4. INCOME TAXES

12 Months Ended

Dec. 31, 2019

Income Tax Disclosure [Abstract]

INCOME TAXES

4. INCOME TAXES

There is no material income tax expense or benefit recorded for the years ended December 31, 2019 or 2018 due to the Company's net losses and related deferred tax asset full valuation allowance.

Income tax expense (benefit) for the years ended December 31, 2019 and 2018 differed from the amounts computed by applying the U.S. federal income tax rates of 21 percent to the pretax income (loss) for the following reasons:

	2019			2018
Income tax expense (benefit) at U.S. federal statutory rates	$	(46,000	)	$	16,000
Foreign rate change impacts		29,000			70,000
Change in valuation allowance		18,000			(88,000	)
Other		(1,000	)		2,000
	$	–		$	–

The Company has a deferred tax asset and an equal amount of valuation allowance of approximately $2,038,000 and $2,020,000 at December 31, 2019 and 2018, respectively, relating primarily to tax net operating loss carryforwards approximating $1,921,000, as discussed below, and temporary differences related to the recognition of accrued licensing fees approximating $117,000.

As of December 31, 2019, the Company had tax net operating loss carryforwards ("NOLs") of approximately $2,522,000 and $5,563,000 available to offset future taxable Federal and foreign income, respectively. The Federal NOL begins to expire in 2025 over varying years. The foreign net operating loss relates to Germany and does not have an expiration date.

In the event the Company were to experience a greater than 50% change in ownership, as defined in Section 382 of the Internal Revenue Code, the utilization of the Company's Federal tax NOLs could be restricted.