Annual report pursuant to Section 13 and 15(d)

Income Taxes

v3.24.1.1.u2
Income Taxes
 12 Months Ended
Dec. 31, 2023
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. On December 31, 2023 and 2022, the Company did not have any uncertain tax positions. No interest and penalties related to uncertain tax positions were accrued at December 31, 2023, and 2022. Our tax returns for fiscal years 2022, 2021 and 2020 are open to examination.

 

Significant items making up the deferred tax assets and deferred tax liabilities as of December 31, 2023 and 2022 are as follows:

    2023     2022  
Long term deferred taxes:                
Inventory reserve   $ 300,254     $ 268,548  
Other accruals     1,170,640       99,362  
Other    

89,474

       15,715  
Non-cash, stock-based compensation, nonqualified     2,533,983       872,967  
Impairments     167,656       104,609  
Operating loss carry forwards and tax credits     36,324,508       31,026,899  
Less: valuation allowance     (40,586,515 )     (32,388,100 )
Total net deferred tax assets   $ -     $ -  

 

 

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, we established a valuation allowance in 2023 and 2022 for the full amount of our deferred tax assets for the uncertainty of realization. We believe that 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, 2023.

 

We have net operating loss carry-forwards for federal income tax purposes of approximately $129,304,842 as of December 31, 2023. 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 2024 through 2038 Under the Tax Reform Act, NOL’s generated after December 31, 2017 can offset only 80% of a corporation’s taxable income in any year. With limited exceptions, NOL’s generated after 2017, $91,016,166 cannot be carried back, but they can be carried forward indefinitely.

 

We have research and development tax credit carryforwards for federal income tax purposes of approximately $2,288,308 as of December 31, 2023 and research and development tax credit carryforwards for state income tax purposes of approximately $381,425 as of December 31, 2023. The federal credit carryforwards expire at various dates from 2022 through 2037. The state credit carryforwards expire at various dates from 2023 through 2034.

 

The following table reconciles the U.S. Federal statutory tax rate to the Company’s effective tax rate:

 

    2023     2022  
Statutory U.S. Federal tax rate     21 %     21 %
Permanent differences     (0 )     (0 )
State tax expense     (0 )     (0 )
Refundable AMT and R&D tax credit     (0 )     (0 )
Valuation allowance     (21 )     (21 )
Effective tax rate     0 %     0 %