Income Taxes

12 Months Ended

Dec. 31, 2012

Income Tax Disclosure [Abstract]

Income Taxes

13. Income Taxes

At December 31, 2012, the Company has a net operating loss carryforward for Federal income tax purposes of $8,572,639 which expires in varying amounts during the tax years 2028 and 2032. The Company has a research and development tax credit carryforward of $383,067 for Federal tax purposes with no expiration date. The Company recorded an increase in the valuation allowance of $1,056,770 for the year ended December 31, 2012.

The components of the Company’s deferred tax asset are as follows:

	December 31,
	2012			2011
Current Deferred Tax Assets
Accrued Bonuses	$	39,313		$	15,725
Noncurrent Deferred Tax Assets
Net Operating Loss (NOL)		2,914,697			2,036,023
Carryover
Technology Licenses		73,021			119,842
Research & Development Tax		383,067			203,288
Credits
Share Based Expense		179,779			158,229
Total Deferred Tax Asset		3,589,877			2,533,107
Less: Valuation Allowance		(3,589,877	)		(2,533,107	)
Net Deferred Tax Asset	$	-		$	-

Reconciliation between income taxes at the statutory tax rate (34%) and the actual income tax provision for continuing operations follows:

	December 31,
	2012			2011
Loss Before Income Taxes	$	(2,582,537	)	$	(2,363,344	)
Tax (Benefit) @ Statutory Tax Rate		(878,063	)		(803,537	)
Effects of:
Exclusion of ISO Expense		-			105,612
R&D Tax Credits		(179,779	)		(24,928	)
(Increase)/Decrease in Valuation Allowance		1,056,770			726,118
Other		1,072			(3,265	)
Provision (Benefit) for Income Taxes	$	-		$	-

As of December 31, 2012 and 2011, the Company has no unrecognized income tax benefits. The Company is in process of completing an analysis of its tax credit carryforwards. A reconciliation of our unrecognized tax benefits for the years ending December 31, 2012 and 2011 is presented in the table below:

	December 31,
	2012		2011
Beginning balance	$	-	$	-
Additions based on tax positions related to current year		-		-
Reductions for tax positions of prior years		-		-
Reductions due to expiration of statute of limitations		-		-
Settlements with taxing authorities		-		-
Ending Balance	$	-	$	-

The Company’s policy for classifying interest and penalties associated with unrecognized income tax benefits is to include such items as tax expense. No interest or penalties have been recorded during the years ended December 31, 2012, and 2011 and no interest or penalties have been accrued as of December 31, 2012 and 2011.

The tax years from 2009 and forward remain open to examination by federal and state authorities due to net operating loss and credit carryforwards. The Company is currently not under examination by the Internal Revenue Service or any other taxing authorities.