Note 15 - Income Taxes

3 Months Ended

Mar. 31, 2015

Income Tax Disclosure [Abstract]

Income Tax Disclosure [Text Block]

NOTE 15: INCOME TAXES

A reconciliation of income tax expense and the amount computed by applying the statutory federal income tax rate to the income before provision for income taxes is as follows:

	March 31, 2015			March 31, 2014
Federal statutory rate applied to (loss) before income taxes	$	(1,036,631	)	$	(561,148	)
Increase/(decrease) in income taxes results from:
Current tax expense/(benefit)		385			17,655
Non deductible expenses		632,456			(120,715	)
Change in deferred assets		14,012			17,323
Change in valuation allowance		390,163			664,540
Income tax expense/(benefit)	$	385		$	17,655

The components of income tax expense/(benefit) for the three month periods ended:

	March 31, 2015			March 31, 2014
Current tax expense/(benefit):	$	385		$	17,655
Deferred tax expense/(benefit):
Bad debt allowance		7,667			(7,659	)
Operating loss carryforward		(411,842	)		(674,203	)
Amortization of intangibles		1,370			1,370
Patent litigation settlement		12,642			15,952
		(389,778	)		(646,885	)
Valuation allowance		390,163			664,540
Total tax expense/(benefit)	$	385		$	17,655

Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. Significant components of our deferred tax assets and liabilities are as follows:

	March 31, 2015			March 31, 2014
Amortization of intangibles	$	276,846		$	282,328
Bad debt allowance		61,355			31,274
Patent litigation liability accrual		243,799			299,455
Operating loss carryforwards		20,074,040			18,894,685
Gross deferred tax assets		20,656,040			19,507,742
Valuation allowance		(20,656,040	)		(19,507,742	)
Net deferred tax liability/(asset)	$	-0-		$	-0-

The Company has net operating loss carry forwards (NOL) for income tax purposes of approximately $55,591,943. This loss is allowed to be offset against future income until the year 2035 when the NOLs will expire. Other timing differences relate to depreciation and amortization for the stock acquisition of Education Navigator in 1998. The tax benefits relating to all timing differences have been fully reserved for in the valuation allowance account due to the substantial losses incurred through March 31, 2015. The change in the valuation allowance for the three month period ended March 31, 2015 was an increase of $390,163.