Annual report pursuant to section 13 and 15(d)

INCOME TAXES (Tables)

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INCOME TAXES (Tables)
12 Months Ended
Dec. 31, 2012
Components of Deferred Tax Assets and Liabilities

Components of deferred tax assets (liabilities) are as follows:

 

     December 31,  
     2012     2011  

Accounts receivable

   $ 194,000      $ 44,000   

Inventories

     809,000        305,000   

Accrued expenses

     281,000        58,000   

Depreciation

     (44,000     (74,000

Intangible assets

     (3,817,000     44,000   

Stock options

     755,000        687,000   

Deferred revenue

     (144,000     —     

Other

     2,000        —     

Net operating loss carry forwards

     18,151,000        12,044,000   
  

 

 

   

 

 

 
     16,187,000        13,108,000   

Valuation allowance

     (16,187,000     (13,108,000
  

 

 

   

 

 

 
   $ —        $ —     
  

 

 

   

 

 

 

 

Reconciliation of Tax Computed at Statutory Rate to Income Tax Expenses

The following is a reconciliation of tax computed at the statutory federal rate to the income tax expense in the statements of operations for the years ended December 31, 2012, and 2011:

 

     December 31,  
     2012     2011  
     Amount     %     Amount     %  

Tax benefit at statutory federal rate

   $ (2,916,000     (34.0   $ (1,859,000     (34.0

Deferred state tax benefit

     (618,000     (7.2     (21,000     (0.4

Change in valuation allowance

     2,810,000        32.8        1,682,000        30.8   

Goodwill impairment

     676,000        7.9        135,000        2.4   

Adjustment to net operating loss carryforwards

     41,000        0.5        53,000        1.0   

Non-deductible expenses

     7,000        0.0        10,000        0.2   
  

 

 

   

 

 

   

 

 

   

 

 

 

Income tax expense

   $ —          —        $ —          —