INCOME TAXES

9 Months Ended

Sep. 30, 2011

Income Tax Disclosure [Abstract]

Income Tax Disclosure [Text Block]

16. INCOME TAXES

The components of the provision for income tax benefit are as follows for the three months ended:

	September 30, 2011			September 30, 2010
Current taxes
Federal	$	—		$	—
State		—			—
Current taxes		—			—
Change in deferred taxes		(851,594	)		(57,749	)
Change in valuation allowance		889,486			18,794
Provision for income tax expense (benefit)	$	37,892		$	(38,955	)

The components of the provision for income tax benefit are as follows for the nine months ended:

	September 30, 2011			September 30, 2010
Current taxes
Federal	$	—		$	—
State		—			—
Current taxes		—			—
Change in deferred taxes		(1,079,982	)		(246,506	)
Change in valuation allowance		1,114,931			111,935
Provision for income tax benefit	$	34,949		$	(134,571	)

The following is a summary of the significant components of the Company’s deferred tax assets and liabilities at September 30, 2011:

Deferred tax assets:
Equity based compensation	$	21,743
Allowance for doubtful accounts		8,840
Depreciation and amortization timing differences		(4,151	)
Net operating loss carryforward		1,524,087
On-line training certificate reserve		751
Total deferred tax assets		1,551,270
Valuation allowance		(1,477,441	)
Deferred tax assets net of valuation allowance		73,829
Less deferred tax assets – non-current, net of valuation allowance		73,453
Deferred tax assets – current, net of valuation allowance	$	376

The effective tax rate used for calculation of the deferred taxes as of September 30, 2011 was 34%.  The Company has established a valuation allowance against deferred tax assets of $1,477,441 due to the uncertainty regarding realization, comprised primarily of a 98% reserve against the deferred tax assets attributable to the equity based compensation, a 100% reserve against the allowance for doubtful accounts, a 95% reserve against the net operating carryforward, and a 25% reserve against depreciation and amortization timing differences.

The significant differences between the statutory tax rate and the effective tax rates for the Company for the nine months ended are as follows:

	September 30, 2011			September 30, 2010
Statutory tax rate benefit		—	%		—	%
Increase (decrease) in rates resulting from:
Net operating loss carryforward or carryback		(35	)%		(29	)%
Equity based compensation and loss		—	%		1	%
Book/tax depreciation and amortization differences		—	%		(1	)%
Change in valuation allowance		36	%		13	%
Other		—	%		—	%
Effective tax rate benefit		1	%		(16	)%

The following is a summary of the significant components of the Company’s deferred tax assets and liabilities at December 31, 2010:

Deferred tax assets:
Equity based compensation	$	21,743
Allowance for doubtful accounts		5,100
Depreciation and amortization timing differences		(6,199	)
Net operating loss carryforward		449,707
On-line training certificate reserve		938
Total deferred tax assets		471,289
Valuation allowance		(362,511	)
Deferred tax assets net of valuation allowance		108,778
Less deferred tax assets – non-current, net of valuation allowance		108,309
Deferred tax assets – current, net of valuation allowance	$	469

The effective tax rate used for calculation of the deferred taxes as of December 31, 2010 was 34%.  The Company has established a valuation allowance against deferred tax assets of $362,511 due to the uncertainty regarding realization, comprised primarily of a 98% reserve against the deferred tax assets attributable to the equity based compensation, a 100% reserve against the allowance for doubtful accounts, a 75% reserve against the net operating carryforward, and a 25% reserve against depreciation and amortization timing differences.