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Income Taxes | 6 Months Ended
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Jun. 30, 2014
Income Tax Disclosure [Abstract] |
Income Taxes | 11. Income Taxes We compute income taxes using the asset and liability method in accordance with ASC Topic 740. Under the asset and liability method, we determine deferred income tax assets and liabilities based on the differences between the financial reporting and tax bases of assets and liabilities and measure them using currently enacted tax rates and laws. We provide a valuation allowance for the amount of deferred tax assets that, based on available evidence, are not expected to be realized. In our opinion, realization of our net operating loss carry forward is not reasonably assured as of June 30, 2014 and December 31, 2013, and we have recorded a valuation allowance of $7,534,000 and $6,582,000 respectively, against deferred tax assets in excess of deferred tax liabilities in the accompanying consolidated financial statements. The components of net deferred taxes are as follows:
|  | June 30, 2014 |  |  | December 31, 2013 |
|  | (Unaudited) |  |  |  |
Deferred tax assets (liabilities): |  |  |  |  |  |  |  |
Net operating loss |  | $ | 4,857,000 |  |  | $ | 4,212,000 |
Stock-based compensation |  |  | 2,322,000 |  |  |  | 2,103,000 |
Accrued interest expense |  |  | 205,000 |  |  |  | 150,000 |
Allowance for doubtful accounts |  |  | 64,000 |  |  |  | 47,000 |
Deferred lease liability |  |  | 86,000 |  |  |  | 70,000 |
Total deferred tax assets |  |  | 7,534,000 |  |  |  | 6,582,000 |
Less: valuation allowance |  |  | (7,534,000 | ) |  |  | (6,582,000 | )
Net deferred taxes |  | $ | — |  |  | $ | — |
The reconciliation between the income tax expense (benefit) calculated by applying statutory rates to net loss and the income tax benefit reported in the accompanying consolidated financial statements is as follows:
|  | June 30, 2014 |  |  | December 31, 2013 |
|  | (Unaudited) |  |  |  |
U.S. federal statutory rate applied to pretax income |  | $ | (1,127,157 | ) |  | $ | (6,051,780 | )
Permanent differences |  |  | 308,823 |  |  |  | 2,739,048 |
State taxes and other |  |  | (133,666 | ) |  |  | 1,597,415 |
Change in valuation allowance |  |  | 952,000 |  |  |  | 1,715,317 |
|  | $ | — |  |  | $ | — |
As of December 31, 2013, we had federal income tax net operating loss carry forwards of approximately $4,212,000, which expire at various dates beginning in 2032. We are subject to limitations existing under Internal Revenue Code Section 382 (Change of Control) relating to the availability of the operating loss. As of December 31, 2013, we did not recognize any assets or liabilities relative to uncertain tax positions, nor do we anticipate any significant unrecognized tax benefits will be recorded during 2014. We classify interest and penalties on income taxes as penalties expense. Tax positions are positions taken in a previously filed tax return or positions expected to be taken in a future tax return that are reflected in measuring current or deferred income tax assets and liabilities reported in the financial statements. Tax positions include the following:
| • |  | an allocation or shift of income between taxing jurisdictions;
| • |  | the characterization of income or a decision to exclude reportable taxable income in a tax return; or
| • |  | a decision to classify a transaction, entity, or other position in a tax return as tax exempt.
We are potentially subject to tax audits for federal and state tax returns for tax years ended 2013 to 2011. Tax audits by their very nature are often complex and can require several years to complete. Prior to July 13, 2010, as a limited liability company, we were not a tax paying entity for federal and state income tax purposes. Accordingly, we allocated our taxable income or loss to our members in accordance with their respective percentage ownership.

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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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