Note 8 - Income Taxes

12 Months Ended

Dec. 31, 2025

Notes to Financial Statements

Income Tax Disclosure [Text Block]

8. Income Taxes

Effective Tax Rate

The following table presents Income before income taxes by U.S. and foreign location in which such pre-tax income was earned or incurred:

	Year Ended December 31,
	2025		2024
United States	$	249	$	699
Total	$	249	$	699

Income tax provision (benefit) for the years ended December 31, 2025 and 2024 is as follows:

	Year Ended December 31,
	2025			2024
Current tax expense (benefit):
Federal	$	(611	)	$	208
State and local		137			(24	)
Total current tax (benefit) expense		(474	)		184
Deferred tax expense (benefit):
Federal		(27	)		(19	)
State and local		(5	)		12
Total before change in valuation allowance		(32	)		(7	)
Change in valuation allowance		—			—
Net deferred tax benefit		(32	)		(7	)
Total income tax (benefit) expense	$	(506	)	$	177

A reconciliation of the provision (benefit) for income taxes and the amount computed by applying the statutory federal income tax rate to Income before income taxes is detailed below:

	Year Ended December 31,
	2025						2024
	Amount			%			Amount			%
Income before income taxes	$	249					$	699
U.S. federal statutory tax rate		52			21.0	%		147			21.0	%
State and local income taxes, net of federal benefit (a)		104			41.8	%		(9	)		(1.3	%)
Foreign tax effects		—			0.0	%		—			0.0	%
Effect of changes in tax laws or rates enacted in the current period		—			0.0	%		—			0.0	%
Effect of cross-border tax laws
Foreign-derived intangible income		(3	)		(1.2	%)		(8	)		(1.2	%)
Tax credits		—			0.0	%		—			0.0	%
Changes in valuation allowances		—			0.0	%		—			0.0	%
Nontaxable or nondeductible items		—			0.0	%		2			0.3	%
Changes in unrecognized tax benefits		(648	)		(260.2	%)		88			12.6	%
Other adjustments
Income tax receivable (payable) true-up (b)		6			2.4	%		(9	)		(1.3	%)
Noncontrolling interests		(14	)		(5.6	%)		(19	)		(2.7	%)
Other, net		(3	)		(1.2	%)		(15	)		(2.1	%)
Effective tax rate	$	(506	)		(203.0	%)	$	177			25.3	%

^(a) For the year ended December 31, 2025, Florida and Massachusetts made up the majority (greater than 50%) of the tax effect in this category. For the year ended December 31, 2024, Florida, Massachusetts, and New York made up the majority (greater than 50%) of the tax effect of this category.

^(b) This item represents adjustments to align the Company's estimated federal and state income tax provision with the final amounts reported on the filed federal or state tax return, including differences in timing, deductions, and credits.

Deferred Tax Assets

Deferred income taxes for 2025 and 2024 were provided for the temporary differences between the financial reporting basis and the income tax basis of the Company's assets and liabilities. Tax effects of temporary differences and carryforwards as of  December 31, 2025 and 2024 were as follows:

	December 31,
	2025		2024
Deferred tax assets:
Inventory reserve	$	20	$	17
Allowance for doubtful accounts		12		12
Lease liability		58		72
Stock-based compensation		23		9
Depreciation and amortization		16		14
Federal tax loss carryforwards		—		72
Other reserves and accruals		119		35
Total deferred tax assets	$	248	$	231
Deferred tax liabilities:
Right-of-use asset		58		72
Total deferred tax liabilities		58		72
Net deferred tax assets before valuation allowance		190		159
Valuation allowance		—		—
Net deferred tax assets	$	190	$	159

The evaluation of the recoverability of our deferred tax asset and the need for a valuation allowance requires us to weigh all positive and negative evidence to reach a conclusion that is more likely than not that all or some of the deferred tax asset will not be realized. The weight given to the evidence is commensurate with the extent to which it can be objectively verified. The more negative evidence that exists, the more positive evidence is necessary and the more difficult it is to support a conclusion that a valuation allowance is not needed. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become realizable.

As of December 31, 2025 and 2024, the Company did not record a valuation allowance against its deferred tax assets.

Income Taxes Paid

Income taxes paid for the years ended  December 31, 2025 and 2024 are as follows:

	Year Ended December 31,
	2025		2024
Federal
United States	$	115	$	—
Total federal		115		—
State and local
Florida		39		—
Massachusetts		—		70
Other		8		6
Total state and local		47		76
Income taxes paid	$	162	$	76

Uncertain Tax Benefits

Significant judgment is required in determining our provision for income taxes. In the ordinary course of business, there are many transactions for which the ultimate tax outcome is uncertain. We review our tax contingencies on a regular basis and make appropriate accruals as necessary.

As of December 31, 2025, our unrecognized tax benefits totaled $118, and are included within Other liabilities on the Consolidated Balance Sheets. A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows:

	Year Ended December 31,
	2025			2024
Balance, beginning of year	$	766		$	678
Additions for tax positions related to prior years		13			88
Lapse of statute of limitations		(661	)		—
Balance, end of year	$	118		$	766

The Company will recognize any interest and penalties related to unrecognized tax positions in income tax expense. Net adjustments to accruals for interest and penalties associated with uncertain tax positions were immaterial as of December 31, 2025. The total amount of unrecognized tax benefits that, if recognized, would affect the effective tax rate is $118. We do not expect a significant change to the amount of unrecognized tax benefits over the next 12 months. We believe that the taxes accrued in our Consolidated Balance Sheet fairly represent the amount of income taxes to be settled or realized in the future.

Tax Regulatory Matters

The Company files a consolidated U.S. federal income tax return with our eligible subsidiaries. The Company also files income tax returns in various state and local jurisdictions including California, Florida, Massachusetts, New York, and Texas.

The statute of limitations for assessment by the Internal Revenue Service ("IRS") and state tax authorities is open for tax returns for years ended December 31, 2022, 2023 and 2024; although carryforward attributes that were generated prior to tax year 2022, including NOL carryforwards and tax credits, may still be adjusted upon examination by the IRS or state tax authorities, if they either have been or will be used in a future period. The Company received notice from the IRS of an examination of its federal tax returns for the year ended December 31, 2022, the outcome of which management is unable to determine at this time.

The Company is generally subject to examinations by foreign tax authorities from 2017 to the present.