v3.26.1
Note 13 - Income Tax
 12 Months Ended
Dec. 31, 2025
Notes to Financial Statements  
Income Tax Disclosure [Text Block]

13. Income Tax 

 

The reconciliation of the statutory rate to the effective tax rate is as follows:

 

  

2024

 

Tax computed on the loss before tax at a tax rate of 21.0% for the year ended December 31, 2024

 $(5,228)

Foreign rate differential

  (164)

Tax value of derivative warrants

  (562)

Special tax deduction on research and development expenses

  (645)

Loss offset to research and development incentive

  798 

Other adjustments

  106 

Adjustment of tax concerning previous years

  320 

Change in valuation allowance

  4,994 
  $(381)

 

As ASU 2023-09 has been prospectively adopted, the reconciliation of the statutory rate to the effective tax rate for 2025 is as follows:

 

  

2025

  

Percent

 

Tax computed on the loss before tax at a tax rate of 21.0% for the year ended December 31, 2025

 $(2,359)  21.00%

Foreign Taxes

        

Denmark

        

Loss offset to research and development incentive

  833   (7.42)

Other adjustments

  150   (1.34)

Change in Denmark valuation allowance

  215   (1.91)

Change in US valuation allowance

  1,161   (10.33)

Effective tax rate

  -   - 

 

The components of net loss before income taxes were as follows:

 

  

Year ended

 
  

December 31,

 
  

2025

  

2024

 

Denmark

 $(5,669) $(16,376)

United States

  (5,562)  (8,520)
  $(11,231) $(24,896)

 

The components of the provision for income taxes from operations were as follows: 

 

  

Year ended

 
  

December 31,

 
  

2025

  

2024

 

Current:

        

Denmark

 $—  $— 

United States

  —   — 

Total

  —   — 

Deferred:

        

Denmark

  —   (381)

United States

  —   — 

Total

  —   (381)
  $—  $(381)

 

Deferred tax comprises:

 

2025

  

2024

 

Property, plant and equipment

 $(2) $(24)

Intangible assets

  613   719 

Stock compensation

  829   800 

Other accruals

  —   15 

Capitalized R&E costs

  124   243 

Net operating losses

  22,617   19,325 

Total deferred tax

  24,181   21,078 

Valuation allowance

  (24,181)  (21,078)

Net deferred tax liabilities

 $—  $— 

 

Tax on profit/loss for the year:

 

2025

  

2024

 

Change in deferred tax

 $—  $(381)

Tax (benefit) expense

 $—  $(381)

 

As of December 2025, the Company has tax losses carried forward of approximately $38.9 million for US Federal income tax, and $65.3 million for Denmark income tax purposes.  $1.4 million of the US federal tax loss carryforwards can be forward for 20 years and will begin to expire in 2037, while the remaining $37.5 million can be carried forward indefinitely. Our Denmark tax loss carryforwards can be carried forward indefinitely. Deferred tax has been provided corresponding to the statutory tax rate applied.

 

The statute of limitations for re-assessment of tax returns in Denmark is three years and five years for transfer pricing. As of December 31, 2025, the tax years that remain subject to examination by the major tax jurisdictions, under the statute of limitations, are from the year ended December 31, 2020, forward. The Company does not believe it has any uncertain tax positions that would result in the Company having a liability to the taxing authorities.