PROVISION FOR INCOME TAXES

3 Months Ended

Jul. 31, 2011

PROVISION FOR INCOME TAXES [Abstract]

PROVISION FOR INCOME TAXES

9.    PROVISION FOR INCOME TAXES

For the three months ended July 31, 2011, we have recognized the minimum amount of franchise tax required under California corporation law of $800.  We are not currently subject to further federal or state tax since it has incurred losses since its inception.

As of July 31, 2011, we had federal and state net operating loss carry forwards of approximately $9,800,000 which can be used to offset future federal income tax.  The federal and state net operating loss carry forwards expire at various dates through 2031.  Deferred tax assets resulting from the net operating losses are reduced by a valuation allowance, when, in our opinion, utilization is not reasonably assured.

As of July 31, 2011, we had the following deferred tax assets related to net operating losses.  A 100% valuation allowance has been established due to the uncertainty of our ability to realize future taxable income and to recover its net deferred tax assets.

	2011
Federal net operating loss (at 34%)	$	3,332,000
State net operating loss (at 8.84%)		866,320
		4,198,320
Less: valuation allowance		(4,198,320	)
Net deferred tax assets	$	-

Our valuation allowance increased by $342,720 during the three months ended July 31, 2011.