Annual report pursuant to Section 13 and 15(d)

Income Taxes

v3.3.1.900
Income Taxes
 12 Months Ended
Dec. 31, 2015
Income Taxes [Abstract]  
Income Taxes

Note 9- Income Taxes

 

The tax effects of temporary differences that give rise to deferred tax assets are as follows:

 

    For the Years Ended
December 31,		  
    2015     2014  
             
Current:            
Accrued expenses   $ 31,156     $ 38,900  
                 
Non-current:                
Stock compensation     132,645       90,794  
                 
Net operating loss carryforward     2,989,634       1,596,600  
                 
Research and development credit carryforward     100,480       20,890  
                 
Total deferred tax asset     3,253,915       1,747,184  
                 
Valuation allowance     (3,253,915 )     (1,747,184 )
                 
Deferred tax asset, net of valuation allowance   $ -     $ -  

 

A reconciliation of the statutory federal income tax rate to the Company’s effective tax rate is as follows:

 

    For the Years Ended
December 31,		  
    2015     2014  
U.S. statutory federal rate     (34.0 )%     (34.0 )%
State income taxes, net of federal tax benefit     (5.4 )%     (5.6 )%
Permanent differences     2.6 %     1.5 %
Prior year true-ups     - %     (0.1 )%
R&D tax credit     (2.1 )%     (0.6 )%
Change in valuation allowance     38.9 %     38.8 %
Income tax provision (benefit)     - %     - %

  

The income tax provision consists of the following:

 

    For the Years Ended
December 31,		  
    2015     2014  
Federal            
Current   $ -     $ -  
Deferred     (1,190,022 )     (550,708 )
State and local                
Current     -       -  
Deferred     (316,709 )     (154,199 )
Change in valuation allowance     1,506,731       704,907  
Income tax provision (benefit)   $ -     $ -  

 

The Company assesses the likelihood that deferred tax assets will be realized. To the extent that realization is not more likely than not, a valuation allowance is established. Based upon the Company’s losses since inception, management believes that it is more-likely-than-not that future benefits of deferred tax assets will not be realized.

 

The Company files income tax returns in the U.S. federal jurisdiction and various state jurisdictions, principally California and New Jersey. The Company is subject to examination by the various taxing authorities. The Company’s federal and state income tax returns for tax years beginning in 2011 remain subject to examination.

 

At December 31, 2015 and 2014, the Company had $7,672,674 and $4,175,611, respectively, of federal and state net operating loss carryovers that may be available to offset future taxable income. The net operating loss carry forwards, if not utilized, will expire from 2032 to 2035 for federal and state purposes. In accordance with Section 382 of the Internal Revenue Code, the usage of the Company’s net operating loss carryforward could be limited in the event of a change in ownership. At this time, the Company has not completed a full study to assess whether an ownership change under Section 382 of the Code occurred due to the costs and complexities associated with such a study.