Annual report pursuant to Section 13 and 15(d)

Note 11 - Income Taxes

v2.4.0.8
Note 11 - Income Taxes
12 Months Ended
Dec. 31, 2013
Notes  
Note 11 - Income Taxes

Note 11 - Income Taxes

 

Income taxes are provided for temporary differences between financial and tax bases of assets and liabilities. The following is a reconciliation of the amount of benefit that would result from applying the federal statutory rate to pretax loss with the benefit from income taxes for the years ended December 31, 2013 and 2012:

 

Rate Reconciliation

 

 

 

2013

2012

Federal income tax (benefit) at statutory rate (34%)

$(2,552,000)

$(1,114,000)

State income tax (benefit) , net of federal benefit

(100,000)

12,000

Foreign income tax benefit

-

7,000

Losses allocated to preferred members of GCE Mexico

1,971,000

1,151,000

Losses allocated GEHD

15,000

22,000

Share-based compensation

38,000

54,000

Expiration of operating loss and research credit carryforwards

-

75,000

Other differences

5,000

(2,000)

Change in valuation allowance

623,000

$(205,000)

Income tax benefit

$-

$-

 

The components of deferred tax assets and liabilities are as follows at December 31, 2013 and 2012, using a combined deferred income tax rate of 40%:

 

Components of Net Deferred Taxes

 

 

 

2013

2012

Net operating loss carryforward

$7,225,000

$6,839,000

Share-based compensation

781,000

692,000

Accrued compensation and other liabilities

647,000

499,000

Impairment of long lived assets

58,000

58,000

Other

(2,000)

(2,000)

Valuation allowance

(8,709,000)

(8,086,000)

Net deferred tax asset

$-

$-

 

The Company has available net operating losses of approximately $21,052,000 which can be utilized to offset future earnings of the Company. The utilization of the net operating losses are dependent upon the tax laws in effect at the time such losses can be utilized. The loss carryforwards expire between the years 2014 and 2033. Should the Company experience a significant change of ownership, the utilization of net operating losses could be reduced.

 

The Company and its subsidiaries file tax returns in the U.S. Federal jurisdiction and, in the state of California. The Company is no longer subject to U.S. federal tax examinations for tax years before and including December 31, 2009. The Company is no longer subject to examination by state tax authorities for tax years before and including December 31, 2008. During the years ended December 31, 2013 and 2012, the Company did not recognize interest and penalties.