statutory federal income tax rate and the effective income tax rate for the year ended December 31, 2025, are as follows:
dollars in thousands2025
Income tax - at US statutory tax rate$824 21.0 %
State and local taxes - net of federal1
226 5.8 %
Foreign tax effects
Spain
Stock Based Compensation(651)(16.6)%
Other(2)(0.1)%
Nontaxable or nondeductible items
Stock Based Compensation1,183 30.1 %
Warrant Mark-to-Market Adjustment895 22.8 %
Contingent Liability(480)(12.2)%
Other(38)(1.0)%
Changes in valuation allowance(2,116)(53.9)%
Other
Deferred Remeasurement(56)(1.4)%
Effective rate of tax$(215)(5.5)%
1    State taxes in Alabama made up the majority (greater than 50 percent) of the tax effect in this category.
The reconciliation between the statutory federal income tax rate and the effective income tax rate for the years ended December 31, 2024, are as follows:
2024
Income tax - at U.S. statutory tax rate21.0 %
State and local taxes - net of federal4.9 %
Stock-based compensation(34.5)%
Warrant mark-to-market adjustment5.8 %
Valuation allowance10.9 %
Return to provision(1.6)%
Other(1.8)%
Effective rate of tax4.7 %
In addition to the US federal statutory income tax rate, significant recurring items that affect the Company’s income tax rate are state and local income taxes, nondeductible officer compensation, and change in valuation allowance recognition.
Deferred tax assets and liabilities
The components of the total net deferred tax assets and liabilities as of December 31, 2025 and 2024, consisted of the following:
As of December 31,
dollars in thousands20252024
Deferred tax assets:
Net operating losses$26,609 $24,117 
Partnership4,027 11,638 
Interest expense limitation - 163(j)12,413 11,568 
Stock-based compensation3,067 3,492 
Other1,609 123 
Total deferred tax assets47,725 50,938 
Valuation allowance for deferred tax assets(45,845)(49,748)
Net deferred tax assets1,880 1,190 
Deferred tax liabilities:
Intangibles(1,507)(1,190)
Total deferred tax liabilities(1,507)(1,190)
Net deferred tax assets$373 $— 
Income taxes paid
The components of the income taxes paid as of December 31, 2025, consisted of the following:
dollars in thousands2025
Federal$— 
State
Alabama118 
Texas38 
Other7 
Foreign
Spain267 
Total Income Taxes Paid$430 
The total deferred tax liability presented in the financial statements as of December 31, 2025 is subject to certain significant estimates. The valuation allowance recorded as of December 31, 2025 is reliant on the scheduling of future taxable income. This is highly subjective in nature and may materially change within the next 12 months.
As of December 31, 2025, the Company had tax effected federal net operating loss carryforwards of $21.9 million available, and all have an unlimited carryforward period. Future federal NOL utilization is limited to 80% of taxable income on an annual basis. As of December 31, 2025, the Company had $4.7 million of tax-effected state net operating loss carryforwards available. If not utilized, the state NOL carryforwards will expire at various dates beginning in 2033. As of December 31, 2025, the Company had $12.4 million of tax-effected interest expense limitation available, and all of the limitation has an unlimited carryforward period. Future interest expense utilization is limited to 30% of taxable income on an annual basis.
The Company records interest and penalties through income tax expense relating to uncertain tax positions. As of December 31, 2025, the Company has not recognized any liabilities for uncertain tax positions nor has the Company accrued interest and penalties related to uncertain tax positions.
The Company’s federal, state and foreign income tax returns are subject to audit. The Company is not currently under audit by federal or foreign taxing authorities. The years open to examination include years ending 2022 to 2024 for federal income tax purposes, years ending 2022 to 2024 for state income tax purposes, and years ending 2022 to 2024 for foreign income tax purposes.
Due to uncertainty regarding future utilization, a valuation allowance has been recorded in respect of all federal and state deferred tax assets, inclusive of federal and state net operating loss carryforwards and state credit carryforwards. Management determined that it is more likely than not that the benefit of such loss and credit carryforwards will not be fully realized. The Company recorded a valuation allowance of $45.8 million and $49.7 million as of December 31, 2025 and 2024, respectively. The valuation allowance decreased by $3.9 million.