INCOME TAXES |
6 Months Ended |
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Jun. 30, 2026 | |
| Income Tax Disclosure [Abstract] | |
| INCOME TAXES | 10. INCOME TAXES
The Company’s tax provision for interim periods is determined using an estimate of its annual effective tax rate, adjusted for discrete items arising in that quarter. In each quarter, the Company updates its estimate of the annual effective tax rate, and if the estimated annual tax rate changes, the Company makes a cumulative adjustment in that quarter. The Company’s quarterly tax provision, and its quarterly estimate of its annual effective tax rate, are subject to significant volatility due to several factors, including the Company’s ability to accurately predict its pre-tax income and loss in multiple jurisdictions.
The Company’s effective tax rate was an expense of 5.67% and none for the three months ended June 30, 2026 and 2025, respectively, and an expense of 5.48% and none for the six months ended June 30, 2026 and 2025, respectively. The difference between the effective tax rate and the U.S. federal statutory rate of 21% is primarily due to a valuation allowance established on the Company’s domestic federal and state net deferred tax assets.
Income tax expense was $471,423 and $881,158 for the three and six months ended June 30, 2026, respectively. There was income tax expense recorded for the three and six months ended June 30, 2025. The Company’s income tax expense for the three and six months ended June 30, 2026 was primarily attributable to the gain on sale recognized during the period attributed to the sale of four of our Georgia facilities along with a reversal of the Company’s valuation allowance. The Company does not record a deferred tax provision as there is a full valuation allowance offsetting the Company’s net deferred tax assets.
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