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Income Taxes | 12 Months Ended
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Dec. 31, 2021
Income Taxes |
Income Taxes | 16. Income Taxes The Company has established a full valuation allowance for its deferred tax assets based on management’s belief that it is not more likely than not that the related deferred tax assets will be realized. For the years ended December 31, 2021 and 2020, there was no income tax expense or benefit. At December 31, 2021 and December 31, 2020, the Company had no recorded tax liabilities for uncertain tax positions. The Company does not expect any significant changes to the estimate amount of liabilities associated with uncertain tax positions in the next 12 months. Pursuant to the Spin-off, the Company and Alliqua BioMedical, Inc. entered into a Tax Matters Agreement to provide for the payment of tax liabilities and entitlement of refunds; allocation of the responsibility for, and cooperation in, filing of tax returns; and other matters relating to taxes for the pre- and post-Spin-off periods. Prior to the consummation of the Spin-Off, NexGel’s operating results were included in Adynxx consolidated U.S. federal and state income tax returns. For the purposes of the Company’s Consolidated and Combined Financial Statements for periods prior to the Separation, income tax expense and deferred tax balances have been recorded as if the Company filed tax returns on a standalone basis separate from Adynxx. The Separate Return Method applies the accounting guidance for income taxes to the standalone financial statements as if the Company was a separate taxpayer and a standalone enterprise prior to the separation from Adynxx. The income tax (benefit) provision consists of the following: ​
​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | For The Years Ended
​ | ​ | December 31
​ |  | 2021 |  | 2020
Federal: |  | ​ |  |  | ​ |
Current | ​ | $ | — | ​ | $ | —
Deferred | ​ |  | — | ​ |  | —
State and local: | ​ |  |  | ​ |  |
Current | ​ |  | — | ​ |  | —
Deferred | ​ |  | — | ​ |  | —
Income tax provision | ​ | $ | — | ​ | $ | —
​ Company has established a full valuation allowance for its deferred tax assets based on management’s belief that it is not more likely than not that the related deferred tax assets will be realized. For the years ended December 31, 2021 and 2020, the expected tax benefit based on the statutory rate reconciled with the actual benefit is as follows: ​
​ | ​ | ​ | ​ | ​ | ​
​ | ​ | For The Years Ended December 31, |
​ |  | 2021 |  | 2020 |
U.S. federal statutory rate |  | 21.0 | % | 21.0 | %
State tax rate, net of federal benefit |  | 5.3 | % | 5.3 | %
Permanent differences |  |  |  |  | ​
Non-deductible expenses |  | (10.5) | % | (1.3) | %
State tax change |  | 0.0 | % | 0.0 | %
Timing differences | ​ | 0.6 | % | 0.0 | %
Change in valuation allowance |  | (16.4) | % | (25.0) | %
Income tax provision |  | 0.0 | % | 0.0 | %
​ For the years ended December 31, 2021 and 2020, differences between the expected tax expense based on the federal statutory rate and the actual tax expense is primarily attributable to losses for which no benefit is recognized. As of December 31, 2021 and 2020, the Company’s deferred tax assets consisted of the effects of temporary differences attributable to the following: ​
​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | As of December 31,
​ |  | 2021 |  | 2020
Deferred tax assets: |  | ​ |  |  | ​ |
Net operating loss carryforwards | ​ | $ | 3,165 | ​ | $ | 2,494
Intangible Assets | ​ |  | — | ​ |  | —
Other | ​ |  | 4 | ​ |  | 3
Total deferred tax assets | ​ |  | 3,169 | ​ |  | 2,497
Valuation allowance | ​ |  | (3,169) | ​ |  | (2,382)
Deferred tax assets, net of valuation allowance | ​ | $ | — | ​ | $ | 115
Deferred tax liabilities: | ​ |  | ​ | ​ |  |
Property and equipment, net | ​ |  | — | ​ |  | (115)
Total deferred tax liabilities | ​ |  | — | ​ |  | (115)
Net deferred tax liabilities | ​ | $ | — | ​ | $ | —
​ The deferred tax assets associated with net operating losses included in the table above reflect proforma net operating losses as if the Company were a separate taxpayer during the periods presented. As of December 31, 2021 and 2020, reported approximately $12.6 million and $10.0 million of federal NOL carryovers, respectively, which begin to expire in 2029 and through 2036. Similarly, the subsidiary’s Pennsylvania state returns reported state NOL carryovers of approximately $12.6 million and $10 million, as of December 31, 2021 and 2020, respectively. However, these loss carryforwards on a separate company basis may be subject to limitations on the amounts that may be utilized pursuant to Internal Revenue Code section 382 and applicable state law. Section 382 imposes significant limitations on the utilization of net operating losses after certain changes of corporate ownership. The Company will need to determine the amount of loss carryforwards that may be utilized in the future as necessary. In assessing the realization of deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets will be realized. The ultimate realization of the deferred tax assets is dependent upon the future generation of 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. After consideration of all the evidence, both positive and negative, management has recorded a full valuation allowance against net deferred tax assets at December 31, 2021 and 2020 because management has determined that it is more likely than not that these deferred tax assets will not be realized. The Company is subject to taxation in the U.S. and various states. Based on the history of net operating losses all jurisdictions and tax years are open for examination until the operating losses are utilized or the statute of limitations expires. As of December 31, 2021 and 2020, the Company does not have any significant uncertain tax positions.

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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=121826272&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=122134291&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=121826272&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=122134291&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=121826272&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 Reference 9: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 235 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SX 210.4-08(h)(2)) -URI http://asc.fasb.org/extlink&oid=120395691&loc=d3e23780-122690 + Details
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