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Note 16 - Income Taxes
 12 Months Ended
Dec. 31, 2023
Notes to Financial Statements  
Income Tax Disclosure [Text Block]

(16) Income Taxes

 

The provision for income taxes reflects current taxes and deferred taxes. The effective tax rate for each of the years ended  December 31, 2023 and 2022 was 0%. The Company continues to provide for a valuation allowance to offset its net deferred tax assets until such time it is more likely than not the tax assets or portions thereof will be realized.

 

Components of the provision for income taxes allocated to continuing operations include the following:

 

  Year Ended December 31, 
  

2023

  

2022

 

Current:

        

Federal

 $(141) $(60)

State

  (9)  (20)

Foreign

  (37)  (34)

Sub-total

 $(187) $(114)

Deferred:

        

Federal

 $(17) $17 

State

  —   — 

Foreign

  —   — 

Sub-total

 $(17) $17 

Total

 $(204) $(97)

 

The reconciliation of the statutory federal income tax rate to the Company’s effective income tax rate is as follows:

 

  Year Ended      Year Ended     
  

December 31,

      

December 31,

     
  

2023

  

%

  

2022

  

%

 

Income taxes computed at statutory rates

 $9,609   (21)% $12,537   (21)%

(Increases) decreases resulting from:

                

Change in valuation allowance

  (11,716)  26%  (13,463)  22%

NOL surrendered for refundable tax credit

  (1,607)  4%  (2,164)  4%

Foreign research deductions and credits

  803   (2)%  1,329   (2)%

Federal and state research and experimentation credits

  1,412   (3)%  1,037   (2)%

State income taxes, net of federal tax benefit

  468   (1)%  491   (1)%

Other

  827   (3)%  136   —%

Total

 $(204)  —% $(97) $— 

 

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. The tax effects of significant items comprising the Company’s deferred tax assets and deferred tax liabilities are as follows:

 

  

December 31,

  

December 31,

 
  

2023

  

2022

 

Deferred tax assets:

        

Federal and state net operating losses

 $77,201  $74,270 

Federal and state research and experimentation credits

  12,406   10,869 

Research and experimental costs

  9,458   4,837 

ASC 842 - lease liabilities

  1,468   1,508 

Stock based compensation

  1,474   482 

Fixed asset differences

  185   87 

Goodwill

  —   36 

Accrued compensation

  610   69 

Other

  59   43 

Total gross deferred tax assets

  102,861   92,201 

Less valuation allowance

  (95,256)  (83,000)

Net deferred tax assets

 $7,605  $9,201 
         

Deferred tax liabilities:

        

Patent expenditures

 $(1,096) $(1,464)

ASC 842 - right of use assets

  (897)  (1,049)

Fixed asset differences

  (9)  (28)

Intangible asset differences

  (5,603)  (6,644)

Total gross deferred tax liabilities

 $(7,605) $(9,185)

Total net deferred tax assets and liabilities

 $—  $16 

 

The Company had a valuation allowance of $95,256 and $83,000 on deferred tax assets as of  December 31, 2023 and 2022, respectively, an increase of $12,256 during the year ended December 31, 2023.

 

As of December 31, 2023, the Company has federal, state, and foreign net operating loss carryforwards of $247,472, $178,519, and $68,925 respectively, which have a carryforward of 5 years to indefinite depending on the jurisdiction.

 

As of  December 31, 2023, the Company has federal and state research and experimental tax credits of $13,469 and $11,915, respectively, which have a carryforward of 20 years.

 

A summary reconciliation of the Company’s uncertain tax positions is as follows:

 

  Year Ended December 31, 
  

2023

  

2022

 

Beginning balance

 $1,046  $918 

Addition for current year tax positions

  94   98 

Addition for prior year tax positions

  —   30 

Reduction for prior year positions

  (77)  — 

Reduction for prior year positions resolved during the current year

  —   — 

Ending balance

 $1,063  $1,046 

 

The Company records accrued interest and penalties associated with uncertain tax positions in the “provision for income taxes” in the Consolidated Statements of Operations. For the years ended  December 31, 2023 and 2022, the Company recognized accrued interest and penalties associated with uncertain tax positions of $0 and $0, respectively. The Company does not anticipate any of its unrecognized benefits will significantly increase or decrease within the next 12 months.

 

The Company’s open tax years subject to examination in the U.S. federal jurisdiction are 2020 through 2022, in applicable state jurisdictions for the tax years 2020 through 2022, and in applicable foreign jurisdictions for tax year 2022. To the extent allowed by law, the taxing authorities may have the right to examine prior periods where net operating losses or tax credits were generated and carried forward, and make adjustments up to the amount of the net operating loss or tax credit carryforward.