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Note 12 - Income Taxes | 12 Months Ended
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Dec. 31, 2015
Notes to Financial Statements |
Income Tax Disclosure [Text Block] |
12. | Income Taxes
Significant components of the Company's deferred tax assets for federal income taxes consisted of the following:
|  | December 31, |
Deferred Tax Assets |  | 2015 |  |  | 2014 |
Net operating loss carryforwards |  | $ | 25,165,014 |  |  | $ | 23,030,884 |
Stock option compensation |  |  | 6,937,512 |  |  |  | 6,083,848 |
Other |  |  | — |  |  |  | 26,783 |
Valuation allowance |  |  | (32,102,526 | ) |  |  | (29,141,515 | )
Net deferred tax asset |  | $ | — |  |  | $ | — |
Deferred Tax Liabilities |  |  |  |  |  |  |  |
Intangible assets |  | $ | (2,274,526 | ) |  | $ | (2,274,526 | )
During the year ended December 31, 2014, in conjunction with the accounting associated with the Paloma acquisition described in note 4 to the consolidated financial statements, the Company recorded a deferred tax liability related to tax basis differences associated with the acquired indefinite lived IPR&D intangible asset. As the entire deferred tax liability as of December 31, 2015 and 2014 relates to an indefinite lived intangible asset, which due to its indefinite life will not serve as reversible temporary differences that give rise to future taxable income; the Company maintains a full valuation allowance on its deferred tax assets, resulting in a net deferred tax liability position equal to the deferred tax liability on the Company’s indefinite lived intangible asset. 101 The Company has no current tax provision due to its current and accumulated losses, which result in net operating loss carryforwards. The Company recorded a deferred tax benefit of $2,816,884 in the consolidated statements of operations for the year ended December 31, 2014 due primarily to the reduction in the Company’s intangible assets resulting from the impairment loss on such assets recorded in 2014 and the amortization recorded on a portion of those impaired intangible assets prior to the date of the impairment. The Company had net operating loss carry-forwards (“NOL”) for federal and state income tax purposes of approximately:
|  | December 31, |
|  | 2015 |  |  | 2014 |
Combined NOL Carryforwards: |  |  |  |  |  |  |  |
Federal |  | $ | 63,013,194 |  |  | $ | 57,521,560 |
State |  |  | 54,131,507 |  |  |  | 50,440,965 |
The net operating loss carryforwards begin expiring in 2020 for Federal income tax purposes and 2016 for state income tax purposes. From December 31, 2012 to December 31, 2015, the number of outstanding shares of our common stock increased from 890,837 to 18,614,968. In January 2016, the number of outstanding shares of common stock further increased to 101,578,512 following completion of the Merger discussed in note 17. This increase in the number of shares outstanding constitutes a change of ownership, under the provisions of Internal Revenue Code Section 382 and similar state provisions, and is likely to significantly limit the Company’s ability to utilize these net operating loss carryforwards to offset future income. Accordingly, the Company recorded a 100% valuation allowance of the deferred tax assets as of December 31, 2015 and December 31, 2014 because of the uncertainty of their realization. A reconciliation of the income tax rate computed at the federal statutory rate to that recorded in the financial statements for 2015 and 2014 is as follows:
|  | 2015 |  |  | 2014 |
Rate reconciliation: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Federal tax benefit at statutory rate |  | $ | (8,337,236 | ) |  |  | (35.0 | %) |  | $ | (6,009,398 | ) |  |  | (35.0 | %)
State tax, net of Federal benefit |  |  | (1,368,216 | ) |  |  | (5.7 | %) |  |  | (986,051 | ) |  |  | (5.7 | %)
Change in valuation allowance |  |  | 2,961,011 |  |  |  | 12.4 | % |  |  | 2,866,582 |  |  |  | 10.9 | %
Goodwill impairment |  |  | 4,510,986 |  |  |  | 18.9 | % |  |  | — |  |  |  | — |
Other |  |  | 2,233,455 |  |  |  | 9.4 | % |  |  | 1,311,983 |  |  |  | 13.4 | %
Total provision |  | $ | — |  |  |  | 0.0 | % |  | $ | (2,816,884 | ) |  |  | (16.4 | %)

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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://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 235 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SX 210.4-08.(h)) -URI http://asc.fasb.org/extlink&oid=26873400&loc=d3e23780-122690 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 3 -URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32559-109319 Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 15 -URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32718-109319 Reference 4: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 9 -URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32639-109319 Reference 5: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 2 -URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32537-109319 + Details
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