Quarterly report pursuant to Section 13 or 15(d)

Income Taxes

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Income Taxes
 9 Months Ended
Sep. 30, 2012
Income Taxes [Abstract]  
Income Taxes

15. Income Taxes

No provision for Federal and State income taxes was required for the three and nine months ended September 30, 2012 and 2011 due to the Company’s operating losses and increased deferred tax asset valuation allowance.  At September 30, 2012 and December 31, 2011, the Company has unused net operating loss carry-forwards of approximately $60,700,000 and $55,394,000 which expire at various dates through 2032.  Some of this amount may be subject to annual limitations under certain provisions of the Internal Revenue Code related to “changes in ownership.” 

As of September 30, 2012 and December 31, 2011, the deferred tax assets related to the aforementioned carry-forwards have been fully offset by valuation allowances, since significant utilization of such amounts is not presently expected in the foreseeable future. 

Deferred tax assets and valuation allowances consist of:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

September 30,

December 31,

 

 

2012

2011

 

 

 

 

 

 

Net Operating Loss Carryforwards

 

$
23,673,000 

$
21,603,700 

Stock Option Expense

 

 
1,832,000 

 
1,753,400 

Book tax differences on assets and liabilities

 

 
374,600 

 
348,600 

Valuation Allowance

 

 
(25,879,600)

 
(23,705,700)

 

 

 

 

 

 

Net Deferred Tax Assets

 

$

 -

$

 -

 

15. Income Taxes (cont’d)

 

The Company files income tax returns in the U.S. Federal and Maryland state jurisdictions.  Tax years for fiscal 2008 through 2011 are open and potentially subject to examination by the Federal and Maryland state taxing authorities.