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INCOME TAXES
 12 Months Ended
Dec. 31, 2024
INCOME TAXES  
INCOME TAXES

7. INCOME TAXES

The Company accounts for income taxes under ASC 740. Deferred income tax assets and liabilities are determined based upon differences between financial reporting and tax bases of assets and liabilities, which are measured using the enacted tax rates and laws that will be in effect when the differences are expected to reverse.

The Company’s consolidated loss before income taxes for the years ended December 31, 2023, 2022 and 2021 is as follows:

​

​

​

​

​

​

​

​

​

​

Year Ended December 31,

​

    

2024

    

2023

Domestic

​

$

(11,722,734)

​

$

(21,913,297)

Foreign

​

 

(10,687,048)

​

 

(8,147,202)

Total

​

$

(22,409,782)

​

$

(30,060,499)

​

The provision for income taxes consists of the following:

​

​

​

​

​

​

​

​

​

    

December 31,

​

​

2024

    

2023

State Tax, including sale of New Jersey losses & credits

​

$

(1,690,825)

​

$

(813,739)

Foreign tax provision

​

 

—

​

 

—

Total

​

$

(1,690,825)

​

$

(813,739)

​

The Company has deemed any foreign earnings will be indefinitely reinvested. Currently, foreign operations have resulted in an accumulated deficit. The Company will continue to analyze their stance if their circumstances change in the future.

As of December 31, 2024, the Company had federal net operating loss (“NOL”) carry forwards of $103,299,951, state NOL carry forwards of $6,449,176, and foreign NOL carry forwards of $59,061,197 which are available to reduce future taxable income. Any unutilized NOL carry forwards will begin to expire at various dates starting in 2025 and some may be carried indefinitely. As of December 31, 2024 and 2023, the Company had Federal and state research and development tax credit carryforwards of $2,224,012 and $0 (net of uncertain tax benefits), respectively, available to reduce future tax liabilities which will begin to expire at various dates starting in 2026.

The federal NOL carryforwards of $47.7 million, if not utilized, will expire between 2025 and 2038. The federal NOL carryforwards of $55.7 million generated since 2018 are subject to an 80% limitation on taxable income, do not expire and will carry forward indefinitely.

The NOL carry forwards are subject to review and possible adjustment by the Internal Revenue Service and state tax authorities. The NOLs may become subject to an annual limitation in the event of certain cumulative changes in the ownership interest of significant shareholders over a three-year period in excess of 50%, as defined under Section 382 of the Internal Revenue Code of 1986, as amended, as well as similar state tax provisions. In addition to the new provisions enacted under the Tax Cuts and Jobs Act, This could limit the amount of NOLs that the Company can utilize annually to offset future taxable income or tax liabilities. The amount of the annual limitation, if any, will generally be determined based on the value of the Company immediately prior to the ownership change. Subsequent ownership changes may further affect the limitation in future years. The Company has not determined whether such a change has occurred and accordingly, the utilization of the net operating loss carryforwards may be subject to certain limitations.

Sale of NOLs

The Company may be eligible, from time to time, to receive cash from the sale of its Net Operating Losses and R&D tax credits under the State of New Jersey Technology Business Tax Certificate Transfer Program.

As of December 31, 2024, the Company has accrued a receivable $1,690,825 from the approved sale of the 2023 state NOL and research and development credits. The Company expects to collect this receivable in the first half of 2025.

