9. INCOME TAXES

12 Months Ended

Dec. 31, 2012

Income Tax Disclosure [Abstract]

9. INCOME TAXES

The income tax provision (benefit) for the years ended December 31, 2012 and 2011 differs from the computed expected provision (benefit) at the federal statutory rate for the following reasons:

		2012			2011
Computed expected income tax provision (benefit)	$	(537,978	)	$	(851,053	)
Increase in allowance for doubtful accounts		–			–
Net operating loss carryforward		576,606			826,141
Increased
Accrued liabilities		(39,478	)		40,484
Allowance for doubtful accounts		–			(17,000	)
Non-deductible meals & entertainment		850			1,428
Depreciation		–			–
Income tax provision (benefit)	$	–		$	–

The components of the deferred tax assets and (liabilities) as of December 31, 2012 and 2011 were as follows:

		2012			2011
Deferred tax assets:
Temporary differences:
Accrued liabilities	$	3,652		$	(46,757	)
Allowance for bad debt		–			–
Net operating loss carryforward		16,149,854			15,471,495
Valuation allowance		(16,153,507	)		(15,424,738	)
Net long-term deferred tax asset	$	–		$	–

The components of the deferred tax (expense) benefit were as follows for the years ended December 31, 2012 and 2011:

	2012			2011
Deferred tax assets:
Accrued expenses	$	50,410		$	47,628
Allowance for bad debt		–			21,200
Accumulated Depreciation		–			2,180
Increase in net operating loss carryforward		678,360			971,830
Change in valuation allowance		(627,950	)		(1,042,939	)
	$	–		$	–

As of December 31, 2012, the Company had net operating loss carryforwards of approximately $32,600,000 expiring from 2012 through 2026.