CAPITAL LEASE

3 Months Ended

Sep. 30, 2012

Capital Lease Obligations [Abstract]

Capital Leases in Financial Statements of Lessee Disclosure [Text Block]

5.  CAPITAL LEASE

Digipath is the lessee of equipment under a capital lease expiring September 2015.  The asset and liability are recorded at the lower of the present value of the minimum lease payments or fair value of the asset.  The asset is amortized over the shorter of the lease term or the estimated life of the asset.  The following is a summary of the property held under the capital lease:  

		September 30,
		2012
Machinery and equipment	$	181,384
Less accumulated amortization		63,484
	$	117,900

Minimum future lease payments under the capital lease are as follows:

Year Ending September 30,
2013	$	39,897
2014		39,897
2015		39,897
2016		13,299
Total minimum lease payments		132,990
Less amount representing interest		13,219
Present value of minimum lease payments		119,771
Less current portion of obligation under capital lease		44,945
Long-term portion of obligation under capital lease	$	74,826

Interest on the capital lease is 6.25% and is imputed based on the lower of the incremental borrowing rate at the inception of the lease or the lessor’s implicit rate of return.  Interest expense for the three months ended September 30, 2012 was $291.