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Note 18 - Income Taxes | 12 Months Ended
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Dec. 31, 2021
Notes to Financial Statements |
Income Tax Disclosure [Text Block] | NOTE 18. INCOME TAXES For the years ended December 31, 2021, 2020 and 2019, loss before provision for income taxes consisted of the following (in thousands):
|  | Year Ended December 31, |
|  | 2021 |  |  | 2020 |  |  | 2019 |
United States |  | $ | (5,824 | ) |  | $ | (11,034 | ) |  | $ | (9,652 | )
International |  |  | — |  |  |  | — |  |  |  | — |
|  | $ | (5,824 | ) |  | $ | (11,034 | ) |  | $ | (9,652 | )
For the years ended December 31, 2021, 2020 and 2019, the federal and state income tax provision is summarized as follows (in thousands):
|  | Year Ended December 31, |
|  | 2021 |  |  | 2020 |  |  | 2019 |
Current |  |  |  |  |  |  |  |  |  |  |  |
Federal |  | $ | — |  |  | $ | — |  |  | $ | — |
State |  |  | — |  |  |  | 5 |  |  |  | 6 |
Other |  |  | — |  |  |  | — |  |  |  | — |
Total current tax expense |  |  | — |  |  |  | 5 |  |  |  | 6 |
Deferred |  |  |  |  |  |  |  |  |  |  |  |
Federal |  |  | — |  |  |  | — |  |  |  | — |
State |  |  | — |  |  |  | — |  |  |  | — |
Other |  |  | — |  |  |  | — |  |  |  | — |
Total deferred tax expense |  |  | — |  |  |  | — |  |  |  | — |
Income tax provision |  | $ | — |  |  | $ | 5 |  |  | $ | 6 |
Deferred income taxes reflect the net tax effects of (a) temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes, and (b) operating losses and tax credit carryforwards. The tax effects of significant items comprising the Company's deferred taxes as of December 31, 2021 and 2020 are as follows (in thousands):
|  | Year Ended December 31, |
|  | 2021 |  |  | 2020 |
Deferred tax assets: |  |  |  |  |  |  |  |
Net operating losses |  | $ | 33,455 |  |  | $ | 31,115 |
Stock options |  |  | 884 |  |  |  | 790 |
Research and development credits |  |  | 641 |  |  |  | 641 |
Accruals |  |  | 306 |  |  |  | 267 |
Operating lease liabilities |  |  | 19 |  |  |  | 109 |
Property and equipment |  |  | 10 |  |  |  | 2 |
Other deferred tax assets |  |  | 376 |  |  |  | 81 |
Total deferred tax assets |  |  | 35,691 |  |  |  | 33,005 |
Deferred tax liabilities: |  |  |  |  |  |  |  |
Operating lease right-of-use assets |  |  | (19 | ) |  |  | (108 | )
Total deferred tax liabilities |  |  | (19 | ) |  |  | (108 | )
Valuation allowance |  |  | (35,672 | ) |  |  | (32,897 | )
Net deferred taxes |  | $ | — |  |  | $ | — |
ASC 740 requires that the tax benefit of net operating losses, temporary differences and credit carryforwards be recorded as an asset to the extent that management assesses that realization is "more likely than not." Realization of the future tax benefits is dependent on the Company's ability to generate sufficient taxable income within the carryforward period. Because of the Company's recent history of operating losses, management believes that recognition of the deferred tax assets arising from the above-mentioned future tax benefits is currently not likely to be realized and, accordingly, has provided a valuation allowance. On March 27, 2020, the Coronavirus Aid, Relief, and Economic Security Act was enacted. The CARES Act changed net loss carryforward and back provisions and the business interest expenses limitation. The Company has evaluated the impact of the CARES Act and determined that none of the changes would result in a material cash benefit to the Company. The valuation allowance increased by $2.8 million, $1.3 million and $2.2 million during the years ended December 31, 2021, 2020 and 2019, respectively. Net operating loss and tax credit carryforwards as of December 31, 2021, are as follows (in thousands):
|  |  |  |  |  | Expiration |
|  | Amount |  |  | Years |
Net operating losses, federal (Post December 31, 2017) |  | $ | 30,989 |  |  | Does Not Expire |
Net operating losses, federal (Pre January 1, 2018) |  | $ | 94,886 |  |  | Beginning in 2024 |
Net operating losses, state |  | $ | 106,784 |  |  | Beginning in 2028 |
