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INCOME TAXES | 12 Months Ended
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Dec. 31, 2012
Income Tax Disclosure [Abstract] |
Income Tax Disclosure [Text Block] |
9. | INCOME TAXES
Our income tax expense (benefit) aggregated $102,640, ($287,171) and ($298,728) (amounting to 53%, (41%) and (44%) of the income (loss) before income taxes, respectively) for the years ended December 31, 2012, 2011 and 2010, respectively. The income tax provision consists of the following:
|  | Year Ended December 31, |
|  | 2012 |  |  | 2011 |  |  | 2010 |
Federal |  | $ | — |  |  | $ | — |  |  | $ | — |
State |  |  | — |  |  |  | — |  |  |  | — |
International |  |  | 708 |  |  |  | 510 |  |  |  | 144 |
Current |  |  | 708 |  |  |  | 510 |  |  |  | 144 |
Federal |  |  | 89,788 |  |  |  | (250,899 | ) |  |  | (262,985 | )
State |  |  | 12,144 |  |  |  | (36,782 | ) |  |  | (35,887 | )
International |  |  | — |  |  |  | — |  |  |  | — |
Deferred |  |  | 101,932 |  |  |  | (287,681 | ) |  |  | (298,872 | )
Total |  | $ | 102,640 |  |  | $ | (287,171 | ) |  | $ | (298,728 | )
The actual income tax expense (benefit) differs from the expected tax computed by applying the U.S. federal corporate tax rate of 34% to income before income tax as follows:
|  | Year Ended December 31, |
|  | 2012 |  |  | 2011 |  |  | 2010 |
Computed expected tax expense (benefit) |  | $ | 65,332 |  |  | $ | (236,871 | ) |  | $ | (232,360 | )
State income taxes, net of federal expense (benefit) |  |  | 12,144 |  |  |  | (36,782 | ) |  |  | (35,887 | )
Share-based compensation |  |  | 9,766 |  |  |  | 8,042 |  |  |  | 10,034 |
Research and development tax credit |  |  | (10,813 | ) |  |  | (23,796 | ) |  |  | (22,357 | )
Other |  |  | 26,211 |  |  |  | 2,236 |  |  |  | (18,158 | )
Total income tax expense (benefit) |  | $ | 102,640 |  |  | $ | (287,171 | ) |  | $ | (298,728 | )
The significant components of our deferred tax asset are as follows:
|  | As of December 31, |
|  | 2012 |  |  | 2011 |
Deferred revenue and other reserves |  | $ | 6,028 |  |  | $ | 9,817 |
Product rights |  |  | 201,000 |  |  |  | 236,509 |
Depreciation |  |  | 8,355 |  |  |  | (32,781 | )
Research and development tax credit |  |  | 207,529 |  |  |  | 180,192 |
Federal net operating loss carryforward |  |  | 592,774 |  |  |  | 651,465 |
State net operating loss carryforward |  |  | 238,536 |  |  |  | 275,226 |
Interest rate swap |  |  | 33,263 |  |  |  | 27,088 |
Prepaid expenses and other |  |  | (10,326 | ) |  |  | 17,835 |
Deferred tax asset |  | $ | 1,277,159 |  |  | $ | 1,365,351 |
In order to accelerate the utilization of available net operating loss carryforwards in advance of their expiration dates, we elected to increase income for federal income tax purposes by capitalizing research and experimentation expenditures aggregating approximately $1,731,000 for our 2000 and 2001 tax returns. Accordingly, we recorded amortization of these capitalized expenditures of approximately $90,000 in 2000 and $173,000 in each of the nine years ended December 31, 2009 and $83,000 for the year ending December 31, 2010 for tax return purposes only. We carried back our 2008 federal net operating loss of approximately $1,151,000 to previous years for tax return purposes, and we have a state net operating loss carryforward of approximately $2,671,000 that expires in 2028, 2029, 2030 and 2031, if not utilized before then, and a federal net operating loss carryforward of approximately $1,743,000 that expires in 2029, 2030 and 2031, if not utilized before then. The $965,000 licensing payment that we made during the fourth quarter of 2004 was treated as an intangible asset and is being amortized over 15 years, for tax return purposes only. The Company files income tax returns in the U.S. federal jurisdiction and several state jurisdictions. With few exceptions, the Company is no longer subject to income tax examinations by tax authorities for years before 2009. We currently have no tax examinations in progress. We also have not paid additional taxes, interest or penalties as a result of tax examinations nor do we have any unrecognized tax benefits for any of the periods in the accompanying financial statements.

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- Definition The entire disclosure for income taxes. Disclosures may include net deferred tax liability or asset recognized in an enterprise's statement of financial position, net change during the year in the total valuation allowance, approximate tax effect of each type of temporary difference and carryforward that gives rise to a significant portion of deferred tax liabilities and deferred tax assets, utilization of a tax carryback, and tax uncertainties information. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Statement of Financial Accounting Standard (FAS) -Number 109 -Paragraph 136, 172 -LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy. Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 235 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SX 210.4-08.(h)) -URI http://asc.fasb.org/extlink&oid=6881521&loc=d3e23780-122690 Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher SEC -Name Regulation S-X (SX) -Number 210 -Section 08 -Paragraph h -Article 4 Reference 4: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 15 -URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32718-109319 Reference 5: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Statement of Financial Accounting Standard (FAS) -Number 109 -Paragraph 43, 44, 45, 46, 47, 48, 49 -LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy. Reference 6: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 2 -URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32537-109319 Reference 7: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 9 -URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32639-109319 Reference 8: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 3 -URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32559-109319 + Details
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