INCOME TAXES

6 Months Ended

Jun. 30, 2024

Income Tax Disclosure [Abstract]

INCOME TAXES

NOTE 10 – INCOME TAXES

The Company’s income tax expense (benefit) differs from the amounts computed by applying the federal income tax rate of 21% to income (loss) before federal income tax expense. These differences, historically, are primarily caused by state income taxes, net of federal tax benefit, income that is not taxable for federal and state income tax purposes, expenses that are not deductible for tax purposes, and tax adjustments related to prior federal income tax returns.

Specifically, these differences reflect: (i) a non-taxable $5.0 million preliminary bargain purchase gain in connection with the Merger for the six months ended June 30, 2024; and (ii) non-deductible merger costs, including success-based fees for completing the Merger, of $340,000, for the six months ended June 30, 2024, respectively.

During the three and six months ended June 30, 2024, the Company recorded an income tax provision of $351,000 and an income tax benefit of $1.7 million, reflecting an effective tax rate of 18.9% and 97.9%, respectively.

During the three and six months ended June 30, 2023, the Company recorded an income tax provision of $19,000 and $177,000, respectively, reflecting an effective tax rate of 15.7% and 24.4%, respectively. The lower tax rate in the three months ended June 30, 2023, reflects a favorable adjustment to the year-to-date tax accrual.