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Income Taxes
 12 Months Ended
Dec. 31, 2023
Income Tax Disclosure [Abstract]  
Income Taxes

 

(8)Income Taxes

 

Our net income tax provision, including both current and deferred, related to U.S. federal and state income taxes, is $6. Our current federal and deferred tax expenses are zero.

 

A reconciliation of income tax benefit to the amount computed by applying the Federal income tax rate to loss before provision for income taxes as of December 31, 2023 and 2022 is as follows:

 

   2023   2022 
Income tax credit at statutory rates  $(921)  $(551)
Over/Under Accrual of Income Taxes   (3)   (17)
Nondeductible Expenses   23    —   
Record Tax Credits   (118)   —   
Permanent tax deduction stock options exercised   (63)   (273)
State income tax, net of federal benefits   (165)   (124)
Expiration of NOL & credits   1,492    1,149 
Effect of change in deferred tax rate   45    69 
Expiration of stock options   60    75 
Other   —      2 
Change in valuation allowance   (344)   (347)
   $6    (17)

 

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 amounts used for income tax purposes. Significant components of our deferred income taxes consist of the following:

 

         
   As of December 31, 
   2023   2022 
Deferred tax liabilities:          
  Excess tax depreciation  $(477)   (253)
ASC 892 Operating Lease Asset   (1,975)    —   
     Total deferred tax liabilities   (2,452)   (253)
           
Deferred tax assets:          
  Net operating loss carryforwards  $12,020   $13,416 
  179 Carryforwards   245    117 
  163(j) Business interest limitation carryforwards   302    98 
  Deferred revenue   —      202 
  Inventory and other allowances   239    177 
  Excess (tax) book depreciation   —      —   
  Excess (tax) book amortization   60    59 
  174 research & experimental expenditures   902    480 
  Share-based compensation   530    394 
  Tax Credits   118    —   
ASC 892 Operating Lease Liability    2,610   —   
  Other accrued costs   13    238 
     Total deferred tax assets   17,039    15,181 
           
  Less: Valuation allowance   (14,587)   (14,928)
Deferred income taxes  $—     $—   

 

The valuation allowance decreased approximately $0.3 million and $0.3 million for the years ended December 31, 2023 and 2022, respectively (net of approximately $7.1 million and $5.5 million for the years ended December 31, 2023 and 2022, respectively, for expiring net operating loss carryforwards and credits) due principally to the change in the net operating loss carryforward and uncertainty as to whether future taxable income will be generated prior to the expiration of the carryforward period. Under the Internal Revenue Code, certain ownership changes, including the prior issuance of preferred stock and our public offering of common stock, may subject us to annual limitations on the utilization of our net operating loss carryforward. As of December 31, 2023, it has been determined that we are not subject to annual limitations on the utilization of our net operating loss carryforward.

 

We have federal net operating loss carryforwards for tax purposes of approximately $50 million on December 31, 2023. $44 million expire between 2024 and 2037. We have section 179 carryforwards of approximately $0.2M at December 31, 2023. All net operating loss carryforwards generated after January 1, 2018 do not expire. Therefore, $5.6 million in net operating losses generated since January 1, 2018 do not expire. We have Illinois net loss deduction carryforwards for tax purposes of approximately $21.3 million on December 31, 2023. Due to the provisions of Illinois Public Act 102-0669 signed November 16, 2021, Illinois net loss deductions expire between 2029 and 2039.