Income Taxes (Tables)

12 Months Ended

Dec. 31, 2022

Income Tax Disclosure [Abstract]

Summary of Change in Valuation Allowance

The following table summarizes the change in the valuation allowance during 2021 and 2022, (in thousands):

Balance as of December 31, 2020	$	13,097
Change during 2021		(855	)
Balance as of December 31, 2021		12,242
Change during 2022		(7,813	)
Balance as of December 31, 2022	$	4,429

Schedule of Components of Income Tax Expense (Benefit)

The reported tax expense varies from the amount that would be provided by applying the statutory U.S. Federal income tax rate to the income before income tax expense for the following reasons in each of the years ended December 31, (in thousands):

	2022			2021
Expected federal statutory tax expense	$	2,311		$	628
Increase (reduction) in taxes resulting from:
State income taxes		470			43
Non-deductible expenses (permanent differences)		(179	)		(707	)
Change in valuation allowance		(7,813	)		(855	)
Other		725			830
Income tax benefit	$	(4,486	)	$	(61	)

Schedule of Deferred Tax Assets and Liabilities

The components of the net deferred tax assets as of December 31, 2022 and 2021 are as follows in (thousands):

	2022			2021
Deferred tax assets:
Net operating loss carry forwards	$	14,097		$	16,824
Stock based compensation		317			1,095
Operating lease liabilities		742			719
Other		280			262
Total gross deferred tax assets		15,436			18,900
Deferred tax liabilities:
Trade names		(686	)		(734	)
Customer relationships		(27	)		(7	)
Equity method investments		—			(479	)
Operating lease right-of-use assets		(718	)		(704	)
Other		(127	)		(246	)
Total gross deferred tax liabilities		(1,558	)		(2,170	)
Total deferred tax assets		13,878			16,730
Less: valuation allowance		(4,429	)		(12,242	)
Deferred tax assets, net of valuation allowance	$	9,449		$	4,488

The Inflation Reduction Act (“IRA”) was enacted on August 16, 2022. The company does not expect the IRA will have a material impact to the Company’s financial statements when it becomes effective for the tax years after December 31, 2022.