Annual report pursuant to Section 13 and 15(d)

INCOME TAXES

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INCOME TAXES
 12 Months Ended
Dec. 31, 2021
Income Tax Disclosure [Abstract]  
INCOME TAXES

NOTE 13 - INCOME TAXES

 

Income tax expense differs from the statutory amounts for each of the following years:

 

    2021     2020  
    For the years ended December 31,  
    2021     2020  
Income taxes at U.S. statutory rate   $ (17,836,000 )   $ (17,689,000 )
Current year reserve    

12,539,000

       12,020,000  
Expenses not deductible    

5,297,000

       5,669,000  
Total tax expense   $ -     $ -  

 

Deferred taxes are provided for the temporary differences between the financial reporting bases and the tax bases of our assets and liabilities. The temporary differences that give rise to deferred tax assets and liabilities were as follows:

 

    December 31,
2021		     December 31,
2020		  
Deferred tax assets (liabilities):                
Net operating loss carryforwards   $ 71,001,000     $ 61,062,000  
General business credit carryforwards     4,741,000       4,398,000  
State credits     2,780,000       2,857,000  
Property, equipment and goodwill     200,000       8,000  
Stock options     10,537,000       9,551,000  
Deferred revenue     62,000       62,000  
Intangible assets     367,000       312,000  
Other    

16,000

       70,000  
Gross deferred tax assets    

89,704,000

       78,320,000  
Valuation allowance    

(89,704,000

 )     (78,320,000 )
Net deferred taxes   $ -     $ -  

 

 

As of December 31, 2021, we had approximately $338.1 million of net operating loss carryforwards and approximately $4.7 million of general business credit carryforwards. These carryforwards expire as follows:

 

    Net operating
loss
carryforwards		     General business
credit
carryforwards		  
2022   $ 8,230,000     $ 431,000  
2023     5,434,000       362,000  
2024     8,711,000       287,000  
2025     2,370,000       182,000  
2026     7,160,000       72,000  
Thereafter     90,416,000       3,407,000  
    $ 122,321,000     $ 4,741,000  

 

As of December 31, 2021, we had approximately $215.8 million of net operating loss carryforwards that do not expire and can be carried forward indefinitely. Such net operating loss carryforwards can only be used to offset 80% of taxable income in any given tax year. In addition, our net operating loss carryforwards may be subject to limitation due to ownership changes.

 

We acquired MacroChem Corporation on March 25, 2009 and Somanta Pharmaceuticals, Inc. on January 4, 2008. Both of these corporations were loss-making entities at the time of acquisition. As a result, the net operating losses related to those acquisitions may be subject to annual limitations.