Note 8 - Income Taxes

12 Months Ended

Dec. 31, 2022

Notes to Financial Statements

Income Tax Disclosure [Text Block]

8. Income Taxes

The federal and state provision (benefit) for income taxes was $0.0 million for the years ended December 31, 2022 and 2021.

The total income tax provision (benefit) differed from the amounts computed by applying the U.S. federal income tax rate of 21.0% for the years ended December 31, 2022 and 2021 to net income (loss) before income taxes as a result of the following:

	Year Ended December 31,
	2022			2021
Statutory tax expense (benefit)		(21.0	)%		21.0	%
Increase (decrease) in taxes resulting from:
Nondeductible expenses		(2.6	)		3.3
Valuation allowance		23.6			(24.3	)
		0.0	%		0.0	%

The tax effects of temporary differences that gave rise to significant portions of the deferred tax assets were as follows: 

	As of December 31,
	2022			2021
	(In thousands)
Deferred tax asset:
Carrying values of ownership interests and other holdings	$	33,222		$	31,985
Tax loss and credit carryforwards		68,492			77,045
Disallowed interest carryforwards		6,891			7,120
Accrued expenses		47			24
Stock-based compensation		180			268
Other		(106	)		136
		108,726			116,578
Valuation allowance		(108,726	)		(116,578	)
Net deferred tax asset	$	—		$	—

As of December 31, 2022, the Company and its subsidiaries had federal net operating and capital loss carryforwards for tax purposes of approximately $326 million, of which approximately $60 million have an indefinite life. These carryforwards expire as follows: 

	Total
	(In thousands)
2023	$	45,830
2024		50,140
2025		17,266
2026		7,648
2027 and thereafter		145,275
	$	266,159

In assessing the recoverability of deferred tax assets, the Company considers whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. The Company has determined that it is more likely than not that certain future tax benefits may not be realized as a result of current and future income. Accordingly, a valuation allowance has been recorded against substantially all of the Company’s deferred tax assets.

The Company recognizes in its Consolidated Financial Statements the impact of a tax position if that position is more likely than not to be sustained upon examination, based on the technical merits of the position. All uncertain tax positions relate to unrecognized tax benefits that would impact the effective tax rate when recognized.

The Company does not expect any material increase or decrease in its income tax expense, in the next twelve months, related to examinations or changes in uncertain tax positions.

There were no changes in the Company’s uncertain tax positions for the years ended December 31, 2022 and 2021.

The Company files income tax returns in the U.S. federal jurisdiction, and various state jurisdictions. Tax years 2015 and forward remain open for examination for federal tax purposes and the Company’s more significant state tax jurisdictions. To the extent utilized in future years’ tax returns, net operating loss carryforwards at December 31, 2022 will remain subject to examination until the respective tax year is closed. The Company recognizes penalties and interest accrued related to income tax liabilities in income tax benefit (expense) in the Consolidated Statements of Operations.