8.	Income Taxes

The Company recognizes deferred tax assets and liabilities for estimated future tax consequences of events that have been recognized in the financial statements or tax returns. Under this method, deferred tax assets and liabilities are determined based on the difference between the financial statement and tax basis of assets and liabilities using the enacted tax rates in effect for the year in which the differences are expected to reverse. A valuation allowance is established if, based on management’s review of both positive and negative evidence, it is more likely than not that all or a portion of the deferred tax assets will not be realized. Because of its historical losses from operations, the Company established a valuation allowance for the net deferred tax assets. The Company recorded an income tax benefit of $26,000 and $56,000 for the three and six months ended December 31, 2013, as well as $37,000 and $70,000 for the three and six months ended December 31, 2012. These income tax benefits related to earned foreign research and development tax credits.

For the three and six months ended December 31, 2013 and 2012, the Company had no significant unrecognized tax benefits. At December 31, 2013 and June 30, 2013, the Company had no accrued penalties or interest related to uncertain tax positions.