Annual report pursuant to Section 13 and 15(d)

Income Taxes

v3.24.1
Income Taxes
 12 Months Ended
Dec. 31, 2023
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, 2023 December 31, 2022
Continuing Operations    
Current    
Federal $ 772  $ 1,040 
State 284  3,543 
$ 1,056  $ 4,583 
Deferred    
Federal (5,459) 72 
State (1,615) (210)
$ (7,074) $ (138)
Income taxes from continuing operations $ (6,018) $ 4,445 
A reconciliation of the statutory federal income tax expense (benefit) to the effective tax is as follows (in thousands):
  2023 2022
Statutory Rate - federal $ (4,788) $ 4,811 
State taxes, net of federal benefit (1,133) 2,789 
Research & development tax credit (350) (1,200)
Permanent differences and other 510  (601)
Income taxes from continuing operations before valuation allowance (5,761) 5,799 
Change in valuation allowance (257) (1,354)
Income tax expense (benefit) $ (6,018) $ 4,445 
Total $ (6,018) $ 4,445 
The tax effects of the primary “temporary differences” between values recorded for assets and liabilities for financial reporting purposes and values utilized for measurement in accordance with tax laws giving rise to our deferred tax assets are as follows (in thousands):
  For the years ended
  December 31, 2023 December 31, 2022
Net operating loss and capital loss carryforward $ 4,649  $ 1,324 
Right of use asset (1,464) (1,466)
Other 4,972  2,684 
Capital lease obligations 1,464  1,466 
Depreciation (479) (705)
Amortization (1,612) (2,703)
Tax credit 350  — 
Valuation allowance (567) (824)
Total 7,313  (224)
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, 2023, the Company is in a net deferred tax asset position for federal and state jurisdictions. Based on a three-year cumulative income position and anticipated future taxable income, the Company concluded that the federal and combined state deferred tax assets will be realized and there is no need for a valuation allowance at this time. The Company will continue to monitor the need for any valuation allowance changes on a quarterly basis.

The Company continues to maintain a valuation allowance against some of the separate company state net operating loss ("NOL") carryforwards. As of December 31, 2023 there is a valuation allowance of $0.6 million compared to $0.8 million as of December 31, 2022. As of December 31, 2023, the Company has state NOL carryforwards of $1.5 million, which begin to expire in 2024 and federal NOL carryforwards of $3.1 million as well as an R&D tax credit carryforward of $0.3 million which can be carried forward indefinitely. 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 files a consolidated federal income tax return and separate company state returns as well as combined state returns where applicable.