10. INCOME TAX (Tables)

12 Months Ended

Dec. 31, 2012

Income Tax Tables

Components of Income Tax Expense (Benefit)

	2012			2011
Current tax, federal	$	921,247		$	852,316
Current tax, state		205,221			293,850
Current tax, foreign		—			—
Current tax, total		1,126,468			1,146,166
Deferred income tax, federal		(73,111	)		(20,000	)
Deferred income tax, state		—			—
Deferred income tax, foreign		—			—
Deferred income tax, total		(73,111	)		(20,000	)
Total	$	1,053,357		$	1,126,166

Reconciliation of income tax benefit

The following table reconciles the income tax benefit at the U.S. Federal statutory rate to income tax benefit at the Company's effective tax rates.:

	2012			2011
Income (Loss) Before Taxes		(31,090	)		1,308,622
US Statutory tax rate		34.00	%		34.00	%
Expected income tax (recovery)		(10,571	)		444,931
Non-deductible items		(71,650	)		82,340
Change in estimates		758
Functional currency adjustments		(40,925	)		(116,981	)
Foreign Tax Rate Difference		217,576			114,131
Change in Valuation Allowance		752,948			311,357
Total income taxes (recovery)		848,136			835,778
Current Income Tax Expenses		1,126,468			1,146,166
Deferred Tax Expenses (Recovery)		(73,111	)		(20,000	)
Total income taxes (recovery)		1,053,357			1,126,166

Deferred tax assets (liabilities)

Deferred tax assets (liabilities) at December 31, 2012 and 2011 are comprised of the following:

Canadian		2012			2011
	Non capital loss carry-forwards		2,119,669			1,741,452
	Intangible Assets		(118	)		(6,691	)
	Fixed Assets		199,983			(46,604	)
			2,319,534			1,688,157
	Valuation Allowance		2,319,534			1,688,157
	Net Deferred tax asset (liability)		-			-
USA
			2012			2011
	Property and Equipment		272,062			219,000
	Net operating losses		108,969			-
	Stock Based Compensation		147,051			114,400
			528,082			333,400
	Deferred tax asset not recognized		235,971			114,400
	Net Deferred tax asset		292,111			219,000

Expiration of non operating loss carry-forwards

EXPIRY	2012 FS
2014		455,480
2015		723,880
2026		934,586
2027		839,285
2028		752,034
2029		1,035,876
2030		1,081,844
2031		1,245,677
2032		1,366,993
TOTAL		8,435,655