Income Taxes

For the years ended June 30, 2014 and 2013, the Company did not record an income tax benefit because it has incurred taxable losses and has no history of generating taxable income and therefore the Company cannot presently anticipate the realization of a tax benefit on its Net Operating Loss carryforward. At June 30, 2014 the Company has a Net Operating Loss carryforward of $92.4 million, which will begin to expire in 2030. The Company has established a full valuation allowance against its deferred tax assets as of June 30, 2014 and 2013. Income tax expense for the years ended June 30, 2014 and 2013 was $92 and $70, respectively.

A reconciliation of the statutory U.S. federal tax rate and our effective tax rate is as follows:



	Year Ended June 30, 2014		Year Ended June 30, 2013
Statutory U.S. federal tax rate	35.00	%	35.00	%
State and local income taxes - net of federal benefit	10.37	%	10.37	%
Valuation allowance	(45.37	)%	(45.37	)%

Effective tax rate	—	%	—	%

The components of deferred taxes as of June 30, 2014, are as follows:



Deferred tax assets:	(in thousands)
Share based compensation	$	71,848
Start-up expenditures	5,674
Other	1,816
Operating loss carryforward	40,679
Depreciation and amortization	1,625
Total deferred tax assets	121,642
Deferred tax liabilities:
Depreciation and amortization	(668		)
Valuation allowance	(121,136		)
Deferred tax liability, net	$	(162	)

The components of deferred taxes as of June 30, 2013, are as follows:



Deferred tax assets:	(in thousands)
Share based compensation	$	55,235
Start-up expenditures	6,137
Other	1,869
Operating loss carryforward	27,650
Depreciation and amortization	772
Total deferred tax asset	91,663
Deferred tax liabilities:
Depreciation and amortization	(91		)
Valuation allowance	(91,642		)
Deferred taxes, net	$	(70	)

The deferred tax liability, net is included in other long term liabilities in the accompanying consolidated balance sheets.

The Company has evaluated its income tax positions and has determined that it does not have any uncertain tax positions. The Company will recognize interest and penalties related to any uncertain tax positions through its income tax expense.

The Company may in the future become subject to federal, state and local income taxation though it has not been since its inception. The Company is not presently subject to any income tax audit in any taxing jurisdiction.