Income Tax Provision

12 Months Ended

Jan. 31, 2024

Income Tax Disclosure [Abstract]

Income Tax Provision

Income Tax Provision

The income tax provision consists of the following:

Income tax provision / (benefit) consists of the following (in thousands):

	January 31, 2024		January 31, 2023
Federal
Current	$	1,451	$	113
Deferred	251		(184)
State and Local
Current	342		165
Deferred	(36)		(85)
Income tax provision	$	2,008	$	9

The Company had U.S. federal net operating loss carryovers (NOLs) of approximately $0.0 million and $2.7 million at January 31, 2024 and 2023, respectively, available to offset taxable income through 2034. The Company also has State NOLs of approximately $8.8 million and $8.8 million at January 31, 2024 and 2023, respectively, available to offset future taxable income through 2036.

In assessing the realization of deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon future generation of taxable income during the periods in which temporary differences representing net future deductible amounts become deductible. Management considers the scheduled reversal of deferred tax liabilities, projected future taxable income and tax planning strategies in making this assessment. There was no valuation allowance as of January 31, 2024 and 2023.

The Company evaluated the provisions of ASC 740 related to the accounting for uncertainty in income taxes recognized in an enterprise’s financial statements. ASC 740 prescribes a comprehensive model for how a company should recognize, present, and disclose uncertain positions that the Company has taken or expects to take in its tax return. For those benefits to be recognized, a tax position must be more-likely-than-not to be sustained upon examination by taxing authorities. Differences between tax positions taken or expected to be taken in a tax return and the net benefit recognized and measured pursuant to the interpretation are referred to as “unrecognized benefits.” A liability is recognized (or amount of net operating loss carry forward or amount of tax refundable is reduced) for unrecognized tax benefit because it represents an enterprise’s potential future obligation to the taxing authority for a tax position that was not recognized as a result of applying the provisions of ASC 740.

If applicable, interest costs related to the unrecognized tax benefits are required to be calculated and would be classified as “Other expenses – Interest” in the consolidated statements of operations. Penalties would be recognized as a component of “Selling, general and administrative expenses.”

No interest or penalties on unpaid tax were recorded during the years ended January 31, 2024 and 2023, respectively. As of January 31, 2024 and 2023, no liability for unrecognized tax benefits was required to be reported. The Company does not expect any significant changes in its unrecognized tax benefits in the next year.

The Company’s deferred tax assets and liabilities consisted of the effects of temporary differences attributable to the following:

Deferred Tax Assets	Year Ended January 31, 2024		Year Ended January 31, 2023
Net operating loss carryovers	$	24	$	607
Share-based compensation	52		32
Acquisition costs	98		108
Capitalized start-up and organization costs	16		24
Right of use liability	722		820
Inventory	47		27
Bad debt	23		49
Capitalized R&D Costs	114		-
Accrued payroll	387		—
Total deferred tax assets	1,483		1,667
Deferred Tax Liabilities
Fixed assets	225		65
Intangibles	46		77
Right of use asset	709		807
Total deferred tax liabilities	980		949
Net deferred tax asset	$	503	$	718

The expected tax provision (benefit) based on the statutory rate is reconciled with actual tax provision (benefit) as follows:

	Year Ended January 31, 2024		Year Ended January 31, 2023
US Federal statutory rate	21.0	%	21.0	%
State income tax, net of federal benefit	3.3		3.4
Adjustments to deferred tax assets	(0.8)		(24.0)
Income tax provision (benefit)	23.4	%	0.4	%