INCOME TAXES

12 Months Ended

Sep. 30, 2013

Income Taxes

NOTE 10. INCOME TAXES

The regional sources of tax losses for the years ended September 30, 2013, 2012 and 2011 were as follows:

	2013			2012			2011
North America	$	(127,369	)	$	(92,893	)	$	(262,060	)
Outside North America		(631,107	)		-			-
	$	(758,476	)	$	(92,893	)	$	(559,314	)

Tax losses by year of origin and year of expiry are as follows:

Origin	United States		Year of Expiry	Canada		Year of Expiry	Outside North America		Year of Expiry
1998	$	212,899	2018
1999		795,878	2019
2000		6,179	2020
2001		292,351	2021
2002		1,017,792	2022
2003		1,189,476	2023
2004		790,108	2024
2005		2,166,634	2025		732,448	2015
2006		1,764,202	2026		682,619	2016
2007		1,530,976	2027					293,528	2014
2008		1,266,180	2028					99,852	2015
2009		208,940	2029		97,040	2019		78,953	2016
2010		477,350	2030		54,697	2020		27,267	2017
2011		77,922	2031		184,138	2021
2012		38,979	2032		90,950	2022
2013		3,502	2033		123,867	2023		631,107	2020
TOTAL	$	11,839,368		$	1,965,759		$	1,130,707
CONSOLIDATED TAX LOSSES							$	14,935,834

The tax effect of material temporary differences representing deferred tax assets is estimated as follows:

	2013			2012			2011
Deferred tax assets:
North America	$	4,762,769		$	4,718,827		$	4,674,001
Outside North America		169,606			105,708			105,708
Sub-total		4,932,375			4,824,535			4,779,709
Less Valuation allowance		(4,932,375	)		(4,824,535	)		(4,779,709	)
Net deferred tax assets		-			-			-

The valuation allowance as of September 30, 2013, 2012 and 2011 totaled $4,932,375, $4,824,535 and $4,779,709 respectively which consisted primarily of established reserves for deferred tax assets on non-capital operating loss carry forwards for our entities in United States and our foreign entities. The tax rates being used to determine deferred tax assets are estimated at 34.5% for North America and 15% for outside North America. The consolidated effective tax (benefit) rate as a percentage of income (loss) before income taxes is as follows:

	2013			2012			2011
Combined Statutory Rates		31.3	%		31.3	%		31.3	%
Non-deductible expenses		(9	)		(9	)		(9	)
Change in valuation allowance		(22.3	)		(22.3	)		(22.3	)
Effective tax rate		0	%		0	%		0	%

As of September 30, 2013, 2012 and 2011 the Company had no unrecognized tax benefits and as such required no adjustments to the financial statements. The Company records any interest and penalties related to tax matters within general and administrative expenses on the accompanying consolidated statements of operations and comprehensive loss. These amounts are not material to the consolidated financial statements for the periods presented. The Company’s US and Canadian tax returns are subject to examination by respective tax authorities. Generally tax years 2007 – 2010 remain open to examination by those respective tax authorities. (IRS in the United States and Canada Customs and Revenue Agency in Canada).