Income Taxes (Tables)

12 Months Ended

Dec. 31, 2019

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	%