Tax credits, federal |  | $ | 1,321 |  |  | Beginning in 2026 |
Tax credits, state |  | $ | 325 |  |  | Indefinite |
A reconciliation of the beginning and ending balance of unrecognized income tax benefits follows (in thousands):
|  | Year Ended December 31, |
|  | 2021 |  |  | 2020 |
Unrecognized benefit - beginning of period |  | $ | 974 |  |  | $ | 974 |
Change during the period |  |  | — |  |  |  | — |
Unrecognized benefit - end of period |  | $ | 974 |  |  | $ | 974 |
The entire amount of the unrecognized tax benefits would not impact our effective tax rate if recognized. The balance of unrecognized tax benefits increased as a result of a comprehensive analysis to substantiate the company's research credits. Accrued interest and penalties related to unrecognized tax benefits are classified as income tax expense and were immaterial. We do not anticipate that total unrecognized tax benefits will significantly change in the next 12 months. The Company files income tax returns in the United States and in California. Other jurisdictions are not significant. The tax years 2004 - 2021 remain open in the federal jurisdiction and 2006 - 2021 for California. The Company is not currently under examination by income tax authorities in federal, state or other jurisdictions. The effective tax rate of the Company's provision (benefit) for income taxes differs from the federal statutory rate as follows:
|  | Year Ended December 31, |
|  | 2021 |  |  | 2020 |  |  | 2019 |
Statutory rate |  |  | 21.0 | % |  |  | 21.0 | % |  |  | 21.0 | %
State tax |  |  | 11.2 | % |  |  | 3.2 | % |  |  | 3.1 | %
Change in valuation allowance |  |  | (47.7 | %) |  |  | (11.7 | %) |  |  | (23.0 | %)
Warrant/equity expenses |  |  | 16.7 | % |  |  | (10.3 | %) |  |  | 1.7 | %
Stock-based compensation expense |  |  | (1.1 | %) |  |  | (4.0 | %) |  |  | (3.7 | %)
Other |  |  | (0.1 | %) |  |  | 1.7 | % |  |  | (0.3 | %)
Impact of 162m |  |  | — | % |  |  | — | % |  |  | 1.1 | %
Total |  |  | 0.0 | % |  |  | (0.1 | %) |  |  | (0.1 | %)

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- Definition The entire disclosure for income taxes. Disclosures may include net deferred tax liability or asset recognized in an enterprise's statement of financial position, net change during the year in the total valuation allowance, approximate tax effect of each type of temporary difference and carryforward that gives rise to a significant portion of deferred tax liabilities and deferred tax assets, utilization of a tax carryback, and tax uncertainties information. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 21 -URI http://asc.fasb.org/extlink&oid=121826272&loc=d3e32857-109319 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section S99 -Paragraph 2 -Subparagraph (SAB Topic 11.C) -URI http://asc.fasb.org/extlink&oid=122134291&loc=d3e330215-122817 Reference 3: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 17 -Subparagraph (b) -URI http://asc.fasb.org/extlink&oid=121826272&loc=d3e32809-109319 Reference 4: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SAB TOPIC 6.I.5.Q1) -URI http://asc.fasb.org/extlink&oid=122134291&loc=d3e330036-122817 Reference 5: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 14 -URI http://asc.fasb.org/extlink&oid=121826272&loc=d3e32705-109319 Reference 6: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 270 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=6424409&loc=d3e44925-109338 Reference 7: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -URI http://asc.fasb.org/topic&trid=2144680 Reference 8: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 30 -Section 50 -Paragraph 2 -Subparagraph (a) -URI http://asc.fasb.org/extlink&oid=6424122&loc=d3e41874-109331 Reference 9: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 235 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SX 210.4-08(h)(2)) -URI http://asc.fasb.org/extlink&oid=120395691&loc=d3e23780-122690 + Details
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