Annual report pursuant to Section 13 and 15(d)

Income Taxes

v2.4.0.8
Income Taxes
12 Months Ended
Dec. 31, 2013
Income Tax Disclosure [Abstract]  
Income Tax Disclosure [Text Block]
7. Income Taxes
 
Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. Significant components of the Company's deferred tax assets as of December 31, 2013 and 2012 are summarized below. 
 
 
 
December 31,
 
 
 
2013
 
2012
 
Start-up and organization costs
 
$
56,000
 
$
63,000
 
Research credits
 
 
95,000
 
 
68,000
 
Contingent liability
 
 
31,000
 
 
31,000
 
Net operating loss carryforwards
 
 
2,939,000
 
 
2,421,000
 
Total deferred tax assets
 
 
3,121,000
 
 
2,583,000
 
Valuation allowance
 
 
(3,121,000)
 
 
(2,583,000)
 
Net deferred tax assets
 
$
—
 
$
—
 
 
In assessing the potential realization of deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets will be realized. The ultimate realization of deferred tax assets is dependent upon the Company attaining future taxable income during the periods in which those temporary differences become deductible. As of December 31, 2013 and 2012, management was unable to determine if it is more likely than not that the Company’s deferred tax assets will be realized, and has therefore recorded an appropriate valuation allowance against deferred tax assets at such dates.
 
No federal tax provision has been provided for the years ended December 31, 2013 and 2012 due to the losses incurred during such periods. Reconciled below is the difference between the income tax rate computed by applying the U.S. federal statutory rate and the effective tax rate for the years ended December 31, 2013 and 2012.
 
 
 
Years Ended
December 31,
 
 
2012
 
2012
 
 
 
 
 
 
 
 
 
 
U. S. federal statutory tax rate
 
 
(34.0)
%
 
 
(34.0)
%
Non-deductible stock-based compensation
 
 
2.9
%
 
 
8.6
%
Non-deductible fair value of warrant extensions
 
 
—
%
 
 
10.8
%
Non-deductible fair value of warrant discounts
 
 
—
%
 
 
3.2
%
Adjustment to deferred tax asset
 
 
(1.3)
%
 
 
(2.0)
%
Change in valuation allowance
 
 
32.4
%
 
 
13.4
%
Effective tax rate
 
 
0.0
%
 
 
0.0
%
 
At December 31, 2013, the Company has available net operating loss carryforwards for federal income tax purposes of approximately $7,099,000 which, if not utilized earlier, expire through 2032.