Income Taxes

12 Months Ended

Dec. 31, 2012

Income Taxes [Abstract]

Income Taxes

9. Income Taxes

The United States and foreign components of loss from continuing operations before income taxes are as follows for the years ended December 31:

	2012			2011
United States	$	(2,227,102	)	$	(1,611,052	)
Foreign		(372	)		(790	)
Intercompany elimination		-			-
Loss from continuing operations before income taxes	$	(2,227,474	)	$	(1,611,842	)

The significant components of the Company's net deferred tax assets are as follows for the years ended December 31:

	2012			2011
Deferred tax assets:
Net operating loss carryforwards	$	17,613,225		$	16,846,134
Depreciation and amortization		55,369			61,895
Accrued expenses and reserves		162,817			144,179
Impairment loss		78,304			78,304
Compensatory stock options and warrants		136,756			76,871
Capital Loss Carryover		44,739			44,739
Other		18,864			18,873
Total deferred tax assets		18,110,073			17,270,995
Valuation allowance		(18,110,073	)		(17,270,995	)
Net deferred tax assets	$	-		$	-

FASB ASC 740, Income Taxes, requires a valuation allowance to reduce the deferred tax assets reported if, based on the weight of the evidence, it is more likely than not that some portion or all of the deferred tax assets will not be realized. After consideration of all the evidence, both positive and negative, management has determined that a full valuation allowance of $18,110,073 and $17,270,995 against its net deferred taxes is necessary as of December 31, 2012 and December 31, 2011, respectively. The change in valuation allowance for the years ended December 31, 2012 and 2011 is $839,078 and $604,773 respectively.

At December 31, 2012 and December 31, 2011, respectively, the Company had $48,317,850 and $46,120,202, respectively, of U.S. net operating loss carryforwards remaining, which expire beginning in 2020.

As a result of certain ownership changes, the Company may be subject to an annual limitation on the utilization of its U.S. net operating loss carryforwards pursuant to Section 382 of the Internal Revenue Code. A study to determine the effect, if any, of this change, has not been undertaken.

A reconciliation of the Company's income taxes to amounts calculated at the federal statutory rate is as follows for the years ended December 31:

	2012		2011
Federal statutory taxes		(34.00)%		(34.00)%
State income taxes, net of federal tax benefit		(3.63)		(3.63)
Nondeductible items		0.11		0.11
Change in valuation allowance		37.54		37.54
Other		(0.02)		(0.02)
		-%		-%