Income Taxes

12 Months Ended

Dec. 31, 2012

Income Tax Disclosure [Abstract]

Income Tax Disclosure [Text Block]

8.         provision for income taxes

The Company recognizes the tax effects of transactions in the year in which such transactions enter into the determination of net income, regardless of when reported for tax purposes.  Deferred taxes are provided in the financial statements under ASC Topic 740 to give effect to the resulting temporary differences which may arise from differences in the bases of fixed assets, depreciation methods, allowances, and start-up costs based on the income taxes expected to be payable in future years. Exploration and development stage deferred tax assets arising as a result of net operating loss carryforwards have been offset completely by a valuation allowance due to the uncertainty of their utilization in future periods. Tax operating loss carryforwards generated during the period from January 23, 2007 (date of inception) through December 31, 2012 of approximately $4,667,207 will begin to expire in 2027. Accordingly, deferred tax assets of approximately $1,981,352 (2011 – $1,485,571) related to net operating loss carry-forwards and $30,712 related to stock-based compensation were offset by the valuation allowance in the same amount.

The Company adopted the provisions of FASB Interpretation No. 48 Accounting for Uncertainty in Income Taxes, on January 23, 2007.  As a result of the implementation of Interpretation 48, the Company recognized no increase in the liability for unrecognized tax benefits.

The Company has no tax positions at December 31, 2012 and 2011 for which the ultimate deductibility is highly certain but for which there is uncertainty about the timing of such deductibility.

The Company’s tax returns for the years ended December 31, 2012, 2011, 2010 and 2009 are open for examination under Federal Statute of Limitations and for the years ended December 31, 2012, 2011 and 2010 under the State of California Statute of Limitations.

The Company recognizes interest accrued related to unrecognized tax benefits in interest expense and penalties in operating expenses.  The Company had no accruals for interest and penalties since inception.

Components of income tax benefits are as follows:

	Years Ended December 31,
	2012	2011
Current	$                -	$                -
Federal	-	-
State	-	-
	-	-
Deferred	-	-
	$                -	$                -

A reconciliation of the provision for income tax expense with the expected income tax computed by applying the federal statutory income tax to income before provision for income taxes is as follows:

	Years  Ended December 31
	2012	2011
Income tax (benefit) computed at
Federal statutory tax rate of 34%	$   (291,736)	$   (886,590)
Change in valuation allowance	367,587	1,016,971
State taxes (net of federal benefit)	(75,851)	(130,381)
	$                -	$                -