XML 39 R20.htm IDEA: XBRL DOCUMENT v3.25.0.1
Income Taxes
 12 Months Ended
Dec. 31, 2024
Income Tax Disclosure [Abstract]  
Income Taxes Income Taxes
The components of the Company's net deferred tax assets at December 31 are as follows:
20242023
Deferred Tax Assets
Net operating loss and tax credits$14,312,099 $15,427,801 
Property and equipment and intangibles79,979 71,990 
Right-of-use liability1,205,692 1,307,178 
Intangible assets2,762,590 2,337,091 
Section 174 expenses2,586,832 2,208,093 
Allowance for accounts receivable306,007 147,919 
Reserve for expired product649,549 616,979 
Inventory266,695 185,189 
Business interest expense limitation54,720 — 
Deferred charges1,027,520 937,935 
Cumulative compensation costs incurred on deductible equity awards83,189 176,926 
Total deferred tax assets23,334,872 23,417,101 
Deferred Tax Liabilities
Right-of-use asset(1,385,534)(1,547,773)
Net deferred tax assets, before valuation allowance21,949,338 21,869,328 
Less: deferred tax asset valuation allowance(21,949,338)(21,869,328)
Net deferred taxes$— $— 
The following table summarizes the amount and year of expiration of the Company's federal and state net operating loss carryforwards as of December 31, 2024:
Years of expirationFederalState
2025$— $213,534 
2026-204245,526,439 26,275,020 
Indefinite Period7,143,930 3,299,837 
Total federal and state net operating loss carryforwards$52,670,369 $29,788,391 
Income tax expense (benefit) includes the following components for the years ended December 31:
20242023
Current:
Federal$— $— 
State and other(22,669)45,769 
Total current income tax expense(22,669)45,769 
Deferred:
Federal— — 
State— — 
Total deferred income tax expense— — 
Total income tax expense (benefit)$(22,669)$45,769 
The Company’s effective income tax rate for 2024 and 2023 reconciles with the federal statutory tax rate as follows:
20242023
Income tax expense computed at federal statutory tax rate21.00 %21.00 %
State Taxes Net of Federal Benefit0.11 (0.58)
Tax Credits Generated3.31 0.80 
Change in valuation allowance(23.61)(4.96)
Permanent differences(1.86)(6.51)
Expiring tax credits(0.28)(3.32)
Deferred True-ups1.67 (7.16)
Net loss tax benefit (expense)0.34 %(0.73)%
The Company believes that it is not more likely than not that its net deferred tax assets will be realized. As such, the net deferred tax assets are fully offset with a valuation allowance as of the periods ended December 31, 2024 and 2023.
As of December 31, 2024, the Company has general business credit carryforwards of $1.5 million. These credit carryforwards will expire in years 2025 through 2044.
Years of expirationFederal
2025$25,323 
2026-20441,518,577 
Total federal and state credit carryforwards$1,543,900 
The Company expects it will continue to pay minimal taxes in future periods through the continued utilization of net operating loss carryforwards, as it is able to achieve taxable income through its operations. The Company is no longer subject to U.S. federal tax examinations for tax years before 2021, and with few exceptions, the Company is not subject to examination by state tax authorities for tax years which ended before 2021. Loss carryforwards and credit carryforwards generated or utilized in years earlier than 2021 remain subject to examination and adjustment. During 2012, the 2009 federal tax return was examined by the Internal Revenue Service with no significant findings or adjustments. During 2024, the 2022 federal tax return was selected for examination by the Internal Revenue Service. Based on the audit plan, the estimated completion date of this exam is July 31, 2025. The Company has no unrecognized tax benefits in 2024 and 2023.