Income Taxes (Tables)
|
12 Months Ended |
Dec. 31, 2013 |
|---|
| Income Tax Disclosure [Abstract] |
|
| Components of (Loss) before Income Taxes |
The components of (loss) before income taxes are as follows:
|
|
|
|
|
|
|
|
|
|
|
|
Year ended December 31,
|
|
|
|
|
2013 |
|
|
2012 |
|
|
Domestic (US)
|
|
$ |
(547,508) |
|
|
$ |
(190,025) |
|
|
Foreign (UK)
|
|
|
(7,855,509) |
|
|
|
(5,244,538) |
|
|
Foreign (Germany)
|
|
|
(176,229) |
|
|
|
(893,777) |
|
|
Loss before income taxes
|
|
$ |
(8,579,246) |
|
|
$ |
(6,328,340) |
|
|
| Reconciliation of Income Tax Expense (Benefit) |
The reconciliation of income tax expense (benefit) at the UK
corporation tax rate, being the rate applicable to the country of
domicile of Xenetic UK, to net income tax expense (benefit) is as
follows:
|
|
|
|
|
|
|
|
|
|
|
|
Year ended December 31,
|
|
|
|
|
2013 |
|
|
2012 |
|
|
UK corporation tax benefit at statutory rate
|
|
$ |
(1,994,675 |
) |
|
$ |
(1,550,443 |
) |
|
Increase in tax losses not recognized
|
|
|
1,461,836 |
|
|
|
1,319,946 |
|
|
Permanent differences, net
|
|
|
674,920 |
|
|
|
99,825 |
|
|
Foreign rate differential
|
|
|
(100,131 |
) |
|
|
(89,442 |
) |
|
Share-based compensation, net
|
|
|
9,179 |
|
|
|
6,770 |
|
|
Other
|
|
|
163 |
|
|
|
6,531 |
|
|
Impairment of IPR&D
|
|
|
- |
|
|
|
266,471 |
|
|
Enhanced research and development tax credits
|
|
|
(51,292 |
) |
|
|
(59,658 |
) |
|
Net expense (benefit) for income taxes
|
|
$ |
|
|
|
$ |
- |
|
|
| Components of Company's Deferred Tax Assets |
Significant components of the Company’s deferred tax assets
are as follows:
|
|
|
|
|
|
|
|
|
|
|
|
Year ended December 31,
|
|
|
|
|
2013 |
|
|
2012 |
|
|
Deferred tax assets:
|
|
|
|
|
|
|
|
|
|
UK net operating loss carryforwards
|
|
$ |
7,735,113 |
|
|
$ |
7,543,489 |
|
|
Enhanced research and development tax credits
|
|
|
713,029 |
|
|
|
751,213 |
|
|
Share-based compensation
|
|
|
409,391 |
|
|
|
462,976 |
|
|
Germany net operating loss carryforwards
|
|
|
360,763 |
|
|
|
290,036 |
|
|
US federal net operating loss carryforwards
|
|
|
242,254 |
|
|
|
59,294 |
|
|
US state net operating loss carryforwards
|
|
|
35,929 |
|
|
|
8,754 |
|
|
Other
|
|
|
24,781 |
|
|
|
31,726 |
|
|
Total deferred tax assets before valuation allowance
|
|
|
9,521,260 |
|
|
|
9,147,488 |
|
|
Less valuation allowance
|
|
|
(9,521,260 |
) |
|
|
(9,147,488 |
) |
|
Net deferred tax assets
|
|
$ |
- |
|
|
$ |
- |
|
|
Deferred tax liability:
|
|
|
|
|
|
|
|
|
|
Indefinite-lived intangible asset
|
|
$ |
(3,257,910 |
) |
|
$ |
(3,192,909 |
) |
|
Total net deferred tax liability
|
|
$ |
(3,257,910 |
) |
|
$ |
(3,192,909 |
) |
|
| Schedule of Changes to Unrecognized Tax Positions |
The changes to unrecognized tax positions for 2013 and 2012 were as
follows:
|
|
|
|
|
|
|
|
|
|
|
|
Year ended December 31,
|
|
|
|
|
2013 |
|
|
2012 |
|
|
Unrecognized tax benefits as of January 1
|
|
$ |
182,251 |
|
|
$ |
174,289 |
|
|
Gross adjustments in tax positions
|
|
|
- |
|
|
|
- |
|
|
Gross increases
|
|
|
- |
|
|
|
- |
|
|
Foreign currency translation
|
|
|
3,710 |
|
|
|
7,962 |
|
|
Unrecognized tax positions as of December 31
|
|
$ |
185,961 |
|
|
$ |
182,251 |
|
|