5.	INCOME TAXES

The Company's deferred tax assets are primarily comprised of federal and state net operating loss carryforwards. Such carryforwards began to expire in the fiscal year ended September 30, 2011. The Company's ability to use its net operating loss carryforwards may be substantially limited due to ownership change limitations that may occur in the future, as required by Section 382 of the Internal Revenue Code of 1986, as amended ("Section 382"), as well as similar state law provisions. These potential ownership changes may limit the amount of net operating loss carryforwards that can be utilized annually to offset future taxable income. The Company carries a deferred tax valuation allowance equal to 100% of the net deferred tax assets. In recording this allowance, management has considered a number of factors, particularly the Company's recent history of sustained operating losses. Management has concluded that a valuation allowance is required for 100% of the net deferred tax assets as it is more likely than not that the deferred tax assets will not be realized. There can be no assurance that the Company will ever realize the benefit of any or all of the federal and state net operating loss carryforwards or the credit carryforwards, either due to ongoing operating losses or due to ownership changes, which limit the usefulness of the net operating loss or credit carryforwards. Any net operating loss or credit carryforwards that will expire prior to utilization or are determined to be limited due to Section 382 will be removed from deferred tax assets with a corresponding reduction to the valuation allowance. Due to the existence of the valuation allowance, it is not expected that any expiration or limitation of net operating loss or credit carryforwards will have an impact on the results of operations or financial position of the Company.

The Company recognizes the impact of an uncertain income tax position on its income tax return at the largest amount that is more-likely-than-not to be sustained upon audit by the relevant taxing authority. An uncertain income tax position will not be recognized if it has less than a 50% likelihood of being sustained. The Company's policy is to classify interest and penalties related to income tax matters as income tax expense. The Company had no accrual for interest or penalties as of March 31, 2012 or March 31, 2011, and has not recognized interest and/or penalties in the statements of operations for the six months ended March 31, 2012.

The Company is subject to taxation in the U.S. and in various state jurisdictions. Generally, all of the Company's tax returns are subject to examination by U.S. federal tax and state tax authorities due to the Company's net operating loss carryforwards.