INCOME TAXES

3 Months Ended

Mar. 31, 2012

Income Tax Disclosure [Abstract]

Income Tax Disclosure [Text Block]

14. INCOME TAXES

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

	March 31, 2012			March 31, 2011
Current taxes
Federal	$	—		$	—
State		—			—
Current taxes		—			—
Change in deferred taxes		(93,698	)		(93,639	)
Change in valuation allowance		106,814			73,715
Provision for income tax expense (benefit)	$	13,116		$	(19,924	)

The following is a summary of the significant components of the Company’s deferred tax assets and liabilities at March 31, 2012:

Deferred tax assets:
Equity based compensation	$	21,743
Allowance for doubtful accounts		6,800
Depreciation and amortization timing differences		—
Net operating loss carryforward		1,716,254
On-line training certificate reserve		1,022
Total deferred tax assets		1,745,819
Valuation allowance		(1,710,619	)
Deferred tax assets net of valuation allowance		35,200
Less deferred tax assets – non-current, net of valuation allowance		34,689
Deferred tax assets – current, net of valuation allowance	$	511

The effective tax rate used for calculation of the deferred taxes as of March 31, 2012 was 34%. The Company has established a valuation allowance against deferred tax assets of $1,710,619 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 97% 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 three months ended are as follows:

	March 31, 2012			March 31, 2011
Statutory tax rate benefit		—	%		—	%
Increase (decrease) in rates resulting from:
Net operating loss carryforward or carryback		(22	)%		(32	)%
Equity based compensation and loss		—	%		—	%
Book/tax depreciation and amortization differences		(1	)%		—	%
Change in valuation allowance		25	%		25	%
Other		—	%		—	%
Effective tax rate (benefit)		3	%		(7	)%

The following is a summary of the significant components of the Company’s deferred tax assets and liabilities at December 31, 2011:

Deferred tax assets:
Equity based compensation	$	21,743
Allowance for doubtful accounts		10,540
Depreciation and amortization timing differences		(4,389	)
Net operating loss carryforward		1,623,065
On-line training certificate reserve		1,162
Total deferred tax assets		1,652,121
Valuation allowance		(1,603,805	)
Deferred tax assets net of valuation allowance		48,316
Less deferred tax assets – non-current, net of valuation allowance		47,735
Deferred tax assets – current, net of valuation allowance	$	581

The effective tax rate used for calculation of the deferred taxes as of December 31, 2011 was 34%. The Company has established a valuation allowance against deferred tax assets of $1,603,805 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 97% reserve against the net operating carryforward, and a 25% reserve against depreciation and amortization timing differences.