Income Taxes

12 Months Ended

Dec. 31, 2025

Income Tax Disclosure [Abstract]

Income Taxes

Income Taxes

The provision for income taxes for the years ended December 31, 2025 and 2024, respectively, consisted of:

	Year Ended December 31,
	2025		2024
	(in thousands)
Current
Federal	$	6,169	$	11,594
State	1,934		2,048
	8,103		13,642
Deferred
Federal	2,117		(3,428)
State	138		(343)
	2,255		(3,771)
Provision for income taxes	$	10,358	$	9,871

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, 2025		December 31, 2024
	(in thousands)
Deferred tax assets:
State taxes	$	386	$	402
Reserves	782		666
Accruals and deferred expenses	179		1,592
Inventory	1,452		1,137
Government grant	328		328
Stock-based compensation	479		537
Capitalized research and development costs	165		1,852
Operating lease liabilities	14,903		14,118
Total deferred tax assets	18,674		20,632
Deferred tax liabilities:
Fixed assets – depreciation	(8,069)		(8,504)
Investment in Global Wells Investment Group	(77)		(176)
Operating ROU asset	(13,209)		(12,378)
Total deferred tax liabilities	(21,355)		(21,058)
Net deferred tax liability	$	(2,681)	$	(426)

Reconciliation of income taxes are as follows from statutory rate of 21% to the effective tax rate for the year ended December 31, 2025 and 2024, respectively:

	December 31, 2025		December 31, 2024
	(in thousands)
Income tax computed at the federal statutory rate	$	9,034	$	8,546
State taxes, net of federal tax benefits	1,552		1,459
Noncontrolling interest - Income not subject to tax	(252)		(241)
Permanent items	14		22
Excess tax liability (benefit) from stock-based compensation	7		19
Research and development credit	(71)		(76)
Others	74		142
Provision for income taxes	$	10,358	$	9,871

On July 4, 2025, the President signed H.R. 1, the “One Big Beautiful Bill Act,” into law. The legislation includes several changes to federal tax law that generally allow for more favorable deductibility of certain business expenses beginning in 2025, including the restoration of immediate expensing of domestic research and development expenditures, reinstatement of 100% bonus depreciation, and more favorable rules for determining the limitation on business interest expense. These changes, primarily timing differences with no net impact, were incorporated in the income tax provision for the year ended December 31, 2025.

The Company remains subject to IRS examination for the 2022 through 2024 tax years. Additionally, the Company files multiple state and local income tax returns and remains subject to examination in various jurisdictions for the 2021 through 2024 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. In October 2025, the Company received a notice from the IRS that its 2023 federal income tax return was selected for examination. As of both December 31, 2025 and 2024, the Company did not have any unrecognized tax benefit.

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, 2025, and 2024, based on the available evidence, the Company did not record any valuation allowance.