Note 17 - Income Taxes
|12 Months Ended|
Dec. 31, 2022
|Notes to Financial Statements|
|Income Tax Disclosure [Text Block]||
Loss before income tax expense consists of the following (in thousands):
The components of the provision for income tax expense consist of the following (in thousands):
Reconciliation of the statutory federal income tax rates consist of the following:
The components of deferred tax assets (liabilities) included on the consolidated balance sheets are as follows (in thousands):
Based on the available objective evidence at this time, management believes that it is more-likely-than-not that the net deferred tax assets of the Company will not be realized. Accordingly, management has applied a full valuation allowance against net deferred tax assets at both December 31, 2022 and December 31, 2021. The net valuation allowance increased by approximately $3.0 million during the year ended December 31, 2022. The increase in net valuation allowance primarily relates to net operating losses generated during 2022.
At December 31, 2022, the Company has Federal and California net operating loss carryforwards of approximately $153.4 million and $4.1 million, respectively, which will begin to expire on December 31, 2034 for Federal and California purposes.
Utilization of the Company’s net operating loss may be subject to substantial annual limitation due to the ownership change limitations provided by the Internal Revenue Code and similar state provisions. Such an annual limitation could result in the expiration of net operating loss carryforwards prior to utilization.
At December 31, 2022, the Company had research and development credits carryforward of approximately $0.5 million and $0.5 million for Federal and California income tax purposes, respectively. If not utilized, the Federal research and development credits carryforward will begin to expire on December 31, 2034. The California credits can be carried forward indefinitely.
The Company’s policy is to account for interest and penalties as income tax expense. As of December 31, 2022, the Company had no interest related to unrecognized tax benefits. No amounts of penalties related to unrecognized tax benefits were recognized in the provision for income taxes.
The Company maintains liabilities for uncertain tax positions. These liabilities involve considerable judgement and estimation and are continuously monitored by management based on the best information available, including changes in tax regulations, the outcome of relevant court cases, and other information. The Company recognizes potential accrued interest and penalties related to unrecognized tax benefits as income tax expense. At December 31, 2022, the Company’s total amount of unrecognized tax benefit was approximately $0.3 million, none of which will affect the effective tax rate, if recognized. The Company does not expect its unrecognized benefits to change materially over the next twelve months.
The Company files income tax returns with the United States federal government and the State of California. The Company’s tax returns for2020 and 2021 remain open to audit for Federal and California purposes.
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.
Reference 1: http://www.xbrl.org/2003/role/disclosureRef