9. INCOME TAXES

12 Months Ended

Jun. 30, 2013

Income Tax Disclosure [Abstract]

INCOME TAXES

Income tax for the years ended June 30, 2013 and 2012 is summarized as follows:

	2013			2012
Current tax, net	$	22,763		$	800
Deferred (tax)/ benefit		77,330			(115,115	)
Change in valuation allowance		(77,330	)		115,115
Income tax expense	$	22,763		$	800

Through June 30, 2012, the Company incurred net operating losses for tax purposes of approximately $4,597,192, which was increased to $4,795,953 due to operating loss for the year ended June 30, 2013 amounting to $198,761. The net operating loss carryforward for federal and state purposes may be used to reduce taxable income through the year 2031.

The gross deferred tax asset balance as of June 30, 2013 is approximately $1,876,153 after utilization of the amount of $77,330 against taxes computed on taxable income for the year ended June 30, 2013. A 100% valuation allowance has been established against the deferred tax assets, as the utilization of the loss carry forward cannot be reasonably assured. Components of the deferred tax assets are limited to the Company's net operating loss carryforwards, and are presented as follows at June 30:

	2013			2012
Deferred tax assets (liabilities):
Net operating loss carryforwards	$	4,795,953		$	4,597,192
Deferred tax assets, net		1,876,153			1,798,823
Valuation allowance		(1,876,153	)		(1,798,823	)
Net deferred tax assets	$	-		$	-

Differences between the benefit from income taxes and income taxes at the statutory federal income tax rate are as follows for the years ended June 30:

	2013						2012
	Amount			Rate			Amount			Rate
Tax expense (benefit) at federal statutory rate	$	(64,369	)		-34.0	%	$	80,825			34.0	%
State taxes, net of federal benefit		(16,736	)		-8.8	%		14,263			6.0	%
Beneficial conversion expense		3,776			2.3	%		20,027			8.4	%
Minimum franchise tax		(800	)		0.0	%		(800	)		0.0	%
Change in valuation allowance		77,330			40.6	%		(115,115	)		-48.4	%
Tax expense at actual rate	$	(22,763	)		0.0	%	$	(800	)		0.0	%