11. Income Taxes

The significant components of the Company's net deferred tax assets are as follows for the years ended December 31:


	2014		2013
Deferred tax assets:
Net operating loss carryforwards	$	17,317,362	$	18,136,610
Depreciation and amortization		—		53,214
Accrued expenses and reserves		188,626		188,441
Impairment loss		—		89,323
Compensatory stock options and warrants		147,712		76,871
Capital Loss Carryover		1,549		44,739
Other		2,308		18,864
Total deferred tax assets		17,657,557		18,608,062
Valuation allowance		(17,657,557)		(18,608,062	)
Net deferred tax assets	$	—	$	—

FASB ASC 740, Income Taxes, requires a valuation allowance to reduce the deferred tax assets reported if, based on the weight of the evidence, it is more likely than not that some portion or all of the deferred tax assets will not be realized. After consideration of all the evidence, both positive and negative, management has determined that a full valuation allowance of $17,657,557 and $18,608,062 against its net deferred taxes is necessary as of December 31, 2014 and December 31, 2013, respectively. The change in valuation allowance for the years ended December 31, 2014 and 2013 is $950,505 and $497,989 respectively.

At December 31, 2014 and December 31, 2013, respectively, the Company had 46,924,149 and $49,450,072, respectively, of U.S. net operating loss carryforwards remaining, which expire beginning in 2017.

As a result of certain ownership changes, the Company may be subject to an annual limitation on the utilization of its U.S. net operating loss carryforwards pursuant to Section 382 of the Internal Revenue Code. A study to determine the effect, if any, of this change, has not been undertaken.

Tax returns for the years ended December 31, 2014, 2013, 2012 and 2011 are subject to examination by the Internal Revenue Service.

A reconciliation of the Company's income taxes to amounts calculated at the federal statutory rate is as follows for the years ended December 31:


	2014			2013

Federal statutory taxes		(34.00	)%		(34.00	)%
State income taxes, net of federal tax benefit		(3.63	)		(3.63	)
Nondeductible items		0.72			0.92
Change in valuation allowance		36.91			36.68
Other		—			(0.03	)
		—	%		—	%