v3.26.1
Note 14 - Income Taxes
 6 Months Ended
Jun. 30, 2026
Notes to Financial Statements  
Income Tax Disclosure [Text Block]

NOTE 14 INCOME TAXES

 

Income tax expense (benefit) for the three and six months ended June 30, 2026 and June 30, 2025 varies from the amount that would result by applying the applicable U.S. federal corporate income tax rate of 21% to loss before income tax expense (benefit). The following table summarizes the differences:

 

(in thousands)

 

Three months ended June 30,

  

Six months ended June 30,

 
  

2026

  

2025

  

2026

  

2025

 

Income tax expense (benefit) at U. S. statutory income tax rate

 $72  $(692) $(414) $(1,397)

Valuation allowance

  (536)  524   (198)  941 

Share-based payment awards

  23   8   48   52 

Earnings of noncontrolling interests

  (163)  (32)  (206)  (58)

State and local income taxes, net of federal income tax effects

  117   49   215   33 

Disposition of subsidiary

  652   —   652   — 

Other

  20   12   41   34 

Income tax expense (benefit)

 $185  $(131) $138  $(395)

 

The Company maintains a valuation allowance for its gross deferred tax assets at June 30, 2026 and December 31, 2025. The Company's operations have generated substantial operating losses in prior years. These losses can be available to reduce income taxes that might otherwise be incurred on future taxable income; however, it is uncertain whether the Company will generate the taxable income necessary to utilize these losses or other reversing temporary differences. This uncertainty has caused management to place a valuation allowance on its June 30, 2026 and December 31, 2025 net deferred tax asset, excluding the deferred income tax liability amounts set forth in the paragraph below which were determined to not reverse and offset existing deferred tax assets. 

 

The Company carries net deferred income tax liabilities of $3.0 million and $3.2 million at June 30, 2026 and December 31, 2025, respectively, that consists of:

 

 

•

$4.1 million and $4.1 million of deferred income tax liabilities related to indefinite lived intangible assets;

 •$1.5 million and $1.4 million of deferred income tax assets related to indefinite life tax attribute carryforwards; and
 

•

$0.4 million and $0.5 million of deferred state income tax liabilities.

 

As of June 30, 2026 and December 31, 2025, the Company had no unrecognized tax benefits. The Company classifies interest and penalty accruals, if any, related to unrecognized tax benefits as income tax benefit.  The Company recorded income tax expense of zero related to interest and penalty accruals for the three and six months ended June 30, 2026 and  June 30, 2025.