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Income Taxes
 12 Months Ended
Dec. 31, 2024
Income Tax Disclosure [Abstract]  
Income Taxes
11.
Income Taxes
The components of income before income taxes as shown in the accompanying Consolidated Statement of Operations, consisted of the following for the years ended December 31, 2024, 2023 and 2022:
 
    
Years Ended December 31,
  
    
2024
     
2023
     
2022
  
    
(Amounts in thousands)
  
Income (loss) before income taxes:
         
Domestic
    $ 1,556      $ (6,222 )     $ 13,892  
Foreign
      2,868        (2,809 )       (1,401 ) 
  
 
 
     
 
 
     
 
 
  
Income (loss) before income taxes
    $ 4,424      $ (9,031 )     $ 12,491  
  
 
 
     
 
 
     
 
 
  
The Company has foreign subsidiaries which generate revenues from foreign clients. Additionally, the Company has foreign subsidiaries which provide services to its U.S. operations. Accordingly, the Company allocates a portion of its income to these subsidiaries based on a “transfer pricing” model and reports such income as foreign in the above table.
The provision (benefit) for income taxes, as shown in the accompanying Consolidated Statement of Operations, consisted of the following for the years ended December 31, 2024, 2023 and 2022:
 
    
Years Ended December 31,
  
    
2024
     
2023
     
2022
  
    
(Amounts in thousands)
  
Current provision (benefit):
         
Federal
    $ 672      $ (473 )     $ 2,293  
State
      93        (23 )       653  
Foreign
      762        316        178  
  
 
 
     
 
 
     
 
 
  
Total current provision (benefit)
      1,527        (180 )       3,124  
  
 
 
     
 
 
     
 
 
  
Deferred provision (benefit):
         
Federal
      (445 )       (648 )       678  
State
      (52 )       (133 )       162  
Foreign
      6        (1,001 )       (433 ) 
  
 
 
     
 
 
     
 
 
  
Total deferred provision (benefit)
      (491 )       (1,782 )       407  
  
 
 
     
 
 
     
 
 
  
Change in valuation allowance
      (14 )       69        248  
  
 
 
     
 
 
     
 
 
  
Total provision (benefit) for income taxes
    $ 1,022      $ (1,893 )     $ 3,779  
  
 
 
     
 
 
     
 
 
  
 
The reconciliation of income taxes computed using our statutory U.S. income tax rate and the provision (benefit) for income taxes for the years ended December 31, 2024, 2023 and 2022 were as follows:
 
   
Years Ended December 31,
  
(Amounts in thousands)
  
2024
    
2023
    
2022
  
Income taxes computed at the federal statutory rate
   $ 929       21.0 %    $ (1,897 )      (21.0 %)    $ 2,623       21.0 % 
State income taxes, net of federal tax benefit
     21       0.5       (198 )      (2.2 )      804       6.4  
Shortfalls in expected tax benefits from stock options/RSUs
     102       2.3       220       2.4       56       0.5  
Worthless stock deduction
     (248 )      (5.6 )      —        —        —        —   
Difference in tax rate on foreign earnings/other
     232       5.2       (87 )      (1.0 )      48       0.4  
Change in valuation allowance
     (14 )      (0.3 )      69       0.8       248       2.0  
 
 
 
    
 
 
    
 
 
    
 
 
    
 
 
    
 
 
  
  $ 1,022       23.1 %    $ (1,893 )      (21.0 %)    $ 3,779       30.3 % 
 
 
 
    
 
 
    
 
 
    
 
 
    
 
 
    
 
 
  
The components of the deferred tax assets and liabilities were as follows:
 
    
At December 31,
  
    
2024
     
2023
  
    
(Amounts in thousands)
  
Deferred tax assets:
      
Allowance for credit losses
    $ 100      $ 150  
Accrued vacation and bonuses
      403        437  
Stock-based compensation expense
      2,316        2,100  
Acquisition-related transaction costs
      455        471  
Severance liabilities
      448        —   
Net operating losses
      452        628  
Other
      157        —   
  
 
 
     
 
 
  
Total deferred tax assets
      4,331        3,786  
  
 
 
     
 
 
  
Deferred tax liabilities:
      
Prepaid expenses
      776        488  
Depreciation, intangibles and contingent consideration
      1,805        1,877  
  
 
 
     
 
 
  
Total deferred tax liabilities
      2,581        2,365  
Valuation allowance
      (452 )       (628 ) 
  
 
 
     
 
 
  
Net deferred tax asset (liability)
    $ 1,298      $ 793  
  
 
 
     
 
 
  
For the three years ending on December 31, 2024, the Company had no unrecognized tax benefits related to uncertain tax positions.
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 December 31, 2024, our valuation allowance was comprised of net operating losses in Ireland and the United Kingdom totaled $452,000. 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, we reversed $162,000 of our valuation allowance. At December 31, 2023 and 2022, our valuation allowance totaled $628,000 and $559,000, respectively, and was comprised of balances in Singapore, Ireland and the United Kingdom. Our valuation allowance reflects net operating losses which may not be realized in the future.