XML 25 R15.htm IDEA: XBRL DOCUMENT v3.25.3
Note 9 - Income Taxes
 9 Months Ended
Sep. 30, 2025
Notes to Financial Statements  
Income Tax Disclosure [Text Block]

Note 9 — Income Taxes

 

The following table summarizes the Company's income tax expense and effective tax rates for the three and nine months ended September 30, 2025 and 2024:

 

  

Three Months Ended

  

Nine Months Ended

 
  

September 30,

  

September 30,

  

September 30,

  

September 30,

 
  

2025

  

2024

  

2025

  

2024

 
                 

Income (loss) before income taxes

 $(1,955) $501  $(5,972) $(3,297)

Income tax expense (benefit)

  (28)  (126)  112   (72)

Effective tax rate

  1.4%  (25.1%)  (1.9%)  2.2%.

 

 

The Company’s quarterly income tax provision is calculated under the discrete method, which treats the interim period as if it were the annual period and determines the income tax expense or benefit on that basis. The discrete method is applied when application of the estimated annual effective income tax rate is impractical because it is not possible to reliably estimate the annual effective tax rate. The Company believes, at this time, the use of this discrete method is more appropriate as the annual effective income tax rate cannot be reliably estimated given the Company's full valuation allowance recorded on its net deferred tax assets and annual utilization limitations that prevent the Company from fully offsetting its expected current income tax liabilities with its available net operating losses and income tax credits.

 

The Company's quarterly income tax provision calculated under the discrete method for the period ended September 30, 2025 captures the income tax effects of the One Big Beautiful Bill Act (“OBBBA”), which was enacted on July 4, 2025. The Company's current income tax expense for the period ended September 30, 2025 includes the benefit of the OBBBA restoring the ability to immediately deduct domestic research & experimental expenditures under Internal Revenue Code Section 174. The Company did not record any deferred income tax expense or benefit related to the OBBBA tax law changes during the period ended September 30, 2025 as the Company continues to record a full valuation allowance against its net deferred tax assets.

 

The effective tax rate for the three months and nine months ended September 30, 2025 varies from the three months and nine months ended September 30, 2024 primarily as a result of the Company's valuation allowance recorded against its net deferred tax assets and annual tax attribute limitations that result in current income tax expense. Income taxes paid during the nine months ended September 30, 2025 and 2024 were $117 and $181, respectively.