Income Taxes

12 Months Ended

Dec. 31, 2022

Income Tax Disclosure [Abstract]

Income Taxes

12. Income Taxes

Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. Significant components of the Company’s deferred tax assets (liabilities) as of December 31, 2022, and 2021 are as follows (in thousands): 

	December 31
	2022			2021
Net operating loss carryforwards	$	15,994		$	22,497
Net operating loss carryforwards of foreign subsidiaries		56			56
Depreciation expense		(73	)		(94	)
Stock-based compensation expense		349			52
Other		830			544
Net deferred tax assets		17,156			23,055
Valuation allowance for net deferred tax assets		(17,156	)		(23,055	)
Net deferred tax assets, net of allowance	$	–		$	–

Deferred tax assets are required to be reduced by a valuation allowance if it is more likely than not that some portion or all the deferred tax assets will not be realized. Realization of the future benefits related to the deferred tax assets is dependent on many factors, including the Company’s ability to generate taxable income within the near to medium term. Management has considered these factors in determining the valuation allowance for 2022 and 2021.

The differences between the provision for income taxes and income taxes computed using the federal statutory rate for the years ended December 31, 2022, and 2021 are as follows (in thousands): 

	2022			2021
Reconciliation of income tax benefit to statutory rate:
Income benefit at statutory rate	$	(3,409	)	$	(3,948	)
State income taxes (benefit), net of federal income tax benefit		(107	)		(331	)
Permanent differences		89			(206	)
Change in valuation allowance		(5,899	)		2,458
Expiring federal net operating losses		9,745			–
Other		(419	)		2,027
Income tax provision	$	–		$	–

On December 31, 2022, the Company had federal net operating loss carryforwards of approximately $76.1 million for income tax purposes that begin to expire in 2022 and are subject to the ownership change limitations under Internal Revenue Code Section 382.