Income Taxes

12 Months Ended

Dec. 31, 2018

Income Tax Disclosure [Abstract]

Income Taxes

NOTE 12 - INCOME TAXES

We have identified our federal and California state tax returns as “major” tax jurisdictions. The periods our income tax returns are subject to examination for these jurisdictions are 2014 through 2016. We believe our income tax filing positions and deductions will be sustained on audit, and we do not anticipate any adjustments that would result in a material change to our financial position. Therefore, no liabilities for uncertain income tax positions have been recorded.

At December 31, 2017, we had available net operating loss carry-forwards for federal income tax reporting purposes of approximately $332 million and had available tax credit carry-forwards for federal tax reporting purposes of approximately $10.6 million, which are available to offset future taxable income. Portions of these carry-forwards will expire through 2038 if not otherwise utilized. We have not performed a formal analysis, but we believe our ability to use such net operating losses and tax credit carry-forwards is subject to annual limitations due to change of control provisions under Sections 382 and 383 of the Internal Revenue Code, which significantly impacts our ability to realize these deferred tax assets.

Our net deferred tax assets, liabilities and valuation allowance as of December 31, 2018 and 2017 are summarized as follows:

	Year Ended December 31,
	2018		2017
Deferred tax assets:
Net operating loss carryforwards (a)	$	4,109,956	$	2,075,529
Tax credit carryforwards (a)		-		-
Depreciation and amortization		2,799,217		3,107,094
Share based compensation		435,770		297,893
Other		248,654		389,146
Total deferred tax assets		7,593,597		5,869,662
Valuation allowance		(7,539,944)		(5,354,880	)
Net deferred tax assets		53,653		514,782
Deferred tax liabilities:
Intangible assets		(53,653)		(514,782	)
Net deferred tax liabilities	$	-	$	-

(a)       reflects estimated change of control limitation under Section 382 and 383 of the Internal Revenue Code as of December 31, 2016 due to reverse merger on November 15, 2016.

We record a valuation allowance in the full amount of our net deferred tax assets since realization of such tax benefits has been determined by our management to be less likely than not. The valuation allowance increased $2,185,064 and $1,436,089 during 2018 and 2017, respectively.

In 2018 and 2017, there was income tax expense of $0 and $800, respectively, due to IThena’s income tax due the state of California.

As of the date of this filing, the Company has not filed its 2018 or 2017 federal and state corporate income tax returns. The Company expects to file these documents as soon as practicable.

The Tax Cuts and Jobs Act (the Act) was enacted on December 22, 2017. The Act reduces the US federal corporate tax rate from 35% to 21% and will require the Company to re-measure certain deferred tax assets and liabilities based on the rates at which they are anticipated to reverse in the future, which is generally 21%. The Company adopted the new rate as it relates to the calculations, of deferred tax amounts as of December 31, 2017.