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Income Taxes
 12 Months Ended
Dec. 31, 2024
Income Tax Disclosure [Abstract]  
Income Taxes

(12) Income Taxes

 

The Company applies the provisions of FASB ASC 740-10 Uncertainty in Income Taxes. As a result of the implementation, there has been no material change to the Company’s tax positions as they have not paid any corporate income taxes due to operating losses. With the exception of net operating losses and research and development credits generated in New Jersey, all tax benefits will likely not be recognized due to the substantial net operating loss carryforwards which will most likely not be realized prior to expiration.

 

As of December 31, 2024, and December 31, 2023, respectively, the Company has approximately $117,194,000 of Federal net operating loss carryforwards (expiring in the years 2024 through 2038), and $103,300,000 of Federal net operating loss carryforwards with no expiration date, both of which have been limited by Internal Revenue Code Section 382, available to offset future federal taxable income. The Company has approximately $41,700,000 of New Jersey state net operating loss carryforwards (expiring in 2044). The Company has approximately $96,365,000 of Florida state net operating loss carryforwards with no expiration date to offset future Florida taxable income. The Company has approximately $3,600,000 of Belgium net operating loss carryforwards with no expiration date to offset future taxable income In December 2023, the Company effectively sold $14,156,000 of its New Jersey state net operating loss carryforward and $38,600 in R&D credits for the year 2022 for approximately $1,313,000. The company has fully utilized the maximum $20,000,000 allowance in proceeds received for the sale of New Jersey net operating loss carryforwards and R&D credits as of December 31, 2023. The utilization of certain state net operating loss carryforwards may be subject to annual limitations. With no tax due for the foreseeable future, the Company has determined that a policy to determine the accounting for interest or penalties related to the payment of tax is not necessary at this time.

 

 

Under the Tax Reform Act of 1986, the utilization of a corporation’s net operating loss carryforward is limited following a greater than 50% change in ownership. As noted above, due to the Company’s prior and current equity transactions, some of the Company’s net operating loss carryforwards are subject to an annual limitation generally determined by multiplying the value of the Company on the date of the ownership change by the federal long-term tax-exempt rate. Any unused annual limitation may be carried forward to future years for the balance of the net operating loss carryforward period. As of December 31, 2024, the tax years after 2020 remain subject to examination by major tax jurisdictions.

 

Deferred income taxes reflect the net tax effects of temporary differences between carrying amounts of assets and liabilities for financial reporting purposes and the carrying amounts used for income tax purposes. In assessing the realizability of deferred tax assets, Management considers whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. The realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which temporary differences representing net future deductible amounts become deductible. With the exception of net operating losses generated in New Jersey which can be surrendered for 80% of their value, due to the uncertainty of the Company’s ability to realize the benefit of the deferred tax asset, the remainder of our deferred tax assets are fully offset by a valuation allowance at December 31, 2024 and 2023.

 

The components of the net deferred tax assets and liabilities as of December 31, 2024 and 2023, consist of the following:

 

   2024   2023 
   (in thousands) 
Deferred tax assets:  December 31, 
   2024   2023 
Net operating losses  $29,001   $25,114 
Research and Development costs   3,914    3,517 
Stock Compensation   1,515    1,479 
R&D credits   2,829    1,376 
           
Other   41    137 
Amortization & Depreciation   

5,575

    

6,791

 
Right of use asset   4    6 
Total deferred tax assets   42,879    38,420 
           
Less: Valuation allowance   (42,879)   (36,816)
Deferred tax assets, net  $—   $1,604 

 

Deferred tax assets are included within other assets in the accompanying Consolidated Balance Sheets. The benefits of deferred tax assets are included within the gain from sale of income tax operating losses in the accompanying Consolidated Statements of Operations and Comprehensive Loss. The Company’s 2023 net deferred tax asset estimates the projected sale of 2023 New Jersey state operating losses to be sold in the subsequent year. After further analysis, it was determined that the New Jersey state operating loss sales proceeds reached the maximum $20 million allowed after the 2022 sale and a full valuation allowance was recorded in 2024 against all deferred tax assets.

 

Reconciliation between the effective tax rate on income from continuing operations and the statutory tax rate is as follows (in thousands):

 

Pre Tax Book Loss  $(17,320)     
           
Federal Rate   (3,637)   21.0%
State Taxes   (1,321)   7.63%
Other Perms   1    -0.01%
RTP   396    -2.29%
Income Tax Income   459    -2.65%
State Rate Change   149    -0.86%
162(m)   126    -0.73%
R&D credits   (969)   5.59%
Mark to Market   (163)   0.94%
R&D credit addback   

261

    

-1.51

%
Loss on Fair Value Warrants   131    -0.76%
Other   108   -0.62%
Valuation Allowance   4,459    -25.75%
         
Total  $—    -0.0%

 

The Company files tax returns in the U.S., Florida and New Jersey. As of December 31, 2024, tax years for 2023, 2022, and 2021 are still subject to examination by the tax authorities. The Company is no longer subject to U.S. federal or state examinations by tax authorities for years before 2021.