Income Taxes

A reconciliation of income tax expense at the statutory rate to income tax expense at our effective tax rate is as follows:



	2019			2018
Tax Expense (Benefit) Computed at 22.79 % and 22.79% of Pretax Income (Loss)	$	(7,780,323	)	$	(7,299,026	)
Changes in Tax Laws	—			—
Foreign Income Tax Expense	—			—
Effect of Change in Valuation Allowance	7,780,323			7,299,026
Total Income Tax Expense	$	—		$	—

The details of the net deferred tax asset are as follows:



	December 31,
	2019			2018
Deferred tax assets:
Net Operating Loss Carryforward	$	52,935,000		$	45,055,000
Stock Based Compensation	7,514,000			6,405,000
Deferred Revenue	2,752,000			3,266,000
General Business Credit	6,872,000			6,872,000
Accrued Expenses	280,000			426,000
Inventories	866,000			1,685,000
Book over Tax Depreciation	18,000			13,000
Other Deferred Tax Assets	22,000			—
Total Deferred Tax Assets	71,259,000			63,722,000
Deferred Tax Liabilities:
Goodwill & Intangible Assets	136,000			122,000
Prepaid Expenses	332,000			187,000
Total Deferred Tax Liabilities	468,000			309,000
Subtotal	70,791,000			63,413,000
Valuation Allowance	(70,791,000		)	(63,413,000		)
Net Deferred Tax Asset	$	—		$	—

TCJA tax reform legislation enacted on December 22, 2017 makes major changes to the U.S. corporate income tax system, including lowering the U.S. federal corporate income tax rate to 21 percent from 35 percent, limiting or eliminating certain existing tax deductions, credits and incentives, allowing immediate expensing of capital expenditures through 2022, and eliminating the expiration of net operating loss carryforwards for losses generated in 2018 or after. ASC 740 requires companies to recognize the effects of tax law changes in the period of enactment, which for us was the fourth quarter of 2017, even though the effective date of most provisions of the TCJA is January 1, 2018. TCJA resulted in significant changes to our fourth quarter of 2017 income tax provision most notably a reduction in our deferred tax asset, before valuation allowance, as a result of the lower corporate income tax rate.

Deferred tax assets result primarily from net operating loss carryforwards. For tax purposes, we have net operating loss carryforwards of approximately $232,300,000, of which $169,000,000 that expire between 2020 and 2037.

In assessing the potential for realization of deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets will be realized upon the generation of future taxable income during the periods in which those temporary differences become deductible. We recognized no income tax expense or benefit for the years ended December 31, 2019, and 2018. We expect to incur operating losses until our drug products are marketed and generating sufficient profits to offset our operating expenses. Due to our history of recurring net losses, management has placed a full valuation allowance against the net deferred tax assets as of December 31, 2019 and 2018. The portion of the valuation allowance resulting from excess tax benefits on share based compensation that would be credited directly to contributed capital if recognized in subsequent periods is 3.8 million.

We account for our uncertain tax positions in accordance with ASC 740‑10, Income Taxes and the amount of unrecognized tax benefits related to tax positions is not significant at December 31, 2019 and 2018. We have not been under tax examination in any jurisdiction for the years ended December 31, 2019 and 2018.