INCOME TAXES (Tables)

12 Months Ended

Dec. 31, 2013

Expiration of consolidated operating loss carryforwards and research credit carryforwards

NOTE 19.

INCOME TAXES

There was no current federal tax provision or benefit recorded for any period since inception, nor were there any recorded deferred income tax assets, as such amounts were completely offset by valuation allowances. Deferred tax assets as of December 31, 2013, of $18,344,933 were reduced to zero, after considering the valuation allowance of $18,344,933, since there is no assurance of future taxable income. As of December 31, 2013 we have consolidated net operating loss carryforwards (“NOL”) and research credit carryforwards for income tax purposes of approximately $49,550,149 and $511,949, respectively.

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		3,695,792		8,690
2033		3,187,559		15,882
Total	$	49,550,149	$	511,949

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, 2013 and 2012 are as follows:

	2013			2012
Deferred tax assets:
Net operating loss carryforwards	$	17,657,746		$	16,549,134
Intangible assets		247,248			305,552
Other		512,286			502,732
Total gross deferred tax assets		18,417,280			17,357,418

Deferred tax liabilities:
Property and equipment		72,347			77,839
Total gross deferred tax liabilities		72,347			77,839

Net total of deferred assets and liabilities		18,344,933			17,279,579
Valuation allowance		(18,344,933	)		(17,279,579	)
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:

	2013			2012
Expected income tax (benefit) at federal statutory tax rate -35%	$	( 1,137,320	)	$	( 1,309,975	)

Permanent differences		21,754			16,500
Research tax credits		(15,882	)		(8,690	)
Amortization of deferred start up costs		-			-
Valuation allowance		1,131,448			1,302,165
Income tax expense	$	-		$	-