XML 58 R12.htm IDEA: XBRL DOCUMENT
v2.4.0.6

Income Taxes | 9 Months Ended
--- | ---
Sep. 30, 2012
Income Taxes [Abstract] |
INCOME TAXES | NOTE G – INCOME TAXES As of September 30, 2012, the Company had consolidated income tax net operating loss (“NOL”) carryforwards for federal tax purposes of approximately $135 million. The federal NOL carryforward from 1997 of $564,000 will expire beginning with the 2013 tax year. The federal NOL carryforwards from 1998 forward will expire in various years beginning in 2019 and ending through the year 2032. From 2019 through 2023, approximately $7.5 million of the NOL will expire, from 2024 through 2028, approximately $80.5 million of the NOL will expire, and from 2029 through 2032, approximately $46.5 million of the NOL will expire. 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 and tax credit carryforwards |  | $ | 48,537,961 |
Capital loss carryforward |  |  | 384,901 |
Accrued expenses |  |  | 62,625 |
Reserve for accounts receivable |  |  | 2,087,344 |
Reserve for inventory |  |  | 133,155 |
Start-up costs |  |  | 107,074 |
Excess of book over tax depreciation |  |  | 1,187,108 |
Stock option and restricted stock award expense |  |  | 1,578,615 |
Investment in unconsolidated entity |  |  | 3,695,636 |
Less: valuation allowance |  |  | (57,583,166 | )
|  | $ | 191,253 |
Deferred tax liability: |  |  |  |
Property and equipment basis |  | $ | 69,260 |
Prepaid expenses |  |  | 121,993 |
|  | $ | 191,253 |
Net deferred tax asset |  | $ | — |
As reflected above, we have recorded a net deferred tax asset of $0 at September 30, 2012. 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 realized without the recovery and rights of ownership or salvage rights of high-value shipwrecks and thus a valuation allowance has been recorded as of September 30, 2012. The change in the valuation allowance is as follows:
September 30, 2012 |  | $ | 57,583,166 |
December 31, 2011 |  |  | 52,515,797 |
Change in valuation allowance |  | $ | 5,067,370 |
Income taxes for the nine-month periods ended September 30, 2012 and 2011 differ from the amounts computed by applying the effective federal income tax rate of 34.0% to income (loss) before income taxes as a result of the following:
|  | September 30, 2012 |  |  | September 30, 2011 |
Expected (benefit) |  | $ | (5,871,516 | ) |  | $ | (4,162,479 | )
State income taxes net of federal benefits |  |  | (167,562 | ) |  |  | (122,296 | )
Nondeductible expense |  |  | 14,166 |  |  |  | 12,474 |
Stock options and restricted stock awards |  |  | 242,390 |  |  |  | 729,241 |
Derivatives |  |  | 521,008 |  |  |  | (396,232 | )
Change in valuation allowance |  |  | 5,067,370 |  |  |  | 3,910,077 |
Effects of: |  |  |  |  |  |  |  |
Change in apportionment estimate |  |  | (40,826 | ) |  |  | — |
Change in net operating loss estimate |  |  | 612,353 |  |  |  | — |
Change in capital loss carryover estimate |  |  | (374,051 | ) |  |  | — |
Other, net |  |  | (3,332 | ) |  |  | 29,215 |
|  | $ | — |  |  | $ | — |
During the nine-month periods ended September 30, 2012 and 2011 the Company recognized certain tax benefits and (liabilities), prior to any valuation allowances, related to stock option plans in the amounts of $249,423 and $0, respectively. If we did not have a full valuation allowance, such benefits would be recorded as an increase to the deferred tax asset and increase in additional paid in capital. We have not recognized a material adjustment in the liability for unrecognized tax benefits and have not recorded any provisions for accrued interest and penalties related to uncertain tax positions. The earliest tax year still subject to examination by a major taxing jurisdiction is 2009.

X
- Details
Name: | us-gaap_IncomeTaxDisclosureAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration

X
- 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 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 2: 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 Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher SEC -Name Regulation S-X (SX) -Number 210 -Section 08 -Paragraph h -Article 4 Reference 4: 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 5: 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 6: 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 7: 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 8: 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 + Details
Name: | us-gaap_IncomeTaxDisclosureTextBlock
Namespace Prefix: | us-gaap_
Data Type: | nonnum:textBlockItemType
Balance Type: | na
Period Type: | duration