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Note 13 - Income Taxes
 12 Months Ended
Dec. 31, 2023
Notes to Financial Statements  
Income Tax Disclosure [Text Block]

13. INCOME TAXES

 

The components for income tax expense included in the accompanying Consolidated Statements of Operations for the years ended December 31, 2023 and 2022 are as follows (in thousands):

 

  

December 31, 2023

  

December 31, 2022

 

Current state income tax expense

 $118  $(108)

Current foreign income tax expense

  126   373 

Deferred federal income tax expense

  —   — 

Income tax expense from continuing operations

 $244  $265 
         

Income tax expense from discontinued operations

 $—  $149 

 

A reconciliation of income taxes computed using the 21% U.S. federal statutory rate to the amount reflected in the accompanying consolidated statement of operations within net loss from continuing operations for the years ended December 31, 2023 and 2022 is as follows (in thousands):

 

  

December 31, 2023

  

December 31, 2022

 

Income tax benefit using U.S. federal statutory rate

 $77  $(633)

State income tax expense

  26   (85)

Foreign income tax expense

  123   155 

Foreign tax rate difference

  263   377 

Non-deductible expenses

  65   447 

Change in valuation allowance

  (367)  1,677 

Capital loss carryforward

  —   (1,719)

Other

  57   46 

Total income tax expense from continuing operations

 $244  $265 

 

The effects of temporary differences and carryforwards that give rise to deferred tax assets (liabilities) are as follows (in thousands):

 

  

December 31, 2023

  

December 31, 2022

 

Federal net operating loss carryforward

 $11,737  $12,027 

Accrued interest to related parties, not deductible until paid

  —   — 

Stock compensation

  684   511 

Accrued compensation

  86   56 

Basis of intangible assets

  147   191 

Capital loss carryforward

  1,719   1,719 

Other

  —   28 

Valuation allowance

  (9,407)  (9,774)

Total deferred tax assets

  4,966   4,758 
         

Basis of property, plant and equipment

  3,636   4,139 

Prepaid expenses

  212   225 

Basis in foreign entity

  1,118   394 

Other

  —   — 

Total deferred tax liabilities

  4,966   4,758 

Net deferred tax liabilities

 $—  $— 

 

 

At December 31, 2023, the Company has net operating loss carry forwards of approximately $58.0 million which may be used to offset future taxable income. The net operating loss carryforwards include $42.8 million of losses arising prior to December 31, 2017 that expire in 2028 through 2037. Those arising in tax years after 2017 can be carried forward indefinitely. Also, for losses arising in taxable years beginning after December 31, 2017 the operating loss deduction is limited to 80% of taxable income (determined without regard to the deduction). Since the Company has not yet generated significant taxable income, a valuation allowance has been established to fully reserve the Company's net deferred tax assets at December 31, 2023. A change in ownership eliminated substantially all net operating loss carryforwards of an acquired subsidiary at July 26, 2019.

 

The Company recognizes the tax benefit or obligation from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities, based not only on the technical merits of the tax position based on tax law, but also past administrative practices and precedents of the taxing authority. The tax benefits or obligations are recognized in our financial statements if there is a greater than 50% likelihood of the tax benefit or obligation being realized upon ultimate resolution. As of the years ended December 31, 2023 and 2022, the Company had no uncertain tax positions that required recognition.

 

As of December 31, 2023, the Company's tax returns for years 2020 to 2022 remain subject to examination for both federal and state filings.