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INCOME TAXES
 12 Months Ended
Jun. 30, 2012
Income Tax Disclosure [Abstract]  
INCOME TAXES
9. INCOME TAXES
 
At June 30, 2012, the Company had net operating loss carryforwards of $168,327,709 to offset future taxable income expiring through approximately 2032. The Company had capital loss carryforwards of $4,759 as of June 30, 2011 that expired on June 30, 2012.
 
The timing and extent to which the Company can utilize future tax deductions in any year may be limited by provisions of the Internal Revenue Code regarding changes in ownership of corporations (i.e. IRS Code Section 382). The changes in ownership limitations under IRS Code Section 382 have had the effect of limiting the maximum amount of net operating loss carryforwards as of June 30, 2012 and 2011 available for use to offset future years’ taxable income to $127,024,196 and $121,667,065, respectively. Those net operating loss carryforwards start to expire June 30, 2022.
 
At June 30, 2012 and 2011 the Company recorded net deferred tax assets of $51,708,064 and $48,973,987, respectively, which were offset by a valuation allowance of $51,720,663 and $48,973,987 as of June 30, 2012 and 2011, respectively, as the realization of the deferred tax asset is not likely, principally due to the lack of earnings history.
 
As of June 30, 2012, net deferred tax liabilities of $12,599 were recorded representing the future potential state and federal income tax effects for basis differences between financial reporting and income tax purposes as of June 30, 2012 for indefinite life intangible assets and goodwill that are being amortized for income tax purposes but not for financial reporting. The potential future income tax effects associated with such indefinite life assets are not subject to offset against deferred tax assets with finite lives.
 
These deferred tax liabilities resulted in a provision for income taxes for the year ended June 30, 2012 of $12,599 which is comprised of deferred state income taxes of $3,101 and deferred federal income taxes of $9,498.
 
An income tax benefit of $1,767,537 at the federal statutory rate of 34% is indicated for the year ended June 30, 2012 based upon the loss before provision for income taxes. In recording the provision for income taxes that benefit was reduced for the effects of increases in the valuation allowance of $2,327,354 for federal income taxes associated with deferred tax assets, increased for the effects of permanent differences of $594,264 and reduced by state income taxes net of federal benefit $2,046.
 
The net deferred tax assets arose primarily from net operating loss carryforwards, as well as the use of different accounting methods for financial statement and income tax reporting purposes as follows:
 
 
June 30,
2012
2011
Deferred tax assets:
Net operating loss carryforwards
 $ 48,825,628 $ 46,695,537
Deferred research and development costs
 185,940 218,622
Intangibles
 1,059,409 1,003,047
Stock-based compensation
 694,407 476,273
Other
 955,279 685,861
51,720,663 49,079,340
Deferred tax liabilities:
Intangibles and goodwill
 (12,599 ) (105,353 )
Deferred tax assets, net
 51,708,064 48,973,987
Valuation allowance
 (51,720,663 ) (48,973,987 )
Deferred tax (liabilities) assets, net of allowance
 $ (12,599 ) $ -