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Note 11: Provision for Income Taxes | 12 Months Ended
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Sep. 30, 2012
Income Tax Disclosure [Abstract] |
Note 11: Provision for Income Taxes | Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. A full valuation allowance is established against all net deferred tax assets as of September 30, 2012 and 2011 based on estimates of recoverability. While the Company has optimistic plans for its business strategy, it determined that such a valuation allowance was necessary given the current and expected near term losses and the uncertainty with respect to its ability to generate sufficient profits from its new business model. Because of the impacts of the valuation allowance, there was no income tax expense or benefit for the year ended September 30, 2012. A reconciliation of the differences between the effective and statutory income tax rates for years ended September 30, is as follows:
|  | 2012 |  |  | 2011 |
|  | Amount |  |  | Percent |  |  | Amount |  |  | Percent |
Federal statutory rates |  | $ | (535,573 | ) |  |  | 34% |  |  | $ | (1,870,764 | ) |  |  | 34% |
State income taxes |  |  | (52,946 | ) |  |  | 3% |  |  |  | (184,942 | ) |  |  | 3% |
Write off of deferred tax asset related to vested restricted stock |  |  | 10,670 |  |  |  | (1)% |  |  |  | 184,050 |  |  |  | (3)% |
Permanent differences |  |  | 3,411 |  |  |  | (0)% |  |  |  | – |  |  |  | – |
Valuation allowance against net deferred tax assets |  |  | 574,438 |  |  |  | (36)% |  |  |  | 1,920,862 |  |  |  | (35)% |
Other |  |  |  |  |  |  | 0% |  |  |  | (49,206 | ) |  |  | 1% |
Effective rate |  | $ | – |  |  |  | 0% |  |  | $ | – |  |  |  | 0% |
At September 30, deferred income tax assets and liabilities were comprised of:
|  | 2012 |  |  | 2011 |
Deferred income tax asset, current: |  |  |  |  |  |  |  |
Book to tax differences in accounts receivable |  | $ | 582,549 |  |  | $ | 738,671 |
Book to tax differences in prepaid assets and accrued expenses |  |  | (7,774 | ) |  |  | (20,502 | )
Total deferred income tax asset, current |  |  | 574,775 |  |  |  | 718,169 |
Less: valuation allowance |  |  | (574,775 | ) |  |  | (718,169 | )
Deferred income tax asset, current, net |  |  | – |  |  |  | – |
Deferred income tax asset, long-term: |  |  |  |  |  |  |  |
Net operating loss carryforwards |  |  | 10,012,906 |  |  |  | 9,060,073 |
Book to tax differences for stock based compensation |  |  | 6,407 |  |  |  | 17,706 |
Book to tax differences in intangible assets |  |  | 6,961,861 |  |  |  | 7,295,815 |
Book to tax differences in other |  |  | 326 |  |  |  | 326 |
Book to tax differences in depreciation |  |  | (2,072,674 | ) |  |  | (1,798,370 | )
Total deferred income tax asset, long-term |  |  | 14,908,825 |  |  |  | 14,575,550 |
Less: valuation allowance |  |  | (14,908,825 | ) |  |  | (14,575,550 | )
Deferred income tax asset, net |  |  | – |  |  |  | – |
Total deferred income tax asset |  | $ | – |  |  | $ | – |
The Company has recorded as of September 30, 2012 a valuation allowance of $14,908,825, as it believes that it is more likely than not that the deferred tax assets will not be realize in future years. Management has based its assessment on available historical and projected operating results. The Company annually conducts an analysis of its tax positions and has concluded that it has no uncertain tax positions as of September 30, 2012. As part of its deferred tax assets, the Company has net operating loss carryforwards resulting from its acquisition of LiveDeal, Inc. in fiscal 2007. Such amounts are subject to IRS code section 382 limitations and expire in 2027. The 2007 to 2010 tax years are still subject to audit.

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- Definition The entire disclosure for income taxes. Disclosures may include net deferred tax liability or asset recognized in an enterprise's statement of financial position, net change during the year in the total valuation allowance, approximate tax effect of each type of temporary difference and carryforward that gives rise to a significant portion of deferred tax liabilities and deferred tax assets, utilization of a tax carryback, and tax uncertainties information. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Statement of Financial Accounting Standard (FAS) -Number 109 -Paragraph 136, 172 -LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy. Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 235 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SX 210.4-08.(h)) -URI http://asc.fasb.org/extlink&oid=6881521&loc=d3e23780-122690 Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher SEC -Name Regulation S-X (SX) -Number 210 -Section 08 -Paragraph h -Article 4 Reference 4: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 15 -URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32718-109319 Reference 5: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Statement of Financial Accounting Standard (FAS) -Number 109 -Paragraph 43, 44, 45, 46, 47, 48, 49 -LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy. Reference 6: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 2 -URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32537-109319 Reference 7: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 9 -URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32639-109319 Reference 8: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 3 -URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32559-109319 + Details
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