XML 25 R10.htm IDEA: XBRL DOCUMENT
v3.21.1

Note 4 - Income Taxes | 12 Months Ended
--- | ---
Dec. 31, 2020
Notes to Financial Statements |
Income Tax Disclosure [Text Block] | Note 4: Income Taxes The Tax Cuts and Jobs Act (“TCJA”) was enacted on December 22, 2017 and became 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 repeal of the corporate alternative minimum tax (“AMT”). 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, 2019. The TCJA repealed the corporate AMT but permitted unused AMT credit carryforwards to be used to reduce the regular tax obligation in future years. 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. Subsequently, the Coronavirus Aid, Relief and Economic Security Act (“CARES Act”), which was signed into law in March 2020, accelerated the full refund of any unused AMT credits from 2021 (as provided for in the TCJA) to 2018 or 2019, at the taxpayer’s election. Accordingly, we reclassified the balance of the AMT credit from the deferred tax asset to an income tax receivable in 2018. The corresponding balance in the valuation allowance has been reversed into income tax benefit in the amount of $1,001,233. In 2019, we have received 50% or approximately $0.5 million AMT refund for tax year 2018. In 2020, we received the remaining 50% or approximately $0.5 million AMT refund for the tax year 2019. For the year ended December 31, 2020, there was no provision for income taxes or unrecognized tax benefits recorded. The significant components of loss before income taxes are as follows:
|  | Years Ended December 31, |
|  | 2020 |  |  | 2019 |
U.S. operations |  | $ | (9,246,122 | ) |  | $ | (8,274,712 | )
Foreign operations |  |  | (47,833 | ) |  |  | (22,947 | )
Total loss before provision for income taxes |  | $ | (9,293,955 | ) |  | $ | (8,297,659 | )
The Company has no current or deferred income tax for the years ended December 31, 2020 and 2019. 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 permanent differences, state income 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, |
|  | 2020 |  |  | 2019 |
Tax at U.S. statutory rate |  |  | (21.00 | )% |  |  | (21.00 | )%
State taxes, net of federal benefit |  |  | (3.60 | ) |  |  | (4.61 | )
Non-deductible items |  |  | (0.45 | ) |  |  | (6.49 | )
Change in valuation allowance |  |  | 24.19 |  |  |  | 30.99 |
True-up adjustment |  |  | 1.33 |  |  |  | 0.18 |
Foreign operations |  |  | (0.13 | ) |  |  | (0.07 | )
Change in tax rates |  |  | — |  |  |  | 1.00 |
Other |  |  | (0.34 | ) |  |  | — |
Effective income tax rate |  |  | — | % |  |  | — | %
The significant components of the Company’s net deferred income tax assets are as follows:
|  | December 31, |
|  | 2020 |  |  | 2019 |
Stock option expense |  | $ | 689,600 |  |  | $ | 275,000 |
NOL carryforward |  |  | 7,080,600 |  |  |  | 5,214,200 |
Research and development credits |  |  | 1,656,500 |  |  |  | 1,656,500 |
Unrealized gain from investment in Alphazyme |  |  | (69,800 | ) |  |  | — |
Other |  |  | 7,900 |  |  |  | 4,400 |
Deferred tax asset, net of deferred tax liabilities |  |  | 9,364,800 |  |  |  | 7,150,100 |
Valuation allowance |  |  | (9,364,800 | ) |  |  | (7,150,100 | )
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, 2020 and 2019. The Company had net operating loss (“NOL”) carryforwards available in 2020 that will begin to expire in 2038. As of December 31, 2020, and 2019, the Company had NOLs in the amount of approximately $27.3 million and $19.7 million, respectively. As of December 31, 2020 and 2019, 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 June 20, 2019, the Company received a letter from the United States Internal Revenue Service (the “IRS”) informing the Company that its 2016 federal tax return was selected for examination. On June 16, 2020, the Company received the final closing letter from the IRS, informing the Company that its review of our tax filing for 2016 was complete, and no changes were required. Indian Tax Income generated in India is subject to Tax Deducted at Source (“TDS”), which is a means of collecting income tax at the source when income is generated rather than at a later date by the Indian government. The TDS amount paid can be used as foreign tax credit for US tax purposes. However, we do not expect to use the credit due to our loss from operation. As a result, the Company recorded a provision for income taxes of approximately $31,000 and $10,000 as a result of TDS for the years ended December 31, 2020 and 2019, respectively.

X
- References No definition available. + Details
Name: | us-gaap_DisclosureTextBlockAbstract
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/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
Name: | us-gaap_IncomeTaxDisclosureTextBlock
Namespace Prefix: | us-gaap_
Data Type: | nonnum:textBlockItemType
Balance Type: | na
Period Type: | duration