The principal components of the Company’s deferred tax assets and liabilities are as follows:

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​

​

​

​

​

​

​

​

    

Year Ended December 31,

​

​

2024

​

2023

​

​

​

​

As Restated

Current and long term deferred tax assets:

    

​

  

    

​

  

Federal NOL

​

$

21,692,990

​

$

20,409,328

Foreign NOL

​

​

17,164,274

​

​

15,172,966

NJ NOL

​

​

458,536

​

​

1,253,713

Net operating loss carryforward

​

​

39,315,800

​

​

36,836,007

Stock Options

​

 

482,824

​

 

418,776

Federal R&D Credit

​

​

2,224,012

​

​

2,113,233

NJ R&D Credit

​

​

—

​

​

197,406

Research and development credit carryforward

​

 

2,224,012

​

 

2,310,639

Other

​

​

458,013

​

​

242,841

Charitable Contributions

​

​

5,832

​

​

5,832

Accruals and others

​

 

463,845

​

 

248,673

§174(b) research & experimental

​

 

5,485,885

​

 

5,495,850

§163(j) business interest expense

​

​

255,450

​

​

—

Lease Liability

​

 

3,625,251

​

 

3,730,280

Gross deferred tax assets

​

​

51,853,067

​

​

49,040,225

Less valuation allowance

​

 

(48,267,681)

​

 

(45,334,554)

​

​

​

3,585,386

​

​

3,705,671

Deferred tax liability:

​

 

​

​

 

​

Fixed Assets

​

 

(349,578)

​

 

(315,915)

Right of Use Asset

​

 

(3,235,808)

​

 

(3,389,756)

Net deferred tax assets

​

$

—

​

$

—

​

In assessing the realization of deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets will be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible. Management considers the scheduled reversal of deferred tax liabilities, projected future taxable income and tax planning strategies in making this assessment. Based on this assessment, management has established a full valuation allowance against all of the deferred tax assets for each period because it is more likely than not that all of the deferred tax assets will not be realized.

The changes in valuation allowance for the years ended December 31, 2024 and 2023 were $2,933,127 and $6,031,103, respectively.

A reconciliation of income tax (expense) benefit at the statutory federal income tax rate and income taxes as reflected in the financial statements is as follows:

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​

​

​

​

​

​

​

    

Year Ended December 31,

​

​

​

2024

    

2023

    

Federal statutory rate

 

21.0

%  

21.0

%

State taxes, net of federal benefit

 

2.6

 

5.1

 

Foreign rate differential

 

3.1

 

2.2

 

Permanent items

 

(3.6)

 

(1.9)

 

Other rate change and true-up

 

0.3

 

(0.7)

 

NJ NOL and R&D credit write-off

​

(8.4)

​

—

​

True up of foreign NOLs

​

(4.2)

​

—

​

NJ Amended NOL

​

1.8

​

—

​

Uncertain tax positions

​

(0.6)

​

(7.0)

​

Change in valuation allowance

 

(13.1)

 

(20.1)

 

R&D credit

 

1.1

 

1.8

 

Sale of 2023 NJ R&D & NOL

 

7.6

 

2.7

 

Other

​

—

​

(0.4)

​

Effective income tax rate

 

7.6

%  

2.7

%

​

A reconciliation of the unrecognized tax benefit balances is as follows:

​

​

​

​

​

​

​

​

​

    

Year Ended December 31,

​

​

2024

    

2023

Balance at beginning of the year

​

$

2,113,233

​

$

—

Increase for tax positions of prior years

​

 

(9,276)

​

 

1,571,431

Increase for tax positions in current year

​

 

120,056

​

 

541,802

Balance at end of the year

​

$

2,224,013

​

$

2,113,233

​

The total amount of unrecognized tax benefits that could affect our effective tax rate, if recognized, was $2.2 million and $2.1 as of December 31, 2024 and 2023, respectively. The Company and its subsidiaries file income tax returns in the U.S. federal jurisdiction and New Jersey. With few exceptions, we are no longer subject to U.S. federal, state and local, or non-U.S. income tax examinations by tax authorities for years before 2019, although NOL carryforwards and tax credit carryforwards from any year are subject to examination and adjustment for at least three years following the year in which they are fully utilized. As of December 31, 2024, no significant adjustments have been proposed relative to our tax positions.

For year ended December 31, 2024, there are no interest and penalties relating to our uncertain tax positions.