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Note 9 - Income Taxes
 12 Months Ended
Dec. 31, 2021
Notes to Financial Statements  
Income Tax Disclosure [Text Block]

9.

Income Taxes

 

At December 31, 2021, we have a consolidated federal net operating loss (“NOL”) carryforward of approximately $75.2 million available to offset against future taxable income of which approximately $48.9 million expires in varying amounts in 2022 through 2037. Additionally, we have approximately $1.6 million in research and development (“R&D”) tax credits that expire in 2022 through 2041 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.

 

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, 2021 and 2020:

 

  

2021

  

2020

 

Deferred tax assets:

        

Net operating loss carryforward

 $18,449,694  $14,737,240 

Research and development tax credit carryforward

  1,566,293   1,189,110 

Stock-based compensation expense

  129,475   4,870 

Accrued salaries

  69,940   72,721 

Total deferred tax assets

  20,215,402   16,003,941 

Deferred tax liabilities

        

Depreciation

  30,945   28,274 

Net deferred tax assets

  20,184,457   15,975,667 

Valuation allowance

  (20,184,457)  (15,975,667)

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:

 

  

2021

  

2020

 

U.S. federal statutory rate applied to pretax loss

 $(3,899,767) $(621,194)

Permanent differences

  -   65 

Research and development credits

  (377,183)  (66,574)

Change in valuation allowance, net of expired items and other adjustments

  4,276,950   687,703 

Reported income tax expense

 $-0-  $-0-