INCOME TAXES (Tables)

12 Months Ended

Dec. 31, 2012

Expiration of consolidated operating loss carryforwards and research credit carryforwards

The following are the consolidated operating loss carryforwards and research credit carryforwards that will begin expiring as follows:

Calendar Years	Consolidated Operating Loss Carryforwards		Research Activities Carryforwards
2021	$	34,248	$	---
2023		95,666		---
2024		910,800		13,584
2025		1,687,528		21,563
2026		11,950,281		60,797
2027		3,431,365		85,052
2028		8,824,940		139,753
2029		6,889,761		81,940
2030		5,113,583		41,096
2031		3,728,626		43,592
2032		3,695,936		8,690
Total	$	46,362,734	$	496,067

Deferred tax assets and deferred tax liabilities

An analysis of 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:
Net operating loss carryforwards	$	16,549,134		$	15,257,981
Intangible assets		305,552			363,399
Other		502,732			489,105
Total gross deferred tax assets		17,357,418			16,110,485

Deferred tax liabilities:
Property and equipment		77,839			56,589
Total gross deferred tax liabilities		77,839			56,589

Net total of deferred assets and liabilities		17,279,579			16,053,896
Valuation allowance		(17,279,579	)		(16,053,896	)
Net deferred tax assets	$	---		$	---

Reconciliation of expected statutory federal income tax rate to actual income tax rate

The following is a reconciliation of the expected statutory federal income tax rate to our actual income tax rate for the years ended December 31:

	2012			2011
Expected income tax (benefit) at federal statutory tax rate -35%	$	( 1,309,975	)	$	( 1,364,770	)

Permanent differences		16,500			59,803
Research tax credits		(8,690	)		(43,592	)
Amortization of deferred start up costs		---			---
Valuation allowance		1,302,165			1,348,559
Income tax expense	$	---		$	---