Annual report pursuant to Section 13 and 15(d)

Income Taxes (Tables)

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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