XML 37 R18.htm IDEA: XBRL DOCUMENT
v3.3.1.900

Income Taxes | 12 Months Ended
--- | ---
Dec. 31, 2015
Income Tax Disclosure [Abstract] |
Income Taxes | Income Taxes The components of the Company's net deferred tax assets at December 31 are as follows:
|  | 2015 |  | 2014
Deferred Tax Assets |  |  |  |
Net operating loss and tax credits |  | $ | 2,274,994 |  |  | $ | 2,205,260 |
Property and equipment and intangibles |  | 326,499 |  |  | 300,301 |
Allowance for accounts receivable |  | 145,200 |  |  | 172,008 |
Reserve for expired product |  | 849,579 |  |  | 817,736 |
Inventory |  | 1,154,507 |  |  | 1,412,477 |
Deferred charges |  | 660,973 |  |  | 1,504,835 |
Cumulative compensation costs incurred on deductible equity awards |  | 1,675,757 |  |  | 1,676,729 |
Total deferred tax assets |  | 7,087,509 |  |  | 8,089,346 |
Deferred Tax Liabilities |  |  |  |
Intangible assets |  | (3,162,502 | ) |  | (3,707,535 | )
Net deferred tax assets, before valuation allowance |  | 3,925,007 |  |  | 4,381,811 |
Less: deferred tax asset valuation allowance |  | (185,497 | ) |  | (152,074 | )
Net deferred tax assets |  | $ | 3,739,510 |  |  | $ | 4,229,737 |
The following table summarizes the amount and year of expiration of the Company's federal and state net operating loss carryforwards as of December 31, 2015:
Years of expiration |  | Federal |  | State
2016 - 2018 |  | $ | — |  |  | $ | 562,865 |
2019 - 2028 |  | — |  |  | 38,585,151 |
2029 |  | 42,973,043 |  |  | 10,266,915 |
2030 - 2035 |  | 1,984,927 |  |  | 1,615,752 |
Total federal and state net operating loss carryforwards |  | $ | 44,957,970 |  |  | $ | 51,030,683 |
The Company has total recognized carryforward tax assets of $0.2 million for foreign tax credits and AMT carryforwards. In addition, the Company has recognized as of December 31, 2015 federal Orphan Drug and Research and Development tax credits of $1.1 million that expire between 2021 and 2035. The Company has unrecognized federal net operating loss carryforwards as a result of the exercise of nonqualified options of approximately $43.0 million. These benefits occurred as a result of the actual tax benefit realized upon an employee's exercise exceeding the cumulative book compensation charge associated with the awards and will be recognized in the year in which they are able to reduce current income taxes payable. Accordingly, deferred tax assets are not recognized for these net operating loss carryforwards or credit carryforwards resulting from the exercise of nonqualified options. The Company's utilization of these net operating loss carryforwards and a net operating loss in 2013, resulted in minimal income taxes paid in each of the years 2009 through 2015. The Company expects to pay minimal income taxes in 2016 through utilization of these net operating loss carryforwards. The Company has $51.0 million of state net operating loss carryforwards. This amount includes $45.1 million from the exercise of nonqualified options during 2009 and 2015. The state net operating loss carryforwards above include approximately $3.9 million that is subject to a valuation allowance at December 31, 2015. Income tax (expense) benefit includes the following components for the years ended December 31:
|  | 2015 |  | 2014 |  | 2013
Current: |  |  |  |  |  |
Federal |  | $ | (41,326 | ) |  | $ | (1,440,010 | ) |  | $ | (45,287 | )
State and other |  | (44,276 | ) |  | (250,064 | ) |  | (11,580 | )
Total current income tax expense |  | (85,602 | ) |  | (1,690,074 | ) |  | (56,867 | )
Deferred: |  |  |  |  |  |
Federal |  | (385,723 | ) |  | 213,552 |  |  | 1,426,701 |
State |  | (104,504 | ) |  | 95,778 |  |  | 153,217 |
Total deferred income tax benefit (expense) |  | (490,227 | ) |  | 309,330 |  |  | 1,579,918 |
Total income tax benefit (expense) |  | $ | (575,829 | ) |  | $ | (1,380,744 | ) |  | $ | 1,523,051 |
Deferred income tax is comprised of the following components for the years ended December 31:
|  | 2015 |  | 2014 |  | 2013
Deferred tax (expense) benefit, excluding items below |  | $ | 26,193 |  |  | $ | 85,844 |  |  | $ | 60,739 |
Inventory |  | (257,970 | ) |  | (83,418 | ) |  | 310,477 |
Operating loss carryforwards |  | 34,465 |  |  | 17,424 |  |  | 788,342 |
Tax credit carryforwards |  | 35,272 |  |  | 43,398 |  |  | 196,631 |
Valuation allowance due to changes in net deferred tax asset balances |  | (33,405 | ) |  | (20,457 | ) |  | (23,299 | )
Deductible equity awards |  | (972 | ) |  | 298,039 |  |  | 127,308 |
Allowance for accounts receivable |  | (26,808 | ) |  | (63,438 | ) |  | 161,084 |
Deferred charges |  | (59,028 | ) |  | 838,556 |  |  | 83,755 |
Reserve for expired product |  | 31,784 |  |  | 217,330 |  |  | (106,554 | )
Intangible assets |  | (239,758 | ) |  | (1,023,948 | ) |  | (18,565 | )
Deferred income tax benefit (expense) |  | $ | (490,227 | ) |  | $ | 309,330 |  |  | $ | 1,579,918 |
The valuation allowance at December 31, 2015, 2014 and 2013 is primarily related to state tax benefits at CET and CPSC that will likely not be realized. The Company’s effective income tax rate for 2015, 2014 and 2013 reconciles with the federal statutory tax rate as follows:
|  | 2015 |  | 2014 |  | 2013
Federal tax expense at statutory rate |  | 34 | % |  | 34 | % |  | 34 | %
State income tax expense (net of federal income tax benefit) |  | 4 | % |  | 5 | % |  | 4 | %
Permanent differences associated with general business credits |  | (3 | )% |  | (1 | )% |  | 5 | %
Other permanent differences |  | 10 | % |  | 1 | % |  | — | %
Other |  | 1 | % |  | (2 | )% |  | (1 | )%
Net income tax expense |  | 46 | % |  | 37 | % |  | 42 | %
During 2012, the Company’s 2009 federal tax return was examined with no significant findings or adjustments. Federal tax years that remain open to examination are 2010 through 2014. Due to a 2009 net operating loss carryback, federal tax years 2006 through 2008 remain open to the extent of net operating losses utilized in those years. State tax years that remain open to examination are 2008 to 2014. The Company has no unrecognized tax benefits in 2015, 2014 and 2013. Excluding the alternative minimum tax (AMT) tax credits, the Company will need to generate future taxable income in order to realize its deferred tax assets. Based upon the level of taxable income over the last three years and projections for future taxable income over the periods in which the deferred tax assets are deductible, management believes it is more likely than not that the Company will realize the benefits of these deductible differences, net of the existing valuation allowances at December 31, 2015. The amount of deferred tax assets considered realizable, however, could be reduced in the future periods if estimates of future taxable income during the carryforward period are reduced.

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