Note 7 - Income Taxes

12 Months Ended

Dec. 31, 2023

Notes to Financial Statements

Income Tax Disclosure [Text Block]

Note 7 — Income Taxes

Income tax expense (benefit) for the years ended December 31, 2023 and 2022 consisted of the following:

	Year ended December 31,
	2023			2022
Current provision (benefit)
Federal	$	-		$	-
State		-			-
		-			-
Deferred provision (benefit)
Federal		360,354			396,083
State		20,241			(1,987,646	)
		380,595			(1,591,563	)
Change in valuation allowance		(380,595	)		1,591,563
Consolidated provision (benefit)	$	-		$	-

Significant components of the Company's deferred tax assets and liabilities consisted of the following at December 31, 2023 and 2022:

	December 31,
	2023			2022
Deferred tax assets:
Net operating loss carryforwards and credits	$	40,945,364		$	41,262,032
Property, equipment, intangible assets, and other		297,666			353,310
Stock-based compensation		12,643			20,926
		41,255,673			41,636,268
Deferred tax liabilities		-			-
Valuation allowance		(41,255,673	)		(41,636,268	)
Net deferred tax assets	$	-		$	-

The following table presents a reconciliation between the U.S. federal statutory income tax rate and the Company's effective tax rate:

	Year ended December 31,
	2023			2022
Federal tax rate		(21.0	)%		(21.0	)%
State tax rate, net of Federal benefit		(6.5	)%		(6.5	)%
Change in valuation allowance		(12.0	)%		50.2	%
Permanent differences and other		32.6	%		(22.7	)%
Effective tax rate		6.9	%		0.0	%

The Company has Federal net operating loss carry-forwards of approximately $158.1 million as of December 31, 2023. The Federal net operating loss carry-forwards are subject to annual limitation under Section 382 of the Internal Revenue Code as a result of the Company’s emergence from bankruptcy in 2016 as well as due to other changes in ownership subsequent to such emergence; any such limitation reduces the Company's ability to use its net operating loss carryforwards to offset future taxable income on an annual basis and may permanently reduce the Company’s ability to use such net operating loss carryforwards. Federal net operating loss carryforwards generated before 2018 have a 20-year life and expire through 2028, while net operating loss carryforwards generated after 2017 have an indefinite life.  The Company has not filed its required state income tax returns since 2017 and intends to file all required state returns within the next 12-18 months.  The Company has provided a full valuation allowance against its net deferred tax assets as it is more likely than not that those net assets will not be realized.  The Company does not believe that it has any uncertain income tax positions.