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Income Taxes | 11 Months Ended
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Sep. 30, 2012
Income Taxes [Abstract] |
INCOME TAXES |
5. | INCOME TAXES
For the fiscal years ended September 30, 2012 and 2011 the (benefit) provision for income taxes were as follows:
|  | 2012 |  |  | 2011 |
Federal—current |  | $ | (4,808 | ) |  | $ | — |
State—current |  |  | 800 |  |  |  | 2,492 |
Total |  | $ | (4,008 | ) |  | $ | 2,492 |
Significant components of the Company’s net deferred tax assets and liabilities as of September 30, 2012 and 2011 are as follows:
|  | 2012 |  |  | 2011 |
Deferred tax assets (liabilities): |  |  |  |  |  |  |  |
Net operating loss carryforwards |  | $ | 8,428,034 |  |  | $ | 6,031,376 |
Capitalized research and development costs |  |  | 336,475 |  |  |  | 519,141 |
Stock based compensation |  |  | 380,989 |  |  |  | 280,633 |
Prepaid License Fees |  |  | 4,641 |  |  |  | 50,769 |
AMT credit carryforwards |  |  | 66,320 |  |  |  | 71,128 |
Other |  |  | 78,620 |  |  |  | 85,366 |
Research credit carryforwards |  |  | 49,310 |  |  |  | 58,361 |
Total deferred assets |  |  | 9,344,389 |  |  |  | 7,096,774 |
Valuation allowance for net deferred tax assets |  |  | (9,344,389 | ) |  |  | (7,096,774 | )
Total |  | $ | — |  |  | $ | — |
The Company has provided a valuation allowance against deferred tax assets recorded as of September 30, 2012 and 2011 due to uncertainties regarding the realization of such assets. The net change in the total valuation allowance for the fiscal year ended September 30, 2012 was an increase of $2,247,615. The net change in the total valuation allowance for the year ended September 30, 2011 was a decrease of $17,388. In assessing the realizability of deferred tax assets, the Company considers whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during periods in which those temporary differences become deductible. The Company considers projected future taxable income and planning strategies in making this assessment. Based on the level of historical operating results and projections for future taxable income, the Company has determined that it is more likely than not that the deferred tax assets will not be realized. Accordingly, the Company has recorded a valuation allowance to reduce deferred tax assets to zero. There can be no assurance that the Company will ever be able to realize the benefit of some or all of the federal and state loss carryforwards or the credit carryforwards, either due to ongoing operating losses or due to ownership changes, which limit the usefulness of the loss carryforwards. As of September 30, 2012, the Company has available net operating loss carryforwards of $38,161,579 for federal income tax purposes, which will start to expire in 2018. The net operating loss carryforwards for state purposes are $31,323,928 and will begin to expire in 2013. Included in these amounts are federal and state net operating losses of $15,665,767 attributable to stock option deductions of which the tax benefit will be credited to equity when realized. As of September 30, 2012, the Company has available federal research and development credit carryforwards of $29,306 and alternative minimum tax credit carryforwards of $66,320. The research and development credits will start to expire in 2023. As of September 30, 2012, the Company has available state research and development credit carryforwards and manufacturers’ investment credit carryforwards of $21,963 and $16,568 respectively. The state research and development credits have no expiration date and the state manufacturers’ investment credits start to expire in the current year. The Company’s ability to use its net operating loss and research and development credit carryforwards may be substantially limited due to ownership change limitations that may have occurred or that could occur in the future, as required by Section 382 of the Internal Revenue Code of 1986, as amended (“Section 382”), as well as similar state provisions. The Company has not completed a study to assess whether an ownership change has occurred or whether there have been multiple ownership changes since the Company became a “loss corporation” as defined in Section 382. Due to the existence of the valuation allowance, it is not expected that any possible limitation will have an impact on the results of operations or financial position of the Company. The differences between the provision for income taxes and income taxes computed using the U.S federal income tax rate was as follows for the fiscal years ended September 30, 2012 and 2011:
|  | 2012 |  |  | 2011 |
Amount computed using statutory rate |  | $ | (2,666,961 | ) |  | $ | (42,519 | )
Net change in valuation allowance for net deferred tax assets |  |  | 2,247,615 |  |  |  | (18,388 | )
Non-deductible items |  |  | 807,533 |  |  |  | 798 |
Other |  |  | — |  |  |  | (18,378 | )
State income tax |  |  | (392,995 | ) |  |  | 78,487 |
State tax expense |  |  | 800 |  |  |  | 2,492 |
(Benefit) provision for income taxes |  | $ | (4,008 | ) |  | $ | 2,492 |
The Company files income tax returns in the U.S. federal jurisdiction and various state jurisdictions. Because the Company is carrying forward federal and state net operating losses from 1997 and 2000, respectively, the Company is subject to U.S. federal and state income tax examinations by tax authorities for all years since 1997 and 2000, as the case may be. The Company does not have any uncertain tax positions. As of September 30, 2012, no accrued interest or penalties are recorded in the financial statements.

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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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