INCOME TAXES (Tables)

12 Months Ended

Dec. 31, 2025

Schedule of Foreign and Domestic Income Before Tax

The domestic and foreign components of net income before provision for income taxes is as follows:


	Year ended December 31,
	2025		2024
Domestic	$	(3,725)	$	(31,531)
Foreign	(131)		28,061
(Loss) income before provision for income taxes	$	(3,856)	$	(3,470)

Schedule of components of Income Tax Expense (Benefit)

The components of the provision for (benefit from) income taxes are as follows:


	Year ended December 31,
	2025		2024
Current tax provision (benefit):
U.S. Federal	$	—	$	—
State and local	31		(15)
Foreign	1,088		783
Total current provision for (benefit from) income taxes	1,119		768
Deferred tax provision (benefit):
U.S. Federal	—		—
State and local	—		—
Foreign	942		532
Total deferred provision (benefit) from income taxes	942		532
Total provision for income taxes	$	2,061	$	1,300

Schedule of Cash Flow, Supplemental Disclosures


	Year ended December 31,
	2025
Income taxes paid:
U.S. Federal	$	95


State and local	163
Foreign
Australia	1,233
U.K.	233
India	134
Other	37
Total Foreign	1,637
Total income taxes paid	$	1,895

Schedule of Effective Income Tax Rate Reconciliation

The following is a reconciliation of the effective tax rate for the year ended December 31, 2025 to the U.S. federal statutory rate of 21%:


	Year ended December 31, 2025
	Amount		Percent
US federal statutory income tax rate	$	(810)	21.0	%
Domestic federal

Nontaxable and nondeductible items
Nondeductible employee compensation	151		(3.9)	%
Nondeductible professional fees	471		(12.2)	%
Nondeductible share based compensation	376		(9.7)	%
Other	149		(3.9)	%
Changes in valuation allowance	(9,188)		238.2	%
Operating losses expired	8,833		(229.0)	%

Domestic state and local income taxes, net of federal effect1	32		(0.8)	%
Foreign tax effects
United Arab Emirates
Changes in valuation allowance	329		(8.5)	%
Australia
Statutory income tax rate differential	385		(10.0)	%
Noncreditable withholding tax	41		(1.1)	%
United Kingdom
Deferred investment impairment true‑up and NOL carryback	1,111		(28.8)	%
Other	13		(0.3)	%
Other foreign jurisdictions	162		(4.2)	%
Worldwide changes in unrecognized tax benefits	6		(0.2)	%
Provision for income taxes	$	2,061	(53.4)	%

1.State and local income taxes in Pennsylvania and Texas comprise the majority of the domestic state and local income taxes, net of federal effect category

The following is a reconciliation of the effective tax rate for the year ended December 31, 2024 to the U.S. federal statutory rate of 21%:


	Year ended December 31,
		2024
Provision at federal statutory rates		$	(729)
State income taxes, net of federal benefit		1,133
Change in valuation allowance		6,817
Taxes related to foreign income		(1,506)
Non-deductible expenses		(4,943)


Uncertain tax positions		6
Prior period adjustments		395
Permanent differences and other		127
Provision for income taxes		$	1,300

Schedule of Deferred Tax Assets and Liabilities

Net deferred tax assets have been reported as non-current in the accompanying Consolidated Balance Sheets. Significant temporary differences at December 31, 2025 and 2024 are as follows:


	As of December 31,
	2025		2024
Deferred tax assets (liabilities):
Allowance for expected credit losses	$	89	$	108
Property and equipment	(7,383)		(170)
Goodwill and intangibles	4,863		714
Accrued compensation	1,417		1,786
Accrued liabilities and other	4,607		29
Loss carryforwards	65,855		73,672
Deferred tax assets before valuation allowance	69,448		76,139
Valuation allowance	(67,537)		(73,491)
Deferred tax assets, net of valuation allowance	$	1,911	$	2,648

Schedule of Income Tax Contingencies

A reconciliation of the beginning and ending amount of unrecognized tax benefits, excluding interest and penalties is as follows:


	2025		2024
Balance, beginning of year	$	60	$	60
Additions for tax positions of current years	—		—
Additions for tax positions of prior years	—		—
Reductions for tax positions of prior years	—		—

Expiration of applicable statutes of limitations	—		—

Balance, end of year	$	60	$	60

Star Equity Holdings, Inc. 10-K