Annual report pursuant to section 13 and 15(d)

10. INCOME TAXES

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10. INCOME TAXES
12 Months Ended
Dec. 31, 2013
Income Tax Disclosure [Abstract]  
10. INCOME TAXES

A reconciliation of income taxes at the U.S. Federal statutory rate to the benefit for income taxes is as follows:

 

    Year Ended December 31,  
    2013     2012  
Benefit at US federal statutory rate   $ (5,279,264 )   $ (2,692,436 )
State taxes - deferred     (901,800 )     (395,946 )
Increase in valuation allowance, inclusive of true-ups     6,850,118       3,088,382  
Research and development credits     (599,003 )     -  
Sale of state net operating loss     -       (617,615 )
Other     (70,051 )     -  
Benefit for income taxes   $ -     $ (617,615 )

 

A summary of our deferred tax assets is as follows:

 

    Year Ended December 31,  
    2013     2012  
Federal and state net operating loss carryforwards   $ 16,791,893     $ 11,602,301  
Federal and state research credits     2,846,245       1,938,664  
Accrued expenses and other     752,945       -  
Total gross deferred taxassets     20,391,083       13,540,965  
Less: valuation allowance for deferred taxassets     (20,391,083 )     (13,540,965 )
Net deferred taxassets   $ -     $ -  

 

As of December 31, 2013, the Company had Federal and state net operating loss carryforwards of approximately $44.1 million and $33.3 million, respectively.  The Company also had Federal and state research and development tax credit carryforwards of approximately $2.2 million and $0.6 million, respectively.  The net operating loss carryforwards and tax credits will expire at various dates beginning in 2027 if not utilized.

 

The Company received $617,615 in January 2012 from the sale of net operating loss and research and development credit carryforwards under the New Jersey Economic Development Authority Technology Business Tax Certificate Transfer Program.  These amounts are recorded on the financial statements as income tax benefits in the year they are received.