Income Taxes (Tables)
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12 Months Ended |
Dec. 31, 2024 |
Income Tax Disclosure [Abstract] |
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Schedule of Components of Income Tax Expense |
Income tax expense reported in the consolidated income statements is comprised of the following:
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December 31, |
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2024 |
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2023 |
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Current expense: |
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Federal |
$ |
— |
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$ |
— |
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State, net of state tax credits |
62,142 |
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101,232 |
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Total current expense |
62,142 |
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101,232 |
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Deferred expense (benefit): |
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Federal |
— |
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8,545,086 |
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State |
— |
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2,377,093 |
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Total deferred expense (benefit) |
— |
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10,922,179 |
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Total income tax expense |
$ |
62,142 |
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$ |
11,023,411 |
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Schedule of Deferred Tax Assets and Liabilities |
The following are the components of the Company’s deferred tax assets (liabilities) for federal and state income taxes reported in the consolidated balance sheets:
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December 31, |
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2024 |
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2023 |
Deferred income tax assets: |
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Accrued expenses |
$ |
1,607,324 |
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$ |
424,865 |
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Deferred revenue |
3,909,556 |
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4,269,104 |
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Lease liability |
5,710,136 |
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6,697,111 |
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Goodwill - component 2 |
55,368 |
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63,328 |
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Asset basis difference related to property and equipment |
560,818 |
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— |
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Nonqualified stock options |
322,376 |
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378,208 |
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Net operating loss carryforwards |
3,095,071 |
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3,337,155 |
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Tax credits |
35,850 |
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35,850 |
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Intangibles |
3,921,752 |
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3,932,350 |
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Restricted stock compensation |
90,471 |
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65,886 |
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Total deferred income tax assets |
19,308,722 |
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19,203,857 |
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Deferred income tax liabilities: |
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Lease right-of-use asset |
(5,392,996) |
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(5,852,353) |
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Deferred franchise costs |
(75,284) |
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(108,148) |
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Goodwill - component 1 |
(807,823) |
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(673,278) |
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Asset basis difference related to property and equipment |
— |
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(1,853,103) |
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Total deferred income tax liabilities |
(6,276,103) |
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(8,486,882) |
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Valuation allowance |
(13,032,619) |
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(10,774,128) |
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Net deferred tax liabilities |
$ |
— |
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$ |
(57,153) |
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Schedule of Effective Income Tax Reconciliation |
The following is a reconciliation of the statutory federal income tax rate applied to pre-tax accounting net (loss) income, compared to the income tax expense in the consolidated income statements:
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For the Years Ended December 31, |
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2024 |
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2023 |
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Amount |
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Percent |
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Amount |
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Percent |
Expected federal tax expense |
$ |
(309,702) |
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21.0 |
% |
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$ |
53,341 |
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21.0 |
% |
Meals and entertainment |
30,460 |
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(2.1) |
% |
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31,055 |
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12.2 |
% |
State tax provision (benefit), net of federal benefit |
62,142 |
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(4.2) |
% |
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69,794 |
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27.5 |
% |
Section 162(m) limitation on compensation |
85,992 |
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(5.8) |
% |
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— |
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— |
% |
Other permanent differences |
26,576 |
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(1.8) |
% |
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15,664 |
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6.2 |
% |
Change in VA |
9,521 |
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(0.6) |
% |
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10,692,253 |
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4,209.5 |
% |
Stock compensation |
(119,263) |
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8.1 |
% |
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(2,030) |
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(0.8) |
% |
Change in tax rate |
123,722 |
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(8.4) |
% |
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171,007 |
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67.3 |
% |
Return to provision |
(25,025) |
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1.7 |
% |
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(146,638) |
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(57.7) |
% |
Uncertain tax position - net impact |
212,687 |
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(14.4) |
% |
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138,585 |
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54.6 |
% |
Other adjustments |
(34,968) |
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2.4 |
% |
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380 |
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0.1 |
% |
Expense |
$ |
62,142 |
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(4.2) |
% |
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$ |
11,023,411 |
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4,339.9 |
% |
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Schedule of Uncertain Tax Positions Roll Forward |
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December 31, |
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2024 |
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2023 |
Beginning balances |
$ |
1,175,766 |
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$ |
1,314,351 |
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Increases related to tax positions taken during a prior year |
— |
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— |
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Decreases related to tax positions taken during a prior year |
— |
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— |
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Increases related to tax positions taken during a current year |
— |
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— |
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Decreases related to settlements with taxing authorities |
— |
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— |
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Decreases related to expiration of the statute of limitations |
(227,584) |
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(138,585) |
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Ending balances |
$ |
948,182 |
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$ |
1,175,766 |
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