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Income Taxes | 12 Months Ended
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Dec. 31, 2020
Income Tax Disclosure [Abstract] |
INCOME TAXES | 16. INCOME TAXES Our income tax (benefit) expense aggregated ($10,136) and $28,174 (amounting to (1%) and 2% of our loss before income taxes, respectively) for the years ended December 31, 2020 and 2019, respectively. As of December 31, 2020, we had federal net operating loss carryforwards of $14,642,294 of which $12,930,387 do not expire and $1,711,907 which expire in 2034 through 2037 (if not utilized before then) and state net operating loss carryforwards of $2,647,292 that expire in 2037 through 2038 (if not utilized before then). Additionally, we had federal general business tax credit carryforwards of $490,018 that expire in 2027 through 2039 (if not utilized before then) and state tax credit carryforwards of $763,350 that expire in 2023 through 2039 (if not utilized before then). The provision for income taxes is determined using the asset and liability approach of accounting for income taxes. Under this approach, deferred taxes represent the estimated future tax effects of temporary differences between book and tax treatment of assets and liabilities and carryforwards to the extent they are realizable. During the second quarter of 2018, we assessed our historical and near-term future profitability and recorded $563,252 in non-cash income tax expense to create a full valuation allowance against our net deferred tax assets (which consist largely of net operating loss carryforwards and federal and state credits) based on applicable accounting standards and practices. At that time, we had incurred a net loss for six consecutive quarters, had not been profitable on a year-to-date basis since the nine-month period ended September 30, 2017 and projected additional net losses for some period going forward before returning to profitability. Should future profitability be realized at an adequate level, we would be able to release this valuation allowance (resulting in a non-cash income tax benefit) and realize these deferred tax assets before they expire. We will continue to assess the need for the valuation allowance at each quarter and, in the event that actual results differ from these estimates, or we adjust these estimates in future periods, we may need to adjust our valuation allowance. Adjustments related to the termination of our interest rate swap agreements were recorded during the first quarter of 2020. No subsequent adjustments were recorded. 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. We file income tax returns in the U.S. federal jurisdiction and several state jurisdictions. 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. The income tax provision consisted of the following:
|  | During the Years Ended December 31, |
|  | 2020 |  |  | 2019 |
Current |  |  |  |  |  |
Federal |  | $ | — |  |  | $ | — |
State |  |  | 4,496 |  |  |  | 3,490 |
Current subtotal |  |  | 4,496 |  |  |  | 3,490 |
Deferred |  |  |  |  |  |  |  |
Federal |  |  | (418,295 | ) |  |  | (240,458 | )
State |  |  | (24,337 | ) |  |  | (31,205 | )
Deferred subtotal, gross |  |  | (442,632 | ) |  |  | (271,663 | )
Valuation allowance |  |  | 428,000 |  |  |  | 296,347 |
Deferred subtotal, net |  |  | (14,632 | ) |  |  | 24,684 |
Income tax (benefit) expense |  | $ | (10,136 | ) |  | $ | 28,174 |
The actual income tax expense differs from the expected tax computed by applying the U.S. federal corporate tax rate of 21% to the loss before income taxes during the years ended December 31, 2020 and 2019 respectively, as follows:
|  | During the Years Ended December 31, |
|  | 2020 |  |  | 2019 |
|  | $ |  |  | % |  |  | $ |  |  | % |
Computed expected income tax expense rate |  | $ | (216,773 | ) |  |  | (21.00 | )% |  | $ | (266,157 | ) |  |  | (21.00 | )%
State income taxes, net of federal expense |  |  | (15,674 | ) |  |  | (1.52 | ) |  |  | (21,894 | ) |  |  | (1.73 | )
Share-based compensation |  |  | 30,121 |  |  |  | 2.92 |  |  |  | 37,811 |  |  |  | 2.98 |
Tax credits |  |  | (55,180 | ) |  |  | (5.35 | ) |  |  | (27,815 | ) |  |  | (2.19 | )
Valuation allowance |  |  | 428,000 |  |  |  | 41.46 |  |  |  | 296,347 |  |  |  | 23.38 |
Paycheck Protection Program loan forgiveness |  |  | (196,917 | ) |  |  | (19.08 | ) |  |  | — |  |  |  | — |
Other |  |  | 16,287 |  |  |  | 1.59 |  |  |  | 9,882 |  |  |  | 0.78 |
Income tax (benefit) expense/rate |  | $ | (10,136 | ) |  |  | (0.98 | )% |  | $ | 28,174 |  |  |  | 2.22 | %
The significant components of our deferred tax assets, net, consisted of the following:
|  | As of December 31, |
|  | 2020 |  |  | 2019 |
Product rights |  | $ | 444 |  |  | $ | 6,709 |
Property, plant and equipment |  |  | (2,482,237 | ) |  |  | (2,306,435 | )
Federal general business tax credits |  |  | 490,018 |  |  |  | 434,838 |
Federal net operating loss carryforwards |  |  | 3,074,882 |  |  |  | 2,509,471 |
State tax credits carryover |  |  | 826,091 |  |  |  | 841,558 |
Interest rate swaps |  |  | — |  |  |  | 14,632 |
Prepaid expenses and other |  |  | (8,814 | ) |  |  | (12,070 | )
UNICAP |  |  | 11,791 |  |  |  | 16,756 |
Incentive compensation |  |  | 53,179 |  |  |  | 31,895 |
Valuation allowance |  |  | (1,965,354 | ) |  |  | (1,537,354 | )
Deferred tax assets, net |  | $ | — |  |  | $ | — |

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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/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 21 -URI http://asc.fasb.org/extlink&oid=84230637&loc=d3e32857-109319 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section S99 -Paragraph 2 -Subparagraph (SAB Topic 11.C) -URI http://asc.fasb.org/extlink&oid=116825942&loc=d3e330215-122817 Reference 3: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 17 -Subparagraph (b) -URI http://asc.fasb.org/extlink&oid=84230637&loc=d3e32809-109319 Reference 4: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SAB TOPIC 6.I.5.Q1) -URI http://asc.fasb.org/extlink&oid=116825942&loc=d3e330036-122817 Reference 5: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 14 -URI http://asc.fasb.org/extlink&oid=84230637&loc=d3e32705-109319 Reference 6: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 270 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=6424409&loc=d3e44925-109338 Reference 7: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -URI http://asc.fasb.org/topic&trid=2144680 Reference 8: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 30 -Section 50 -Paragraph 2 -Subparagraph (a) -URI http://asc.fasb.org/extlink&oid=6424122&loc=d3e41874-109331 + Details
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