Annual report pursuant to Section 13 and 15(d)

Income Taxes (Tables)

v3.19.1
Income Taxes (Tables)
12 Months Ended
Dec. 31, 2018
Income Tax Disclosure [Abstract]  
Schedule of Income Tax Provision (Benefit)

The income tax provision (benefit) for the years ended December 31, 2018 and 2017 consists of the following:

 

    For the Year Ended  
    December 31,  
    2018     2017  
Federal:                
Current   $ -     $ -  
Deferred     (581,300 )     5,974,700  
                 
State and local:                
Current     -       -  
Deferred     (127,000 )     (1,953,800 )
      (708,300 )     4,020,900  
Change in valuation allowance     708,300       (4,020,900 )
Income tax provision (benefit)   $ -     $ -  

Summary of Reconciliation of Statutory Federal Income Tax Rate and Effective Income Tax Rate

A reconciliation of the statutory federal income tax rate to the Company’s effective tax rate is as follows:

 

    For the Year Ended  
    December 31,  
    2018     2017  
             
Tax benefit at federal statutory rate     (21.0 )%     (34.0 )%
State income taxes, net of federal benefit     (5.0 )%     (4.0 )%
Permanent differences:                
Derivative liabilities     22.9 %     22.2 %
Other     (3.5 )%     4.4 %
Tax credits     (1.4 )%     0.0 %
Change in effective rate     0.0 %     16.7 %
Change in valuation allowance     8.0 %     (5.3 )%
Effective income tax rate     0.0 %     0.0 %

Schedule of Deferred Tax Assets and Liabilities

The tax effects of temporary differences that give rise to deferred tax assets and liabilities are presented below:

 

    For The Years Ended  
    December 31,  
    2018     2017  
Deferred Tax Assets:                
Net operating loss carryforwards   $ 26,073,500     $ 18,351,600  
Stock-based compensation     -       3,128,200  
Accruals     296,300       4,502,700  
Goodwill     1,586,300       1,586,300  
Internet expense     233,700       -  
Intangible assets     245,000       271,400  
Inventory     53,000       -  
Allowance for doubtful accounts     22,000       9,100  
Tax credits     536,600       488,800  
Gross deferred tax assets     29,046,400       28,338,100  
                 
Deferred Tax Liabilities:                
Fixed assets     (528,400 )     (528,400 )
Gross deferred tax liabilities     (528,400 )     (528,400 )
                 
Net deferred tax assets     28,518,000       27,809,700  
                 
Valuation allowance     (28,518,000 )     (27,809,700 )
                 
Deferred tax asset, net of valuation allowance   $ -     $ -  
                 
Changes in valuation allowance   $ 708,300     $ (4,020,900 )