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 Taxes

(7) Income Taxes

 

Tax positions must meet a “more likely than not” recognition threshold at the effective date to be recognized. At December 31, 2015 and 2014, the Company did not have any uncertain tax positions. No interest and penalties related to uncertain tax positions were accrued at December 31, 2015 and 2014.

 

We did not record an income tax benefit or provision for the years ended December 31, 2015 and 2014.

 

Significant items making up the deferred tax assets and deferred tax liabilities as of December 31, 2015 and December 31, 2014 are as follows:

 

    2015     2014  
Current deferred taxes                
Inventories   $ 19,640     $ 19,640  
Other accruals     23,714       21,818  
Less: valuation allowance     (43,354 )     (41,458 )
Total current deferred tax assets   $ -     $ -  
Long term deferred taxes:                
Accelerated tax depreciation   $ 14,134     $ 12,162  
Non-cash, stock-based compensation, nonqualified     562,426       440,614  
Goodwill and intangibles     -       -  
Operating loss carry forwards and tax credits     12,028,900       9,720,260  
Less: valuation allowance     (12,605,460 )     (10,173,036 )
Total long term deferred tax assets (liabilities), net     -       -  
Total net deferred tax liabilities   $ -     $ -  

 

A valuation allowance is established if it is more likely than not that all or a portion of the deferred tax asset will not be realized. Accordingly, a valuation allowance was established in 2015 and 2014 for the full amount of our deferred tax assets due to the uncertainty of realization. We believe based on our projection of future taxable operating income for the foreseeable future, it is more likely than not that we will not be able to realize the benefit of the deferred tax asset at December 31, 2015.

 

We have net operating loss carry-forwards for federal income tax purposes of $26,752,000 as of December 31, 2015. Included in these numbers are loss carry-forwards that were obtained through the acquisition of BioSeq, Inc. and are subject to Section 382 NOL limitations. These net operating loss carry-forwards expire at various dates from 2018 through 2036.

 

We had net operating loss carry-forwards for state income tax purposes of approximately $20,895,000 at December 31, 2015. These net operating loss carry-forwards expire at various dates from 2016 through 2036.

 

We have research and development tax credit carry-forwards for federal income tax purposes of approximately $1,019,000 as of December 31, 2015 and research and development tax credit carry-forwards for state income tax purposes of approximately $165,000 as of December 31, 2015. The federal credit carry-forwards expire at various dates from 2016 through 2036. The state credit carry-forwards expire at various dates from 2023 through 2031.

 

In addition, we have federal alternative minimum tax credit carry-forwards for federal income tax purposes of approximately $217,000 as of December 31, 2015. These credits do not expire.

  

Our effective income tax (benefit) provision rate was different than the statutory federal income tax (benefit) provision rate as follows for the years ended December 31:

 

    2015     2014  
Federal tax provision rate     34 %     34 %
Permanent differences     (12 )%     (2 )%
State tax expense     0 %     0 %
Refundable AMT and R&D tax credit     0 %     0 %
Net operating loss carry back     0 %     0 %
Valuation allowance     (23 )%     (32 )%
Effective income tax provision     0 %     0 %