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Income Taxes | 12 Months Ended
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Dec. 31, 2011
Income Taxes [Abstract] |
Income Taxes | NOTE S – INCOME TAXES As of December 31, 2011, we had consolidated income tax net operating loss ("NOL") carryforwards for federal income tax purposes of approximately $123,000,000. The federal NOL carryforward will expire in various years ending through the year 2031. From 2017 through 2021, approximately $4 million of the NOL will expire, from 2022 through 2026, approximately $42 million of the NOL will expire and from 2027 through 2031, approximately $76 million of the NOL will expire. The components of the provision for income taxes (benefits) are attributable to continuing operations as follows:
|  | 12 Month Period Ended December 31, 2011 |  |  | 12 Month Period Ended December 31, 2010 |  |  | 12 Month Period Ended December 31, 2009 |
Current |  |  |  |  |  |  |  |  |  |  |  |
Federal |  | $ | — |  |  | $ | — |  |  | $ | — |
State |  |  | — |  |  |  | — |  |  |  | — |
|  | $ | — |  |  | $ | — |  |  | $ | — |
Deferred |  |  |  |  |  |  |  |  |  |  |  |
Federal |  | $ | — |  |  | $ | — |  |  | $ | — |
State |  |  | — |  |  |  | — |  |  |  | — |
|  | $ | — |  |  | $ | — |  |  | $ | — |
Deferred income taxes reflect the net tax effects of the 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 and liabilities are as follows:
Deferred tax assets: |  |  |  |
Net operating loss carryforwards |  | $ | 44,047,299 |
Accrued expenses |  |  | 62,829 |
Reserve for accounts receivable |  |  | 2,748,005 |
Reserve for inventory return |  |  | 137,663 |
Stock option and restricted stock awards |  |  | 1,383,376 |
Start-up costs |  |  | 107,422 |
Excess of book over tax depreciation |  |  | 1,078,584 |
Investment – unconsolidated entity |  |  | 3,117,958 |
Less: valuation allowance |  |  | (52,515,797 | )
|  |  | 167,339 |
Deferred tax liability: |  |  |  |
Prepaid expenses |  |  | 97,854 |
Property and equipment basis |  |  | 69,485 |
|  |  | 167,339 |
Net deferred tax asset |  | $ | — |
As reflected above, we have recorded a net deferred tax asset of $0 at December 31, 2011. As required by the Accounting for Income Taxes topic in the ASC, we have evaluated whether it is more likely than not that the deferred tax assets will be realized. Based on the available evidence, we have concluded that it is more likely than not that those assets would not be realizable without the recovery and rights of ownership or salvage rights of high value shipwrecks and thus a valuation allowance has been recorded as of December 31, 2011. The change in the valuation allowance is as follow:
December 31, 2011 |  | $ | 52,515,797 |  |  | December 31, 2010 |  | $ | 45,983,926 |
December 31, 2010 |  | $ | 45,983,926 |  |  | December 31, 2009 |  | $ | 39,693,015 |
Change in valuation allowance |  | $ | 6,531,871 |  |  | Change in valuation allowance |  | $ | 6,290,911 |
Income taxes for the twelve month periods ended December 31, 2011, 2010 and 2009 differ from the amounts computed by applying the effective income tax rate of 34.0% to income taxes as a result of the following:
|  | 12 Month Period Ended December 31, 2011 |  |  | 12 Month Period Ended December 31, 2010 |  |  | 12 Month Period Ended December 31, 2009 |
Expected benefit |  | $ | (5,516,605 | ) |  | $ | (7,936,643 | ) |  | $ | (6,333,587 | )
Effects of: |  |  |  |  |  |  |  |  |  |  |  |
State income taxes net of federal benefits |  |  | (205,521 | ) |  |  | (190,311 | ) |  |  | (277,292 | )
Nondeductible expenses |  |  | 17,657 |  |  |  | 15,606 |  |  |  | 17,428 |
Stock options and restricted stock awards |  |  | 833,749 |  |  |  | 627,684 |  |  |  | 4,584 |
Derivatives |  |  | (1,693,247 | ) |  |  | 1,367,186 |  |  |  | — |
Change in valuation allowance |  |  | 6,531,871 |  |  |  | 6,290,911 |  |  |  | 6,483,692 |
Change in net operating loss |  |  | 3,564 |  |  |  | — |  |  |  | — |
Inventory capitalization |  |  | — |  |  |  | — |  |  |  | — |
Change in rate estimate |  |  | 23,798 |  |  |  | (174,913 | ) |  |  | 105,267 |
Other, net |  |  | 4,734 |  |  |  | 480 |  |  |  | (92 | )
Income tax provision (benefit) |  | $ | — |  |  | $ | — |  |  | $ | — |
During the twelve-month periods ended December 31, 2011 and 2010, we recognized certain tax benefits and (liabilities), prior to any valuation allowances, related to stock option plans in the amount of $860,721 and $(647,841), respectively. If we did not have a full valuation allowance, such benefits would be recorded as an increase in the deferred tax asset and an increase in additional paid-in capital. We have not recognized a material adjustment in the liability for unrecognized tax benefits and do not need to record any provision for accrued interest and penalties related to uncertain tax positions. The earliest tax year still subject to examination by a major taxing jurisdiction is 2008.

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- Definition The entire disclosure for income taxes. Disclosures may include net deferred tax liability or asset recognized in an enterprise's statement of financial position, net change during the year in the total valuation allowance, approximate tax effect of each type of temporary difference and carryforward that gives rise to a significant portion of deferred tax liabilities and deferred tax assets, utilization of a tax carryback, and tax uncertainties information. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 2 -URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32537-109319 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Statement of Financial Accounting Standard (FAS) -Number 109 -Paragraph 136, 172 -LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy. Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Statement of Financial Accounting Standard (FAS) -Number 109 -Paragraph 43, 44, 45, 46, 47, 48, 49 -LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy. Reference 4: http://www.xbrl.org/2003/role/presentationRef -Publisher SEC -Name Regulation S-X (SX) -Number 210 -Section 08 -Paragraph h -Article 4 Reference 5: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 3 -URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32559-109319 Reference 6: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 9 -URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32639-109319 Reference 7: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 15 -URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32718-109319 Reference 8: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 235 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SX 210.4-08.(h)) -URI http://asc.fasb.org/extlink&oid=6881521&loc=d3e23780-122690 + Details
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