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Income Taxes
 6 Months Ended
Jun. 30, 2024
Income Tax Disclosure [Abstract]  
Income Taxes
9.
Income Taxes
The components of income (loss) before income taxes, as shown in the accompanying Financial Statements, consisted of the following for the three and six months ended June 30, 2024 and 2023:
 
    
Three Months Ended
June 30,
     
Six Months Ended
June 30,
  
    
2024
     
2023
     
2024
     
2023
  
    
(Amounts in thousands)
     
(Amounts in thousands)
  
Income (loss) before income taxes:
            
Domestic
    $ 615      $ (5,074 )     $ 299      $ (2,994 ) 
Foreign
      1,194        2,296        1,228        695  
  
 
 
     
 
 
     
 
 
     
 
 
  
Income (loss) before income taxes
    $ 1,809      $ (2,778 )     $ 1,527      $ (2,299 ) 
  
 
 
     
 
 
     
 
 
     
 
 
  
The Company has foreign subsidiaries which generate revenues from
non-U.S.-based
clients. Additionally, these subsidiaries provide services to the Company’s U.S. operations. Accordingly, the Company allocates a portion of its income (loss) to these subsidiaries based on a “transfer pricing” model and reports such income (loss) as foreign in the above table.
The provision (benefit) for income taxes, as shown in the accompanying Financial Statements, consisted of the following for the three and six months ended June 30, 2024 and 2023:
 
    
Three Months Ended
June 30,
     
Six Months Ended
June 30,
  
    
2024
     
2023
     
2024
     
2023
  
    
(Amounts in thousands)
     
(Amounts in thousands)
  
Current provision (benefit):
            
Federal
    $ 100      $ (894 )     $ (124 )     $ (183 ) 
State
      26        (136 )       (13 )       34  
Foreign
      197        591        301        145  
  
 
 
     
 
 
     
 
 
     
 
 
  
Total current provision (benefit)
      323        (439 )       164        (4 ) 
  
 
 
     
 
 
     
 
 
     
 
 
  
Deferred provision (benefit):
            
Federal
      73        (154 )       96        (402 ) 
State
      14        (38 )       19        (98 ) 
Foreign
      101        (2 )       18        60  
  
 
 
     
 
 
     
 
 
     
 
 
  
Total deferred provision (benefit)
      188        (194 )       133        (440 ) 
  
 
 
     
 
 
     
 
 
     
 
 
  
Change in valuation allowance
      (93 )       28        —         57  
  
 
 
     
 
 
     
 
 
     
 
 
  
Total provision (benefit) for income taxes
    $ 418      $ (605 )     $ 297      $ (387 ) 
  
 
 
     
 
 
     
 
 
     
 
 
  
 
The reconciliation of income taxes computed using the statutory U.S. income tax rate and the provision (benefit) for income taxes for the three and six months ended June 30, 2024 and 2023 were as follows (amounts in thousands):
 
    
Three Months Ended
June 30, 2024
    
Three Months Ended
June 30, 2023
  
Income taxes computed at the federal statutory rate
    $ 380        21.0 %    $ (583 )       (21.0 )% 
State income taxes, net of federal tax benefit
      (9 )       (0.5 )      (182 )       (6.5 ) 
Excess tax expense (benefit) from stock options/restricted shares
      46        2.5       17        0.6  
Worthless stock deduction
      —        —        —         —   
Difference in income tax rate on foreign earnings/other
      94        5.2       115        4.1  
Change in valuation allowance
      (93 )       (5.1 )      28        1.0  
  
 
 
     
 
 
    
 
 
     
 
 
  
   $ 418        23.1 %    $ (605 )       (21.8 )% 
  
 
 
     
 
 
    
 
 
     
 
 
  
 
    
Six Months Ended
June 30, 2024
    
Six Months Ended
June 30, 2023
  
Income taxes computed at the federal statutory rate
    $ 321        21.0 %    $ (483 )       (21.0 )% 
State income taxes, net of federal tax benefit
      (19 )       (1.3 )      (72 )       (3.1 ) 
Excess tax expense (benefit) from stock options/restricted shares
      131        8.6       40        1.7  
Worthless stock deduction
      (248 )       (16.2 )      —         —   
Difference in income tax rate on foreign earnings/other
      112        7.3       71        3.1  
Change in valuation allowance
      —        —        57        2.5  
  
 
 
     
 
 
    
 
 
     
 
 
  
   $ 297        19.4 %    $ (387 )       (16.8 )% 
  
 
 
     
 
 
    
 
 
     
 
 
  
We evaluate deferred income taxes quarterly to determine if valuation allowances are required or should be adjusted. GAAP accounting guidance requires us to assess whether valuation allowances should be established against deferred tax assets based on all available evidence, both positive and negative using a “more likely than not” standard. Our assessment considers, among other things, the nature of cumulative losses; forecast of future profitability; the duration of statutory carry-forward periods and tax planning alternatives. At June 30, 2024, our valuation allowance was comprised of net operating losses in Ireland and the United Kingdom and totaled $466,000. During the quarter ended March 31, 2024, we secured a worthless stock deduction for our dissolved Singapore entity, which allowed us to recognize a current tax deduction during the 2024 period and accordingly reverse $162,000 of our valuation allowance against outstanding deferred tax assets. As of December 31, 2023, our valuation allowance balance totaled $628,000.