Income Taxes

12 Months Ended

Dec. 31, 2012

Income Tax Disclosure [Abstract]

Income Taxes

8. Income Taxes

Deferred taxes are recorded for all existing temporary differences in the Company’s assets and liabilities for income tax and financial reporting purposes. Due to the valuation allowance for deferred tax assets, as noted below, there was no net deferred tax benefit or expense for the years ended December 31, 2012, 2011 or the period November 27, 2000 (Date of Inception) through December 31, 2012.

There is no current or deferred income tax expense or benefit allocated to continuing operations for the years ended December 31, 2012 or 2011 or the period November 27, 2000 (Date of inception) through December 31, 2012.

The provision for income taxes is different from that which would be obtained by applying the statutory federal income tax rate to income before income taxes. The items causing this difference are as follows:

	2012			2011
Tax expense (benefit) at U.S. statutory rate	$	(394,500	)	$	(760,900	)
State income tax expense (benefit), net of federal benefit		(42,200	)		(81,700	)
Effect of non-deductible expenses		(7,900	)		500
Other		—			(200	)
Change in valuation allowance		444,600			842,300
	$	—		$	—

The tax effects of temporary differences that give rise to significant portions of the deferred tax assets and deferred tax liabilities at December 31, 2012 and 2011 are as follows:

	2012			2011
Deferred tax assets (liability), noncurrent:
Depreciation	$	2,000			5,000
License agreement		237,600			316,700
Capitalized start up costs		4,906,000			4,612,600
Net operating loss		560,700			486,100
Stock compensation		104,400			114,400
Contribution carryover		2,700			2,700
Debt issuance		2,100			700
Amortization expense and beneficial conversion features		(25,100	)		(12,900	)
Valuation allowance		(5,969,900	)		(5,525,300	)
	$	—		$	—

Change in valuation allowance:

	2012
Balance, December 31, 2011	$	(5,525,300	)
Increase in valuation allowance		(444,600	)
Balance, December 31, 2012		(5,969,900	)

Since management of the Company believes that it is more likely than not that the net deferred tax assets will not provide future benefit, the Company has established a 100 percent valuation allowance on the net deferred tax assets as of December 31, 2012 and 2011.

As of December 31, 2012, the Company had federal and state net operating loss carry-forwards totaling approximately $1,521,000 which begin expiring in 2022.

We are subject to income tax audits by the Internal Revenue Service and the State of Florida for the years 2009 – 2011.