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Note 13 - Income Taxes
 9 Months Ended
Sep. 30, 2025
Notes to Financial Statements  
Income Tax Disclosure [Text Block]

NOTE 13 INCOME TAXES

 

Income tax (benefit) expense for the three and nine months ended September 30, 2025 and September 30, 2024 varies from the amount that would result by applying the applicable U.S. federal corporate income tax rate of 21% to loss from continuing operations before income tax (benefit) expense. The following table summarizes the differences:

 

(in thousands)

 

Three months ended September 30,

  

Nine months ended September 30,

 
  

2025

  

2024

  

2025

  

2024

 

Income tax benefit at U. S. statutory income tax rate

 $(937) $(453) $(2,334) $(1,352)

Valuation allowance

  (1,329)  358   (426)  1,450 

Compensation

  95   195   147   117 

Investment income

  (2)  (96)  (60)  (134)

State income tax

  35   38   68   210 

Indefinite life intangibles

  (9)  (27)  29   (161)

Contingent consideration

  —   —   —   57 

Other

  97   6   131   22 

Income tax (benefit) expense

 $(2,050) $21  $(2,445) $209 

 

The Company maintains a valuation allowance for its gross deferred tax assets at September 30, 2025 and December 31, 2024. 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 full valuation allowance on its September 30, 2025 and December 31, 2024 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 $4.6 million and $4.4 million at September 30, 2025 and December 31, 2024, respectively, that consists of:

 

 

•

$4.1 million and $3.7 million of deferred income tax liabilities related to indefinite lived intangible assets; and

 

•

$0.5 million and $0.7 million of deferred state income tax liabilities.

 

As of September 30, 2025 and December 31, 2024, the Company carried a liability for unrecognized tax benefits of zero. The Company classifies interest and penalty accruals, if any, related to unrecognized tax benefits as income tax expense.  The Company recorded income tax expense of zero related to interest and penalty accruals for the three and nine months ended September 30, 2025 and  September 30, 2024.

 

On July 4, 2025, the “Big Beautiful Bill” P.L. 119-21 was signed into law. This legislation includes changes to U.S. federal tax law, which may be subject to further clarification and the issuance of interpretive guidance. We are assessing the legislation and its effect on our consolidated financial statements, which we have started reflecting in the three month period ended September 30, 2025.