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Note 11 - Income Taxes | 12 Months Ended
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Dec. 31, 2018
Notes to Financial Statements |
Income Tax Disclosure [Text Block] |
11 . | Income Taxes
At December 31, 2018, we have a consolidated federal net operating loss (“NOL”) carryforward of approximately $72.5 million, available to offset against future taxable income which expires in varying amounts in 2019 through 2038. Additionally, we have approximately $1,064,000 in research and development (“R&D”) tax credits that expire in 2022 through 2038 unless utilized earlier. No income taxes have been paid to date. Section 382 of the Internal Revenue Code contains provisions that may limit our utilization of our NOL and R&D tax credit carryforwards in any given year as a result of significant changes in ownership interests that have occurred in past periods or may occur in future periods. On December 22, 2017, the Tax Cuts and Jobs Act (the “Tax Act”) was enacted into law in the United States. The Tax Act made broad changes to the U.S. tax code, including, but not limited to, reducing the U.S. federal corporate tax rate from 35% to 21%. With regard to the Tax Act impact to the Company for the year ended December 31, 2017, we have recognized the impact of tax reform related to the revaluation of deferred tax assets and liabilities based on the rates we expect them to reverse in the future, which is generally 21%. The amount recorded as tax expense related to the remeasurement of the deferred tax balance was approximately $10.1 million, which was fully offset by a reduction in the valuation allowance. Deferred income taxes reflect the net effect of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. Significant components of our deferred tax assets and liabilities included the following at December 31, 2018 and 2017:
|  | 2018 |  |  | 2017 |
Deferred tax assets: |  |  |  |  |  |  |  |
Net operating loss carryforward |  | $ | 16,681,908 |  |  | $ | 16,273,259 |
Research and development tax credit carryforward |  |  | 1,063,877 |  |  |  | 949,340 |
Stock-based compensation expense |  |  | 1,808,509 |  |  |  | 1,709,867 |
Accrued salaries and directors’ fees |  |  | 317,246 |  |  |  | 185,961 |
Depreciation |  |  | 8,414 |  |  |  | 5,532 |
Total deferred tax assets |  |  | 19,879,954 |  |  |  | 19,123,959 |
Deferred tax liabilities |  |  | - |  |  |  | - |
Net deferred tax assets |  |  | 19,879,954 |  |  |  | 19,123,959 |
Valuation allowance |  |  | (19,879,954 | ) |  |  | (19,123,959 | )
Net deferred tax asset after reduction for valuation allowance |  | $ | -0- |  |  | $ | -0- |
We have established a full valuation allowance equal to the amount of our net deferred tax assets due to uncertainties with respect to our ability to generate sufficient taxable income to realize these assets in the future. A reconciliation of the income tax benefit on losses at the U.S. federal statutory rate to the reported income tax expense is as follows:
|  | 2018 |  |  | 2017 |  |  | 2016 |
U.S. federal statutory rate applied to pretax loss |  | $ | (537,620 | ) |  | $ | (737,855 | ) |  | $ | (1,112,378 | )
Permanent differences |  |  | 549 |  |  |  | 436 |  |  |  | 2,012 |
Research and development credits |  |  | (53,884 | ) |  |  | (57,109 | ) |  |  | (59,087 | )
Impact of Tax Act |  |  | - |  |  |  | 10,086,795 |  |  |  | - |
Change in valuation allowance |  |  | 590,955 |  |  |  | (9,292,267 | ) |  |  | 1,169,453 |
Reported income tax expense |  | $ | -0- |  |  | $ | -0- |  |  | $ | -0- |

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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://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -URI http://asc.fasb.org/topic&trid=2144680 + Details
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