G. INCOME TAXES

12 Months Ended

Jun. 30, 2013

Income Tax Disclosure [Abstract]

INCOME TAXES

The Company accounts for income taxes in accordance with FASB ASC 740-10-05 Income Taxes, which provides for an asset and liability approach to accounting for income taxes. Deferred income tax assets and liabilities are computed annually for differences between the financial statement and income tax bases of assets and liabilities that will result in taxable or deductible amounts in the future based on enacted tax laws and rates applicable to the periods in which the differences are expected to affect taxable income. The valuation allowances have been established to offset net deferred tax assets due to the uncertainty of their realization.

A reconciliation of estimated income tax expense (benefit) to the amount of computed using statutory federal rates is as follows:

	Year Ended June 30,
	2013			2012
Tax benefit at federal statutory rate of 35%	$	(871,286	)	$	(602,478	)
State taxes net of federal benefit		(121,765	)		(86,068	)
Permanent and other differences		21,162			73,607
Increase in valuation allowance		971,890			614,939
Provision	$	0		$	0

No deferred income taxes have been provided for the temporary differences between the financial reporting and income tax basis of the Company due to the valuation allowances outlined below:

	Year Ended June 30,
	2013			2012
Deferred tax asset – Net operating loss carry forward	$	2,798,593		$	2,004,290
Deferred tax asset – Depreciation		63,921			52,375
Deferred tax asset – Accrued officer salaries		174,130			8,090
Valuation allowance		(3,036,645	)		(2,064,755	)
Net deferred tax asset	$	0		$	0

The Company has estimated federal and state net operating loss carryforwards of approximately $7.0 million expiring in the years 2025 through 2033. The Company has established a valuation allowance equal to the amount of cumulative tax assets. Accordingly, no net deferred tax assets, nor any current or deferred tax benefits, have been recognized at June 30, 2013 or 2012.

The Company believes it is no longer subject to United States or state income tax examinations for years before 2009. The amount of net operating losses arising from fiscal years before 2009 is still subject to examination until expiration.