Income Taxes

3 Months Ended

Mar. 31, 2013

Income Taxes

Income Taxes

(6) Income Taxes

The Company did not record an income tax provision or benefit for the three months ended March 31, 2013 and 2012 as the Company has a deferred tax asset related to its net operating loss carry forwards which are fully reserved with a valuation allowance at March 31, 2013 and December 31, 2012.

Before becoming consolidated subsidiaries of the Company, HCG and TLC reported earnings and losses under the Subchapter S-Corporation election and thereby all taxable income passed through to the shareholders and was taxed at the shareholders’ ordinary tax rates.  As a result, there has been no provision for income taxes in the prior years.

The acquisition of TLC resulted in the Company recognizing a deferred tax asset.  The purchase accounting adjustment for TLC’s property, plant and equipment resulted in a value lower than the tax book value.