The Company accounts for income
taxes in accordance with ASC 740, Income Taxes ("ASC 740"), which requires the recognition of deferred tax liabilities
and assets at currently enacted tax rates for the expected future tax consequences of events that have been included in the financial
statements or tax returns. A valuation allowance is recognized to reduce the net deferred tax asset to an amount that is more likely
than not to be realized.
ASC 740 provides guidance on the
accounting for uncertainty in income taxes recognized in a company's financial statements. ASC 740 requires a company to determine
whether it is more likely than not that a tax position will be sustained upon examination based upon the technical merits of the
position. If the more-likely-than-not threshold is met, a company must measure the tax position to determine the amount to recognize
in the financial statements.
The Company performed a review
of its material tax positions. During the three months ended June 30, 2012 and 2011, there were no increases or decreases in unrecognized
tax benefits as a result of tax positions taken during period, there were no decreases in unrecognized tax benefits relating to
settlements with taxing authorities, and there were no reductions to unrecognized tax benefits as a result of a lapse of the applicable
statute of limitations. As of June 30, 2012 and September 30, 2011, the Company had no unrecognized tax benefits that, if recognized,
would affect the effective tax rate. As of June 30, 2012, the Company has no tax positions for which it is reasonably possible
that the total amounts of unrecognized tax benefits will significantly increase or decrease within 12 months of the reporting date.