Note 10 - Income Taxes |
6 Months Ended | ||
|---|---|---|---|
Jun. 30, 2025 | |||
| Notes to Financial Statements | |||
| Income Tax Disclosure [Text Block] |
During the six months ended June 30, 2025, the Company recorded a non-cash debit to its valuation allowance of $170,000, decreasing its valuation allowance against deferred tax assets to $8.1 million as of June 30, 2025. The primary assets covered by this valuation allowance are federal net operating losses, which approximate $34.9 million at June 30, 2025. The Company did make any cash payments for income tax in the three- and six-month periods ended June 30, 2025 and 2024 due to its net operating loss carryforwards.
The Company maintains a valuation allowance against deferred tax assets that currently exceeds our deferred tax liabilities. The primary assets covered by this valuation allowance are net operating loss carryforwards. The valuation allowance was calculated in accordance with the provisions of ASC 740, Income Taxes, which requires an assessment of both positive and negative evidence when measuring the need for a valuation allowance. The Company’s results over the most recent periods were heavily affected by business restructuring activities. The Company’s cumulative loss represented sufficient negative evidence to require a valuation allowance. The Company intends to maintain a valuation allowance until sufficient positive evidence exists to support its reversal, resulting in no deferred tax asset balance being recognized.
As of June 30, 2025, the Company has a valuation allowance that covers all deferred tax assets, net of deferred tax liabilities. The Company’s effective tax rates were 0.0% and (0.8%) for the three- and six-month periods ended June 30, 2025, respectively, and (29.0%) and (108.0%) for the three- and six-month periods ended June 30, 2024, respectively, and primarily related to a taxable loss at all jurisdictions and state income tax paid in jurisdictions without prior net operating loss carryforwards available to offset taxable income, respectively.
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