XML 29 R18.htm IDEA: XBRL DOCUMENT
v3.3.1.900

Income Taxes | 12 Months Ended
--- | ---
Dec. 31, 2015
Income Taxes [Abstract] |
INCOME TAXES | 11. INCOME TAXES Our income tax expense (benefit) aggregated $850,309, ($88,292) and $87,865 (amounting to 41%, (35%) and 43% of the income (loss) before income taxes, respectively) for the years ended December 31, 2015, 2014 and 2013, respectively. In 2015, we utilized approximately $1,700,000 of net operating loss carryforwards to offset otherwise taxable income. As of December 31, 2015, we have federal net operating loss carryforwards of approximately $115,000 that expire in 2031, if not utilized before then. Additionally, we have federal general business tax credit carryforwards of approximately $262,000 that expire in 2027 through 2034, if not utilized before then, as well as approximately $78,000 of state tax credits. The $965,000 licensing payment that we made during the fourth quarter of 2004 was treated as an intangible asset and is being amortized over 15 years, for tax return purposes only. Approximately $1,112,000 of our investment in a small-scale facility to produce the Drug Substance (our Active Pharmaceutical Ingredient, Nisin) for Mast OutÒ was expensed as incurred for our books. Included in this amount is approximately $820,000 that was capitalized and is being depreciated over statutory periods for tax return purposes only. The income tax provision consisted of the following:
|  | Year Ended December 31, |
|  | 2015 |  |  | 2014 |  |  | 2013 |
Current-state |  | $ | 3,150 |  |  | $ | 252 |  |  | $ | 301 |
Federal |  |  | 641,733 |  |  |  | (77,986 | ) |  |  | 74,713 |
State |  |  | 205,426 |  |  |  | (10,558 | ) |  |  | 12,851 |
Deferred |  |  | 847,159 |  |  |  | (88,544 | ) |  |  | 87,564 |
Total |  | $ | 850,309 |  |  | ($ | 88,292 | ) |  | $ | 87,865 |
The actual income tax (benefit) expense differs from the expected tax computed by applying the U.S. federal corporate tax rate of 34% to income before income tax as follows:
|  | Year Ended December 31, |
|  | 2015 |  |  | 2014 |  |  | 2013 |
Computed expected tax expense (benefit) |  | $ | 701,607 |  |  | ($ | 86,853 | ) |  | $ | 69,788 |
State income taxes, net of federal expense (benefit) |  |  | 32,699 |  |  |  | (6,968 | ) |  |  | 8,482 |
Share-based compensation |  |  | (7,524 | ) |  |  | 10,201 |  |  |  | 10,526 |
Research and development tax credit |  |  | (42,664 | ) |  |  | (19,405 | ) |  |  | (21,887 | )
State income tax rate change, net of federal (1) |  |  | 109,112 |  |  |  | 0 |  |  |  | 0 |
Other |  |  | 57,079 |  |  |  | 14,733 |  |  |  | 20,956 |
Total income tax (benefit) expense |  | $ | 850,309 |  |  | ($ | 88,292 | ) |  | $ | 87,865 |
(1) This impact is due to the actual state tax rate in 2015 being lower than the expected state tax rate used in computing prior deferred taxes. The significant components of our deferred tax asset consisted of the following:
|  | As of December 31, |
|  | 2015 |  |  | 2014 |
Product rights |  | $ | 91,344 |  |  | $ | 130,036 |
Property, plant and equipment |  |  | (26,717 | ) |  |  | 225,229 |
Federal and state tax credits |  |  | 339,585 |  |  |  | 266,078 |
Federal net operating loss carryforward |  |  | 39,241 |  |  |  | 464,998 |
State net operating loss carryforward |  |  | 0 |  |  |  | 165,901 |
Interest rate swap |  |  | 28,253 |  |  |  | 15,486 |
Prepaid expenses and other |  |  | (19,589 | ) |  |  | (6,925 | )
Deferred tax asset |  | $ | 452,117 |  |  | $ | 1,260,803 |
Deferred tax assets are recognized only when it is probable that sufficient taxable income will be available in future periods against which deductible temporary differences and credits may be utilized. However, the amount of the deferred tax asset could be reduced if projected income is not achieved due to various factors, such as unfavorable business conditions. If projected income is not expected to be achieved, we would decrease the deferred tax asset to the amount that we believe can be realized. Net operating loss carryforwards, credits, and other tax attributes are subject to review and possible adjustment by the Internal Revenue Service. Section 382 of the Internal Revenue Code contains provisions that could place annual limitations on the future utilization of net operating loss carryforwards and credits in the event of a change in ownership of the Company, as defined. The Company files income tax returns in the U.S. federal jurisdiction and several state jurisdictions. With few exceptions, the Company is no longer subject to income tax examinations by tax authorities for years before 2012. We currently have no tax examinations in progress. We also have not paid additional taxes, interest or penalties as a result of tax examinations nor do we have any unrecognized tax benefits for any of the periods in the accompanying financial statements.

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