Income Taxes (Tables)

12 Months Ended

Dec. 31, 2012

Effective Income Tax Rate Reconciliation

A reconciliation of the statutory U.S. federal tax rate and effective tax rates is as follows:

	2012			2011
Federal statutory taxes		34.0	%		34.0	%
State income taxes, net of federal tax benefit		4.0	%		4.1	%
Foreign taxes less than the domestic rate		(1.2	%)		(0.8	%)
Permanent differences		0.0	%		(0.3	%)
Change in valuation allowance		(34.8	%)		(48.0	%)
Other		(1.0	%)		2.3	%
		1.0	%		(8.7	%)

Deferred Tax Assets and Liabilities

Deferred income taxes are recorded based upon differences between the financial reporting and income tax basis of assets and liabilities. The following deferred income taxes are recorded:

	2012			2011
Deferred tax assets:
Federal net operating loss carryforward	$	34,868		$	27,595
State loss carryforward		3,860			3,382
Goodwill		27,961			–
Other intangible assets		3,844			1,188
Allowance for bad debts		637			1,050
Stock-based compensation		1,214			874
Accrued expenses		140			111
Inventory		93			88
Fixed assets		77			-
Other		941			425
Total gross deferred tax assets		73,635			34,713
Deferred tax liabilities:
Fixed assets		-			(140	)
Goodwill		-			(961	)
Total gross deferred tax liabilities		-			(1,101	)
Valuation allowance		(73,635	)		(34,573	)
Total net deferred liability	$	-		$	(961	)