INCOME TAXES (Tables)

3 Months Ended

Mar. 31, 2013

Income Taxes Tables

Provision for income

The provision for income taxes as at March 31, are set forth below:

	2013		2012
	(Unaudited)		(Unaudited)
Current
Federal	$	376,000	$	-
Federal AMT		-		227,000
State		113,000		59,000
Total Expense		489,000		286,000
Deferred
Federal		-		-
State		-		-
Total Deferred Taxes		-		-
Net Expense for Income Taxes	$	489,000	$	286,000

Deferred tax assets

The components of net deferred tax assets as of March 31, 2013 and December 31 2012 are set forth below:

	March 31,			December 31,
	2013			2012
	(Unaudited)
Deferred tax assets:
Capital loss carry forwards	$	1,088,000		$	1,088,000
Bad debts		290,000			282,000
Stock based compensation - options and restricted stock		506,000			506,000
Capitalized engineering costs		461,000			447,000
Account payable, accrued expenses and reserves		9,000			9,000
Deferred rent		430,000			423,000
Amortization - NTW Transaction		210,000			138,000
Inventory - 263A adjustment		734,000			569,000
Lease Impairment		76,000			85,000
Deferred gain on sale of real estate		205,000			209,000
Section 1231 loss carryover		86,000			86,000
Total deferred tax assets before valuation allowance		4,095,000			3,842,000
Valuation allowance		(2,608,000	)		(2,269,000	)
Total deferred tax assets after valuation allowance		1,487,000			1,573,000
Deferred tax liabilities:
Property and equipment		(928,000	)		(997,000	)
Amortization - Welding Transaction		(559,000	)		(576,000	)
Total Deferred Tax Liability		(1,487,000	)		(1,573,000	)
Net deferred tax asset	$	-		$	-