Note 7 - Income Taxes

12 Months Ended

Dec. 31, 2019

Notes to Financial Statements

Income Tax Disclosure [Text Block]

Note

7.

  Income Taxes

Our provision for income taxes for the years ended

December 31, 2019

and

2018

consists of the following:

	2019			2018
Current provision:
Federal	$	-		$	-
State		-			-
Foreign		-			-
Total current provision		-			-
Deferred provision (benefit):
Federal		(545,792	)		7,726
State		1,001,786			(2,749,386	)
Foreign		-			-
Total deferred provision (benefit)		455,994			(2,741,660	)
Valuation allowance		(455,994	)		2,741,660
Consolidated income tax provision	$	-		$	-

We provide a full valuation allowance on our net deferred tax assets because management has determined that it is more likely than

not

that we will

not

earn income sufficient to realize the deferred tax assets during the asset reversal periods.

The difference between income taxes computed by applying the statutory federal income tax rate to consolidated losses before income taxes and the consolidated provision for income taxes is attributable to the following:

	2019			2018
Federal statutory rate		(21.0	%)		(21.0	%)
State income taxes, net of Federal benefits		(5.3	%)		(5.0	%)
Rate changes		(6.4	%)		(66.3	%)
Change in fair value of liability classified warrants		(1.6	%)		(17.3	%)
Other, including non-deductible expenses		28.8	%		53.9	%
Valuation allowance		5.5	%		55.7	%
Total		0.0	%		0.0	%

The tax effects of significant temporary differences representing deferred tax assets as of

December 31

are:

	2019			2018
Net operating loss carryforwards	$	43,190,604		$	42,580,533
Stock based compensation expense		2,605,277			2,643,471
Tax credit carryforwards and other		889,372			1,005,255
Gross deferred tax assets		46,685,253			46,229,259
Valuation allowance		(46,685,253	)		(46,229,259	)
Net deferred tax assets	$	-		$	-

The Company had Federal net operating loss (“NOL”) carryforwards of approximately

$160

million at

December 31, 2019

of which

$146

million was created prior to

2018

and began expiring in

2019.

The Company also has certain Federal tax credit carryforwards that will begin expiring in

2020.

The timing and manner in which these net operating loss carryforwards and credits

may

be used in any year will be limited to the Company's ability to generate future earnings and also

may

be limited by certain provisions in the U.S. tax code. The Company has

not

identified any uncertain tax positions and did

not

recognize any adjustments for unrecognized tax benefits. The Company remains subject to examination for income tax returns dating back to

2016.