Note 11 - Income Taxes

12 Months Ended

Jun. 30, 2013

Notes

Note 11 - Income Taxes

NOTE 11 – INCOME TAXES

Operating losses for the years ended June 30, 2013 and 2012 were $849,408 and $227,171 relating to domestic operations and $804,439 and $396,367 relating to foreign operations, respectively.

We had approximately $3,886,598 and $805,393 of net operating loss carry forwards as of June 30, 2013 and June 30, 2012, respectively, which are comprised of $646,788 and $204,668 of U.S. federal and $2,039,910 and $204,568 state net operating losses, respectively, which expire in varying amounts beginning 2032, if unused. The Company also has net operating losses related to its Ghana operations of $1,199,900 and $396,157 as of June 30, 2013 and 2012, respectively, which begin to expire in 2018; however, there is a tax holiday for our agriculture operations in Ghana and therefore there is no future tax benefit for the losses.

As discussed in note 5 to these consolidated financial statements, a change in our ownership of more than 50% occurred during the year ended June 30, 2012. The annual utilization of the net operating carry forwards is subject to certain limitations under Section 382 of the Internal Revenue Code of 1986, as amended, and other limitations under state tax laws.  As a result the provisions of Section 382 caused $6,445,902 of prior net operating losses to become permanently restricted.

The temporary differences and carry forwards which give rise to the deferred income tax assets are as follows:

	For the Years Ended
	June 30, 2013	June 30, 2012
Accrued compensation	$104,176	$23,089
Issuance of non-qualified stock options	31,836	18,248
Other	21,573	3,767
Net operating loss carry forwards	287,225	76,338
Debt discount on beneficial conversion feature	(16,570)	-
Valuation allowance	(428,240)	(121,442)
Net long-term deferred tax asset	$-	$-

A reconciliation of income taxes at the federal statutory rate to actual income tax expense is as follows:

	For the Years Ended
	June 30, 2013	June 30, 2012
Income tax benefit at the statutory rate	$(562,308)	$(212,002)
State income taxes, net of federal benefit	(28,131)	(7,598)
Foreign rate differential	273,202	134,764
Change in valuation allowance	265,743	(2,200,026)
Change in NOL carry forwards	25,896	2,284,862
Debt discount on beneficial conversion feature	24,991	-
Other	607	-
Deferred income tax expense	$-	$-