XML 52 R19.htm IDEA: XBRL DOCUMENT v2.4.1.9
Income Taxes
 12 Months Ended
Dec. 31, 2014
Income Taxes:  
Income Tax Disclosure

Note 11 – Income Taxes

 

Deferred income taxes are provided based on the provisions of ASC Topic 740, “Accounting for Income Taxes”, to reflect the tax consequences in future years of differences between the tax basis of assets and liabilities and their financial reporting amounts based on enacted tax laws and statutory tax rates applicable to the periods in which the differences are expected to affect taxable income. Valuation allowances are established when necessary to reduce deferred tax assets to the amount expected to be realized.

 

The Company did not have any tax positions for which it is reasonably possible that the total amount of unrecognized tax benefits will significantly increase or decrease within the next 12 months. The tax years that remain subject to examination by major taxing jurisdictions are those for the years ended December 31, 2014, 2013, 2012 and 2011.

 

The Company classifies interest and penalties arising from underpayment of income taxes in the consolidated statements of operations as general and administrative expenses. As of December 31, 2014, the Company had no accrued interest or penalties related to uncertain tax provisions.

 

Significant components of the Company’s net deferred income taxes are as follows:

 

     

For the Years ended

December 31,

  
      2014     2013  
Deferred tax assets:              
               
Net operating loss carryforwards     $ 2,307,440     $ 2,092,216  
Start-up cost       350,834       381,070  
Goodwill       805,100        871,272  
Amortization of Intellectual Property       (6,893 )     (6,893 )
Stock based compensation       621,858       542,836  
Other       131       1,653  
Deferred tax assets       4,078,470       3,882,154  
Less valuation allowance       (4,078,470 )     (3,882,154 )
Net deferred tax assets after valuation allowance     $ —     $ —  

 

A reconciliation of the U.S. statutory federal income tax rate to the effective income tax rate (benefit) follows:

 

Rate Reconciliation  

For the Years ended

December 31,

  
    2014      2013  
             
Federal income tax at statutory rate   $ (192,410 )   $ (358,686 )
State Tax, net of Federal rate     (20,543 )     (58,023 )
Permanent Differences     237       (13,829 )
Forfeiture of fully vested stock compensation     —       255,438  
Rate Change from 39.5% to 37.63%     —       88,950  
Other     16,400       21,891  
Change in Valuation Allowance     196,316        64,259  
    $ —     $ —  

  

In assessing the ability to realize a portion of the deferred tax assets, management considers whether it is more than likely than not that some portion or all of the deferred tax assets will not be realized. The ultimate realization of the deferred tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible. Management considers the scheduled reversal of deferred tax liabilities and projected future taxable income in making the assessment. After consideration of the evidence, both positive and negative, management has determined that a $4,078,470 valuation allowance at December 31, 2014 is necessary to reduce the deferred tax assets to the amount that will more likely than not be realized. The change in the valuation allowance for the current year is $196,315, as opposed to $64,259 on December 31, 2013. At December 31, 2014, the Company has available net operating loss carry forwards for federal income tax purposes of $5,841,620 expiring at various times from 2027 through 2032.

 

Valuation and Qualifying Accounts

 

Description   Balance at     Charged to     Write-offs     Other     Balance at  
    Beginning     Cost and           Charges     End of  
    of Period     Expenses                 Period  
                               
Deferred tax asset valuation allowance  
                               
Year ended December 31, 2014   $ 3,882,154     $ 196,316     $ —     $ —     $ 4,078,470  
Year ended December 31, 2013   $ 3,817,895     $ 64,259     $ —     $ —     $ 3,882,154