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INCOME TAXES
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12 Months Ended |
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Dec. 31, 2013
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| INCOME TAXES [Abstract] | |
| INCOME TAXES |
NOTE 12 - INCOME TAXES
Income tax expense differs from the statutory amounts as follows:
2013 2012
Income taxes at U.S. statutory rate $ 1,547,000 $(3,581,000)
Current year reserve 189,000 2,794,000
Expenses not deductible (1,736,000) 787,000
Total tax expense $ - $ -
Deferred taxes are provided for the temporary differences between the financial reporting bases and the tax bases of our assets and liabilities. The temporary differences that give rise to deferred tax assets were as follows:
December 31,
2013 2012
Deferred tax assets
Net operating loss carryforwards $ 63,051,000 $ 64,147,000
General business credit carryforwards 2,363,000 2,450,000
State credits 3,053,000 3,072,000
Property and equipment - 57,000
Stock options 473,000 1,531,000
Derivatives (92,000) 4,007,000
Deferred revenue 1,072,000 899,000
Intangible assets 418,000 517,000
Accrued interest 253,000 253,000
Other 231,000 230,000
Gross deferred tax assets 70,822,000 77,163,000
Valuation allowance (70,822,000) (77,163,000)
Net deferred taxes $ - $ -
At December 31, 2013, we had approximately $188,444,000 of net operating loss carryforwards and approximately $2,363,000 of general business credit carryforwards. These carryforwards expire as follows:
Net operating General business
loss carryforwards credit carryforwards
2012 $ - $ -
2013 - -
2014 - -
2015 - -
Thereafter 188,444,000 2,363,000
$188,444,000 $ 2,363,000
As a result of a merger on January 25, 1996, a change in control occurred for federal income tax purposes, which limits the utilization of pre-merger net operating loss carryforwards of approximately $3,100,000 to approximately $530,000 per year.
Additionally, we acquired MacroChem Corporation on February 25, 2009 and Somanta Pharmaceuticals, Inc. on January 4, 2008. Both corporations were loss companies at the time of the acquisition. Therefore, the net operating losses related to those acquisitions may be subject to annual limitations as provided by IRC Sec. 382.
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