Annual report pursuant to Section 13 and 15(d)

Income taxes

v2.4.0.8
Income taxes
 12 Months Ended
Dec. 31, 2013
Income Tax Disclosure [Abstract]  
Income taxes
Income taxes
 
A reconciliation of the federal statutory income tax provision to the Company's actual provision for the years ended December 31, 2013 and 2012 is as follows:
 
 
2013
 
2012
Benefit at federal statutory tax rate
$
1,280,000

 
$
680,000

Unbenefited operating losses
(1,280,000
)
 
(680,000
)
Income tax provision
$
—

 
$
—


 
The components of net deferred tax assets recognized in the accompanying consolidated balance sheets at December 31, 2013 and 2012 are as follows:
 
 
2013
 
2012
Net operating loss carryforwards
$
4,850,000

 
$
3,380,000

Accrued expenses and other
598,000

 
676,000

Accounts receivable
40,000

 
60,000

Inventory
117,000

 
130,000

Property, plant and equipment
155,000

 
94,000

 
5,760,000

 
4,340,000

Valuation allowance
(5,760,000
)
 
(4,340,000
)
Net deferred tax asset
$
—

 
$
—


 
As of December 31, 2013, the company has federal loss carryforwards of approximately $12,300,000, which expire beginning in 2021 through 2033. In addition, the Company has varying amounts of state net operating losses, expiring at various dates starting in 2012 through 2033. The federal net operating losses include approximately $2,800,000 attributable to the Company’s majority owned subsidiary, which can only be used against income of that entity.
 
Management has determined that it is more likely than not that the company will not recognize the benefits of the federal and state deferred tax assets and as a result has recorded a valuation allowance against the entire net deferred tax asset. The valuation allowance has increased by $1,420,000 during the year ended December 31, 2013. If the company should generate sustained future taxable income, against which these tax attributes may be recognized, some portion or all of the valuation allowance would be reversed.
 
The Company did not record a benefit for income taxes related to its operating losses for the years ended December 31, 2013 and 2012.
 
The Company has analyzed its current tax return compliance positions and has determined that no uncertain tax positions have been taken that would require recognition.