Income Taxes

12 Months Ended

Dec. 31, 2019

Income Tax Disclosure [Abstract]

Income taxes

Note 8—Income taxes

The table below presents the components of the provision for taxes:

	As of December 31,
	2019			2018
Current
US Federal	$	-		$	-
US State		-			-
Total current provision		-			-
Deferred
US Federal		1,692,939			414,952
US State		-			2,825
Total deferred benefit		1,692,939			417,777
Change in valuation allowance		(1,692,939	)		(417,777	)
Total provision for income taxes	$	-		$	-

At December 31, 2019 and 2018, the tax effects of the temporary differences and carryforwards that give rise to deferred tax assets consist of the following:

	As of December 31,
	2019			2018
Deferred tax assets:
Net operating loss carryforward	$	1,975,501		$	701,785
License acquired		133,182			144,265
Stock Compensation		427,558			-
Total deferred income tax assets		2,536,241			846,050
Deferred income tax assets liabilities:
Prepaids		-			(2,613	)
Depreciation fixed assets		(132	)		(267	)
Total deferred income tax liabilities		(132	)		(2,880	)
Net deferred income tax assets		2,536,109			843,170
Valuation allowance		(2,536,109	)		(843,170	)
Deferred tax asset, net of allowance	$	-		$	-

A reconciliation of the statutory income tax rates and the Company's effective tax rate for the year ended December 31, 2019 and 2018 is as follows:

	For the Years ended December 31,
	2019			2018
Statutory federal income tax rate		(21.0	)%		(21.0	)%
State taxes, net of federal tax benefit		0.0	%		(0.1	)%
Return to Provision		(1.3	)%		-	%
Other		0.4	%		-	%
Change in valuation allowance		22.0	%		21.1	%
Income taxes provision (benefit)		-	%		-	%

The Company has determined, based upon available evidence, that it is more likely than not that the net deferred tax assets will not be realized and, accordingly, has provided a full valuation allowance against its net deferred tax assets.

As of December 31, 2019, the Company has net operating loss carryforwards of approximately $9.4 million available to reduce future taxable income, if any, for Federal and state income tax purposes. Approximately $1.5 million of Federal net operating losses can be carried forward to future tax years and expire in 2037. The Federal net operating loss generated during the year ended December 31, 2018 and 2019 of approximately $7.9 million can be carried forward indefinitely. However, the deduction for net operating losses incurred in tax years beginning after January 1, 2018 is limited to 80% of annual taxable income.

At December 31, 2019 and 2018, the Company did not have any significant uncertain tax positions. The Company will recognize interest and penalties related to uncertain tax positions in income tax expense. As of December 31, 2019 and 2018, the Company had no accrued interest or penalties related to uncertain tax positions and no amounts have been recognized in the Company's statement of operations. The Company does not anticipate a material change to unrecognized tax benefits in the next twelve months.

All of the Company's tax years will remain open for examination by the Federal and state tax authorities from the date of utilization of the net operating loss.