Note 8 Income Taxes

Our provision for income taxes for 2014, 2013 and 2012 consists of the following:

	2014		2013		2012
Current provision:
Federal	$	-	$	-	$	-
State		-		-		-
Foreign		-		-		-
Total current provision		-		-		-

Deferred provision (benefit):
Federal		(5,563,694)		(4,436,239)		(3,537,536)
State		(61,835)		502,696		(505,362)
Foreign		-		-		-
Total deferred provision (benefit)		(5,625,529)		(3,933,543)		(4,042,898)
Change in valuation allowance		5,625,529		3,933,543		4,042,898
Consolidated income tax provision	$	-	$	-	$	-

We provide a full valuation allowance on our net deferred tax assets because management has determined that it is more likely than not that we will not earn income sufficient to realize the deferred tax assets during the asset reversal periods.

The difference between income taxes computed by applying the statutory federal income tax rate to consolidated losses before income taxes and the consolidated provision for income taxes is attributable to the following:

	2014			2013			2012
Federal statutory rate		(34.0)	%		(34.0)	%		(34.0)	%
State income taxes, net of Federal benefits		(4.5)	%		(5.3)	%		(5.0)	%
Warrant modification/inducement expense		5.3	%		9.9	%		0.0	%
Other		8.3	%		9.5	%		(0.9)	%
Valuation allowance		24.9	%		19.9	%		39.9	%
Total		0.0	%		0.0	%		0.0	%

The tax effects of significant temporary differences representing deferred tax assets as of December 31, 2014 and 2013:

	2014		2013
Net operating loss carryforwards	$	36,008,206	$	31,541,018
Stock based compensation expense		11,183,210		9,923,714
Tax credit carryforwards and other		1,139,961		1,241,115
		48,331,377		42,705,847

Valuation allowance		(48,331,377)		(42,705,847)
Net deferred tax assets	$	-	$	-

The Company had Federal net operating loss (“NOL”) carryforwards of approximately $95.4 million and $82.0 million, excluding stock-based compensation NOLs, at December 31, 2014 and 2013, respectively, which will expire beginning in 2015. The Company also has certain Federal tax credit carryforwards that will expire through 2034. The timing and manner in which these net operating loss carryforwards and credits may be used in any year will be limited to the Company’s ability to generate future earnings and also may be limited by certain provisions in the U.S. tax code. The Company has not identified any uncertain tax positions and did not recognize any adjustments for unrecognized tax benefits. The Company remains subject to examination for income tax returns dating back to 2011.