Note 15 - Income Taxes

6 Months Ended

Jun. 30, 2014

Income Tax Disclosure [Abstract]

Income Tax Disclosure [Text Block]

NOTE 15:             INCOME TAXES

A reconciliation of income tax expense and the amount computed by applying the statutory federal income tax rate to the income before provision for income taxes is as follows:

	June 30, 2014			June 30, 2013
Federal statutory rate applied to loss before income taxes	$	(317,167	)	$	(2,326,236	)
Increase/(decrease) in income taxes results from:
Current tax expense		33,961			17,730
Non deductible expenses		(922,665	)		1,990,344
Change in deferred assets		33,855			37,086
Change in valuation allowance		1,205,977			298,806
Income tax expense	$	33,961		$	17,730

The components of income tax expense/(benefit) for the six month periods ended:

	June 30, 2014			June 30, 2013
Current tax expense:	$	33,961		$	17,730
Deferred tax expense/(benefit):
Bad debt allowance		(28,600	)		16,189
Operating loss carryforward		(1,211,232	)		(352,081	)
Amortization of intangibles		2,741			-0-
Patent litigation settlement		31,114			37,086
		(1,205,977	)		(298,806	)
Valuation allowance		1,205,977			298,806
Total tax expense	$	33,961		$	17,730

Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. Significant components of our deferred tax assets and liabilities are as follows:

	June 30, 2014			June 30, 2013
Amortization of intangibles	$	280,957		$	283,698
Bad debt allowance		52,214			14,526
Patent litigation liability accrual		284,294			349,596
Operating loss carryforwards		19,431,714			17,708,050
Gross deferred tax assets		20,049,179			18,355,870
Valuation allowance		(20,049,179	)		(18,355,870	)
Net deferred tax liability/(asset)	$	-0-		$	-0-

The Company has net operating loss carry forwards (NOL) for income tax purposes of approximately $53,884,989. This loss is allowed to be offset against future income until the year 2034 when the NOLs will expire. Other timing differences relate to depreciation and amortization for the stock acquisition of Education Navigator in 1998. The tax benefits relating to all timing differences have been fully reserved for in the valuation allowance account due to the substantial losses incurred through June 30, 2014. The change in the valuation allowance for the six month period ended June 30, 2014 was an increase of $1,205,977.