XML 45 R17.htm IDEA: XBRL DOCUMENT v2.4.1.9
INCOME TAXES
12 Months Ended
Dec. 31, 2013
Income Tax Disclosure [Abstract]  
INCOME TAXES

10. INCOME TAXES

 

As of December 31, 2013, the Company has filed its income tax returns for the years through December 31, 2012.

 

As of December 31, 2013, management has evaluated and concluded that there are no significant uncertain tax positions requiring recognition in the Company's financial statements.

 

As of December 31, 2013, the Company has net operating loss carryforwards of approximately $5,100,000 to reduce future Federal and state taxable income through 2032 and $1,922,000 of temporary differences in the timing of the deduction for stock-based compensation. However, as a result of the recent and potential changes in the share ownership of the Company, future utilization of the net operating losses may be limited pursuant to Section 382 of the Internal Revenue Service. The maximum net operating loss carryforward which could be utilized as of December 31, 2013 pursuant to Section 382 for Be Active Brands is $185,000 a year, based on the approximately $2,500,000 losses incurred prior to the Merger.

 

Since at present realization of the Company’s related deferred tax assets of $2,249,000 at December 31, 2013 is not considered more likely than not, a valuation allowance of $2,249,000 at December 31, 2013 has been provided. The valuation allowance increased by $1,275,000 from December 31, 2012.

 

A reconciliation of income taxes and the statutory rate for the years ended December 31, 2013 and 2012 was as follows:

 

Federal statutory rate 34%
Effect of state income taxes 4%
Increase in valuation allowance (38%))
  -       %