11. Income Taxes

12 Months Ended

Jun. 30, 2012

Income Taxes

11. Income Taxes

For the years ended June 30, 2012 and 2011, 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, 2012 the Company has a Net Operating Loss carryforward of $28.7 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, 2012 and 2011.

A reconciliation of the statutory U.S. federal tax rate and our effective tax rate is as follows:
Year Ended June 30,	2012		2011
Statutory U.S. federal tax rate	35	%	35	%
State and local income taxes - net of federal benefit	—	%	—	%
Valuation allowance	(35	)%	(35	)%
Effective tax rate	—	%	—	%

The components of deferred tax asset as of June 30, 2012, are as follows:

	Current		Noncurrent			Total deferred tax asset, net
Deferred tax assets:
Share based compensation	$	—	$	29,328		$	29,328
Start-up expenditures		—		6,719			6,719
Other		—		1,600			1,600
Operating loss carryforward		—		13,048			13,048
Total deferred tax asset		—		50,695			50,695
Deferred tax liabilities:
Depreciation and amortization		—		(210	)		(210	)
Valuation allowance		—		(50,485)			(50,485	)
Deferred tax asset, net	$	—	$	—		$	—

The components of deferred tax asset as of June 30, 2011, are as follows:

	Current		Noncurrent			Total deferred tax asset, net
Deferred tax assets:
Share based compensation	$	—	$	4,887		$	4,887
Start-up expenditures		—		2,159			2,159
Operating loss carryforward		—		751			751
Total deferred tax asset		—		7,797			7,797
Deferred tax liabilities:
Depreciation and amortization		—		(24	)		(24	)
Valuation allowance		—		(7,773	)		(7,773	)
Deferred tax asset, net	$	—	$	—		$	—

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.