Annual report pursuant to Section 13 and 15(d)

Income Taxes

v2.4.0.8
Income Taxes
12 Months Ended
Dec. 31, 2013
Income Taxes [Abstract]  
Income Taxes
14. Income Taxes

The Company has the following net deferred tax assets at December 31, 2013:

Deferred tax assets:
     
Net operating loss
  $ 848,781  
Other deferred tax assets
    617  
Total deferred tax assets
    849,398  
         
Deferred tax liabilities:
       
Goodwill and trade name
    (120,223 )
Developed technology
    (199,840 )
Derivative liability
    (133,959 )
Property and equipment
    (14,544 )
Total deferred tax liabilities
    (468,566 )
         
Net deferred tax asset
  $ 380,832  

The benefit for income taxes for the year ended December 31, 2013 consists of the following:

Federal:
     
Current provision
  $ -  
Deferred benefit
    319,114  
      319,114  
State:
       
Current provision
    -  
Deferred benefit
    61,718  
      61,718  
    $ 380,832  

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

Expected federal statutory rate
    34.00 %
State income taxes, net of federal benefit
    6.58 %
Tax exempt interest income
    0.32 %
Meals and entertainment
    -0.38 %
Dividends received deduction
    0.12 %
Deferred
    -20.95 %
Other
    1.26 %
      20.95 %

At December 31, 2013, the Company had net operating loss carryforwards for federal and state income tax purposes of approximately $2,092,000. The federal and state net operating loss carryforwards will expire, if not utilized, beginning December 31, 2033. There were no net operating losses in periods prior to the year ended December 31, 2013.