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Income Taxes | 12 Months Ended
--- | ---
Dec. 31, 2011
Income Tax Disclosure [Abstract] |
Income Tax Disclosure [Text Block] | 13. Income Taxes Income (loss) before income taxes was distributed geographically as follows (in thousands):
|  | Year Ended December 31, |  |  | Year Ended December 31, |
|  | 2011 |  |  | 2010 |
Domestic |  | $ | (16,867 | ) |  | $ | (29,590 | )
Foreign |  |  | (200) |  |  |  | (1,991 | )
Total |  | $ | (17,067 | ) |  | $ | (31,581 | )
The provision for income taxes is as follows for the year ended December 31:
|  | 2011 |  |  | 2010 |
Current |  |  |  |  |  |
Federal |  | $ | -- |  |  | $ | -- |
State |  |  | 2 |  |  |  | 1 |
Foreign |  |  | 76 |  |  |  | 44 |
Total current |  | $ | 78 |  |  | $ | 45 |
The effective income tax rate differs from the statutory federal income tax rate for the following reasons:
|  | Year Ended December 31, |  |  | Year Ended December 31, |
|  | 2011 |  |  | 2010 |
Amount at standard tax rates |  |  | 34 | % |  |  | 34 | %
Non-deductible loss on revaluation of embedded conversion features and extinguishment of convertible debt |  |  | (29 | )% |  |  | (24 | )%
Foreign losses at different rates |  |  | 2 | % |  |  | -- |
Stock compensation |  |  | -- |  |  |  | (5 | )%
|  |  | 7 | % |  |  | 5 | %
Valuation allowance |  |  | (7 | )% |  |  | (5 | )%
Effective tax rate |  |  | -- |  |  |  | -- |
Significant components of the deferred tax balances are as follows (in thousands):
|  | December 31, |
|  | 2011 |  |  | 2010 |
Deferred tax assets: |  |  |  |  |  |
Accruals |  | $ | 26 |  |  | $ | 85 |
Stock compensation |  |  | 1,080 |  |  |  | 897 |
Net operating losses |  |  | 4.116 |  |  |  | 2,455 |
Total deferred tax assets |  | $ | 5,222 |  |  | $ | 3,437 |
Valuation allowance |  |  | (5,222 | ) |  |  | (3,437 | )
Total net deferred tax assets |  | $ | -- |  |  | $ | -- |
Valuation allowances are recorded to offset certain deferred tax assets due to management’s uncertainty of realizing the benefits of these items. Management applies a full valuation allowance for the accumulated losses of Neonode Inc, and its subsidiary Neonode Technologies AB, since it is not determinable using the “more likely than not” criteria that there will be any future benefit of our deferred tax assets. This is mainly due to our history of operating losses. Due to the reorganization, the Company believes that the US net operating losses and credits would be subject to the provisions of Section 382 and therefore subject to strict limitations. The Company has not completed a study of the limitations and therefore has not included these loss carryforwards or credits in the analysis of the deferred tax assets. The Company has federal, state and foreign net operating losses of $2,824,000, $6,699,000 and $323,000, respectively. The federal loss carryforward begins to expire in 2029, the California loss carryforward begins to expire in 2029 and the foreign loss carryforward indefinitely. On December 9, 2008, Neonode AB filed for liquidation under the Swedish bankruptcy laws and effective with the filing we are no longer responsible for the liabilities and no longer have any ownership interest in the assets of Neonode AB, including any tax net operating loss carryforwards. Effective January 1, 2007, we adopted the provisions of accounting guidance which includes a two-step approach to recognizing, de-recognizing and measuring uncertain tax positions accounted for in accordance with accounting guidance. A reconciliation of the unrecognized tax benefits for the year ended December 31, 2011 is as follows:
Balance at January 1, 2011 |  | $ | --- |
Additions for tax positions of prior years |  |  | --- |
Reductions for tax position of prior years |  |  | --- |
Additions based on tax positions related to the current year |  |  | --- |
Decreases - Settlements |  |  | --- |
Reductions - Settlements |  |  | --- |
Balance at December 31, 2011 |  | $ | --- |
It is the Company’s policy to classify accrued interest and penalties as part of the accrued tax liability in the provision for income taxes. For the year ended December 31, 2011, we did not recognize any interest or penalties related to unrecognized tax benefits. Our continuing practice is to recognize interest and/or penalties related to income tax matters in income tax expense. As of December 31, 2011, we had no accrued interest and penalties related to uncertain tax matters. As of December 31, 2011, we had no uncertain tax positions that would be reduced as a result of a lapse of the applicable statute of limitations. We do not anticipate the adjustments would result in a material change to our financial position. We file income tax returns in the U.S. federal jurisdiction, California and Sweden. The 1997 through 2010 tax years are open and may be subject to potential examination in one or more jurisdictions. We are not currently under any federal, state or foreign income tax examinations.

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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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