Company: BKYI
Filing Date: 2025-04-23
Form Type: 10-K
Source: 0001437749-25-012824
Chunk: 92

Company: BIO KEY INTERNATIONAL INC
Filing Date: 2025-04-23
Form: 10-K
Item: Item 1A
Chunk 92
---
 a valuation allowance against deferred taxes when it is more likely than not that some portion, or all of its deferred tax assets will not be realized. The valuation allowance could be reduced or eliminated based on future earnings and future estimates of taxable income. With a full valuation allowance, any change in the deferred tax asset or liability is fully offset by a corresponding change in the valuation allowance. At  December 31, 2024 and 2023, the Company provided a valuation allowance on its net deferred tax assets of $15,740,289 and $17,214,690 respectively.

       63

   As of  December 31, 2024, the Company has U.S. federal net operating loss carryforwards of approximately $54.6 million. Approximately $36 million are subject to expiration between 2025 and 2037, and $18.6 million net operating loss carryforwards have no expiration date. These net operating loss carryforwards could be subject to the limitations under Section 382 of the Internal Revenue Code due to changes in the equity ownership of the Company. In addition, the Company has net operating loss carry forwards from various states of approximately $5.9 million which expire from 2026 through 2043.
    
   A reconciliation of the effective income tax rate on operations reflected in the statements of operations to the US federal statutory income tax rate is presented below.

       Year ended    Year ended  
   December 31,    December 31,  
   2024    2023  
         
 Federal statutory income tax rate   21%  21%
 State taxes, net of federal benefit   0.82   (1.41)
 Permanent differences   (1.84)  1.97 
 Expiration of net operating loss and research credit carryforwards   (46.14)  (7.84)
 Expiration and forfeiture of stock options   -   - 
 foreign rate differential   (7.23)  (5.84)
 rate change   (0.41)  (1.05)
 Other   0.14   (9.08)
 Valuation allowance   33.98   (0.24)
         
 Effective tax rate   0.32%  (2.5)%

   The Company has not been audited by the Internal Revenue Service (“IRS”) or any states in connection with