Income Taxes

12 Months Ended

Jan. 31, 2012

Income Taxes [Abstract]

Income Taxes [Text Block]

Note 12.  Income Taxes

The components of net (loss) before taxes for the Company’s domestic and prior foreign operations were as follows:

January 31,	2012	2011
Domestic	$(499,527)	$(528,771)
Net income before taxes	$(499,527)	$(528,771)

The difference between the federal statutory tax rate and the effective tax rate on net income before taxes is as follows:

 

January 31,	2012	2011
Federal statutory rate	(34.0)%	-34.00%
Increase in net deferred tax asset valuation allowance	34.0	34.0
	0.0%	0.0%

The Company has federal tax loss carry forwards of approximately $4.5 million at January 31, 2012, which expire through 2032. The principal difference between the net loss reported for income tax purposes and the net loss reported for financial reporting purposes relates to stock based compensation expense.

The Company has a deferred tax asset of approximately $1.5 million resulting from the net operating loss carry forwards.  At this time, the Company is unable to determine if it will be able to benefit from its deferred tax asset.  Accordingly, a valuation allowance has been established for the entire deferred tax asset.  The change in the valuation allowance was approximately $150,000 for the year ended January 31, 2012.

In accordance with Section 382 of the Internal Revenue Code, deductibility of the Company’s net operating loss carry forward may be subject to an annual limitation in the event of a change in control.