XML 26 R10.htm IDEA: XBRL DOCUMENT
v3.19.1

Income Taxes | 12 Months Ended
--- | ---
Dec. 31, 2018
Income Tax Disclosure [Abstract] |
Income Taxes | Income Taxes The Tax Cuts and Jobs Act ("TCJA") was enacted on December 22, 2017 and is effective January 1, 2018. The TCJA contains several key provisions, including a reduction in the U.S. Federal corporate income tax rate from 35% to 21% and a change to the corporate alternative minimum tax ("AMT"). We were required to remeasure all our U.S. deferred tax assets as of December 22, 2017 and recorded a decrease to deferred tax assets of $0.4 million and increase in valuation allowance of the same amount, all of which reflects the estimated impact associated with the re-measurement of our U.S. deferred tax asset at the lower U.S. federal corporate income tax rate. The TCJA's reduction in the U.S. statutory tax rate had no additional impact on the consolidated financial statement for the year ended December 31, 2018. The TCJA eliminated the corporate AMT and permits existing AMT credit carryforwards to be used to reduce the regular tax obligation in 2018, 2019, and 2020. Any AMT credit carryforwards that do not reduce regular taxes are eligible for a 50% refund in 2018 through 2020, and a 100% refund in 2021. Accordingly, we reclassified t he balance of the AMT credit from the deferred tax asset to an income tax receivable. The corresponding balance in the valuation allowance has been reversed into income tax benefit in the amount of $1,001,233. We expect to receive 50% of the refundable balance for tax years 2018 through 2020, and 100% of the remaining refundable balance in 2021. The significant components of loss before income taxes are as follows:
| Years Ended December 31,
| 2018 |  | 2017
U.S. operations | $ | (6,622,695 | ) |  | $ | (2,096,939 | )
Foreign operations | (75,218 | ) |  | (105,574 | )
Total loss before provision for income taxes | $ | (6,697,913 | ) |  | $ | (2,202,513 | )
The significant components of our (benefit) provision for income tax for the years ended December 31, 2018 and 2017 are as follows:
| Years Ended December 31,
| 2018 |  | 2017
Current and deferred tax (benefit) expense |  |  |
Federal | $ | (1,001,233 | ) |  | $ | (66,694 | )
State | — |  |  | — |
Foreign | — |  |  | — |
| $ | (1,001,233 | ) |  | $ | (66,694 | )
The income tax provision differs from the expense amount that would result from applying the federal statutory rates to income before income taxes due to deferred income tax resulting to permanent differences, state taxes and a change in the deferred tax valuation allowance. The reconciliation between the statutory tax rate and the Company’s actual effective tax rate is as follows:
| Years Ended December 31,
| 2018 |  | 2017
Tax at U.S. statutory rate | (21.00 | )% |  | (34.00 | )%
State taxes, net of federal benefit | (4.25 | ) |  | (3.45 | )
Non-deductible items | 0.44 |  |  | 1.73 |
Change in valuation allowance | 10.25 |  |  | 12.97 |
True-up adjustment | (0.17 | ) |  | 7.10 |
Foreign operations | (0.28 | ) |  | 0.66 |
Change in tax rates | — |  |  | 19.40 |
AMT adjustment | 0.06 |  |  | — |
Effective income tax rate | (14.95 | )% |  | 4.41 | %
The significant components of the Company’s net deferred income tax assets are as follows:
| December 31,
| 2018 |  | 2017
Gain/Loss on disposals | $ | — |  |  | $ | (5,900 | )
Stock option expense | 242,700 |  |  | 154,300 |
NOL carryforward | 2,668,000 |  |  | 1,088,000 |
AMT credit carryforward | — |  |  | 1,005,300 |
Research and development credits | 1,656,500 |  |  | 1,656,500 |
Other | 11,200 |  |  | (6,500 | )
Deferred tax asset, net of deferred tax liabilities | 4,578,400 |  |  | 3,891,700 |
Valuation allowance | (4,578,400 | ) |  | (3,891,700 | )
Net deferred tax asset | $ | — |  |  | $ | — |
Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. In assessing the realizability of deferred tax assets, management evaluates whether it is more likely than not that some portion or all of the deferred tax assets will not 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 management’s evaluation, the net deferred tax asset was offset by a full valuation allowance as of December 31, 2018 and 2017. The Company had net operating loss (“NOL”) carryforwards available in 2018 that will begin to expire in 2036. As of December 31, 2018, and 2017, the Company had NOLs in the amount of approximately $9.1 million and $2.9 million, respectively. As of December 31, 2018 and 2017, no liability for unrecognized tax benefits was required to be reported. The Company does not expect any significant changes in its unrecognized tax benefits in the next year. On March 30, 2017, the Company received a letter from the United States Internal Revenue Service (the “IRS”) informing the Company that its 2015 federal tax return was selected for examination. During the period of May to September 2017, the Company had several meetings with the IRS agent and provided the IRS with all requested information. On October 17, 2017, the Company received the final closing letter from the IRS, informing the Company that its review of our tax filing for 2015 was complete, and no changes were required.

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://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -URI http://asc.fasb.org/topic&trid=2144680 + Details
Name: | us-gaap_IncomeTaxDisclosureTextBlock
Namespace Prefix: | us-gaap_
Data Type: | nonnum:textBlockItemType
Balance Type: | na
Period Type: | duration