| Schedule of Provision for Income Taxes |
Our provision (benefit)
for income taxes for the years ended December 31, 2019 and 2018 was as follows:
| |
|
Year Ended December 31, |
|
| |
|
2019 |
|
|
2018 |
|
| Current: |
|
|
|
|
|
|
|
|
| Federal |
|
$ |
- |
|
|
$ |
- |
|
| State |
|
|
- |
|
|
|
- |
|
| Total deferred tax benefit |
|
|
- |
|
|
|
- |
|
| |
|
|
|
|
|
|
|
|
| Deferred: |
|
|
|
|
|
|
|
|
| Federal |
|
|
(1,037,267 |
) |
|
|
(940,510 |
) |
| State |
|
|
(234,033 |
) |
|
|
(292,047 |
) |
| Total deferred tax benefit |
|
|
(1,271,300 |
) |
|
|
(1,232,557 |
) |
| |
|
|
|
|
|
|
|
|
| Valuation allowance |
|
|
668,584 |
|
|
|
329,756 |
|
| Net deferred tax benefit |
|
|
(602,716 |
) |
|
|
(902,801 |
) |
| |
|
|
|
|
|
|
|
|
| Total tax provision (benefit) |
|
$ |
(602,716 |
) |
|
$ |
(902,801 |
) |
|
| Schedule of Effective Income Tax Rate Reconciliation |
A reconciliation of our
effective income tax rate and statutory income tax rate for the years ended December 31, 2019 and 2018 is as follows:
| |
|
Year Ended December 31, |
|
| |
|
2019 |
|
|
2018 |
|
| Federal statutory income tax rate |
|
|
21.00 |
% |
|
|
21.00 |
% |
| State tax rate, net |
|
|
3.60 |
% |
|
|
4.58 |
% |
| Permanent differences |
|
|
(1.96 |
)% |
|
|
(0.90 |
)% |
| Federal orphan drug tax credit |
|
|
7.15 |
% |
|
|
- |
% |
| Deferred tax asset valuation allowance |
|
|
(14.57 |
)% |
|
|
(5.33 |
)% |
| |
|
|
|
|
|
|
|
|
| Effective income tax rate |
|
|
15.22 |
% |
|
|
19.35 |
% |
|
| Schedule of Deferred Tax Assets |
The significant components
of our deferred tax assets and liabilities for Federal and state income taxes consisted of the following:
| |
|
December 31, |
|
| |
|
2019 |
|
|
2018 |
|
| Deferred tax assets: |
|
|
|
|
|
|
|
|
| Non-current: |
|
|
|
|
|
|
|
|
| Net operating loss carry forward – Federal |
|
$ |
854,196 |
|
|
$ |
559,817 |
|
| Net operating loss carry forward – State |
|
|
265,106 |
|
|
|
173,743 |
|
| Deferred rent |
|
|
- |
|
|
|
2,742 |
|
| Stock option expense |
|
|
72,504 |
|
|
|
20,380 |
|
| Depreciation |
|
|
8,753 |
|
|
|
4,549 |
|
| Federal orphan drug credits |
|
|
283,189 |
|
|
|
- |
|
| Start-up expenditures and amortization |
|
|
800,681 |
|
|
|
468,872 |
|
| Total non-current deferred tax assets |
|
|
2,284,429 |
|
|
|
1,230,103 |
|
| Valuation allowance for deferred tax assets |
|
|
(1,165,126 |
) |
|
|
(496,542 |
) |
| Total deferred tax assets |
|
|
1,119,303 |
|
|
|
733,561 |
|
| |
|
|
|
|
|
|
|
|
| Deferred Tax Liabilities: |
|
|
|
|
|
|
|
|
| Non-current: |
|
|
|
|
|
|
|
|
| Intangible asset |
|
|
(2,650,933 |
) |
|
|
(2,867,907 |
) |
| Total non-current deferred tax liabilities |
|
|
(2,650,933 |
) |
|
|
(2,867,907 |
) |
| |
|
|
|
|
|
|
|
|
| Total deferred tax asset (liability) |
|
$ |
(1,531,630 |
) |
|
$ |
(2,134,346 |
) |
|