Annual report pursuant to Section 13 and 15(d)

INCOME TAXES

v3.3.1.900
INCOME TAXES
12 Months Ended
Dec. 31, 2015
Income Tax Disclosure [Abstract]  
Income Tax Disclosure [Text Block]
10.  INCOME TAXES
 
 
 
2015
 
2014
 
 
 
 
 
 
 
 
 
Tax provision (benefit)
 
 
 
 
 
 
 
Current
 
 
 
 
 
 
 
Federal
 
$
 
$
 
State
 
 
 
 
 
Total current
 
 
 
 
 
 
 
 
 
 
 
 
 
Deferred
 
 
 
 
 
 
 
Federal
 
 
(3,105,641)
 
 
(3,868,524)
 
State
 
 
42,562
 
 
810,914
 
Total deferred
 
 
(3,063,079)
 
 
(3,057,610)
 
 
 
 
 
 
 
 
 
Change in valuation allowance
 
 
3,063,079
 
 
3,057,610
 
Total
 
$
 
$
 
 
Deferred tax assets consisted of the following at December 31:
 
 
 
2015
 
2014
 
 
 
 
 
 
 
 
 
Deferred tax assets
 
 
 
 
 
 
 
Federal net operating loss
 
$
32,565,906
 
$
29,246,965
 
Federal research and development tax credit carryforwards
 
 
2,858,628
 
 
2,689,775
 
State net operating loss
 
 
1,812,722
 
 
1,813,954
 
State research and development tax credit carryforwards
 
 
806,568
 
 
753,818
 
Capitalized research and development expenses
 
 
9,883,932
 
 
10,609,942
 
Stock-based compensation expense
 
 
1,993,664
 
 
1,758,909
 
Charitable contributions carryforwards
 
 
340
 
 
 
Intangible assets
 
 
253,971
 
 
313,412
 
Charitable contribution carryforwards
 
 
 
 
 
Accrued liabilities
 
 
35,332
 
 
35,392
 
Total deferred tax assets
 
 
50,211,063
 
 
47,222,167
 
 
 
 
 
 
 
 
 
Deferred tax liabilities
 
 
 
 
 
 
 
Depreciable assets
 
 
(171,602)
 
 
(245,785)
 
Total deferred tax liabilities
 
 
(171,602)
 
 
(245,785)
 
 
 
 
 
 
 
 
 
Net deferred tax assets
 
 
50,039,461
 
 
46,976,382
 
Less– valuation allowance
 
 
(50,039,461)
 
 
(46,976,382)
 
Total deferred tax assets
 
$
 
$
 
 
A reconciliation of income taxes computed using the U.S. federal statutory rate to that reflected in operations is as follows:
 
 
 
Year ended December 31,
 
 
 
2015
 
2014
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Income tax benefit using U.S. federal statutory rate
 
 
34.00
%
 
34.00
%
State income taxes
 
 
(0.50)
%
 
(6.65)
%
Permanent items
 
 
23.18
%
 
9.62
%
Change in valuation allowance
 
 
(55.76)
%
 
(37.98)
%
Other
 
 
(0.92)
%
 
1.01
%
Total
 
 
%
 
%
 
As of December 31, 2015, the Company had federal and state net operating loss carryforwards (“NOLs”) of approximately $95,782,000 and $34,530,000 respectively, which expire in 2018 through 2034 and in 2015 through 2034, respectively.  In addition, the Company has federal and state research and development and investment tax credits of approximately $2,859,000 and $1,222,000, respectively which expire in 2018 through 2033 and in 2018 through 2028, respectively.  The amount of NOLs and tax credit carryforwards which may be utilized annually in future periods will be limited pursuant to Section 382 of the Internal Revenue Code as a result of substantial changes in the Company’s ownership that have occurred or that may occur in the future.  The Company has not quantified the amount of such limitations.
 
Because of the Company’s limited operating history, continuing losses and uncertainty associated with the utilization of the NOLs in the future, management has provided a full allowance against the gross deferred tax asset.
 
The Company did not have unrecognized tax benefits or accrued interest and penalties at any time during the years ended December 31, 2015 or 2014, and does not anticipate having unrecognized tax benefits over the next twelve months.  The Company is subject to audit by the IRS and state taxing authorities for tax periods commencing January 1, 2009. Additionally, the Company may be subject to examination by the IRS for years beginning prior to January 1, 2009 as a result of its NOLs. However, any adjustment related to these periods would be limited to the amount of the NOL generated in the year(s) under examination.