Income taxes:

Reconciliation of federal statutory income tax provision to the Company’s actual provision for the years ended December 31, 2014 and 2013, respectively, are as follows:



	2014			2013
Benefit at federal statutory tax rate	$	(2,222,000	)	$	(1,647,000	)
Foreign rate differential	159,000			141,330
UK Energy Incentives	(649,000		)	—
Unbenefited operating losses	2,062,960			1,505,670
Provision for income taxes	4,000			13,450
Income tax provision	$	(645,040	)	$	13,450

The component of net deferred tax assets recognized in the accompanying balance sheets at December 31, 2014 and 2013, respectively, are as follows:



	2014			2013
Net operating loss carryforwards	$	10,838,000		$	9,902,000
Accrued expenses and other	100,000			200,000
Stock compensation	1,194,000			1,014,000
Depreciation	(216,000		)	(516,000		)
	11,916,000			10,600,000
Valuation allowance	(11,916,000		)	(10,600,000		)
Net deferred tax asset	$	—		$	—

As of December 31, 2014, the Company has federal and state loss carryforwards of approximately $24,683,000 and $19,865,000, respectively, which may be used to offset future federal and state taxable income, expiring at various dates through 2034. Included in these net operating losses is $1,353,000 of excess stock compensation deductions, related to the amount of tax deductions on restricted stock, in excess of book compensation expense. As of December 31, 2014, the Company also has foreign loss carryforwards of approximately $3,595,000 which may be used to offset future foreign taxable income. Management has determined that it is more likely than not that the Company will not recognize the benefits of the federal and state deferred tax assets and as a result has recorded a valuation allowance against the entire net deferred tax asset. If the Company should generate sustained future taxable income, against which these tax attributes may be recognized, some portion or all of the valuation allowance would be reversed. The valuation allowance increased by $1,316,000 during the year-ended December 31, 2014, due primarily to net operating losses generated, stock compensation and depreciation. The valuation allowance increased $1,511,000 during year-ended December 31, 2013, due primarily to net operating losses generated, stock compensation and depreciation.

The tax years 2003 through 2013 remain open to examination by major taxing jurisdictions to which the Company is subject, which are primarily in the United States, as carry forward attributes generated in years past may still be adjusted upon examination by the Internal Revenue Service or state tax authorities if they are or will be used in a future period. The Company is currently not under examination by the Internal Revenue Service or any other jurisdiction for any tax years. The Company did not recognize any interest and penalties associated with unrecognized tax benefits in the accompanying consolidated financial statements.

The Company has no uncertain tax positions as of December 31, 2014.

In 2014, the Company recognized an United Kingdom energy tax incentive benefit of $649,000 for "Advanced Capital Allowances" (ECA), whereby the Company will receive a cash benefit that is an acceleration of tax relief on capital expenditures of co-generation equipment put into service at approved sites in the UK.

The Company's federal and state net operating losses could be limited to the extent that there are significant changes in ownership of the Company's stock. The company has not assessed the impacts of these limitations on its tax attributes.