Income Taxes

6 Months Ended

Jun. 30, 2011

Income Taxes

Income Taxes

10. Income Taxes

Deferred income taxes are recognized for the tax consequences in future years of differences between the tax bases of assets and liabilities and their financial reporting amounts at each year end, based on enacted tax laws and statutory tax rates applicable to the periods in which the differences are expected to affect taxable income.  A valuation allowance is established based upon periodic assessments made by management to reduce deferred tax assets to the amount expected to be realized.  Income tax expense is the current tax provision for the period and the change during the period in deferred tax assets and liabilities.  The Company’s estimated annual effective tax rate was zero for the first six months of 2011 and 2010.  The Company’s estimated effective tax rate was zero for the quarter(s) ended June 30, 2011 and June 30, 2010.  However, the effective income tax rate for the six months ended June 30, 2011 was approximately -1.2% as a result of realizing a discrete item of $15,000 in the first quarter, compared to an effective income tax rate of 0.0% for the six months ended June 30, 2010.