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Income Taxes
 9 Months Ended
Sep. 30, 2025
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 nine months ended September 30, 2025 and 2024:

 

 

Three Months Ended
September 30,

 

 

Nine Months Ended
September 30,

 

 

2025

 

 

2024

 

 

2025

 

 

2024

 

 

(Amounts in thousands)

 

Income (loss) before income taxes:

 

 

 

 

 

 

 

 

 

 

 

 

Domestic

 

$

791

 

 

$

1,748

 

 

$

(2,213

)

 

$

2,047

 

Foreign

 

 

444

 

 

 

824

 

 

 

1,896

 

 

 

2,052

 

Income (loss) before income taxes

 

$

1,235

 

 

$

2,572

 

 

$

(317

)

 

$

4,099

 

 

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.

The provision (benefit) for income taxes, as shown in the accompanying Financial Statements, consisted of the following for the three and nine months ended September 30, 2025 and 2024:

 

 

Three Months Ended
September 30,

 

 

Nine Months Ended
September 30,

 

 

2025

 

 

2024

 

 

2025

 

 

2024

 

 

(Amounts in thousands)

 

Current provision (benefit):

 

 

 

 

 

 

 

 

 

 

 

 

Federal

 

$

(179

)

 

$

351

 

 

$

(442

)

 

$

227

 

State

 

 

13

 

 

 

77

 

 

 

(35

)

 

 

64

 

Foreign

 

 

250

 

 

 

216

 

 

 

689

 

 

 

517

 

Total current provision (benefit)

 

 

84

 

 

 

644

 

 

 

212

 

 

 

808

 

Deferred provision (benefit):

 

 

 

 

 

 

 

 

 

 

 

 

Federal

 

 

245

 

 

 

44

 

 

 

(116

)

 

 

140

 

State

 

 

49

 

 

 

8

 

 

 

(18

)

 

 

27

 

Foreign

 

 

(90

)

 

 

1

 

 

 

(32

)

 

 

19

 

Total deferred provision (benefit)

 

 

204

 

 

 

53

 

 

 

(166

)

 

 

186

 

Change in valuation allowance

 

 

6

 

 

 

-

 

 

 

-

 

 

 

-

 

Total provision (benefit) for income taxes

 

$

294

 

 

$

697

 

 

$

46

 

 

$

994

 

 

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 nine months ended September 30, 2025 and 2024 were as follows (amounts in thousands):

 

 

Three Months Ended
September 30, 2025

 

 

Three Months Ended
September 30, 2024

 

Income taxes computed at the federal statutory rate

 

$

259

 

 

 

21.0

%

 

$

540

 

 

 

21.0

%

State income taxes, net of federal tax benefit

 

 

64

 

 

 

5.2

 

 

 

120

 

 

 

4.6

 

Excess tax expense (benefit) from stock
   options/restricted shares

 

 

163

 

 

 

13.2

 

 

 

25

 

 

 

1.0

 

Worthless stock deduction

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

Difference in income tax rate on foreign
   earnings/other

 

 

(198

)

 

 

(16.1

)

 

 

12

 

 

 

0.5

 

Change in valuation allowance

 

 

6

 

 

 

0.5

 

 

 

—

 

 

 

—

 

 

$

294

 

 

 

23.8

%

 

$

697

 

 

 

27.1

%

 

 

Nine Months Ended
September 30, 2025

 

 

Nine Months Ended
September 30, 2024

 

Income taxes computed at the federal statutory rate

 

$

(67

)

 

 

(21.0

)%

 

$

861

 

 

 

21.0

%

State income taxes, net of federal tax benefit

 

 

(51

)

 

 

(16.1

)

 

 

101

 

 

 

2.5

 

Excess tax expense (benefit) from stock
   options/restricted shares

 

 

155

 

 

 

48.9

 

 

 

156

 

 

 

3.8

 

Worthless stock deduction

 

 

—

 

 

 

—

 

 

 

(248

)

 

 

(6.1

)

Difference in income tax rate on foreign
   earnings/other

 

 

9

 

 

 

2.7

 

 

 

124

 

 

 

3.0

 

Change in valuation allowance

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

$

46

 

 

 

14.5

%

 

$

994

 

 

 

24.2

%

 

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. Our valuation allowance was comprised of net operating losses in Ireland and the United Kingdom and totaled $452,000 at both September 30, 2025, and December 31, 2024.