XML 42 R17.htm IDEA: XBRL DOCUMENT
v2.4.0.8

Income Taxes | 9 Months Ended
--- | ---
Sep. 30, 2014
Income Taxes [Text Block] | Note 10 – Income Taxes In the first quarter of 2014, as a result of incurring losses in 2012, 2013 and 2014, the Company recorded a valuation allowance against all of its net deferred tax assets. At September 30, 2014, the Company has aggregate tax net operating loss carry forwards of approximately $74,128 ($59,266 of unrestricted net operating tax losses and approximately $14,862 of restricted net operating tax losses) and unused minimum tax credit carry forwards of $547. Substantially all of the net operating loss carry forwards and unused minimum tax credit carry forwards expire between 2024 and 2034. The reported tax expense (benefit) varies from the amount that would be provided by applying the statutory U.S. Federal income tax rate to the loss from continuing operations before taxes for the following reasons:
|  | Nine months ended |  |  | Nine months ended |
|  | September 30, 2014 |  |  | September 30, 2013 |
Expected federal statutory tax expenses (benefit) | $ | (645 | ) | $ | (740 | )
Increase (reduction) in taxes resulting from: |  |  |  |  |  |
State income taxes |  | 55 |  |  | 8 |
Non-deductible expenses (permanent differences) |  | 22 |  |  | 31 |
Change in temporary differences: |  |  |  |  |  |
Change in valuation allowance attributable to continuing operations |  | 25,290 |  |  | 448 |
Rate changes |  | — |  |  | — |
Other |  | — |  |  | (213 | )
Income tax expense (recovery) | $ | 24,722 |  | $ | (466 | )
The Company’s utilization of restricted net operating tax loss carry forwards against future income for tax purposes is restricted pursuant to the “change in ownership” rules in Section 382 of the Internal Revenue Code. These rules, in general, provide that an ownership change occurs when the percentage shareholdings of 5% direct or indirect stockholders of a loss corporation have, in aggregate, increased by more than 50 percentage points during the immediately preceding three years. Restrictions in net operating loss carry forwards occurred in 2001 as a result of the acquisition of the Company by Counsel. Further restrictions may have occurred as a result of subsequent changes in the share ownership and capital structure of the Company and Counsel and disposition of business interests by the Company. Pursuant to Section 382 of the Internal Revenue Code, the annual usage of the Company’s net operating loss carry forwards was limited to approximately $2,500 per annum until 2008 and $1,700 per annum thereafter. There is no certainty that the application of these “change in ownership” rules may not recur, resulting in further restrictions on the Company’s income tax loss carry forwards existing at a particular time. In addition, further restrictions, reductions in, or expiry of net operating loss and net capital loss carry forwards may occur through future merger, acquisition and/or disposition transactions or failure to continue a significant level of business activities. Any such additional limitations could require the Company to pay income taxes on its future earnings and record an income tax expense to the extent of such liability, despite the existence of such tax loss carry forwards. The Company, until recently, had a history of incurring annual tax losses, beginning in 1991. All loss taxation years remain open for audit pending the application of the respective tax losses against income in a subsequent taxation year. In general, the statute of limitations expires three years from the date that a company files a tax return applying prior year tax loss carry forwards against income for tax purposes in the later year. The Company applied historic tax loss carry forwards to offset income for tax purposes in 2008, 2010 and 2011, respectively. The 2009 through 2011 taxation years remain open for audit. The Company is subject to state income tax in multiple jurisdictions. In most states, the Company does not have tax loss carry forwards available to shield income attributable to a particular state from being subject to tax in that particular state. The components of the deferred tax asset and liability as of September 30, 2014 and December 31, 2013 are as follows:
|  | September 30, |  |  | December 31, |
|  | 2014 |  |  | 2013 |
Deferred tax assets: |  |  |  |  |  |
Net operating loss carry-forwards | $ | 25,204 |  | $ | 29,816 |
Minimum tax credit carry forwards |  | 186 |  |  | 186 |
Intangible assets |  | (90 | ) |  | (24 | )
Stock based compensation |  | 679 |  |  | 679 |
Start-up costs |  | (16 | ) |  | (14 | )
Depreciation and amortization |  | 6 |  |  | (3 | )
Other |  | 186 |  |  | 210 |
Writedown of inventory |  | 452 |  |  | 452 |
Trade Name |  | (1,291 | ) |  | (1,395 | )
Customer List/Business Network |  | (469 | ) |  | (500 | )
Gross deferred tax assets |  | 24,847 |  |  | 29,407 |
Less: valuation allowance |  | (24,847 | ) |  | (4,740 | )
Net deferred tax assets | $ | — |  | $ | 24,667 |

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 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
Name: | us-gaap_IncomeTaxDisclosureTextBlock
Namespace Prefix: | us-gaap_
Data Type: | nonnum:textBlockItemType
Balance Type: | na
Period Type: | duration