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S-1/A
STEREOTAXIS, INC. filed this Form S-1/A on 06/17/2004
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STEREOTAXIS, INC.

NOTES TO FINANCIAL STATEMENTS — (Continued)

(Information as of March 31, 2004 and for the three months ended
March 31, 2003 and 2004 is unaudited)

       The provision for income taxes varies from the amount determined by applying the U.S. federal statutory rate to income before income taxes as a result of the following:

                         
Year Ended
December 31

2001 2002 2003



U.S. statutory income tax rate
    34.0 %     34.0 %     34.0 %
Increase in taxes, resulting from state income taxes, net of federal tax benefit
    3.6 %     3.6 %     3.6 %
Permanent differences between book and tax, research credits, and other
    2.6 %     1.4 %     2.5 %
Valuation allowance
    (40.2 )%     (39.0 )%     (40.1 )%
     
     
     
 
Effective income tax rate
    0.0 %     0.0 %     0.0 %
     
     
     
 

       The components of the deferred tax asset are as follows:

                 
December 31

2002 2003


Current accruals
  $ 685,283     $ 1,212,564  
Depreciation and amortization
    650,515       833,002  
Deferred compensation
    475,926       540,246  
Net operating loss carryovers
    22,097,952       30,418,180  
Research and development credit carryovers
    1,530,871       2,077,280  
     
     
 
      25,440,547       35,081,272  
Valuation allowance
    (25,440,547 )     (35,081,272 )
     
     
 
    $     $  
     
     
 

       As of December 31, 2003, the Company has federal net operating loss carryforwards of $80,048,000. The net operating loss carryforwards will expire at various dates beginning in 2005 through 2023, if not utilized. As of December 31, 2003, the Company had federal research and development credit carryforwards of $2,100,000, that will expire at various dates beginning in 2006 through 2023, if not utilized.

 
11. Restructuring Charge

       During 2002, the Company decided to discontinue its embolic product line. This resulted in the Company incurring total restructuring expenses, included in research and development, of approximately $267,000, consisting primarily of employee severance costs and cancellation of contract research agreements. The Company utilized this entire accrual in 2003.

F-23


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