Annual report pursuant to Section 13 and 15(d)

Income Taxes (Tables)

v3.20.1
Income Taxes (Tables)
12 Months Ended
Dec. 31, 2019
Income Tax Disclosure [Abstract]  
Schedule of Components of Income Tax Expense (Benefit)
The income tax provision from continuing operations consisted of the following for the years ending December 31, 2019 and 2018:
 
 
December 31,
 
 
2019
 
2018
Current:
 
 
 
 
   Federal
 
$
209,001

 
$
(53,281
)
   State
 
54,572

 
20,560

Total Current
 
263,573

 
(32,721
)
 
 
 
 
 
Deferred:
 
 
 
 
   Federal
 
24,458

 
(52,235
)
   State
 
(7,715
)
 
35,490

Total Deferred
 
16,743

 
(16,745
)
Net income tax expense (benefit)
 
$
280,316

 
$
(49,466
)


Schedule of components of deferred tax assets
The net deferred tax liabilities consisted of the following for the years ending December 31, 2019 and 2018:
 
 
December 31,
 
 
2019
 
2018
Deferred tax assets (liabilities):
 
    
 
    
Net operating losses
 
$
7,596,955

 
$
4,421,423

Accrued compensation
 
321,748

 
465,430

Investment in Aytu
 
577,490

 

Tax credits
 
1,070,738

 
252,095

Stock-based compensation
 
1,872,442

 
1,922,736

Installment sale
 
441,305

 
508,291

Other reserves
 
399,885

 
277,633

Prepaid expenses
 
(120,863
)
 
(160,474
)
Right-of-use asset
 
(167,943
)
 

Lease liability
 
296,259

 

Basis difference in tangible and intangible assets, net
 
1,968,008

 
2,968,764

Total deferred tax assets, net
 
14,256,024

 
10,655,898

Less valuation allowance
 
(14,342,005
)
 
(10,725,136
)
Net deferred taxes
 
$
(85,981
)
 
$
(69,238
)
Reconciliation of income tax expenses between federal statutory rate and effective income tax rate
The income tax benefit for the years ended December 31, 2019 and 2018 differed from the amounts computed by applying the U.S. federal income tax rate of 21% as follows:
 
 
December 31,
 
 
2019
 
2018
Federal statutory rate
 
21.00
 %
 
21.00
 %
Stock compensation
 
(0.47
)%
 
(0.10
)%
State taxes
 
(0.13
)%
 
4.98
 %
Research and development credit
 
5.13
 %
 
0.70
 %
Acquired in-process research and development
 
 %
 
(11.17
)%
Fair value adjustment to contingent consideration
 
1.65
 %
 
 %
Other
 
(1.86
)%
 
(0.74
)%
Valuation allowance
 
(27.07
)%
 
(14.53
)%
Effective income tax rate
 
(1.75
)%
 
0.14
 %