Income Taxes (Tables)

12 Months Ended

Jun. 30, 2013

The provision for income taxes as of June 30, 2013 and 2012 consist of:

	June 30,
	2013			2012
Federal:
Current tax expense	$	-		$	-
Deferred tax benefit		(3,600,000	)		-
State:
Current tax expense		57,613			177,717
Provision for income taxes		(3,542,387	)		177,717

Schedule of deferred tax assets and liabilities

Deferred tax assets and liabilities as of June 30, 2013 and 2012 consist of:

	June 30,
	2013			2012
Deferred tax assets:
Net operating loss carryforwards	$	12,658,000		$	12,690,000
Intangible assets		1,484,000			2,001,000
Property and equipment		135,000			245,000
Stock compensation		146,000			142,000
Other		66,000			83,000
Total deferred tax assets		14,489,000			15,161,000
Valuation allowance		(10,889,000	)		(15,161,000	)
Deferred tax assets, net	$	3,600,000		$	-

Schedule to reconcile the income tax provision computed at statutory tax rates to the actual income tax rate

A reconciliation of the federal statutory income tax rate to the Company's effective tax rate, as reported, is as follows for the years ended June 30, 2013 and 2012:

	Year Ended June 30,
	2013			2012
Income taxes at federal statutory rate		34.0	%		34.0	%
State income tax, net of federal benefit		6.6	%		5.1	%
Nondeductible expenses		0.3	%		(28.5	)%
Prior year true up - Federal		(27.3	)%		27.8	%
Franchise tax true up		0.0	%		16.5	%
Change in valuation allowance		(486.6	)%		(33.4	)%
Effective income tax rate		(473.0	)%		21.5	%