At September 30, 2012, the Company had net operating loss carryforwards of approximately $1,159,000 that may be offset against future taxable income, if any, ratably through 2032. These carry-forwards are subject to review by the Internal Revenue Service.
The Company has fully reserved the approximate $463,000 tax benefit of the operating loss carryforwards, by a valuation allowance of the same amount, because the likelihood of realization of the tax benefit cannot be determined.
There is no current or deferred tax expense for the years ended September 30, 2012 and 2011. The Company believes that all of its positions taken in tax filings are more likely than not to be sustained upon examination by tax authorities.