Annual report pursuant to Section 13 and 15(d)

10. INCOME TAXES

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10. INCOME TAXES
 12 Months Ended
Dec. 31, 2014
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,    
    2014     2013
Benefit at US Federal statutory rate   $ (5,904,062 )   $ (5,279,264 )  
State taxes - deferred     879,793       (901,800 )  
Increase in valuation allowance     5,147,244       6,850,118    
Research and development credits     (551,863 )     (599,003 )  
Sale of state net operating loss     (551,724 )     -    
Other     428,888       (70,051 )  
Benefit for income taxes   $ (551,724 )   $ -    

 

A summary of our deferred tax assets is as follows:

 

    Year Ended December 31,  
    2014     2013  
Federal and state net operating loss carryforwards   $ 21,004,587     $ 16,791,893  
Federal and state research credits     3,649,268       2,846,245  
Accrued expenses and other     884,472       752,945  
Total gross deferred tax assets     25,538,327       20,391,083  
Less: valuation allowance for deferred tax assets     (25,538,327 )     (20,391,083 )
Net deferred tax assets   $ -     $ -  

 

As of December 31, 2014, the Company had Federal and state net operating loss carryforwards of approximately $58.9 million and $31.9 million, respectively.  The Company also had Federal and state research and development tax credit carryforwards of approximately $3.0 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 $551,724 in December 2014 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.