Note 12 - Income Taxes

12 Months Ended

Dec. 31, 2019

Notes to Financial Statements

Income Tax Disclosure [Text Block]

12

. Income Taxes

There is

no

provision for income taxes because the Company has incurred operating losses since inception. As of

December 31, 2019,

the Company had federal and state net operating loss carryforwards of approximately

$400.3

million and

$375.7

million, respectively, which

may

be used to offset future taxable income. The Company also had federal research and development tax credit carryforwards and other federal tax credit carryforwards which aggregate to

$3.5

million at

December 31, 2019.

These carryforwards expire at various times through

2039

and

may

be limited in their annual usage by Section

382

of the Internal Revenue Code, as amended, relating to ownership changes.

The following table sets forth the tax effects of temporary differences that give rise to significant portions of the Company’s net deferred tax assets (in thousands):

	December 31,
	201 9			201 8
Deferred tax assets, net:
Net operating loss carryforwards	$	109,813		$	103,612
Research and other credits		3,482			3,482
Operating lease assets		(170	)		—
Operating lease liabilities		198			—
Other temporary differences		4,851			3,760
Deferred tax assets		118,175			110,854
Valuation allowance		(118,175	)		(110,854	)
Net deferred tax assets	$	—		$	—

The Company recognizes uncertain tax positions net, against any operating losses or applicable research credits as they arise. Currently, there are

no

uncertain tax positions recognized at

December 31, 2019.

The Company has provided a full valuation allowance on its deferred tax assets at

December 31, 2019

and

2018,

as management believes it is more likely than

not

that the related deferred tax asset will

not

be realized. The reported amount of income tax expense differs from the amount that would result from applying domestic federal statutory tax rates to pretax losses, primarily because of changes in the valuation allowance.

The following table sets forth reconciling items from income tax computed at the statutory federal rate:

	Year Ended December 31,
	201 9			201 8
Federal income tax at statutory rate		21.0	%		21.0	%
State income taxes, net of federal benefits		7.0	%		6.2	%
Impact of change in statutory tax rates		(0.2	%)		(8.8	%)
Permanent deductions		(0.1	%)		(3.7	%)
Valuation allowance		(27.7	%)		(14.7	%)
Effective tax rate		—	%		—	%

Accounting literature regarding liabilities for unrecognized tax benefits provides guidance for the recognition and measurement in financial statements of uncertain tax positions taken or expected to be taken in a tax return. The Company’s evaluation was performed for the tax periods from inception to

December 31, 2019.

The Company is subject to examination by major tax jurisdictions for the years ended

December 31, 2015

to

2019.

The Company

may

from time to time be assessed interest or penalties by major tax jurisdictions, although there have been

no

such assessments historically with any material impact to its financial results. The Company would recognize interest and penalties related to unrecognized tax benefits within the income tax expense line in the accompanying Consolidated Statements of Operations. Accrued interest and penalties would be included within the related tax liability line in the Consolidated Balance Sheets.