Annual report pursuant to Section 13 and 15(d)

10. INCOME TAXES

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10. INCOME TAXES
 12 Months Ended
Dec. 31, 2015
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,  
    2015     2014  
Benefit at US federal statutory rate   $ (6,109,776 )   $ (5,904,062 )
State taxes - deferred     (124,874 )     879,793  
Increase in valuation allowance, inclusive of true-ups     6,021,614       5,147,244  
Research and development credits     (389,355 )     (551,863 )
Sale of state net operating loss     -       (551,724 )
Other     602,391       428,888  
Benefit for income taxes   $ -     $ (551,724 )

 

A summary of the Company’s deferred tax assets is as follows:

 

    December 31,  
    2015     2014  
Federal and state net operating loss carryforwards   $ 25,834,860     $ 21,004,587  
Federal and state research credits     4,353,534       3,649,268  
Accrued expenses and other     1,371,547       884,472  
Total gross deferred tax assets     31,559,941       25,538,327  
Less: valuation allowance for deferred tax assets     (31,559,941 )     (25,538,327 )
Net deferred tax assets   $ -     $ -  
                 

 

As of December 31, 2015, the Company had Federal and state net operating loss carryforwards of approximately $72.5 million and $46.0 million, respectively.  The Company also had Federal and state research and development tax credit carryforwards of approximately $3.7 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 consolidated financial statements as income tax benefits in the year they are received. The Company did not qualify for this program in 201, as such, the Company cannot make assurances that it will qualify for the program or that the program will exist in future years.