Company: AWRE
Filing Date: 2025-03-13
Form Type: 10-K
Source: 0000950170-25-038714
Chunk: 121

Company: AWARE INC /MA/
Filing Date: 2025-03-13
Form: 10-K
Item: Item 8
Chunk 121
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 and 2023.  The principal components of deferred tax assets, net, were as follows at December 31 (in thousands):

45

        2024

        2023

        Stock-based compensation
         
        $
        215

        $
        663

        Research and development credits

        6,662

        6,623

        Capitalized research expense

        3,846

        3,094

        Net operating loss

        2,655

        1,768

        Loss on note receivable

        —

        644

        Other

        318

        257

        Total deferred tax assts

        13,696

        13,049

        Valuation allowance

        (13,222
        )

        (12,504
        )

        Deferred tax liabilities

        Depreciation

        (113
        )

        (138
        )

        Intangibles

        (361
        )

        (407
        )

        Total deferred tax liabilities

        (474
        )

        (545
        )

        Net deferred tax assets (liabilities)
         
        $
        -

        $
        -

       As of December 31, 2024, $6.7 million of our deferred tax assets relate to research and development credit carryforwards.  Further, a significant portion of our deferred tax assets relates to federal and state research and development credits.  These credits may only offset 75% of the tax liability after net operating loss carryforwards are utilized and thus, we have the risk that the credits could expire before utilization if sufficient taxable income in the carryforward periods doesn’t exist.As of December 31, 2024, we had a federal net operating loss carryforward of $7.4 million, which may be available to offset future income tax liabilities.  $6.8 million of those NOLs can be carried forward indefinitely and the remaining $0.6 million expire in 2037.  As of December 31, 2024, we had State NOL carryforwards of $26.5 million, which expire at various dates though 2044.  We evaluated and considered all available evidence, both positive and negative, to determine whether, based on the weight of that evidence, a valuation allowance for deferred tax assets was needed.  The deferred tax assets are composed principally of net operating loss carryforwards, capitalized research costs and research