INCOME TAXES

9 Months Ended

Mar. 31, 2013

Income Tax Disclosure [Abstract]

Income Tax Disclosure [Text Block]

7.INCOME TAXES

The income tax (provision) benefit for the nine months ended March 31, 2013 and 2012 and the three months ended March 31, 2013 and 2012 are as follows:

	For the nine months ended March 31,						For the three months ended March 31,
	2013			2012			2013			2012
Current
USA	$	-		$	(29,768	)	$	24,100		$	(2,889	)
China		-			-			-			-
		-			(29,768	)		24,100			(2,889	)
Deferred
USA		(64,500	)		61,000			(9,500	)		10,000
China		-			-			-			-
		(64,500	)		61,000			(9,500	)		10,000
Total	$	(64,500	)	$	31,232		$	14,600		$	7,111

Deferred tax assets are comprised of the following:

	March 31,		June 30,
	2013		2012
Allowance for doubtful accounts	$	175,000	$	175,000
Stock-based compensation		346,000		385,000
Net operating loss		388,000		240,000
Total deferred tax assets		909,000		800,000
Valuation allowance		454,500		281,000
Deferred tax assets, net		454,500		519,000
- Current		87,500		175,000
- Long term		367,000		344,000

Operations in the USA have incurred a cumulative net operating loss of approximately $824,000 as of March 31, 2013, which may be available to reduce future taxable income. This carry-forward will expire if not utilized by 2033. Other deferred tax assets relating to the allowance for doubtful accounts and stock compensation expenses amounting to $175,000 and $346,000 have been recorded respectively. 50% of the deferred tax assets balance has been provided as valuation allowance as of March 31, 2013 based on management’s estimate.