Annual report pursuant to section 13 and 15(d)

INCOME TAXES

v2.4.0.8
INCOME TAXES
 12 Months Ended
Jun. 30, 2013
INCOME TAXES [Abstract]  
INCOME TAXES
NOTE 7 - INCOME TAXES

For federal income tax purposes, the Company elected to capitalize start-up costs incurred during 1999 and 2000 totaling $357,989. The start-up costs were amortized over sixty (60) months beginning in 2001.  An analysis of the components of the (loss) before income taxes and the related income tax (benefit) is presented in the following tables. The tax amounts have been calculated using the 34% federal and 5.5% state income tax rates.

The Company adopted the provisions of ASC 740: Income Taxes.  The Company records a liability for uncertain tax positions when it is probable that a loss has been incurred and the amount can be reasonably estimated.  As of June 30, 2013 and 2012, the Company has no liabilities for uncertain tax positions. The Company continually evaluates expiring statutes of limitations, audits, proposed settlements, changes in tax law and new authoritative rulings.  In general, the Company is no longer subject to examinations by taxing authorities for tax years prior to 2008.

The (provision) benefit for income taxes consists of the following:
 
 
 
2013
 
 
2012
 
Current
 
$
-
 
 
$
-
 
Deferred
 
 
-
 
 
 
-
 
 
 
$
-
 
 
$
-
 
 
Deferred tax assets for June 30, 2013 and 2012 consist of the following:
 
 
2013
 
 
2012
 
 
 
 
 
 
Deferred tax asset (liability):
 
 
 
 
Depreciation and amortization
 
$
(50,538
 
)
 
$
7,985
 
Stock based compensation
 
 
2,980,409
 
 
 
3,134,667
 
Net operating loss carry forward
 
 
6,037,629
 
 
 
5,709,372
 
Interest accrual
 
 
500,288
 
 
 
339,934
 
Research tax credit
 
 
7,203
 
 
 
7,203
 
Less: valuation allowance
 
 
(9,474,991
)
 
 
(9,199,161
)
Deferred tax asset:
 
$
-
 
 
$
-
 
 
A reconciliation of income tax at the statutory rate to the Company's effective tax rates for the periods ended June 30, 2013 and 2012 is as follows:
 
 
 
2013
 
 
2012
 
 
 
 
 
 
Federal Income tax at statutory rate of 34%
 
$
(242,445
)
 
$
(573,547
)
State tax, net of federal benefit
 
 
(25,775
)
 
 
(52,636
)
Other
 
 
(7,609
 )
 
 
33,349
 
Valuation allowance
 
 
275,829
 
 
 
592,834
 
 
 
$
-
 
 
$
-
 
 
As of June 30, 2013, the Company had a net operating loss carry forward of approximately $16,000,000 which will begin to expire in 2017.