Quarterly report pursuant to Section 13 or 15(d)

INCOME TAXES

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INCOME TAXES
 9 Months Ended
Sep. 30, 2015
Income Tax Disclosure [Abstract]  
Income Tax Disclosure [Text Block]
12.
INCOME TAXES
 
Although the Company is forecasting a return to profitability, it incurred cumulative losses which make realization of a deferred tax asset difficult to support in accordance with Accounting Standards Codification (“ASC”) 740. Accordingly, a valuation allowance has been recorded against all Federal and state deferred tax assets as of September 30, 2015 and December 31, 2014.
 
The tax benefit for the three and nine months ended September 30, 2015 represents a $60,000 carry back claim, net of state minimum taxes and taxes attributable to Pakistan. For the three and nine months ended September 30, 2014, we used a discrete approach in calculating the tax benefit. Under the discrete method, we determined our tax benefit based upon actual results as if the interim period were an annual period.
 
The Company’s plan to repatriate earnings in Pakistan to the United States requires that U.S. Federal taxes be provided on the Company’s earnings in Pakistan. For state tax purposes, the Company’s Pakistan earnings generally are not taxed due to a subtraction modification available in most states.