Note 8 - Income Taxes

12 Months Ended

Dec. 31, 2024

Notes to Financial Statements

Income Tax Disclosure [Text Block]

8.    Income Taxes

The income tax expense included in the Consolidated Statements of Operations consists of the following:

	Years Ended December 31,
(in thousands)	2024			2023
Continuing Operations:
Current:
Federal	$	(7	)	$	(24	)
State		—			(2	)
Total Current		(7	)		(26	)
Deferred:
Federal		—			(1,072	)
State		—			—
Total Deferred		—			(1,072	)
Total Continuing Operations	$	(7	)	$	(1,098	)
Discontinued Operation:
Current:
Federal	$	—		$	—
State		—			—
Total Current		—			—
Deferred:
Federal		—			—
State		—			—
Total Deferred		—			—
Total Discontinued Operation	$	—		$	—
Total Income Tax Expense	$	(7	)	$	(1,098	)

The reconciliation of the federal statutory income tax rate to the Company’s effective tax rate based upon the total income tax provision from continuing operations is as follows:

	Years Ended December 31,
	2024			2023
Federal statutory rate		21.0	%		21.0	%
Permanent non-taxable income		(3.5	)%		0.2	%
Business credits		21.3	%		2.8	%
State taxes, net of federal benefit		0.0	%		(0.1	)%
Valuation allowance		(38.7	)%		(68.6	)%
Other		(0.6	)%		(0.1	)%
		(0.5	)%		(44.8	)%

At December 31, 2024 and 2023, the deferred tax assets (liabilities) from continuing operations were comprised of the following:

	Years Ended December 31,
(in thousands)	2024			2023
Deferred Tax Assets:
Inventories	$	202		$	254
Accrued employees' compensation and benefits costs		316			362
Postretirement adjustment (accumulated other comprehensive loss)		566			635
Accrued litigation settlement		128			39
State credit carryforwards		157			177
Federal credit carryforwards		302			—
Federal net operating loss carryforward		482			1,493
Bad debt reserve		3			26
Warranty reserve		70			114
Research and experimentation expenses		2,217			751
Customer accruals		156			344
Sec 163(j) disallowed interest		46			83
Other		1			1
Total deferred tax assets		4,646			4,279
Valuation allowance		(3,727	)		(3,145	)
Net deferred tax assets		919			1,134
Deferred tax liabilities:
Prepaid expenses		(78	)		(71	)
Property, plant and equipment		(841	)		(853	)
Other receivable - insurance proceeds		—			(210	)
Total deferred tax liabilities		(919	)		(1,134	)
Net deferred tax assets	$	—		$	—

In assessing the ability of the Company to realize the benefit of the deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. Based upon the level of historical pre-tax income, as well as projections of future taxable income over the periods which deferred tax assets are deductible, management determined that it is more likely than not that the Company may not realize the net deferred tax assts recorded as of December 31, 2024. Accordingly, a valuation allowance of $3,727,000, an increase of approximately $582,000 from the valuation allowance of $3,145,000 as of  December 31, 2023, was recorded against net deferred tax assets as of  December 31, 2024.  The federal net operating loss carryforward amount is approximately $2,291,000 as of December 31, 2024 ($7,100,000 as of December 31, 2023) and has no expiration date. The Company has a New York state tax credit carryforward of approximately $198,000 as of  December 31, 2024 ($219,000 as of  December 31, 2023), which begins to expire in 2025.

There are no uncertain tax positions or unrecognized tax benefits for 2024 and 2023. The Company is subject to routine audits of its tax returns by the Internal Revenue Service and various state taxing authorities. The 2021 through 2024 federal and 2020 through 2024 state tax returns remain subject to examination.