Quarterly report pursuant to Section 13 or 15(d)

INCOME TAXES

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INCOME TAXES
9 Months Ended
Sep. 30, 2014
Income Tax Disclosure [Abstract]  
Income Tax Disclosure [Text Block]
12.
INCOME TAXES
 
For the three and nine months ended September 30 2013, the Company estimated its effective income tax rate based upon the annual projected pre-tax loss. 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 ASC 740. Accordingly, a valuation allowance has been recorded against all federal deferred tax assets as of September 30, 2014. This resulted in a federal tax provision of $474,091 and $157,435 for the three and nine months ended September 30, 2014, respectively.
 
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. As a result, the Company has reported cumulative losses at the state level for the last three years, and has determined that it is more likely than not that it will not be able to utilize its state deferred tax assets. A valuation allowance has been recorded against all state deferred tax assets as of September 30, 2014.