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Note 11 - Income Taxes | 12 Months Ended
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Dec. 31, 2024
Income Tax Disclosure [Abstract] |
Income Taxes | 11. Income Taxes The Company has no current or deferred income taxes as of December 31, 2024 and December 31, 2023. Income taxes vary from the statutory federal income tax rate applied to loss before income taxes as follows (in thousands):
|  | Year Ended December 31, |
|  | 2024 |  |  | 2023 |
Statutory federal income tax rate of 21 percent applied to loss before income taxes |  | $ | (3,032 | ) |  | $ | (2,583 | )
State taxes - net of federal benefit |  |  | (660 | ) |  |  | (810 | )
Meals and entertainment |  |  | 1 |  |  |  | 3 |
Warrants |  |  | — |  |  |  | (12 | )
Stock-based compensation |  |  | 371 |  |  |  | 522 |
Other non-deductible expenses |  |  | 16 |  |  |  | (89 | )
Expiration of tax attributes |  |  | 184 |  |  |  | 484 |
Change in tax rate |  |  | (346 | ) |  |  | 207 |
Other |  |  | (49 | ) |  |  | — |
Valuation allowance |  |  | 3,515 |  |  |  | 2,278 |
|  | $ | — |  |  | $ | — |
Deferred income tax assets and liabilities arising from differences between accounting for financial statement purposes and tax purposes, less valuation reserves at year end are as follows (in thousands):
|  | Year Ended December 31, |
|  | 2024 |  |  | 2023 |
Deferred tax assets: |  |  |  |  |  |
Accrued expenses |  | $ | 122 |  |  | $ | 128 |
Depreciation |  |  | 82 |  |  |  | 245 |
Lease liability |  |  | 25 |  |  |  | 55 |
Net operating loss carryforwards |  |  | 27,383 |  |  |  | 24,703 |
Stock compensation |  |  | 1,216 |  |  |  | 1,470 |
Capitalized research and development costs |  |  | 3,771 |  |  |  | 2,515 |
Total deferred tax assets |  |  | 32,599 |  |  |  | 29,116 |
Deferred tax liabilities: |  |  |  |  |  |
Operating right-of-use asset |  |  | 23 |  |  |  | 52 |
Prepaid expense |  |  | 108 |  |  |  | 112 |
Total deferred tax liabilities |  |  | 131 |  |  |  | 164 |
Net deferred tax asset |  |  | 32,468 |  |  |  | 28,952 |
Valuation allowance |  |  | (32,468 | ) |  |  | (28,952 | )
Net deferred taxes |  | $ | — |  |  | $ | — |
Deferred tax assets and liabilities are recognized for temporary differences and unused tax losses to the extent that realization of the related tax benefits is more-likely-than-not. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods when the deferred tax assets become deductible. After considering the history of operating losses and uncertainty regarding its ability to generate positive pre-tax income in 2025 and beyond, the Company has concluded that it is not-more-likely-than-not that its deferred tax assets will be realized, and therefore maintains a full valuation allowance on all deferred tax assets. The valuation allowance increased $3.5 million during the year ended December 31, 2024 and $2.3 million during the year ended December 31, 2023. As of December 31, 2024, the Company had federal net operating loss ("NOL") carryforwards of approximately $109.4 mi llion and state NOL carryforwards of approximately $63.0 million. Of the total amount of federal NOL carryforwards, approx imately $77.8 million arose in tax years beginning after December 31, 2017 and will carry forward indefinitely. The federal NOL carryforwards arising in tax years beginning before January 1, 2018 of approximately $31.7 million will begin to expire in 2025 unless previously utilized. The Company’s state NOL carryforwards as of December 31, 2024 may be carried forward for 20 years, and will expire at various dates between 2027 and 2044. Pursuant to the provisions of the Internal Revenue Code ("IRC"), the Company’s NOL and tax credit carryforwards and certain other attributes are subject to review and possible adjustment by the Internal Revenue Service ("IRS") and state tax authorities. NOL and tax credit carryforwards may be subject to an annual limitation in the event of certain cumulative changes in the ownership interest of significant stockholders over a three-year period in excess of 50 percent, as defined under Sections 382 and 383 of the IRC, as well as similar state provisions. This could limit the amount of tax attributes that can be utilized annually to offset future taxable income or tax liabilities. The amount of the annual limitation is determined based on the value of the Company immediately prior to the ownership change. Including the recently completed Merger, the Company has completed several equity offerings since its inception, which may have resulted in a change in control as defined by Sections 382 and 383 of the IRC, or could result in a change in control in the future. The Company has not completed an IRC Section 382 and 383 analysis for all relevant tax years regarding the limitation of net operating losses. The NOL deferred tax asset does reflect the limitation resulting from the Merger; however, there could be further limitations due to prior changes in control. Due to the existence of a full valuation allowance, however, changes in the NOLs included as deferred tax assets on the Company’s consolidated balance sheets would have no impact on the Company's effective tax rate. The Company files income tax returns in the U.S. federal jurisdiction and California. Because of the NOLs, the Company is subject to U.S. federal examinations for tax years 2006 and forward, and for examinations from state taxing authorities for tax years 2008 and forward. The Company accounts for taxation under ASC 740, which clarifies the accounting for uncertain tax positions. ASC 740 requires that the Company recognize the impact of a tax position in its consolidated financial statements if the position is more-likely-than-not to be sustained upon examination based on the technical merits of the position. The Company did no t have any uncertain income tax positions as of December 31, 2024 and 2023. ASC 740 requires the Company to accrue interest and penalties where there is an underpayment of taxes based on the Company's best estimate of the amount to ultimately be paid. The Company identified no unrecorded material uncertain tax positions as of December 31, 2024 and 2023, consequently no interest or penalties have been accrued by the Company in either period. The Company does not anticipate a significant change to its unrecognized tax benefits within the next 12 months.

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