XML 37 R20.htm IDEA: XBRL DOCUMENT
v3.19.1

Income Taxes | 12 Months Ended
--- | ---
Dec. 31, 2018
Income Tax Disclosure [Abstract] |
Income Taxes | NOTE M – INCOME TAXES As of December 31, 2018, the Company had consolidated income tax net operating loss (“NOL”) carryforwards for federal tax purposes of approximately $167,402,048 and net operating loss carryforwards for foreign income tax purposes of approximately $39,589,337. The federal NOL carryforwards from 2005 forward will expire in various years beginning 2025 and ending through the year 2037. From 2025 through 2027, approximately $43 million of the NOL will expire, and from 2028 through 2036, approximately $116 million of the NOL will expire. The NOL generated in 2018 of approximately $8M will be carried forward indefinitely. The components of the provision for income tax (benefits) are attributable to continuing operations as follows:
|  | December 31, 2018 |  |  | December 31, 2017 |  |  | December 31, 2016 |
Current |  |  |  |  |  |  |  |  |  |  |  |
Federal |  | $ | — |  |  | $ | — |  |  | $ | — |
State |  |  | — |  |  |  | — |  |  |  | — |
|  | $ | — |  |  | $ | — |  |  | $ | — |
Deferred |  |  |  |  |  |  |  |  |  |  |  |
Federal |  | $ | — |  |  | $ | — |  |  | $ | — |
State |  |  | — |  |  |  | — |  |  |  | — |
|  | $ | — |  |  | $ | — |  |  | $ | — |
Deferred income taxes reflect the net tax effects of the 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 and liabilities as of December 31, 2018 are as follows:
Deferred tax assets: |  |  |  |
Net operating loss and tax credit carryforwards |  | $ | 48,404,432 |
Capital loss carryforward |  |  | 147,552 |
Accrued expenses |  |  | 559,096 |
Reserve for Dorado accounts receivable |  |  | 287,335 |
Start-up costs |  |  | 7,042 |
Excess of book over tax depreciation |  |  | 707,044 |
Stock option and restricted stock award expense |  |  | 1,331,067 |
Investment in unconsolidated entities |  |  | 1,387,970 |
Less: valuation allowance |  |  | (52,684,059 | )
|  | $ | 147,479 |
Deferred tax liability: |  |  |  |
Property and equipment basis |  | $ | 43,155 |
Prepaid expenses |  |  | 104,324 |
|  | $ | 147,479 |
Net deferred tax asset |  | $ | — |
As reflected above, we have recorded a net deferred tax asset of $0 at December 31, 2018. As required by the Accounting for Income Taxes topic in the ASC, we have evaluated whether it is more likely than not that the deferred tax assets will be realized. Based on the available evidence, we have concluded that it is more likely than not that those assets would not be realized without the recovery and rights of ownership or salvage rights of high-value shipwrecks or other forms of taxable income, thus a valuation allowance has been recorded as of December 31, 2018. The change in the valuation allowance is as follows:
December 31, 2018 |  | $ | 52,684,059 |
December 31, 2017 |  |  | 49,235,133 |
Change in valuation allowance |  | $ | 3,448,926 |
On December 22, 2017, the Tax Cuts and Jobs Act (the “Act”) was signed into United States tax law. The Company has adjusted its deferred tax assets, deferred tax liabilities, and valuation allowance at December 31, 2017 to reflect the Act’s reduction of corporate income tax rates. The federal and state income tax provision (benefit) is summarized as follows for the years ended:
|  | December 31, 2018 |  |  | December 31, 2017 |  |  | December 31, 2016 |
Expected (benefit) |  | $ | (1,923,757 | ) |  | $ | (3,718,058 | ) |  | $ | (2,186,550 | )
Effects of: |  |  |  |  |  |  |  |  |  |  |  |
State income taxes net of federal benefits |  |  | (92,707 | ) |  |  | (110,667 | ) |  |  | (65,082 | )
Nondeductible expense |  |  | 29,670 |  |  |  | 711,679 |  |  |  | (1,083,185 | )
Change in valuation allowance |  |  | 3,765,560 |  |  |  | 28,258,724 |  |  |  | 4,189,828 |
Foreign Rate Differential |  |  | (1,778,766 | ) |  |  | (1,097,681 | ) |  |  | (855,011 | )
Change in Deferred Taxes due to enacted changes in tax law |  |  | — |  |  |  | (24,043,997 | ) |  |  | — |
|  | $ | — |  |  | $ | — |  |  | $ | — |
The Company’s effective income tax rate is lower than what would be expected if the federal statutory rate were applied to income before income taxes primarily because of certain expenses deductible for financial reporting purposes that are not deductible for tax purposes, research and development tax credits, operating loss carryforwards, and adjustments to previously-recorded deferred tax assets and liabilities due to the enactment of the Tax Cuts and Jobs Act. We have not recognized a material adjustment in the liability for unrecognized tax benefits and have not recorded any provisions for accrued interest and penalties related to uncertain tax positions. The earliest tax year still subject to examination by a major taxing jurisdiction is 2015.

X
- References No definition available. + Details
Name: | us-gaap_IncomeTaxDisclosureAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration

X
- 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
Name: | us-gaap_IncomeTaxDisclosureTextBlock
Namespace Prefix: | us-gaap_
Data Type: | nonnum:textBlockItemType
Balance Type: | na
Period Type: | duration