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Income Taxes | 12 Months Ended
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Dec. 31, 2014
Income Tax Disclosure [Abstract] |
Income Taxes | NOTE P – INCOME TAXES As of December 31, 2014, the Company had consolidated income tax net operating loss (“NOL”) carryforwards for federal tax purposes of approximately $129,118,760 and net operating loss carryforwards for foreign income tax purposes of approximately $13,325,245. The federal NOL carryforwards from 2005 forward will expire in various years beginning in 2025 and ending through the year 2034. From 2025 through 2027, approximately $43 million of the NOL will expire, and from 2028 through 2034, approximately $86 million of the NOL will expire. The components of the provision for income tax (benefits) are attributable to continuing operations as follows:
|  | December 31, 2014 |  |  | December 31, 2013 |  |  | December 31, 2012 |
Current |  |  |  |  |  |  |  |  |  |  |  |
Federal |  | $ | (481,055 | ) |  | $ | 481,055 |  |  | $ | — |
State |  |  | — |  |  |  | 15,000 |  |  |  | — |
|  | $ | (481,055 | ) |  | $ | 496,055 |  |  | $ | — |
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 and tax credit carryforwards |  | $ | 49,239,489 |
Capital loss carryforward |  |  | 385,185 |
Accrued expenses |  |  | 62,671 |
Deferred revenue |  |  | 644,362 |
Reserve for accounts receivable |  |  | 1,873,028 |
Reserve for inventory |  |  | 130,011 |
Start-up costs |  |  | 107,153 |
Excess of book over tax depreciation |  |  | 2,766,649 |
Stock option and restricted stock award expense |  |  | 1,389,793 |
Investment in unconsolidated entity |  |  | 3,870,218 |
Less: valuation allowance |  |  | (60,312,726 | )
|  | $ | 155,833 |
Deferred tax liability: |  |  |  |
Property and equipment basis |  | $ | 69,311 |
Prepaid expenses |  |  | 86,522 |
|  | $ | 155,833 |
Net deferred tax asset |  | $ | — |
As reflected above, we have recorded a net deferred tax asset of $0 at December 31, 2014. 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 or other forms of taxable income, thus a valuation allowance has been recorded as of December 31, 2014. The change in the valuation allowance is as follows:
December 31, 2014 |  | $ | 60,312,726 |
December 31, 2013 |  |  | 51,625,159 |
Change in valuation allowance |  | $ | 8,687,567 |
Income taxes for the twelve month periods ended December 31, 2014, 2013 and 2012 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:
|  | December 31, 2014 |  |  | December 31, 2013 |  |  | December 31, 2012 |
Expected (benefit) |  | $ | (9,908,804 | ) |  | $ | (3,483,374 | ) |  | $ | (6,180,388 | )
Effects of: |  |  |  |  |  |  |  |  |  |  |  |
U.S. income tax expense at the AMT 20% rate |  |  | — |  |  |  | (176,839 | ) |  |  | — |
State income taxes net of federal benefits |  |  | (294,933 | ) |  |  | 509,495 |  |  |  | (181,423 | )
Nondeductible expense |  |  | (126,601 | ) |  |  | 31,640 |  |  |  | 17,994 |
Stock options and restricted stock awards |  |  | — |  |  |  | 790,011 |  |  |  | 223,720 |
Derivatives |  |  | — |  |  |  | (783,994 | ) |  |  | 322,848 |
Change in valuation allowance |  |  | 10,469,108 |  |  |  | (6,276,369 | ) |  |  | 5,385,732 |
Change in net operating loss |  |  | — |  |  |  | — |  |  |  | 832,408 |
CFC Dividend Income |  |  | — |  |  |  | 9,190,723 |  |  |  | (374,051 | )
Change in rate estimate |  |  |  |  |  |  | 15,767 |  |  |  | (42,925 | )
Foreign Rate Differential |  |  | (138,770 | ) |  |  | 662,745 |  |  |  | — |
Reversal of Prior Year AMT Accrual |  |  | (481,055 | ) |  |  |  |  |  |  |  |
Other, net |  |  | — |  |  |  | 16,250 |  |  |  | (3,915 | )
|  | $ | (481,055 | ) |  | $ | 496,055 |  |  | $ | — |
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. On July 3, 2014 we received confirmation from the Internal Revenue Service that our private letter ruling was accepted granting us relief to make a late election to carryback our 2008 federal net operating loss five taxable years preceding the taxable year of the NOL in lieu of the general two-year carryback period. There will be no cash-tax benefit related to the carryback as we had a taxable loss during the 2003 tax year. The benefit of making the 5 year carryback election is that the 2008 NOL will now be able to offset 100 percent of future alternative minimum taxable income instead of only 90 percent. The AMT tax accrual for 2013 in the amount of $481,055 was reversed during the quarter ending June 30, 2014 resulting in a tax benefit. The earliest tax year still subject to examination by a major taxing jurisdiction is 2011.

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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 15 -URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32718-109319 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=26873400&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 9 -URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32639-109319 Reference 5: 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 6: 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
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