Note 8 - Income Taxes

3 Months Ended

Mar. 31, 2026

Notes to Financial Statements

Income Tax Disclosure [Text Block]

8. Income Taxes

The Company’s effective tax rate for the three-month period ended March 31, 2026 of 31.9% primarily related to application of the Company's net operating losses that do not have an associated valuation allowance and state income tax in jurisdictions without net operating loss carryforwards to offset taxable income. The Company's effective tax rate for the three-month period ended March 31, 2025 was 1.8%, which was primarily driven by a taxable loss at all jurisdictions and a full valuation allowance against the net operating losses.

During the three months ended March 31, 2026, the Company recorded a non-cash credit to its valuation allowance of $53,339, increasing its valuation allowance against deferred tax assets to $5.1 million, as of March 31, 2026. The primary assets covered by this valuation allowance are net operating losses, which approximate $6.7 million at March 31, 2026. The Company did not make any cash payments for income tax in the three-month periods ended March 31, 2026 and 2025 due to its net operating loss carryforwards.

As of March 31, 2026, the Company maintained a partial valuation allowance against its deferred tax assets. A valuation allowance is recorded to reduce the gross deferred tax assets to an amount management believes is more likely than not to be realized. The valuation allowance is primarily attributable to the uncertainty regarding the realization of net operating losses, which is dependent upon future taxable income.