Income Taxes (Tables)

12 Months Ended

Dec. 31, 2020

Schedule of Effective Income Tax Rate Reconciliation

The reconciliation of federal statutory income tax to the Company's provision for income taxes is as follows:


	As of December 31,
	2020		2019
Expected provision at statutory rate	21.0	%	21.0	%
State tax - net of federal benefit	7.5	%	5.3	%
Tax credits	2.8	%	3.2	%
Permanent differences	(1.0)	%	(8.1)	%
Other	1.1	%	2.9	%
Change in valuation allowance	(31.4)	%	(24.3)	%
Total provision for income taxes	—	%	—	%

Schedule of Deferred Tax Assets

The significant components of the Company’s deferred tax assets and liabilities as of December 31, 2020 and 2019 are comprised of the following:


	As of December 31,
	2020		2019
Deferred tax assets:
Net operating loss carryforwards	$	35,714,104	$	31,575,288
Capital loss carryforwards	7,298,024		7,298,052
Start-up costs	11,234,623		11,234,751
Accruals and reserves	397,982		166,611
Intellectual property amortization	2,285,247		555,352
Stock-based compensation expense	1,290,212		1,123,100
Tax credits	2,541,244		1,926,677
Lease liability	125,266		96,895
Total deferred tax assets	60,886,702		53,976,726
Valuation allowance	(60,761,412)		(53,877,168)
Deferred tax assets, net of allowance	$	125,290	$	99,558

Deferred tax liabilities:
Lease right-of-use assets	(125,290)		(99,558)
Net deferred tax assets	$	—	$	—

The Company has evaluated the positive and negative evidence bearing upon its ability to realize its deferred tax assets. Management has considered the Company’s history of cumulative net losses, estimated future taxable income, and prudent and feasible tax planning strategies and has concluded that it is more likely than that the Company will not realize the benefits of its deferred tax assets. Accordingly, a full valuation allowance has been established against these net deferred tax assets as of December 31, 2020 and 2019, respectively. The Company’s valuation allowance increased during 2020 by approximately $6.9 million primarily due to the generation of net operating losses and research and development and orphan drug credit carryforwards.

Summary of Income Tax Contingencies

A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows:


	Year ended December 31,
	2020		2019
Gross unrecognized tax benefits at beginning of year	$	303,050	$	—
Additions for tax positions taken in a prior year	—		303,050
Additions for tax positions taken in the current year	—		—
Reductions for tax positions taken in the prior year due to settlement	—		—
Reductions for tax positions taken in the prior year due to statutes lapsing	—		—
Gross unrecognized tax benefits at end of year	$	303,050	$	303,050