Provision for Taxes

9 Months Ended

Sep. 30, 2012

Provision for Taxes [Abstract]

PROVISION FOR TAXES

NOTE 6 — PROVISION FOR TAXES

The Company regularly reviews the recoverability of its deferred tax assets and establishes a valuation allowance as deemed appropriate. Realization of deferred tax assets is dependent upon generation of sufficient income by the Company in the jurisdictions in which it has operations and, in some cases, by specific location. Because the Company experienced losses in previous years and continued losses in the current year, management recorded a full valuation allowance against the Company’s net deferred tax asset as of September 30, 2012.

As of September 30, 2012 and December 31, 2011, the Company had no unrecognized tax liabilities. Income taxes are provided based on the liability method for financial reporting purposes. For the three months ended September 30, 2012, there were no interest or penalties recorded.

In Belgium, the Company is still open to examination by the Belgian tax authorities from 2008 forward. Currently, tax years 2009 and 2010 are under examination. The Company does not expect additional taxes to be due as a result of the examination. In the United States, the Company is still open to examination from 2008 forward, although carryforward tax attributes that were generated prior to 2008 may still be adjusted upon examination by the U.S. tax authorities if they either have been or will be utilized.

As of December 31, 2010, the Company provided for U.S. tax on foreign earnings of approximately $25,475 that is expected to be repatriated. As of September 30, 2012, $13,757 had been successfully repatriated. Income taxes related to repatriation of cash held in foreign countries is not expected to exceed $350. As of September 30, 2012, $200 of income taxes related to the repatriation has been paid and the remainder is expected to be paid in 2013. As of September 30, 2012, the fair value of net deferred tax assets is zero due to full valuation allowance.

The Company may undergo, or may already have undergone, an “ownership change” within the meaning of Section 382 of the Internal Revenue Code, which could affect the Company’s ability to offset gains realized in the asset sale against net operating losses and foreign tax credit carryovers.