INCOME TAXES

3 Months Ended

Mar. 31, 2013

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:

	March 31, 2013			March 31, 2012
Current taxes
Federal	$	--		$	--
State		--			--
Current taxes		--			--
Change in deferred taxes		(5,567	)		(93,698	)
Change in valuation allowance		9,350			106,814
Provision for income tax expense	$	3,783		$	13,116

The following is a summary of the significant components of the Company’s deferred tax assets and liabilities at March 31, 2013:

Deferred tax assets:
Equity based compensation	$	152,846
Allowance for doubtful accounts		14,960
Depreciation and amortization timing differences		--
Net operating loss carryforward		1,157,663
On-line training certificate reserve		1,107
Total deferred tax assets		1,326,576
Valuation allowance		(1,320,274	)
Deferred tax assets net of valuation allowance		6,302
Less deferred tax assets – non-current, net of valuation allowance		6,025
Deferred tax assets – current, net of valuation allowance	$	277

The effective tax rate used for calculation of the deferred taxes as of March 31, 2013 was 34%. The Company has established a valuation allowance against deferred tax assets of $1,320,274 or 99%, due to the uncertainty regarding realization, comprised primarily of a 100% reserve against the net operating carryforward, 100% reserve against the allowance for doubtful accounts, and 95% reserve against the deferred tax assets attributable to the equity based compensation.

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, 2013			March 31, 2012
Statutory tax rate		--	%		--	%
%Increase (decrease) in rates resulting from:
Net operating loss carryforward or carryback		(7	)%		(22	)%
Equity based compensation and loss		7	%		--	%
Book/tax depreciation and amortization differences		--	%		--	%
Change in valuation allowance		--	%		25	%
Other		--	%		--	%
Effective tax rate		--	%		3	%

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

Deferred tax assets:
Equity based compensation	$	236,145
Allowance for doubtful accounts		12,240
Depreciation and amortization timing differences		--
Net operating loss carryforward		1,071,409
On-line training certificate reserve		1,215
Total deferred tax assets		1,321,009
Valuation allowance		(1,310,924	)
Deferred tax assets net of valuation allowance		10,085
Less deferred tax assets – non-current, net of valuation allowance		9,781
Deferred tax assets – current, net of valuation allowance	$	304

The effective tax rate used for calculation of the deferred taxes as of December 31, 2012 was 34%. The Company established a valuation allowance against deferred tax assets of $1,310,924, or 99%, due to the uncertainty regarding realization, comprised primarily of a 100% reserve against the net operating carryforward, 100% reserve against the allowance for doubtful accounts, and 95% reserve against the deferred tax assets attributable to the equity based compensation.