Income Taxes

12 Months Ended

Dec. 31, 2012

Income Tax Disclosure [Abstract]

Income Taxes

Note 11 - Income Taxes

Due to our substantial operating losses and the valuation allowance applied against our deferred tax assets, we have not recorded any income tax expense or benefit.

		December 31,		December 31,
		2012		2011
Current:
Federal	$	-	$	-
State		-		-
		-		-
Deferred:
Federal		-		-
State		-		-
		-		-
Provision for income tax, net	$	-	$	-

Income taxes related to our loss from operations differ from the amount computed using the federal statutory income tax rate as follows:

	December 31,			December 31,
	2012			2011
Tax (benefit) provision computed at the federal statutory rate	$	(1,901,595	)	$	(3,837,164	)
State income tax (benefit), net of federal income tax effect		(271,656	)		(548,166	)
Nondeductible permanent differences		(468,568	)		1,468,778
Change in valuation allowance		2,641,819			2,916,552
Provision for income taxes	$	-		$	-

Deferred income taxes result from temporary differences in the recognition of income and expenses for financial reporting purposes and for tax purposes. At December 31, 2012 and 2011, we had available net operating loss carry forwards of $17.4 million and $12.0 million, respectively that expire through 2032.

As of December 31, 2012 and 2011, our deferred tax assets (liabilities) are as follows:

	December 31,			December 31,
	2012			2011
Deferred Tax Assets:
Non-cash interest expense	$	1,403,000		$	1,198,911
Share-based compensation		3,622,057			3,352,610
Other		254,740			254,740
Net operating loss carry forward		6,950,951			4,782,668
Less: Valuation allowance		(11,928,354	)		(9,286,535	)
		302,394			302,394
Deferred Tax Liabilities:
Property and equipment		(302,394	)		(302,394	)
Net deferred asset (liability)	$	-		$	-

We file income tax returns in the U.S. federal jurisdiction and various state jurisdictions. We have not remained current with our filing of our federal or state tax returns. Due to the delinquent filings, our income tax returns are open to examination by federal and state authorities, generally for the years ended September 30, 2008 and later. We do not have any amount recorded for any unrecognized tax benefits as of December 31, 2012 and 2011, nor did we record any amount for the implementation of ASC 740. Our policy is to record estimated interest and penalty related to underpayment of income taxes or unrecognized tax benefits as a component of our income tax provision. During the years ended December 31, 2012 and 2011, we did not recognize any interest or penalties in our statement of operations and there are no accruals for interest or penalties at December 31, 2012 or 2011.