Income Taxes (Tables)

12 Months Ended

Dec. 31, 2013

Income Taxes Tables

Summary of income tax provision (benefit)

The income tax provision (benefit) for the years ended December 31, 2013 and 2012 was as follows:

	For The Years Ended
	December 31,
	2013			2012
Federal:
Current	$	-		$	-
Deferred		(625,702	)		(1,299,493	)
State and local:
Current		-			-
Deferred		(36,806	)		(191,102	)
		(662,508	)		(1,490,595	)
Change in valuation allowance		662,508			1,490,595
Income tax provision (benefit)	$	-		$	-

Summary of significant portions of the deferred tax assets and liabilities

The effects of temporary differences that give rise to significant portions of the deferred tax assets and liabilities as of December 31, 2013 and 2012 are as follows:

	December 31,
	2013			2012
Deferred tax assets:
Net operating loss carryforwards	$	4,966,018		$	4,465,161
Stock-based compensation		466,078			258,742
Inventory reserves		10,949			54,000
Allowance for bad debt		89,899			87,405
Charitable contribution carryforwards		5,630			5,630
Accruals		27,352			24,775
Total deferred tax assets		5,565,926			4,895,713
Valuation allowance		(5,539,178	)		(4,876,670	)
Deferred tax assets, net of valuation allowance		26,748			19,043
Deferred tax liabilities:
Property and equipment		(26,748	)		(19,043	)
Net deferred tax assets	$	-		$	-
Change in valuation allowance	$	662,508		$	1,490,595

Summary of tax expense (benefit) based on the statutory rate

For the years ended December 31, 2013 and 2012, the expected tax expense (benefit) based on the statutory rate is reconciled with the actual tax expense (benefit) as follows:

	For The Years Ended
	December 31,
	2013			2012
US federal statutory rate		(34.0	%)		(34.0	%)
State tax rate, net of federal benefit		(2.0	%)		(2.0	%)
Permanent differences
- Stock based compensation		3.2	%		2.9	%
- Write-off and amortization of intangible asset		0.0	%		3.9	%
- Debt extinquishment		18.3	%		0.0	%
- Other		2.5	%		2.4	%
Change in valuation allowance		12.0	%		26.8	%
Income tax provision (benefit)		0.0	%		0.0	%