INCOME TAXES |
3 Months Ended |
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Mar. 31, 2026 | |
| Income Tax Disclosure [Abstract] | |
| INCOME TAXES | 10. INCOME TAXES The Company uses the estimated annual effective tax rate method under Accounting Standards Codification No. 740-270, Interim Reporting to calculate the provision for income taxes. The Company recorded a benefit from income taxes of approximately $1.4 million on a pre-tax loss from unaudited condensed consolidated operations of approximately $4.5 million for the three months ended March 31, 2026. This results in an effective tax rate of approximately 31.7%. The estimated annual effective tax rate differs from the federal statutory tax rate of 21% primarily due to the impact of state taxes, non-deductible expenses, and the impact of the valuation allowance against disallowed interest expense and net operating losses. In accordance with Accounting Standards Codification No. 740, Accounting for Income Taxes, the Company continues to evaluate the realizability of its net deferred tax assets (“DTAs”) by assessing the future tax consequences of events that have been recognized in the Company’s financial statements or tax returns, tax planning strategies, and future profitability. Management considers all available evidence, both negative and positive, that could impact the future realization of these. As of March 31, 2026, the Company maintains a valuation allowance on its DTAs, most significantly its net operating losses and disallowed interest expense assets, after taking into consideration future taxable income from reversing deferred tax liabilities. The Company is subject to continuous examination of the Company’s income tax returns by the Internal Revenue Service and other domestic tax authorities. The Company believes that an adequate provision has been made for any adjustments that may result from tax examinations.
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