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17A. Income taxes | 12 Months Ended
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Dec. 31, 2013
Income Tax Disclosure [Abstract] |
17. Income taxes | Significant components of the Company's deferred tax assets for federal income taxes consisted of the following:
|  | December 31, |
|  | 2013 |  |  | 2012 |
Net operating loss carryforward |  | $ | 21,492,311 |  |  | $ | 18,050,294 |
Amortization |  |  | (823,367 | ) |  |  | (580,145 | )
Stock option compensation |  |  | 5,841,333 |  |  |  | 904,334 |
Deferred compensation |  |  | 1,563,754 |  |  |  | 883,794 |
Deferred state tax |  |  | (1,904,277 | ) |  |  | (477,307 | )
Other |  |  | 105,179 |  |  |  | 449,209 |
Valuation allowance |  |  | (26,274,933 | ) |  |  | (19,230,179 | )
Net deferred tax asset |  | $ | – |  |  | $ | – |
The Company had net operating loss carry-forwards (“NOL”) for federal and state income tax purposes of approximately:
|  | December 31, |
|  | 2013 |  |  | 2012 |
Combined NOL Carryforwards: |  |  |  |  |  |  |  |
Federal |  | $ | 47,728,300 |  |  | $ | 40,240,679 |
California |  |  | 44,482,850 |  |  |  | 36,995,229 |
The net operating loss carry-forwards for 2013 and 2012 begin expiring in 2021 and 2020, respectively. During 2013, the outstanding shares of common stock increased from 890,837 to 5,813,785. The utilization of net operating loss carry-forwards is likely to be limited due to this ownership change under the provisions of Internal Revenue Code Section 382 and similar state provisions. The Company recorded a 100% valuation allowance on the deferred tax assets at December 31, 2013 and 2012 because of the uncertainty of their realization. A reconciliation of the income tax credit computed at the federal statutory rate to that recorded in the financial statements for 2013 and 2012 is as follows:
|  | 2013 |  |  | 2012 |
Rate reconciliation: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Federal tax benefit at statutory rate |  | $ | (922,591 | ) |  |  | (35.0% | ) |  | $ | (2,578,121 | ) |  |  | (35.0% | )
State tax, net of Federal benefit |  |  | (761,237 | ) |  |  | 28.9% |  |  |  | (782,767 | ) |  |  | 10.6% |
Change in valuation allowance |  |  | 7,044,754 |  |  |  | (267.3% | ) |  |  | 5,495,845 |  |  |  | (74.6% | )
Derivative accounting and other |  |  | (5,360,926 | ) |  |  | 273.4% |  |  |  | (2,134,957 | ) |  |  | 99.0% |
Total provision |  | $ | – |  |  |  | –% |  |  | $ | – |  |  |  | –% |

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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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