INCOME TAXES (Tables)

12 Months Ended

Dec. 31, 2012

Income Taxes Tables

Net deferred tax assets (liabilities)

The significant components of the Company’s net deferred tax assets (liabilities) at December 31, 2012 and 2011 are as follows:

	December 31, 2012		December 31, 2011
Gross deferred tax assets:
Net operating loss carry-forwards	$	4,605,967	$	3,503,965
Stock based expenses		994,016		1,396,526
Tax credit carry-forwards		243,441		222,134
All others		-		13,139
		5,843,425		5,135,764
Gross deferred tax liabilities:
Deferred tax asset valuation allowance		(5,843,425)		(5,135,764)
Net deferred tax asset (liability)	$	-	$	-

Reconciliation of federal statutory income tax rate to our effective income tax rate

Income taxes computed using the federal statutory income tax rate differs from the Company’s effective tax rate primarily due to the following:

	December 31, 2012		December 31, 2011
Income taxes benefit (expense) at statutory rate	34.00%		34.00%
State income tax, net of federal benefit		(5.94)%		(5.94)%
Permanent differences
Meals & entertainment		(0.07)%		(0.11)%
Share-based compensation – Incentive Stock Options		(3.84)%		(3.59)%
Change in valuation allowance		(24.16)%		(24.36)%
		0%		0%