INCOME TAXES (Tables)

12 Months Ended

Dec. 31, 2016

INCOME TAXES [Abstract]

Income tax net (expense) benefit

Income tax net expense comprises the following:

	Year Ended December 31,
	2016			2015
Current:
Federal	$	-		$	-
State		(13,480	)		(12,821	)
Total		(13,480	)		(12,821	)
Deferred:
Federal		-			-
State		-			-
Total		-			-
Income tax net expense	$	(13,480	)	$	(12,821	)

Significant components of deferred income tax assets

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

	December 31,
	2016			2015
Reserves and accruals	$	1,053,863		$	1,578,374
Prepaid expenses		(43,774	)		(50,966	)
Federal NOL carryforwards		8,530,493			6,762,537
State NOL carryforwards		615,919			583,651
Hong Kong NOL carryforwards		995,566			995,566
Federal benefit on state taxes under uncertain tax positions		136,969			132,385
Stock-based compensation		342.294			481,917
Research tax credit		434,637			434,637
Alternative minimum tax credit		348,264			348,264
Contributions carryforward		35,100			33,582
Depreciation		(286,608	)		(312,023	)
Accrued rent		216,432			254,404
Loss on impairment of long-lived assets		53,042			52,226
Valuation allowance		(12,432.197	)		(11,294,554	)
Total		-			-
Total deferred income tax assets, net	$	-		$	-

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 net expense included in the consolidated statements of operations for the years ended December 31, 2016 and 2015 is as follows:

	Year Ended December 31,
	2016			2015
Anticipated income tax benefit at statutory rate	$	1,534,176		$	3,315,420
State income tax benefit, net of federal tax effect		(9,350	)		35,814
Capital loss carryforward expiration		-			(9,227	)
Income tax effect of uncertain tax positions		(8,896	)		(8,461	)
Return to provision adjustments		(23,070	)		(82,341	)
Stock-based compensation		(110,066	)		(215,030	)
Other changes in deferred income tax assets, net		(13,118	)		(22,414	)
Increase in valuation allowance		(1,383,156	)		(3,026,582	)
Income tax net expense	$	(13,480	)	$	(12,821	)

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, 2015 through December 31, 2016:

Balance as of January 1, 2015	$	506,463
Increases related to prior year tax positions		12,821
Balance as of December 31, 2015		519,284
Increases related to prior year tax positions		13,480
Balance as of December 31, 2016	$	532,764