Annual report pursuant to Section 13 and 15(d)

6. Income Taxes

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6. Income Taxes
 12 Months Ended
Dec. 31, 2012
Income Tax Disclosure [Abstract]  
6. Income Taxes

(6) Income Taxes

 

The components of the benefit for income taxes are as follows:

 

We recorded a $2,014 income tax benefit for the year ended December 31, 2012. There were no current benefits and no deferred provisions for federal and state taxes for the year ended December 31, 2011.

 

Significant items making up the deferred tax assets and deferred tax liabilities as of December 31, 2012 and December 31, 2011 are as follows:

 

    December 31,  
Current deferred taxes   2012     2011  
     Inventories   $ 19,723     $ -  
     Accounts Receivable allowance     -       3,787  
     Other accruals     45,053       47,631  
      Less: valuation allowance     (64,776 )     (51,418 )
          Total current deferred tax assets   $ -     $ -  
Long term deferred taxes:                
Accelerated tax depreciation   $ 32,686     $ 29,524  
Non-cash, stock-based compensation, nonqualified     388,506       387,676  
Goodwill and intangibles     (33,580 )     (52,763 )
Operating loss carry forwards and tax credits     7,643,661       6,519,386  
Less: valuation allowance     (8,031,273 )     (6,883,823 )
Total long term deferred tax assets (liabilities), net     -       -  
Total net deferred tax liabilities   $ -     $ -  

 

A valuation allowance is established if it is more likely than not that all or a portion of the deferred tax asset will not be realized. Accordingly, a valuation allowance was established in 2012 and 2011 for the full amount of our deferred tax assets due to the uncertainty of realization. We believe based on our projection of future taxable operating income for the foreseeable future, it is more likely than not that we will not be able to realize the benefit of the deferred tax asset at December 31, 2012.

 

We have net operating loss carry-forwards for federal income tax purposes of $14,200,748 as of December 31, 2012. Included in these numbers are loss carry-forwards that were obtained through the acquisition of BioSeq, Inc. and are subject to Section 382 NOL limitations. These net operating loss carry-forwards expire at various dates from 2013 through 2032.

 

We had net operating loss carry-forwards for state income tax purposes of approximately $18,430,173 at December 31, 2012. These net operating loss carry-forwards expire at various dates from 2013 through 2032.

 

Our effective income tax (benefit) provision rate was different than the statutory federal income tax (benefit) provision rate as follows:

 

    For the Year Ended  
    December 31,  
    2012     2011  
Federal tax (benefit) provision rate     34 %     34 %
Permanent differences     (1 ) %     2 %
State tax expense     0 %     0 %
Refundable AMT and R&D tax credit     0 %     0 %
Net operating loss carry back     0 %     0 %
Valuation allowance     (33 ) %     (36 ) %
Effective income tax (benefit) provision rate from continuing operations     0 %     0 %