Income taxes

12 Months Ended

Dec. 31, 2023

Income Tax Disclosure [Abstract]

Income taxes

Note 10 – Income taxes

The provision for income taxes consists of the following:

	For the Years Ended December 31,
	2023			2022
Current:
Federal	$	3,591		$	645
State and local		1,719			444
Total current		5,310			1,089
Deferred		(28	)		(172	)
Provision for income taxes	$	5,282		$	917

The following is a reconciliation of income tax expense computed at the U.S. federal statutory tax rate to income tax expense reported in the consolidated statement of operations:

	2023				2022
	Amount		Percentage		Amount			Percentage
Federal income tax at statutory rate	$	3,496		21.0%	$	392			21.0%
State and local tax, net		1,126		6.8%		287			15.4%
Other permanent differences		17		0.1%		8			0.4%
Section 162m		435		2.6%		229			12.2%
Stock based compensation		203		1.2%		127			6.8%
Change in tax rates		5		0.0%		(83	)		(4.4%	)
Other		–		–%		(43	)		(2.3%	)
Provision for income taxes	$	5,282		31.7%	$	917			49.1%

The tax effects of temporary differences giving rise to deferred income tax assets and liabilities were:

	December 31,
	2023			2022
Deferred tax liabilities attributable to:
Accumulated depreciation and amortization	$	(3,519	)	$	(3,394	)
Unrealized gains		(469	)		(472	)
Total deferred tax liabilities		(3,988	)		(3,866	)
Deferred tax assets attributable to:
Net operating losses		6			6
Accrued compensation		403			287
Incentive compensation		301			194
Inventory		280			328
Allowances for doubtful accounts and discounts		3			5
Other		(6	)		17
Total net deferred tax assets		987			837
Net deferred tax liabilities	$	(3,001	)	$	(3,029	)

The following table details the Company’s tax attributes related to net operating losses for which it has recorded deferred tax assets.

Tax Attributes	Gross Amount		Net Amount		Expiration Years
State net operating losses	$	116	$	6	2035
			$	6

A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows:

	2023		2022
Balance at January 1	$	–	$	396
Additions based on tax positions of prior years		–		–
Settlement for tax positions of prior years		–		(396	)
Balance at December 31	$	–	$	–

Lifeway is subject to U.S. federal income tax as well as income tax in multiple state and city jurisdictions. With limited exceptions, Lifeway’s calendar year 2020 and subsequent federal and state tax years remain open by statute. As of December 31, 2023, the unrecognized tax benefit is $0.

The amount of interest and penalties recognized in the consolidated statements of operations was $0 during 2023 and 2022, respectively. The amount of accrued interest and penalties recognized in the consolidated balance sheets was $0 at December 31, 2023 and 2022, respectively.