Axogen, 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, 2015

10. Income Taxes

The Company has temporary differences between the carrying amount of assets and liabilities for financial reporting purposes and their respective income tax basis, as measured by enacted state and federal rates as follows:


December 31	2015	2014

Deferred tax assets:
Net operating loss carryforwards	33,424,100	29,263,100
Charitable contributions	500	500
Inventory reserves	267,700	152,000
Amortization	51,400	123,500
Allowance for doubtful accounts	72,300	35,400
Stock-based compensation	260,600	107,900
Total deferred tax assets	34,076,600	29,682,400
Deferred tax liabilities:
Depreciation	(62,400)	(85,700)
Total deferred tax assets (liabilities)	(62,400)	(85,700)
Net deferred tax assets	34,014,200	29,596,700
Valuation allowance	(34,014,200)	(29,596,700)

As of December 31, 2015, the Company had net operating loss carry forwards of approximately $88.8 million to offset future taxable income which expire in various years through 2035. A valuation allowance is recorded to reduce the deferred tax assets reported if, based on the weight of the evidence, it is more likely than not that a portion or none of the deferred tax assets will be realized. After consideration of all the evidence, including reversal of deferred tax liabilities, future taxable income and other factors, management has determined that a full valuation allowance is necessary as of December 31, 2015 and 2014. The valuation allowance increased by $4,452,000 and $6,202,700 during 2015 and 2014, respectively.

The Company had no income tax expense or income tax benefit for 2014 and 2015 due to incurrence of net operating losses. The Company does not believe there are any additional tax refund opportunities currently available.