Income Taxes

9 Months Ended

Sep. 30, 2012

Income Taxes [Abstract]

INCOME TAXES

NOTE 5 - INCOME TAXES

The Company had a net loss for the three and nine months ended September 30, 2012 and a net loss for the nine months ended September 30, 2011. The Company established a valuation allowance at September 30, 2012 of approximately $2.4 million due to uncertainties regarding the future realization of its deferred tax assets. The Company established a valuation allowance at March 31, 2011 and retained a valuation allowance of approximately $0.8 million at September 30, 2011, due to uncertainties regarding the future realization of its deferred tax assets. As a result, there was no income tax expense recorded for the three months ended September 30, 2011.

During the first quarter of 2012, the Company recorded an adjustment to the estimated permanent differences between book and taxable income related to stock compensation expense in prior periods. The adjustment resulted in a charge to deferred tax assets and additional deferred income taxes of approximately $0.7 million, which is reflected in the Company’s statement of operations for the nine months ended September 30, 2012. During the third quarter of 2012, the Company recorded an adjustment to the estimated permanent differences between book and taxable income related to an acquisition in a prior period. The adjustment resulted in a charge to deferred tax assets and additional deferred income taxes of approximately $0.2 million which is reflected in the Company’s statement of operations for the nine months ended September 30, 2012. Although the total adjustments made during the year may be considered material to the financial results for the nine months ended September 30, 2012, the Company does not believe that the adjustment will have a material impact on the financial results for the year ended December 31, 2012.