INCOME TAXES (Tables)

12 Months Ended

Dec. 31, 2014

INCOME TAXES [Abstract]

Income tax net (expense) benefit

Income tax net (expense) benefit comprises the following:

	Year Ended December 31,
	2014			2013
Current:
Federal	$	-		$	-
State		(7,749	)		(22,929	)
Total		(7,749	)		(22,929	)
Deferred:
Federal		(3,691,163	)		408,871
State		(353,051	)		(116,657	)
Total		(4,044,214	)		292,214
Income tax net (expense) benefit	$	(4,051,963	)	$	269,285

Significant components of deferred income tax assets

Significant components of the Company’s deferred income tax assets are as follows:

	December 31,
	2014			2013
Current:
Reserves and accruals	$	1,472,997		$	1,298,557
Prepaid expenses		(48,427	)		(42,801	)
Valuation allowance		(1,424,570	)		(57,924	)
Total	$	-		$	1,197,832

	December 31,
	2014			2013
Noncurrent:
Federal NOL carryforwards	$	4,185,179		$	1,884,118
State NOL carryforwards		616,655			460,652
Hong Kong NOL carryforwards		995,566			995,566
Federal benefit on state taxes under uncertain tax positions		128,026			123,865
Stock-based compensation		189,045			30,724
Investment loss		9,373			9,429
Research tax credit		434,637			434,637
Alternative minimum tax credit		348,264			348,264
Contributions carryforward		3,929			1,095
Depreciation		(418,154	)		(366,863	)
Accrued rent		297,362			-
Loss on impairment of long-lived assets		53,533			53,395
Valuation allowance		(6,843,415)			(1,132,991	)
Total		-			2,841,891
Total deferred income tax assets, net	$	-		$	4,039,723

Schedule of effective income tax rate reconciliation

A reconciliation between expected income taxes, computed at the statutory federal income tax rate of 34% applied to pretax accounting loss, and the income tax benefit (expense) included in the consolidated statements of operations for the years ended December 31, 2014 and 2013 is as follows:

	Year Ended December 31,
	2014			2013
Anticipated income tax benefit at statutory rate	$	3,075,321		$	530,529
State income tax benefit (expense), net of federal tax effect		215,109			(90,099	)
Capital loss carryforward expiration		-			(44,750	)
Income tax effect of uncertain tax positions		(8,080	)		(12,180	)
Return to provision adjustments		(2,751	)		(8,092	)
Stock-based compensation		(279,985	)		(81,564	)
Other changes in deferred income tax assets, net		25,493			(25,416	)
(Increase) decrease in valuation allowance		(7,077,070	)		857
Income tax net (expense) benefit	$	(4,051,963	)	$	269,285

Summary of gross liability for uncertain tax positions

The following summarizes the activity related to the Company’s gross liability for uncertain tax positions from January 1, 2013 through December 31, 2014:

Balance as of January 1, 2013	$	482,510
Increases related to prior year tax positions		11,712
Balance as of December 31, 2013		494,222
Increases related to prior year tax positions		12,241
Balance as of December 31, 2014	$	506,463