Ocuphire Pharma, Inc. Annual report pursuant to Section 13 and 15(d)

Annual report pursuant to Section 13 and 15(d)

Income Taxes

Income Taxes

12 Months Ended

Dec. 31, 2017

14. Income Taxes

No provision for federal and state income taxes was required for the years ended December 31, 2017, 2016 and 2015 due to the Company’s operating losses and increased deferred tax asset valuation allowance. At December 31, 2017 and 2016, the Company had unused net operating loss carry-forwards of approximately $127,877,000 and $111,605,000, respectively, which expire at various dates through 2037. Some of this amount may be subject to annual limitations under certain provisions of the Internal Revenue Code related to “changes in ownership.”

As of December 31, 2017, and 2016, the deferred tax assets related to the aforementioned carry-forwards have been fully offset by valuation allowances, because significant utilization of such amounts is not presently expected in the foreseeable future.

Deferred tax assets and valuation allowances consist of:



	December 31,		December 31,
	2017		2016

Net Operating Loss Carryforwards	$	35,805,000	$	43,526,000
Stock Compensation Expense		1,458,000		1,968,000
Book tax differences on assets and liabilities		365,000		547,000
Valuation Allowance		(37,628,000)		(46,041,000)

Net Deferred Tax Assets	$	-	$	-

The Company files income tax returns in the U.S. federal and Maryland state jurisdictions. Tax years for fiscal 2014 through 2017 are open and potentially subject to examination by the federal and Maryland state taxing authorities.

The Tax Cuts and Jobs Act, which was signed into law on December 22, 2017, reduces the U.S. corporate income tax rate from 35 percent to 21 percent. The Company remeasured its net deferred tax assets based on the new corporate tax rate. There was no impact on income tax expenses resulting from the remeasurement due to the full offset by the valuation allowance.