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Income taxes
 12 Months Ended
Dec. 31, 2025
Income Tax Disclosure [Abstract]  
Income taxes

Note 10 – Income taxes

 

The provision for income taxes consists of the following:

           
    For the Years Ended December 31,  
    2025     2024  
Current:            
Federal   $ 4,333     $ 3,371  
State and local     1,764       1,512  
Total current     6,097       4,883  
Deferred     (270)       61  
Provision for income taxes   $ 5,827     $ 4,944  

 

The following is a reconciliation of income tax expense computed at the U.S. federal statutory tax rate to income tax expense reported in the consolidated statement of operations:

                       
    2025     2024  
    Amount     Percentage     Amount     Percentage  
Federal income tax at statutory rate   $ 4,137       21.0%     $ 2,933       21.0%  
State and local income tax, net (a)     1,135       5.8%       737       5.3%  
Section 162m     479       2.4%       1,074       7.7%  
Stock based compensation     46       0.2%       167       1.2%  
Other permanent differences     31       0.2%       29       0.2%  
Change in tax laws or rates     (1)       0.0%       2       0.0%  
Other     –       0.0%       2       0.0%  
Provision for income taxes   $ 5,827       29.6%     $ 4,944       35.4%  

  

(a)State taxes in Illinois made up the majority (greater than 50 percent) of this category.

 

The income taxes paid (net of refunds) to a jurisdiction that represent greater than 5% of the total income taxes paid are as follows:

        
   December 31, 
   2025   2024 
Federal  $3,846   $4,151 
State          
Illinois   1,087    1,134 
California   –    338 
Other (individually below 5% of total income taxes paid)   655    364 
   $5,588   $5,987 

 

The tax effects of temporary differences giving rise to deferred income tax assets and liabilities were:

        
   December 31, 
   2025   2024 
Deferred tax liabilities attributable to:          
Accumulated depreciation and amortization  $(4,196)  $(3,829)
Unrealized gains   –    (467)
Total deferred tax liabilities   (4,196)   (4,296)
Deferred tax assets attributable to:          
Net operating losses   6    6 
Unrealized loss   23    – 
Accrued compensation   480    454 
Incentive compensation   550    499 
Inventory   349    279 
Allowances for doubtful accounts and discounts   2    2 
Other   (6)   (6)
Total net deferred tax assets   1,404    1,234 
Net deferred tax liabilities  $(2,792)  $(3,062)

 

The following table details the Company’s tax attributes related to net operating losses for which it has recorded deferred tax assets.

                     
Tax Attributes   Gross Amount     Net Amount     Expiration Years  
State net operating losses   $ 116     $ 6     2035  
            $ 6        

 

Lifeway is subject to U.S. federal income tax as well as income tax in multiple state and city jurisdictions. With limited exceptions, Lifeway’s calendar year 2022 and subsequent federal and state tax years remain open by statute. As of December 31, 2025, the unrecognized tax benefit is $0.

 

The amount of interest and penalties recognized in the consolidated statements of operations was $0 during 2025 and 2024, respectively. The amount of accrued interest and penalties recognized in the consolidated balance sheets was $0 at December 31, 2025 and 2024, respectively.

 

On July 4, 2025, the One Big Beautiful Bill Act ("OBBBA") was signed into law, which includes a broad range of tax reform provisions that may affect the Company’s financial results. The OBBBA changes to corporate taxation include, but are not limited to, 100% bonus depreciation for purchases of qualified property, an elective deduction for domestic research and experimental expenditures, changes to the definition of adjusted taxable income for purposes of determining the interest deduction limitation under Internal Revenue Code Section 163(j), and a more favorable tax rate on Foreign-Derived Deduction Eligible Income and income from non-U.S. subsidiaries (Net CFC Tested Income). The OBBBA does not have a material impact on our estimated annual effective tax rate or cash flows in the current fiscal year.