Annual report pursuant to section 13 and 15(d)

Income Taxes

Income Taxes
12 Months Ended
Dec. 31, 2013
Income Tax Disclosure [Abstract]  
12.          INCOME TAXES
Deferred tax assets
Income Taxes
No current tax provision has been recorded for the years ended December 31, 2013 and 2012 since the Company had net operating losses for federal and state tax purposes. The related increase in the deferred tax asset was offset by the valuation allowance.
Deferred income taxes reflect the net tax effects of temporary differences between the carrying amount of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes.  Significant components of the Company’s net deferred income taxes are as follows:
Deferred Tax Asset (Liability):
Net tax loss carry forwards   
Stock based compensation
Provision for warrant liability
Allowance for advanced commission
Intangible assets/goodwill
Deferred rent
Amortization of debt discount
Derivative liability
Property and equipment
Tax credit carry forward
Valuation allowance
Non current deferred income tax assets
At December 31, 2013 and 2012, the Company had a net operating loss carry forwards for both federal and state purposes of approximately $29.2 million and $12.0 million, respectively, which may be offset against future taxable income through 2033.
The Company has determined that a valuation for the entire net deferred tax asset is required. A valuation allowance is required if, based on the weight of evidence, it is more likely than not that some or the entire portion of the deferred tax asset will not be realized. After consideration of all the evidence, both positive and negative, management has determined that a full valuation allowance is necessary to reduce the deferred tax asset to zero, the amount that will more likely not be realized. The change in the valuation allowance for the current year is $10,529,911.
Income taxes in the statements of operations
A reconciliation of the federal statutory income tax rate and the effective income tax rate as a percentage of income before income taxes is as follows:
For the Year Ended December 31,:
Federal statutory income tax rate
    35.0 %    
State taxes net of federal benefit
      35       35  
Permanent differences
Change in valuation allowance on net deferred tax assets
Effective income tax rate
    0.00 %     0.0 %