Income Taxes

12 Months Ended

Dec. 31, 2021

Income Tax Disclosure [Abstract]

Income Taxes

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

	Years Ended December 31,
($ in thousands)	2021		2020
Current:
Federal	$	—	$	(202)
State and local		86		66
Total current		86		(136)
Deferred:
Federal		(2,376)		(3,538)
State and local		(816)		(844)
Total deferred		(3,192)		(4,382)
Total benefit	$	(3,106)	$	(4,518)

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

	Years Ended December 31,
	2021		2020
U.S. statutory federal rate	21.00	%	21.00	%
State and local rate, net of federal tax	4.64		4.54
Stock compensation	(5.56)		(1.94)
Excess compensation deduction	(0.68)		(0.51)
Foreign tax credits	—		0.11
Federal true-ups	(0.10)		—
Life insurance	(0.10)		(0.04)
Net operating loss carryback	—		0.56
Paycheck Protection Program addback	—		2.18
Change in tax rate	0.06		—
Other permanent differences	(0.01)		(0.01)
Income tax benefit	19.25	%	25.89	%

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

	December 31,
($ in thousands)	2021		2020
Deferred tax assets
Stock-based compensation	$	1,274	$	2,440
Federal, state and local net operating loss carryforwards		6,684		2,907
Accrued compensation and other accrued expenses		728		664
Allowance for doubtful accounts		309		329
Basis difference arising from discounted note payable		11		11
Foreign tax credit		219		219
Charitable contribution carryover		77		63
Property and equipment		488		321
Interest expense		602		—
Total deferred tax assets		10,392		6,954
Deferred tax liabilities
Basis difference arising from intangible assets of acquisition		(10,251)		(10,006)
Total deferred tax liabilities		(10,251)		(10,006)
Net deferred tax assets (liabilities)	$	141	$	(3,052)

As of December 31, 2021 and 2020, the Company had approximately $23.7 million and $10.1 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 $23.4 million has an indefinite life and does not expire.

As of December 31, 2021 and 2020, 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.