Annual report [Section 13 and 15(d), not S-K Item 405]

Income Taxes

v3.26.1
Income Taxes
 12 Months Ended
Dec. 31, 2025
Income Tax Disclosure [Abstract]  
Income Taxes Income Taxes
The components of the provision (benefit) for income taxes, in the consolidated statements of operations are as follows (in thousands):
For the years ended
December 31, 2025 December 31, 2024
Continuing Operations
Current
Federal $ —  $ — 
State —  45 
$ 45 
Deferred
Federal —  5,336 
State —  1,814 
$ —  $ 7,150 
Income taxes provision (benefit) from continuing operations $ —  $ 7,195 
The following reconciles the differences between income taxes computed at the federal statutory rate and the provision for income taxes (in thousands):
Year Ended December 31, 2025 Year Ended December 31, 2024
Amount Percent % Amount Percent %
Statutory Rate - federal $ (4,911) 21.0  % $ (7,382) 21.0  %
Nontaxable or nondeductible items 265  (1.1) % —  —  %
State taxes, net of federal benefit —  —  % (2,373) 6.8  %
Permanent differences and other —  —  % 521  (1.5) %
Change in valuation allowance 4,646  (19.9) % 16,429  (46.7) %
Effective tax rate $ —  —  % $ 7,195  (20.4) %
The income taxes paid for the year ended December 31, 2025 consisted of the following (in thousands):
U.S. Federal $ 327 
State and Local Income Taxes
New Jersey 57 
New York 1,033 
New York City 227 
Other States 1 
Total $ 1,645 

Deferred tax assets and liabilities reflect the net tax effects of net operating loss and tax credit carryforwards and temporary differences between the carrying amount of assets and liabilities for financial reporting and the amounts used for tax purposes. Significant components of the Company's deferred tax assets and liabilities were as follows (in thousands):
  For the years ended
  December 31, 2025 December 31, 2024
Net operating loss and capital loss carryforward $ 12,200  $ 12,033 
Right of use asset $ (573) $ (1,403)
Other 5,039  4,944 
Capital lease obligations 936  1,403 
Depreciation 497  783 
Amortization (195) (997)
Tax credit —  350 
Valuation allowance (17,904) (17,113)
Total $ —  $ — 
The Company recognizes tax assets and liabilities for the future tax consequences related to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases, and for net operating loss carryforwards. Management evaluated the deferred tax assets for recoverability using a consistent approach that considers the relative impact of negative and positive evidence, including historical profitability and projections of future reversals of temporary differences and future taxable income. The Company is required to establish a valuation allowance for deferred tax assets if management determines, based on available evidence at the time the determination is made, that it is not more likely than not that some portion or all of the deferred tax assets will be realized.

As of December 31, 2025, the Company is in a net deferred tax asset position for federal and state jurisdictions. Based on a three-year cumulative income position the Company concluded that the federal and combined state deferred tax assets will not be realized and there is a need for a full valuation allowance at this time. The Company will continue to monitor the need for any valuation allowance changes on a quarterly basis.

As of December 31, 2025 there is a valuation allowance of $17.9 million compared to $17.1 million as of December 31, 2024. As of December 31, 2025, the Company has state net operating loss ("NOL") carryforwards of $1.2 million, which begin to expire in 2025 and federal NOL carryforwards of $10.9 million of which never expire. A portion of the federal NOL is attributable to 2021 Nebula acquisition, and it is Section 382 limited with an annual limitation of $0.3 million.
The Company is subject to federal, state and local income tax audits from time to time that could result in proposed assessments. Currently, the Company is under audit for its December 31, 2022 tax return with the Internal Revenue Service. There are no ongoing state or local income tax audits as of December 31, 2025.
The Company files a consolidated federal income tax return and separate company state returns as well as combined state returns where applicable.