v3.26.3
Note 8 - Income Taxes - 10Q
 6 Months Ended 12 Months Ended
Jun. 30, 2026
Dec. 31, 2025
Notes to Financial Statements    
Income Tax Disclosure [Text Block]

8.

Income Taxes

 

No provision for income taxes was recorded in either of the three-month periods ended June 30, 2026 and 2025. The Company remains in a cumulative loss position with a full valuation allowance recorded against its net deferred income tax assets as of June 30, 2026.

 

 

8.         Income Taxes

 

At December 31, 2025, we have a consolidated federal net operating loss (“NOL”) carryforward of approximately $135.4 million available to offset against future taxable income of which approximately $25.7 million expires in varying amounts in 2026 through 2037. Additionally, we have approximately $6.7 million in research and development (“R&D”) tax credits that expire in 2026 through 2045 unless utilized earlier. No income taxes have been paid to date. Section 382 of the Internal Revenue Code contains provisions that may limit our utilization of our NOL and R&D tax credit carryforwards in any given year as a result of significant changes in ownership interests that have occurred in past periods or may occur in future periods.

 

Deferred income taxes reflect the net effect of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. We have established a full valuation allowance equal to the amount of our net deferred tax assets due to uncertainties with respect to our ability to generate sufficient taxable income to realize these assets in the future. The table below presents significant components of our deferred tax assets and liabilities at December 31, 2025 and 2024.

 

   

2025

    

2024

  

Deferred tax assets:

                

Net operating loss carryforward

   $ 35,197,253     $ 30,374,640  

Research and development tax credit carryforward

     6,709,611       5,506,154  

Stock-based compensation expense

     965,107       676,250  

Accrued expenses

     47,212       256,540  

Total deferred tax assets

     42,919,183       36,813,584  

Deferred tax liabilities

                

Depreciation

     18,298       29,812  

Net deferred tax assets

     42,900,885       36,783,772  

Valuation allowance

     (42,900,885 )     (36,783,772 )

Net deferred tax asset after reduction for valuation allowance

   $ 0     $ 0  

 

A reconciliation of the U.S. federal income tax rate to the Company’s effective tax rate is as follows:

 

   

2025

    

2024

  

U.S. federal statutory rate applied to pretax loss

     21.0 %     21.0 %

State income tax (benefit)

     4.0       4.0  

Permanent differences

     (0.0 )     (0.0 )

NOL carryforward expiration

     (2.5 )     (4.1 )

R&D tax credits, net of expiration

     5.7       6.5  

Change in valuation allowance and other adjustments

     (28.2 )     (27.4 )

Effective tax rate

     0.0 %     0.0 %