INCOME TAXES

6 Months Ended

Jun. 30, 2012

Income Tax Disclosure [Abstract]

Income Tax Disclosure [Text Block]

14. INCOME TAXES

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

	June 30, 2012			June 30, 2011
Current taxes
Federal	$	—		$	—
State		—			—
Current taxes		—			—
Change in deferred taxes		(79,717	)		(839,687	)
Change in valuation allowance		80,097			856.848
Provision for income tax expense	$	380		$	16,981

The components of the provision for income tax expense (benefit) are as follows for the six months ended:

	June 30, 2012			June 30, 2011
Current taxes
Federal	$	—		$	—
State		—			—
Current taxes		—			—
Change in deferred taxes		(173,415	)		(933,506	)
Change in valuation allowance		186,911			930,563
Provision for income tax expense (benefit)	$	13,496		$	(2,943	)

The following is a summary of the significant components of the Company’s deferred tax assets and liabilities at June 30, 2012:

Deferred tax assets:
Equity based compensation	$	19,618
Allowance for doubtful accounts		8,500
Depreciation and amortization timing differences		—
Net operating loss carryforward		1,796,292
On-line training certificate reserve		1,126
Total deferred tax assets		1,825,536
Valuation allowance		(1,790,716	)
Deferred tax assets net of valuation allowance		34,820
Less deferred tax assets – non-current, net of valuation allowance		34,257
Deferred tax assets – current, net of valuation allowance	$	563

The effective tax rate used for calculation of the deferred taxes as of June 30, 2012 was 34%. The Company has established a valuation allowance against deferred tax assets of $1,790,716 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 six months ended are as follows:

	June 30, 2012			June 30, 2011
Statutory tax rate benefit		—	%		—	%
Increase (decrease) in rates resulting from:
Net operating loss carryforward or carryback		(23	)%		(34	)%
Equity based compensation and loss		—	%		—	%
Book/tax depreciation and amortization differences		—	%		—	%
Change in valuation allowance		25	%		34	%
Other		—	%		—	%
Effective tax rate (benefit)		2	%		—	%

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.