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INCOME TAXES
3 Months Ended
Mar. 31, 2013
Income Tax Disclosure [Abstract]  
Income Tax Disclosure [Text Block]

5. INCOME TAXES

 

As of March 31, 2013, the Company had net operating loss carryforwards (NOL’s) for federal and New York state income tax purposes of approximately $40.7 million. There can be no assurance that the Company will realize the entire benefit of the NOL’s. The federal and New York state NOL’s are available to offset future taxable income and expire from 2018 through 2030 if not utilized. Under Section 382 of the Internal Revenue Code, these NOL’s may be limited due to ownership changes. The Company has not yet completed its review to determine whether or not these NOL’s will be limited under Section 382 of the Internal Revenue Code due to the ownership change from the acquisition of Mobilisa, Inc.

 

The Company has recorded a full valuation allowance against its net deferred assets since management believes that it is more likely than not that these assets will not be realized.

 

The effective tax rate for the three months ended March 31, 2013 and 2012 is different from the tax benefit that would result from applying the statutory tax rates primarily due to the recognition of valuation allowances.