| Note 9 - Income Taxes |
The
Company has estimated net operating losses for the years ended December 31, 2018 and 2017 of approximately $15.2 million and $12.3
million, respectively, available to offset taxable income in future years. On December 22, 2017, a tax reform bill was signed
into law that decreased the U.S. Federal corporate income tax rate to 21%. As a result, the deferred income tax benefit relating
to the Company’s net operating loss carry forward was reduced by approximately $2.0 million; however, the Company’s
net deferred tax assets of $0 was not impacted as a result of this new tax rate.
The
significant components of deferred income taxes and assets as at December 31, 2018 are as follows:
| |
|
December
31,
2018
|
|
|
December
31,
2017
|
|
| Net Deferred
Tax Liability |
|
$ |
|
|
$ |
|
| Excess
of tax over book depreciation and amortization |
|
|
(10,761 |
) |
|
|
- |
|
| Prepaid
expenses |
|
|
- |
|
|
|
- |
|
| Allowance
for doubtful accounts |
|
|
- |
|
|
|
- |
|
| Accrued
expenses |
|
|
1,154 |
|
|
|
1,154 |
|
| Stock-based
compensation |
|
|
- |
|
|
|
- |
|
| Net
Operating Losses carry-forward |
|
|
12,437,561 |
|
|
|
11,156,839 |
|
| Research
and development tax credits |
|
|
337,507 |
|
|
|
- |
|
| Gross
deferred tax assets |
|
|
12,765,461 |
|
|
|
11,157,993 |
|
| Valuation
allowance |
|
|
(12,765,461 |
) |
|
|
(11,157,993 |
) |
| |
|
|
|
|
|
|
|
|
| Net
deferred tax asset |
|
|
- |
|
|
|
- |
|
| |
|
|
|
|
|
|
|
|
| Change
in Valuation Allowance |
|
|
(1,607,468 |
) |
|
|
|
|
| |
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
| |
|
December
31,
2018
|
|
|
December
31,
2017
|
|
| Summary
Rate Reconciliation |
|
% |
|
|
% |
|
| Federal
statutory rate |
|
|
21.0 |
|
|
|
35.0 |
|
| State
income taxes, net of federal benefit |
|
|
- |
|
|
|
- |
|
| Permanent
Differences |
|
|
(15.1 |
) |
|
|
0.1 |
|
| Stock
based compensation |
|
|
(3.2 |
) |
|
|
(5.8 |
) |
| Federal
Research & Development Credits |
|
|
0.4 |
|
|
|
- |
|
| Foreign
taxes |
|
|
6.2 |
|
|
|
(3.1 |
) |
| Federal
Deferred Rate Decrease |
|
|
- |
|
|
|
(10.3 |
) |
| Increase/(decrease)
in valuation reserve |
|
|
(9.3 |
) |
|
|
(15.9 |
) |
| Total
|
|
|
0 |
|
|
|
0 |
|
| |
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
| Disclosure
Amounts |
|
December
31,
2018
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
| Net
Operating Losses - United States |
|
|
15,260,855 |
|
|
|
|
|
| Net
Operating Losses - Foreign |
|
|
36,684,445 |
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
| Credit
Carryforward - United States |
|
|
- |
|
|
|
|
|
| Credit
Carryforward - Foreign |
|
|
337,507 |
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
| Increase
in Valuation Allowance |
|
|
1,607,468 |
|
|
|
|
|
|