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Income Taxes

6 Months Ended

Jun. 30, 2025

Income Taxes

Income Taxes

14. Income Taxes.

Income (loss) from continuing operations before income taxes disaggregated between domestic and foreign is as follows:

​

​	​	​	​	​	​	​	​	​	​
​	​	Six Months Ended		​	Year Ended
​		June 30, 2025			December 31, 2024			December 31, 2023
Domestic	​	$	324,000	​	$	(11,426,000)	​	$	(3,001,000)
Foreign	​	​	1,299,000	​	​	2,196,000	​	​	—
​	​	$	1,623,000	​	$	(9,230,000)	​	$	(3,001,000)

​

Income taxes paid (net of refunds received) disaggregated by federal (national), state, and foreign for the six months ended June 30, 2025 is as follows:

​	​	​	​
Virginia		$	105,000
Other states	​		6,000
Foreign - Netherlands	​		137,000
Foreign - South Africa	​	​	(57,000)
​	​	$	191,000

​

Income tax (benefit) expense from continuing operations disaggregated by federal (national), state, and foreign is as follows:

​

​	​	​	​	​	​	​	​	​	​
​	​	Six Months Ended		​	Year Ended
​		June 30, 2025			December 31, 2024			December 31, 2023
Federal	​	$	4,000	​	$	—	​	$	—
State	​	​	(2,000)	​	​	21,000	​	​	20,000
Foreign	​	​	317,000	​	​	730,000	​	​	—
Total current tax expense	​	​	319,000	​	​	751,000	​	​	20,000
Federal	​	​	65,000	​	​	(2,731,000)	​	​	—
State	​	​	(831,000)	​	​	(193,000)	​	​	—
Foreign	​	​	134,000	​	​	(156,000)	​	​	—
Total deferred tax benefit	​	​	(632,000)	​	​	(3,080,000)	​	​	—
Total income tax (benefit) expense	​	$	(313,000)	​	$	(2,329,000)	​	$	20,000

​

For the six months ended June 30, 2025, calendar year 2024 and 2023, the income tax benefit attributable to noncontrolling interest was $22,000, $298,000, and $-0-, respectively.

The reconciliation between the Company’s effective tax rate and its statutory tax rate for the six months ended June 30, 2025 is as follows:

​

​	​	​	​	​	​	​
​	​	Six Months Ended June 30, 2025
​	​	Amount		​	Percent
Federal statutory rate		$	341,000	​	21.0	%
State and local taxes, net of federal income tax effect		​	64,000	​	3.9
Foreign tax effects:		​	​	​	​
Statutory difference between US and foreign jurisdictions	​	​	63,000	​	3.8	​
Other foreign - Netherlands	​	​	9,000	​	0.6	​
Other foreign - South Africa	​	​	107,000	​	6.6	​
Change in valuation allowance	​	​	3,000	​	0.2	​
Nontaxable or nondeductible items		​	5,000	​	0.3
Deferred tax rate change		​	(887,000)	​	(54.6)
Other	​	​	(18,000)	​	(1.1)	​
​		$	(313,000)	​	(19.3)	%

​

Income tax (benefit) expense differs from the expected tax (benefit) expense computed by applying the U.S. federal corporate income tax rate of 21% to income (loss) from continuing operations before income taxes as a result of the following:

​

​	​	​	​	​	​	​	​
​	​	Six Months Ended	​	Year Ended			​
​		June 30, 2025		December 31, 2024		December 31, 2023	​
Federal statutory rate		21.0	%	21.0	%	21.0	%
State and local tax		3.9		1.0	​	3.1	​
Foreign income taxes		3.8		(0.6)	​	—	​
Stock-based awards	​	—	​	—	​	(0.5)	​
Change in valuation allowance	​	0.2	​	5.4	​	(24.6)	​
Permanent differences		0.3		(0.7)	​	—	​
Deferred tax rate change	​	(54.6)	​	—	​	—	​
Other		6.1		(0.9)	​	0.3	​
Effective income tax rate		(19.3)	%	25.2	%	(0.7)	%

​

Components of resulting noncurrent deferred tax assets (liabilities) are as follows:

