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Note 10 - Income Taxes | 12 Months Ended
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Dec. 31, 2016
Income Tax Disclosure [Abstract] |
Note 10 - Income Taxes | NOTE 10 — Income Taxes Deferred tax benefit at December 31, 2016 is related to the release of valuation allowance against substantially all of the Company's federal and state deferred tax assets as the Company concluded such assets were fully realizable. The need for a valuation allowance requires an assessment of both positive and negative evidence when determining whether it is more likely than not that deferred tax assets are recoverable. Such assessment is required on a jurisdiction-by-jurisdiction basis. In making such assessment, significant weight is given to evidence that can be verified objectively. After the consideration of both positive and negative evidence to assess the recoverability of the Company's net deferred tax assets during the 2016 tax year, the Company determined that it was more likely than not the Company would realize the majority of the value of federal and state deferred tax assets given the current certainties regarding the timing of profits and forecasted future profitability. The Company will continue to monitor the likelihood that it will be able to recover the deferred tax assets in the future. The components of income taxes for the periods ended December 31, 2016 and 2015 are as follows:
|  | Years Ended December 31,
|  | 2016 |  | 2015
Current: |  |  |  |
Federal |  | $ | 12,200 |  |  | $ | — |
State |  |  | 37,000 |  |  |  | — |
Total Current |  |  | 49,200 |  |  |  | — |
Deferred: |  |  |  |  |  |  |  |
Federal |  |  | (8,473,481 | ) |  |  | 31,940 |
State |  |  | (1,291,140 | ) |  |  | — |
Total Deferred |  |  | (9,764,621 | ) |  |  | 31,940 |
Income tax (benefit) expense |  | $ | (9,715,421 | ) |  | $ | 31,940 |
Reconciliation of the statutory federal income tax rate to the Company's effective tax rate:
|  | Years Ended December 31,
|  | 2016 |  | 2015
Federal tax at statutory rate |  |  | 34.00 | % |  |  | 34.00 | %
State income tax rate |  |  | 5.83 | % |  |  | 5.83 | %
Release of valuation allowance |  |  | 308.63 | % |  |  | (41.56 | %)
Provision for taxes |  |  | 348.46 | % |  |  | (1.73 | %)
As of December 31, 2016, the Company did not recognize deferred tax assets relating to an excess tax benefit for stock-based compensation deduction of $2,094,000. Unrecognized deferred tax benefits will be accounted for as a credit to additional-paid-in-capital when realized through a reduction in income taxes payable. Deferred income tax reflects the net tax effects of temporary differences between the carrying amount of assets and liabilities for financial reporting purposes and the amount used for income tax purposes. At December 31, 2016, the Company released valuation allowance against substantially all deferred tax assets. Significant components of net deferred tax assets are as follows:
|  | Years Ended December 31,
Deferred tax assets: |  | 2016 |  | 2015
Net operating loss carryforwards |  | $ | 8,111,000 |  |  | $ | 8,833,000 |
Credits |  |  | 755,000 |  |  |  | 753,000 |
Capitalized research and development costs |  |  | 9,000 |  |  |  | 13,000 |
Other acquired intangibles |  |  | 49,000 |  |  |  | 91,000 |
Accruals not currently deductible |  |  | 1,343,000 |  |  |  | 1,614,000 |
Depreciation |  |  | 29,000 |  |  |  | 5,000 |
Total deferred tax assets |  |  | 10,296,000 |  |  |  | 11,309,000 |
Valuation allowance for deferred tax assets |  |  | (464,000 | ) |  |  | (11,279,000 | )
Net deferred tax assets |  |  | 9,832,000 |  |  |  | 30,000 |
Deferred tax liability: |  |  |  |  |  |  |  |
Acquired intangibles |  |  | (243,000 | ) |  |  | (205,000 | )
Net deferred tax assets (liabilities) |  | $ | 9,589,000 |  |  | $ | (175,000 | )
As of December 31, 2016, the Company had net operating loss carryforwards for federal income tax purposes of approximately $23,566,000 which will expire at various dates beginning in 2018 and through 2034, and federal research and development tax credits of approximately $464,000, which will expire at various dates beginning in 2018 and through 2036. As of December 31, 2016, the Company had net operating loss carryforwards for state income tax purposes of approximately $13,896,000, which will expire at various dates in 2017 and through 2033, and state research and development tax credits of approximately $291,000, which can be carried forward indefinitely. The Company has determined that utilization of existing net operating losses against future taxable income is not limited by Section 382 of the Internal Revenue Code. Future ownership changes, however, may limit the Company’s ability to fully utilize its existing net operating loss carryforwards against any future taxable income. A reconciliation of the beginning and ending amount of unrecognized tax benefits (“UTBs”), excluding interest and penalties, is as follows:
|  | Amount
Beginning balance at January 1, 2016 |  | $ | 754,000 |
Decreases in UTBs taken in prior years |  |  | (38,000 | )
Decreases in UTBs taken in current years |  |  | 39,000 |
Ending balance at December 31, 2016 |  | $ | 755,000 |
Future changes in the unrecognized tax benefit will have no impact on the effective tax rate due to the existence of the valuation allowance. It is the Company's policy to include interest and penalties related to tax positions as a component of income tax expense. No interest was accrued for the period ended December 31, 2016. The Company estimates that the unrecognized tax benefit will not change significantly within the next twelve months. The Company files its tax returns as prescribed by the tax laws of the jurisdictions in which it operates. The Company is not currently under audit in any of its jurisdictions where income tax returns are filed. The tax years 1996 to 2015 remain open to examination by the major domestic taxing jurisdictions to which the Company is subject, and for the years 2003 to 2010 for the international taxing jurisdictions to which the Company is subject.

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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/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 235 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SX 210.4-08.(h)) -URI http://asc.fasb.org/extlink&oid=26873400&loc=d3e23780-122690 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 3 -URI http://asc.fasb.org/extlink&oid=65882285&loc=d3e32559-109319 Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 15 -URI http://asc.fasb.org/extlink&oid=65882285&loc=d3e32718-109319 Reference 4: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 9 -URI http://asc.fasb.org/extlink&oid=65882285&loc=d3e32639-109319 Reference 5: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 2 -URI http://asc.fasb.org/extlink&oid=65882285&loc=d3e32537-109319 + Details
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