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Note 11 - Income Taxes | 12 Months Ended
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Dec. 31, 2018
Notes to Financial Statements |
Income Tax Disclosure [Text Block] | NOTE 1 1 : INCOME TAXES The Company accounts for income taxes using the asset and liability method, under which deferred income tax assets and liabilities are recognized for the estimated future tax consequences attributable to differences between the financial reporting and tax bases of assets and liabilities and are measured using enacted tax rates in effect for the year in which those temporary differences are expected to be recovered or settled. A valuation allowance is provided for the amount of deferred tax assets that, based on available evidence, are not expected to be realized. On December 22, 2017, the President signed into law the Tax Cut and Jobs Act of 2017 (the “2017 Tax Act”). The 2017 Tax Act provisions applicable to the Company include a permanent reduction to the U.S. federal corporate income tax rate from 35% to 21%, the capitalization and amortization of research and development related expenses, and placing additional limits on the use of net operating losses. Under ASC Topic 740, Accounting for Income Taxes , companies are required to recognize the changes in the period of enactment. During the year ended December 31, 2017, the Company recorded a reduction in the amount of $1.9 million in the carrying value of the Company’s U.S. deferred tax assets resulting from the 2017 Tax Act’s reduction in the U.S. federal corporate income tax rate from 35% to 21%, which is fully offset by the valuation allowance. The Company did not record an income tax benefit for its losses incurred for the years ending December 31, 2018 or 2017, due to uncertainty regarding utilization of its net operating loss carryforwards and due to its history of losses. The benefit for income taxes differs from the benefit computed by applying the federal statutory rate to loss before income taxes as follows:
|  | As of December 31, |
|  | 2018 |  |  | 2017 |
Expected federal income tax benefit |  | $ | (2,395,036 | ) |  | $ | (2,761,678 | )
Stock compensation |  |  | 169,957 |  |  |  | 197,336 |
Other permanent items |  |  | 1,616 |  |  |  | 2,668 |
Effect of change in valuation allowance |  |  | 2,223,463 |  |  |  | (15,344,015 | )
Prior year true-up |  |  |  |  |  |  | (126,031 | )
Tax rate change |  |  |  |  |  |  | 1,912,427 |
Effect of NOL limitation |  |  |  |  |  |  | 16,119,293 |
Actual federal income tax benefit |  | $ |  |  |  | $ |  |
The components of net deferred tax assets and liabilities are as follows:
|  | Year Ended December 31, |
|  | 2018 |  |  | 2017 |
Deferred tax assets |  |  |  |  |  |  |  |
Obsolete inventory |  | $ | 21,881 |  |  | $ | 21,881 |
Accrued vacation |  |  | 33,755 |  |  |  | 31,051 |
Accrued bonuses |  |  | 99,666 |  |  |  |  |
Stock-based compensation |  |  | 968,170 |  |  |  | 620,789 |
Basis difference in fixed assets |  |  | 33,241 |  |  |  | 33,241 |
Intangible assets, net |  |  | 572,687 |  |  |  | 634,521 |
Contribution, carryforward |  |  | 707 |  |  |  | 677 |
Net operating loss carryforwards |  |  | 2,588,401 |  |  |  | 747,589 |
Capital loss carryforward |  |  | 1,027,111 |  |  |  | 1,027,111 |
Valuation allowance |  |  | (5,312,769 | ) |  |  | (3,089,306 | )
Deferred tax asset |  | $ | 32,850 |  |  | $ | 27,554 |
Deferred tax liabilities |  |  |  |  |  |  |  |
Other |  | $ | (32,850 | ) |  | $ | (27,554 | )
Net deferred tax asset |  | $ |  |  |  | $ |  |
Based on an assessment of all available evidence including, but not limited to the Company’s limited operating history in its core business and lack of profitability, uncertainties of the commercial viability of its technology, the impact of government regulation and healthcare reform initiatives, and other risks normally associated with biotechnology companies, the Company has concluded that it is more likely than not that these net operating loss carryforwards and credits will not be realized and, as a result, a full valuation allowance has been recorded against the Company’s deferred income tax assets. Utilization of the net operating loss carryforwards may be subject to a substantial annual limitation due to ownership change limitations that may have occurred or that could occur in the future, as required by the Internal Revenue Code Section 382. In general, an “ownership change,” as defined by the code, results from a transaction or series of transactions over a three -year period resulting in an ownership change of more than 50 percentage points of the outstanding stock of a company by certain stockholders or public groups. Any limitation may result in expiration of all or a portion of the net operating loss carryforwards before utilization. Since the Company’s initial public offering, ownership changes have triggered a Section 382 limitation, which limits the ability to utilize net operating loss carryforwards. The Company has incurred net operating losses from inception. At December 31, 2018, the Company had domestic federal net operating loss carryforwards of approximately $58.2 million. In May of 2018 and October 2017, the Company completed public offerings, which triggered ownership changes under section 382. We believe that as of December 31, 2018, the gross net operating loss carryforwards have been limited to approximately $ 12.3 million, which are available to reduce future taxable income. Federal net operating loss carryforwards generated through December 31, 2017 expire at various dates beginning in 2029 through 2038, while federal net operating loss carryforwards generated in 2018 do not expire. The Company recorded a valuation allowance against all of its net deferred tax assets of approximately $5.3 million and $3.1 million as of December 31, 2018 and 2017, respectively, for a net increase of $2.2 million from 2017 to 2018 and a net decrease of $15.5 million from 2016 to 2017. The Company files income tax returns in the U.S. The Company is subject to tax examinations for the 2012 tax year and beyond. The Company has no unrecognized tax positions and does not believe there will be any material changes in its unrecognized tax positions over the next 12 months. The Company has not incurred any interest or penalties related to unrecognized tax positions. In the event that the Company is assessed interest or penalties at some point in the future, they will be classified in the financial statements as general and administrative expense.

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- Definition The entire disclosure for income taxes. Disclosures may include net deferred tax liability or asset recognized in an enterprise's statement of financial position, net change during the year in the total valuation allowance, approximate tax effect of each type of temporary difference and carryforward that gives rise to a significant portion of deferred tax liabilities and deferred tax assets, utilization of a tax carryback, and tax uncertainties information. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -URI http://asc.fasb.org/topic&trid=2144680 + Details
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