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Income Taxes

12 Months Ended

Dec. 31, 2022

Income Taxes

Income Taxes

10.   Income Taxes

The Company accounts for income taxes in accordance with ASC Topic 740. Deferred tax assets and liabilities are determined based on differences between the financial reporting and tax bases of assets and liabilities and are measured using the enacted tax rates and laws that will be in effect when the differences are expected to reverse. A valuation allowance is established when necessary to reduce deferred tax assets to the amount expected to be realized. In determining the need for a valuation allowance, management reviews both positive and negative evidence pursuant to the requirements of ASC Topic 740, including current and historical results of operations, future income projections, and the overall prospects of the Company’s business.

​

The income tax provision (benefit) for federal and state and local income taxes in the consolidated statements of operations consists of the following:

​

​	​	​	​	​	​	​
​	​	Years Ended December 31,
($ in thousands)		2022			2021
Current:		​			​
Federal	​	$	300	​	$	—
State and local	​		234	​		86
Total current	​		534	​		86
​	​	​	​	​	​	​
Deferred:	​			​
Federal	​		(509)	​		(2,376)
State and local	​		(456)	​		(816)
Total deferred	​		(965)	​		(3,192)
Total benefit	​	$	(431)	​	$	(3,106)

​

The reconciliation of income tax benefit computed at the federal and state and local statutory rates to the Company’s loss before taxes is as follows:

​

​	​	​	​	​	​
​	​	Years Ended December 31,			​
​		2022		2021
U.S. statutory federal rate		21.00	%	21.00	%
State and local rate, net of federal tax benefit		6.10		4.64	​
Stock compensation		(6.14)		(5.56)	​
Excess compensation deduction		(5.32)		(0.68)	​
Federal true-ups		(5.09)		(0.10)	​
Life insurance		(0.52)		(0.10)	​
Change in tax rate	​	—	​	0.06	​
Other permanent differences		—		(0.01)	​
Income tax benefit		10.03	%	19.25	%

​

The significant components of net deferred tax assets (liabilities) of the Company consist of the following:

​

​	​	​	​	​	​	​
​	​	December 31,
($ in thousands)		2022			2021
Deferred tax assets		​			​
Stock-based compensation	​	$	712	​	$	1,274
Federal, state and local net operating loss carryforwards	​		3,175	​		6,684
Accrued compensation and other accrued expenses	​		748	​		728
Allowance for doubtful accounts	​		—	​		309
Basis difference arising from discounted note payable	​		11	​		11
Foreign tax credit	​		—	​		219
Charitable contribution carryover	​		—	​		77
Property and equipment	​		497	​		488
Interest expense	​		—	​		602
Total deferred tax assets	​	​	5,143	​	​	10,392
​	​	​	​	​	​	​
Deferred tax liabilities	​	​	​	​	​	​
Basis difference arising from intangible assets of acquisition	​		(4,036)	​		(10,251)
Total deferred tax liabilities	​		(4,036)	​		(10,251)
​	​	​	​	​	​	​
Net deferred tax assets	​	$	1,107	​	$	141

​

As of December 31, 2022 and 2021, the Company had approximately $10.9 million and $20.8 million, respectively, of federal net operating loss carryforwards ("NOLs") available to offset future taxable income. The NOL as of December 31, 2017 of $0.3 million has an expiration period through 2037. The NOL generated during tax years beginning after December 31, 2017 of $10.9 million has an indefinite life and does not expire.

As of December 31, 2022 and 2021, management does not believe the Company has any material uncertain tax positions that would require it to measure and reflect the potential lack of sustainability of a position on audit in its consolidated financial statements. The Company will continue to evaluate its uncertain tax positions in future periods to determine if measurement and recognition in its consolidated financial statements is necessary. The Company does not believe there will be any material changes in its unrecognized tax positions over the next year.

X

- References

No definition available.

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- Definition

The entire disclosure for income taxes. Disclosures may include net deferred tax liability or asset recognized in an enterprise's statement of financial position, net change during the year in the total valuation allowance, approximate tax effect of each type of temporary difference and carryforward that gives rise to a significant portion of deferred tax liabilities and deferred tax assets, utilization of a tax carryback, and tax uncertainties information.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 740
-SubTopic 10
-Section 50
-Paragraph 21
-URI https://asc.fasb.org/extlink&oid=121826272&loc=d3e32857-109319

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 740
-SubTopic 10
-Section S99
-Paragraph 2
-Subparagraph (SAB Topic 11.C)
-URI https://asc.fasb.org/extlink&oid=122134291&loc=d3e330215-122817

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 740
-SubTopic 10
-Section 50
-Paragraph 17
-Subparagraph (b)
-URI https://asc.fasb.org/extlink&oid=121826272&loc=d3e32809-109319

Reference 4: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 740
-SubTopic 10
-Section S99
-Paragraph 1
-Subparagraph (SAB TOPIC 6.I.5.Q1)
-URI https://asc.fasb.org/extlink&oid=122134291&loc=d3e330036-122817

Reference 5: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 740
-SubTopic 10
-Section 50
-Paragraph 14
-URI https://asc.fasb.org/extlink&oid=121826272&loc=d3e32705-109319

Reference 6: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 740
-SubTopic 270
-Section 50
-Paragraph 1
-URI https://asc.fasb.org/extlink&oid=6424409&loc=d3e44925-109338

Reference 7: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 740
-URI https://asc.fasb.org/topic&trid=2144680

Reference 8: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 740
-SubTopic 30
-Section 50
-Paragraph 2
-Subparagraph (a)
-URI https://asc.fasb.org/extlink&oid=6424122&loc=d3e41874-109331

Reference 9: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 235
-SubTopic 10
-Section S99
-Paragraph 1
-Subparagraph (SX 210.4-08(h)(2))
-URI https://asc.fasb.org/extlink&oid=120395691&loc=d3e23780-122690

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