Note 11 - Income Taxes

12 Months Ended

Dec. 31, 2013

Income Tax Disclosure [Abstract]

Income Tax Disclosure [Text Block]

11.   Income Taxes

   The provision for income taxes consisted of the following:

	For the Years Ended December 31,
	2013			2012
Current	$	888,000		$	336,000
Deferred		(3,000	)		(6,000	)
	$	885,000		$	330,000

Deferred income tax assets (liabilities) consisted of the following:

	December 31,
	2013			2012
Current deferred income taxes:
Foreign tax credits	$	51,000		$	67,000
Temporary differences:
Inventory reserve		204,000			121,000
State income taxes		-			(13,000	)
Accrued expenses and inventory		385,000			379,000
Current deferred income tax assets, net	$	640,000		$	554,000
Non-current deferred income taxes:
Temporary differences:
Property and equipment	$	(696,000	)	$	(760,000	)
Intangible assets		(3,000	)		-
Other		(374,000	)		(14,000	)
Fair value adjustment - common stock warrants		(119,000	)		-
Foreign exchange		(21,000	)		-
State income taxes		(44,000	)		(39,000	)
Non-current deferred tax liabilities		(1,257,000	)		(813,000	)
Net deferred income tax liability	$	(617,000	)	$	(259,000	)

The provision for income taxes differs from the amount that would be obtained by applying the US statutory rate to income before income taxes as a result of the following:

	For the Years Ended December 31,
	2013			2012
Income taxes based on US statutory rate of 34%	$	1,008,000		$	444,000
Non-deductible meals and entertainment		5,000			4,000
Domestic manufacturer's deduction		(53,000	)		(21,000	)
Foreign taxes		(71,000	)		(172,000	)
State taxes		70,000			42,000
Other		(74,000	)		33,000
	$	885,000		$	330,000

In 2012, the Company modified its tax reporting for Harmony, which lowered the Company’s effective tax rate for the year ended December 31, 2013. The Company recorded an uncertain tax position liability of approximately $342,000 as of December 31, 2012, which is included in accrued liabilities in the accompanying 2012 balance sheet. The uncertain tax position liability was reduced during 2013 after it was determined that certain tax returns could not be amended.

Unrecognized tax benefits during the years ended December 31, 2013 and 2012 were as follows:

	For the Years Ended December 31,
	2013			2012
Balance as of January 1	$	342,000		$	-
Gross increase from tax positions taken during the year		-			28,000
Gross increase from tax positions taken during prior periods		-			314,000
Reductions to unrecognized tax benefits		(148,000	)		-
Balance as of December 31	$	194,000		$	342,000