Note 14 - Income Taxes

12 Months Ended

Dec. 31, 2016

Notes to Financial Statements

Income Tax Disclosure [Text Block]

NOTE

1

4

:              

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

:

	December 31, 2016			December 31, 2015
Federal statutory rate applied to income/(loss) before income taxes	$	38,740		$	963,947
Increase/(decrease) in income taxes results from:
Current tax expense/(benefit)		1,069			(24,739	)
Nondeductible expenses		1,078,519			(1,451,221	)
Change in deferred assets		41,019			97,580
Change in valuation allowance		(1,158,278	)		389,694
Income tax expense/(benefit)	$	1,069		$	(24,739	)

The components of income tax expense/(benefit) for the year ended:

	December 31, 2016			December 31, 2015
Current tax expense/(benefit):	$	1,069		$	(24,739	)
Deferred tax expense/(benefit):
Bad debt allowance		(23,699	)		26,059
Operating loss carryforward		1,140,957			(513,333	)
Amortization of intangibles		5,482			5,482
Patent litigation settlement		35,538			92,098
		1,159,347			(414,433	)
Valuation allowance		(1,158,278	)		389,694
Total tax expense/(benefit)	$	1,069		$	(24,739	)

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:

	December 31, 2016			December 31, 2015
Amortization of intangibles	$	267,253		$	272,734
Bad debt allowance		66,662			42,963
Patent litigation liability accrual		128,804			164,342
Operating loss carryforwards		19,034,573			20,175,531
Gross deferred tax assets		19,497,292			20,655,570
Valuation allowance		(19,497,292	)		(20,655,570	)
Net deferred tax liability/(asset)	$	-0-		$	-0-

The Company has net operating loss carry forwards (NOL) for income tax purposes of $

35,363,091.

  This loss is allowed to be offset against future income until the year

2036

when the NOL’s 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

December

31,

2016.

  The change in the valuation allowance for the year ended

December

31,

2016

was a decrease of

$1,158,278.

The Company's tax returns for the prior

three

years remain subject to examination by major tax jurisdictions.