v3.26.1
INCOME TAXES
 12 Months Ended
Dec. 31, 2025
Income Tax Disclosure [Abstract]  
INCOME TAXES
NOTE 8 – INCOME TAXES
The components of loss before income taxes for the years ended December 31, 2025, 2024 and 2023 are as follows (in 000's):
Fiscal Year Ended
December 31, 2025		Fiscal Year Ended
December 31, 2024		Fiscal Year Ended
December 31, 2023
Domestic$(11,473)$(6,293)$5,145 
Foreign(6,165)(1,537)(1,908)
Total$(17,638)$(7,830)$3,237 

Significant components of income tax expense were as follows (in 000’s):
Fiscal Year Ended December 31,
202520242023
Current
U.S. Federal$(2)$(81)$4,565 
State and Local(55)521 1,570 
Total current income tax expense(57)440 6,135 
Deferred
U.S. Federal(4,777)(95)1,192 
State and Local(1,155)(199)431 
Foreign18 42 (281)
Total deferred income tax (benefit)/expense(5,914)(252)1,342 
Total$(5,971)$188 $7,477 
The effective tax rates for the fiscal years ended December 31, 2025, 2024 and 2023 were (33.8)%, (2.3)% and 249.4%. The most significant items impacting the effective tax rate during fiscal years 2025, 2024 and 2023 are non-deductible officer compensation expense and the items listed in the tables below.
The following table presents required disclosure pursuant to ASU 2023-09 and reconciles the U.S. federal statutory tax amount and rate to our actual global effective amount and rate for the year ended December 31, 2025 (in 000's):
Fiscal Year Ended
December 31, 2025
Income tax expense/(benefit) computed at federal statutory rate$(3,704)21.0 %
State taxes, net of federal benefit (1)
(1,181)6.7 %
Foreign tax effects
United Kingdom
Statutory tax rate difference between UK and US125 (0.7)%
Deferred tax write-offs (958)5.4 %
Valuation allowance changes 2,142 (12.1)%
Other foreign jurisdictions (2)
4 0.00 %
Nontaxable or nondeductible items
Worthless stock deduction (2,422)13.7 %
Other permanent items156 (0.9)%
Other reconciling items (133)0.7 %
Total$(5,971)(33.8)%
(1) State and local taxes in California, Florida, and New York City made up the majority (greater than 50%) of the tax effect in this category.
(2) Includes Canada
A reconciliation of income taxes computed at the U.S. federal statutory income tax rate of 21% to the Company's income tax benefit/(expense) was as follows (in 000's):
Fiscal Year Ended December 31,Fiscal Year Ended December 31,
20242023
At U.S. Federal statutory tax rate$(1,710)21.0 %$629 21.0 %
State income taxes212 (2.6)%1,670 55.7 %
Nondeductible officer compensation1,381 (17.0)%4,769 159.1 %
Valuation allowance and other nondeductible expenses304 (3.7)%409 13.6 %
Total$188 (2.3)%$7,477 249.4 %
The Company’s deferred taxes consisted of the following (in 000’s):
December 31,
20252024
Deferred tax assets
Accrued liabilities$110 $39 
Net operating losses2,950 1,368 
Operating lease liability7,185 7,181 
Equity-based compensation1,087 887 
163 (j) limitation 3,176 1,837 
State bonus depreciation705 735 
Other 750 614 
Total deferred tax assets15,963 12,661 
Valuation allowance — (793)
Total deferred tax assets, net of valuation allowance 15,963 11,868 
Deferred tax liabilities
Property, plant, and equipment(5,167)(6,464)
Intangible assets(5,574)(4,722)
Right-of-use assets(5,894)(6,588)
Prepaid expenses and other current assets— (690)
Total deferred tax liabilities (16,635)(18,464)
Net deferred taxes$(672)$(6,596)
As of December 31, 2025, the Company had federal, state, and foreign net operating loss carryforwards in the amount of $9.6 million, $13.6 million, and $0.8 million, and $1.6 million, $0.9 million and $5.0 million, respectively. Certain losses have an indefinite carryforward period, while other loss carryforwards will expire in years 2039 through 2045.
The deferred tax asset related to foreign operations, $0.2 million, is recorded on the consolidated balance sheet as of December 31, 2025. Our deferred tax assets have been evaluated for realization based on historical taxable income, tax planning strategies, the expected timing of reversals of existing temporary differences and future taxable income anticipated. Our deferred tax assets are more likely than not to be realized in full due to the existence of sufficient taxable income of the appropriate character under the tax law. The valuation allowance was reduced in the current year by $(0.8) million as the related deferred tax asset for the foreign NOLs of $0.8 million was written off during the current year due to the closure of the London entity. Management recorded an increase of $0.8 million to the valuation allowance for the deferred tax assets related to the foreign net operating losses which are not more likely than not to be realized as of December 31, 2024.
We adopted ASU 2023-09 on a prospective basis for the year ended December 31, 2025. The components of income taxes paid were as follows (in 000's):

Fiscal Year Ended
December 31, 2025
Federal $(1,899)
Other State66 
Foreign— 
Income taxes paid, net of refunds$(1,833)

Cash paid for income taxes for the years ended December 31, 2024 and December 2023 was $1.8 million and $4.6 million, respectively.

Uncertain Tax Positions
ASC 740 prescribes a recognition threshold of more-likely-than not to be sustained upon examination as it relates to the accounting for uncertainty in income tax benefits recognized in an enterprise’s financial statements. The Company is subject to income taxation at the federal, foreign, and various state levels. The Company is no longer subject to U.S. federal
tax examinations for tax years before 2022, and with few exceptions, the Company is not subject to examination by foreign or state tax authorities for tax years which ended before 2022. Loss carryforwards and credit carryforwards generated or utilized in years earlier than 2022 are also subject to examination and adjustment.
As of December 31, 2025 and 2024, the Company had no uncertain tax positions.