INCOME TAXES (Tables)

6 Months Ended

Jun. 30, 2018

INCOME TAXES [Abstract]

Income Tax Net Benefit (Expense)

Income tax net benefit (expense) for the periods presented comprises the following:

	Six Months Ended June 30,						Year Ended December 31,
	2018			2017			2017			2016
				(unaudited)
Current:
Federal	$	327,594		$	-		$	-		$	-
State		(9,534	)		(18,595	)		(27,609	)		(13,480	)
Total current expense		318,060			(18,595	)		(27,609	)		(13,480	)
Deferred:
Federal		-			-			-			-
State		-			-			-			-
Total deferred expense		-			-			-			-
Income tax net expense	$	318,060		$	(18,595	)	$	(27,609	)	$	(13,480	)

Deferred Income Tax Assets

Significant components of the Company’s deferred income tax assets as of the dates presented are as follows:

				December 31,
	June 30, 2018			2017			2016
Reversals and accruals	$	668,813		$	686,573		$	1,053,863
Prepaid expenses		(38,944	)		(28,744	)		(43,774	)
Federal NOL carryforwards		5,540,016			5,185,438			8,530,493
State NOL carryforwards		714,588			681,364			615,919
Hong Kong NOL carryforwards		995,566			995,566			995,566
Federal benefit on state taxes under uncertain tax positions		96,144			94,142			136,969
Stock-based compensation		412,148			422,623			342,294
Research tax credit		235,742			434,637			434,637
Alternative minimum tax		23,149			350,743			348,264
Contributions carryforward		1,923			-			35,100
Depreciation		(159,100	)		(178,670	)		(286,608	)
Accrued rent		121,124			138,178			216,432
Loss on impairment of long-lived assets		33,157			33,864			53,042
Valuation allowance		(8,644,326	)		(8,815,714	)		(12,432,197	)
Totals		-			-			-
Total deferred income tax assets, net	$	-		$	-		$	-

Effective Income Tax Rate Reconciliation

The following are reconciliations between expected income taxes, computed at the applicable statutory federal income tax rate applied to pretax accounting loss, and the income tax net benefit (expense) for the periods presented:

	Six Months Ended			Year Ended December 31,
	June 30, 2018			2017			2016
Anticipated income tax benefit at statutory rate	$	334,716		$	144,795		$	1,534,176
State income tax expense, net of federal tax effect		7,755			(54,083	)		(9,350	)
Federal income tax effect of change in tax rate		-			(3,729,007	)		-
Income tax effect of uncertain tax positions		37,671			(17,946	)		(8,896	)
Return to provision adjustments		-			2,982			(23,070	)
Stock-based compensation		9,855			(36,233	)		(110,066	)
Other changes in deferred income tax assets, net		(243,325	)		(437	)		(13,118	)
Decrease (increase) in valuation allowance		171,388			3,662,320			(1,383,156	)
Income tax net benefit (expense)	$	318,060		$	(27,609	)	$	(13,480	)

Gross Liability for Uncertain Tax Positions

The following table summarizes the activity related to the Company’s gross liability for uncertain tax positions for the period from December 31, 2015 through June 30, 2018:

Balance at December 31, 2015	$	519,284
Increases related to prior fiscal year tax positions		13,480
Balance at December 31, 2016		532,764
Increases related to prior fiscal year tax positions		27,609
Balance at December 31, 2017		560,373
Decreases related to prior fiscal year tax positions		(35,670	)
Balance at June 30, 2018	$	524,703