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14. INCOME TAXES (Tables)
 12 Months Ended
Dec. 31, 2012
Income Taxes Tables  
Provision for income

The provision for income taxes as at December 31, are set forth below:

 

    2012     2011  
             
Current            
Federal   $ 1,093,000     $ -  
Federal AMT     -       57,000  
State     354,000       -  
Total Expense     1,447,000       57,000  
                 
Deferred                
Federal     -       -  
State     -       -  
Total Deferred Taxes     -       -  
Net Expense for Income Taxes   $ 1,447,000     $ 57,000  

 
Reconciliation of our income tax rate

The following is a reconciliation of our income tax rate computed using the Federal statutory rate to our actual income tax rate as of December 31,

 

    2012     2011  
             
Federal Tax Rate     34 %     34 %
Effect of State taxes     8 %     6 %
Net Operating Loss Carry Forward     -9 %     -40 %
Federal AMT     -       2 %
Others     3 %     -  
Total     36 %     2 %

 
Deferred tax assets

The components of net deferred tax assets as of December 31, are set forth below:

 

    December 31,     December 31,  
    2012     2011  
             
Deferred tax assets:            
Net operating loss carry forwards   $ -     $ 289,000  
Capital loss carry forwards     1,088,000       1,088,000  
Bad debts     282,000       380,000  
Stock based compensation - options and restricted stock     506,000       466,000  
Capitalized engineering costs     447,000       356,000  
Account payable, accrued expenses and reserves     9,000       9,000  
Deferred rent     423,000       390,000  
Amortization - NTW Transaction     138,000       -  
Inventory - 263A adjustment     569,000       -  
Lease Impairment     85,000       -  
Deferred gain on sale of real estate     209,000       224,000  
Section 1231 loss carryover     86,000       86,000  
Total deferred tax assets before valuation allowance     3,842,000       3,288,000  
Valuation allowance     (2,269,000 )     (1,217,000 )
Total deferred tax assets after valuation allowance     1,573,000       2,071,000  
                 
Deferred tax liabilities:                
Property and equipment     (997,000 )     (801,000 )
Amortization - Welding Transaction     (576,000 )     (643,000 )
Inventory - 263A adjustment     -       (627,000 )
Total Deferred Tax Liability     (1,573,000 )     (2,071,000 )
                 
Net deferred tax asset   $ -     $ -