INCOME TAXES (Tables)

12 Months Ended

Dec. 31, 2013

INCOME TAXES [Abstract]

Reconciliation of income tax computed at the U.S. federal statutory tax rates to income tax expense

The reconciliation of income tax computed at the U.S. federal statutory tax rates to income tax expense is as follows:

December 31,	2013			2012
Tax at U.S. statutory rates		(34.0	)%		(34.0	)%
State income and federal minimum taxes		21.0	%		108.0	%
Change in valuation allowance		886.0	%		17.0	%
Permanent differences		-			2.0	%
Nondeductible expenses		4.0	%		15.0	%
		877.0	%		108.0	%

Components of deferred tax assets (liabilities)

Deferred tax assets (liabilities) are comprised of the following:

December 31,	2013			2012
Alternative minimum tax credit carry-forward	$	573,000		$	573,000
Net operating loss carryfowards		2,755,000			2,211,000
Temporary differences in bases of assets and liabilities:
Accounts receivable and inventory		739,000			488,000
Accrued expenses		183,000			406,000
Stock-based compensation		26,000			4,000
Goodwill		1,285,000			1,502,000
Intangible assets		781,000			882,000
Property and equipment		12,000			(7,000	)
		3,026,000			3,275,000
Total deferred tax assets, net		6,354,000			6,059,000
Valuation allowance		(6,354,000	)		(3,806,000	)
Net deferred tax assets	$	-		$	2,253,000

Income tax provision

The income tax provision consists of the following:

	2013		2012
Current income tax expense	$	55,000	$	70,000
Deferred income tax expense		2,252,000		-
Total	$	2,307,000	$	70,000

Components of deferred income taxes

Deferred income taxes are included in the accompanying balance sheet as follows:

	2013		2012
Current asset	$	-	$	447,000
Long-term asset		-		1,806,000
	$	-	$	2,253,000