Annual report pursuant to Section 13 and 15(d)

Income Taxes (Tables)

v3.21.1
Income Taxes (Tables)
12 Months Ended
Dec. 31, 2020
Income Tax Disclosure [Abstract]  
Schedule of Deferred Tax Assets and Liabilities

On March 27, 2020, the Coronavirus Aid, Relief and Economic Security (CARES) Act was signed into law. The CARES Act includes provisions relating to refundable payroll tax credits, net operating loss carryback periods, alternative minimum tax refunds, modifications to the net interest deduction limitations and technical corrections to the tax depreciation methods for qualified improvement property. The CARES Act has an immaterial impact on the Company’s income taxes.

The Company accounts for income taxes in accordance with ASC 740, “Income Taxes” (“ASC 740”).  ASC 740 requires an asset and liability approach for financial accounting and reporting for income taxes and establishes for all entities a minimum threshold for financial statement recognition of the benefit of tax positions and requires certain expanded disclosures. The provision for income taxes is based upon income or loss after adjustment for those permanent items that are not considered in the determination of taxable income. Deferred income taxes represent the tax effects of differences between the financial reporting and tax bases of the Company’s assets and liabilities at the enacted tax rates in effect for the years in which the differences are expected to reverse.  The Company evaluates the recoverability of deferred tax assets and establishes a valuation allowance when it is more likely than not that some portion, or all, of the deferred tax assets will not be realized. As of December 31, 2020, the Company has recorded a full valuation allowance.

Note 9 – Income Taxes, continued

As of December 31, 2020 and 2019, the Company’s deferred tax assets (liabilities) consisted of the effects of temporary differences attributable to the following:

 

 

 

December 31,

 

 

 

2020

 

 

2019

 

Deferred tax assets:

 

 

 

 

 

 

 

 

Research and development tax credits

 

$

8,371,302

 

 

$

7,390,441

 

Net operating loss carryovers

 

 

57,563,810

 

 

 

47,460,988

 

Property and equipment

 

 

219,461

 

 

 

241,000

 

Research and development costs

 

 

12,578,612

 

 

 

15,083,114

 

Start-up and organizational costs

 

 

540

 

 

 

618

 

Stock-based compensation

 

 

4,041,136

 

 

 

3,420,667

 

Operating lease liability

 

 

245,811

 

 

 

594,507

 

Other accruals

 

 

270,912

 

 

 

276,512

 

Total gross deferred tax assets

 

 

83,291,584

 

 

 

74,467,847

 

Less: valuation allowance

 

 

(82,929,675

)

 

 

(73,892,063

)

Total deferred tax assets

 

 

361,909

 

 

 

575,784

 

Deferred tax liabilities:

 

 

 

 

 

 

 

 

Operating lease right-of-use asset

 

 

(361,909

)

 

 

(575,784

)

Total deferred tax liabilities

 

 

(361,909

)

 

 

(575,784

)

Total deferred taxes, net

 

$

 

 

$

 

Summary of Valuation Allowance

The change in the Company’s valuation allowance is as follows:

 

 

 

2020

 

 

2019

 

January 1,

 

$

73,892,063

 

 

$

63,349,287

 

Increase in valuation allowance

 

 

9,037,612

 

 

 

10,542,776

 

December 31,

 

$

82,929,675

 

 

$

73,892,063

 

Schedule of Effective Income Tax Rate Reconciliation

 

 

 

For the Year Ended December 31,

 

 

 

2020

 

 

2019

 

Tax benefit at federal statutory rate

 

 

(21.0

)%

 

 

(21.0

)%

State income taxes

 

 

(6.7

)

 

 

(5.7

)

Permanent differences:

 

 

 

 

 

 

 

 

Stock-based compensation

 

 

3.6

 

 

 

3.1

 

Meals and entertainment

 

 

 

 

 

0.1

 

Executive compensation

 

 

(1.2

)

 

 

1.0

 

True-up of federal deferred taxes

 

 

 

 

 

(1.3

)

True-up of state deferred taxes

 

 

0.1

 

 

 

(0.1

)

Change in effective tax rate

 

 

(0.1

)

 

 

 

Research and development tax credit, federal

 

 

(2.0

)

 

 

(2.1

)

Research and development tax credit, state

 

 

(1.3

)

 

 

(1.4

)

Increase in valuation allowance, federal

 

 

20.6

 

 

 

20.2

 

Increase in valuation allowance, state

 

 

8.0

 

 

 

7.2

 

Effective income tax rate

 

 

0.0

%

 

 

0.0

%