Income Taxes (Tables)

12 Months Ended

Dec. 31, 2023

Income Tax Disclosure [Abstract]

Summary of Change in Valuation Allowance

The following table summarizes the change in the valuation allowance during 2022 and 2023, (in thousands):

Balance as of December 31, 2021	$	12,242
Change during 2022		(7,813	)
Balance as of December 31, 2022		4,429
Change during 2023		(2,205	)
Balance as of December 31, 2023	$	2,224

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):

	2023			2022
Expected federal statutory tax expense	$	2,939		$	2,311
Increase (reduction) in taxes resulting from:
State income taxes		996			470
Non-deductible expenses (permanent differences)		(196	)		(179	)
Change in valuation allowance		(2,205	)		(7,813	)
Other		(14	)		725
Income tax expense (benefit)	$	1,520		$	(4,486	)

Summary of Income tax expense/(benefit)

Income tax expense/(benefit) for the years ended December 31, 2023 and 2022 was comprised of the following (amounts in thousands):

	2023			2022
Current:
Federal	$	-		$	-
State		1,188			475
Total current provision for (benefit from) income taxes		1,188			475
Deferred:
Federal		465			(4,812	)
State		(133	)		(149	)
Total deferred provision for (benefit from) income taxes		332			(4,961	)
Total provision for (benefit from) income taxes	$	1,520		$	(4,486	)

Schedule of Deferred Tax Assets and Liabilities

The components of the net deferred tax assets as of December 31, 2023 and 2022 are as follows in (thousands):

	2023			2022
Deferred tax assets:
Net operating loss carry forwards	$	11,012		$	14,097
Stock based compensation		348			317
Intangibles		224			0
Operating lease liabilities		628			742
Equity method investments		239			—
Allowance for credit loss		176			—
Accruals		131			—
Other		137			280
Total gross deferred tax assets		12,895			15,436
Deferred tax liabilities:
Trade names		(708	)		(686	)
Customer relationships		(48	)		(27	)
Equity method investments		(28	)		—
Operating lease right-of-use assets		(599	)		(718	)
Other		(173	)		(127	)
Total gross deferred tax liabilities		(1,556	)		(1,558	)
Total deferred tax assets		11,339			13,878
Less: valuation allowance		(2,224	)		(4,429	)
Deferred tax assets, net of valuation allowance	$	9,115		$	9,449

The Inflation Reduction Act (“IRA”) was enacted on August 16, 2022. The IRA has not had a material impact to the Company’s financial statements for the tax years ended December 31, 2023 or 2022 and management does not believe it will have a material impact on the Company's financial statements in future tax years.