Income Taxes |
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Dec. 31, 2019 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Income Tax Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Income Taxes | Income Taxes Income tax (benefit)/expense from continuing operations consisted of the following for the periods indicated:
Deferred tax assets and liabilities consist of the following components:
The net deferred tax asset is included in other non-current assets on the consolidated balance sheet. The (benefit)/expense from income taxes from continuing operations differs from the amount computed by applying the federal statutory income tax rate to our loss from continuing operations before income taxes as follows for the periods indicated:
The realization of our deferred income tax assets is dependent upon sufficient taxable income in future periods. In assessing whether deferred tax assets may be realized, we consider whether it is more likely than not that some portion, or all, of the deferred tax asset will be realized. We consider scheduled reversals of deferred tax liabilities, projected future taxable income and tax planning strategies that we can implement in making our assessment. We have net operating loss ("NOL") carryforwards of approximately $6.0 million for API expiring at varying dates through 2035. In 2015, we performed a formal Section 382 study and determined that we do not have a limitation on our NOLs available to offset future income. As a result of the acquisition of API, the API NOL carryover and research and development credits will be subject to the Section 382 limitation. A formal Section 382 study was prepared in 2019, and it was determined that there was no ownership changes in 2019 resulting in a limitation on NOLs, but a portion of the NOLs will expire unutilized. The U.S. federal statute of limitations remains open for the year 2016 and onward. We currently have no federal income tax returns under examination. U.S. state jurisdictions have statutes of limitation generally ranging from three to seven years. We currently have no state income or franchise tax returns under examination. We currently do not file tax returns in any foreign tax jurisdiction other than Canada. As of December 31, 2019, we are no longer in a three-year cumulative loss position, which required additional analysis to be performed in order to determine the likelihood of realizing the deferred tax assets in the foreseeable future. After further analysis, it was determined that a portion of the December 31, 2019 balance of deferred tax assets will be realized. Because the NOLs carried over from API are limited under Section 382, the deferred tax asset of $1.2 million is expected to be realized over an extended period of time (with continued earnings realized ratably through 2034). The deferred tax asset related to the NOL carryovers of API Canada, Luna Analytics, Luna Nanomaterials, and Luna Quest will likely not be realized in the foreseeable future as these entities no longer have any activity. As of December 31, 2019, valuation allowances of $3.3 million were released and a tax benefit has been recognized in our consolidated statement of operations. |