​

​	​	​	​	​	​	​	​	​	​
​	​	Six Months Ended		​	Year Ended
​		June 30, 2025			December 31, 2024			December 31, 2023
Deferred tax assets	​	​	​	​	​	​	​	​	​
Accrued expenses and reserves	​	$	53,000	​	$	57,000	​	$	117,000
Net operating loss and credit carryforwards	​		1,574,000	​		1,968,000	​		529,000
Right of use liability	​	​	7,630,000	​	​	8,458,000	​	​	—
Other	​		889,000	​		665,000	​		13,000
Total deferred tax assets	​	$	10,146,000	​	$	11,148,000	​	$	659,000
​	​	​	​	​	​	​	​	​	​
Deferred tax liabilities	​			​			​
Property, plant and equipment	​	$	(1,907,000)	​	$	(2,207,000)	​	$	(5,000)
Accrued expenses and reserves	​	​	(1,598,000)	​	​	(1,530,000)	​	​	—
Intangible assets	​	​	(5,838,000)	​	​	(6,581,000)	​	​	—
Right of use asset	​	​	(7,450,000)	​	​	(8,321,000)	​	​	—
Other	​	​	(216,000)	​	​	(7,000)	​	​	(9,000)
Total deferred tax liabilities	​		(17,009,000)	​		(18,646,000)	​		(14,000)
​	​	​	​	​	​	​	​	​	​
Net deferred tax (liability) asset before valuation allowance	​	​	(6,863,000)	​	​	(7,498,000)	​	​	645,000
Less: valuation allowance	​	​	(147,000)	​	​	(144,000)	​	​	(645,000)
Net deferred tax liability	​	$	(7,010,000)	​	$	(7,642,000)	​	$	—

​

As of June 30, 2025, the Company had $506,000 of current tax receivables and $1,474,000 of current tax liabilities included in prepaid expenses and other current assets and accrued expenses and other current liabilities, respectively, in the consolidated balance sheets. As of June 30, 2025, the Company had approximately $6,528,000 of federal net operating loss carryforwards available to offset future taxable income. Federal net operating losses generated after 2017 do not expire and may be carried forward indefinitely. The Company also had approximately $1,229,000 of pre-tax state net operating loss carryforwards. The expiration of state NOLs carried forward varies by taxing jurisdiction. Future utilization of NOLs carried forward may be subject to certain limitations under Section 382 of the Internal Revenue Code.

The Company evaluates all significant available positive and negative evidence, including the existence of losses in prior years and its forecast of future taxable income, in assessing the need for a valuation allowance. The underlying assumptions the Company uses in forecasting future taxable income require significant judgment and take into consideration the Company’s recent performance. The change in the valuation allowance for the year ended June 30, 2025 was an increase of $3,000. The Company’s valuation allowance as of June 30, 2025 was related to state NOLs that are not expected to be utilized.

As of June 30, 2025, December 31, 2024, and December 31, 2023, there were $35,000, $35,000, and $42,000 of unrecognized tax benefits, respectively, that if recognized would affect the annual effective tax rate. This liability is reflected as accrued expenses and other current liabilities on the Company’s consolidated balance sheet. The amount of the unrecognized tax benefits, if recognized, that would affect the effective income tax rates of future periods is $35,000. The Company recognized accrued interest related to unrecognized tax benefits in tax expense. For the six months ended June 30, 2025 and calendar years 2024 and 2023, the Company recognized approximately $-0-, $1,000, and $5,000, respectively, in interest and penalties.

The Company files income tax returns in the United States and numerous state and local tax jurisdictions. Tax years 2021 and forward are open for examination and assessment by the Internal Revenue Service. With limited exceptions, tax years prior to 2021 are no longer open in major state and local tax jurisdictions.

A reconciliation of the beginning and ending amount of the liability for uncertain tax positions is as follows:

​

​	​	​	​
Balance at January 1, 2023		$	53,000
Decrease due to state tax expense	​		(16,000)
Increases due to interest and state tax	​		5,000
Balance at December 31, 2023	​	$	42,000
Decrease due to state tax expense	​		(8,000)
Increases due to interest and state tax	​		1,000
Balance at December 31, 2024	​	$	35,000
Balance at June 30, 2025	​	$	35,000

​

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The entire disclosure for income tax.

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