Income Taxes

12 Months Ended

Dec. 31, 2024

Income Tax Disclosure [Abstract]

Income Taxes

Income Taxes

The provision for income taxes for the years ended December 31, 2024 and 2023, respectively, consisted of:

	Year Ended December 31,
	2024		2023
	(in thousands)
Current
Federal	$	11,594	$	8,987
State	2,048		1,776
	13,642		10,763
Deferred
Federal	(3,428)		(1,052)
State	(343)		93
	(3,771)		(959)
Provision for income taxes	$	9,871	$	9,804

Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amount used for federal and state income tax purposes.

The Company’s deferred tax assets (liabilities), calculated using effective tax rates is as follows:

	December 31, 2024		December 31, 2023
	(in thousands)
Deferred tax assets:
State taxes	$	402	$	436
Reserves	666		503
Accruals and deferred expenses	1,592		794
Research and development credit	—		40
Inventory	1,137		1,012
Government grant	328		—
Stock-based compensation	537		282
Capitalized research and development costs	1,852		1,741
Operating lease liabilities	14,118		9,140
Total deferred tax assets	20,632		13,948
Deferred tax liabilities:
Fixed assets – depreciation	(8,504)		(9,902)
Investment in Global Wells Investment Group	(176)		(234)
Operating ROU asset	(12,378)		(8,009)
Total deferred tax liabilities	(21,058)		(18,145)
Net deferred tax liability	$	(426)	$	(4,197)

Reconciliation of income taxes are as follows from statutory rate of 21% to the effective tax rate for the year ended December 31, 2024 and 2023, respectively:

	December 31, 2024		December 31, 2023
	(in thousands)
Income tax computed at the federal statutory rate	$	8,546	$	8,988
State taxes, net of federal tax benefits	1,459		1,609
Noncontrolling interest - Income not subject to tax	(241)		(115)
Permanent items	22		42
Excess tax liability (benefit) from stock based compensation	19		(187)
Research and development credit	(76)		(417)
Others	142		(116)
Provision for income taxes	$	9,871	$	9,804

The Company may be audited by the Internal Revenue Service and various state tax authorities. Disputes may arise with these tax authorities involving issues of the timing and amount of deductions and allocations of income and expenses among various tax jurisdictions because of differing interpretations of tax laws and regulations. The Company evaluates its exposures associated with the tax filing positions and, while it believes its positions comply with applicable laws, may record liabilities based upon estimates of the ultimate outcome of these matters and the guidance provided in ASC 740. As of December 31, 2024 and 2023, the Company does not have any unrecognized tax benefit.

The Company remains subject to IRS examination for the 2021 through 2023 tax years. Additionally, the Company files multiple state and local income tax returns and remains subject to examination in various of these jurisdictions for the 2020 through 2023 tax years. The Company continues to work with the IRS relating to the 2016 and 2017 tax years and does not expect a material impact to the financial statements.

ASC 740, Income Taxes, provides for the recognition of deferred tax assets if realization of these assets is more-likely-than-not. In evaluating the Company’s ability to recover its deferred tax assets, the Company considers all available positive and negative evidence, including its operating results, ongoing tax planning and forecasts of future taxable income

on a jurisdiction-by-jurisdiction basis. Based upon the level of historical taxable income, at this time, the Company determined that sufficient positive evidence existed to conclude that it is more likely than not there will be full utilization of the deferred tax assets in each jurisdiction. As such, as of December 31, 2024, and 2023, based on the available evidence, the Company did not record any valuation allowance.