Income Taxes
 12 Months Ended
Jun. 30, 2012
Income Taxes [Abstract]  
Income Taxes
9.      Income Taxes

The reconciliation of federal income tax attributable to operations computed at the federal statutory tax rate of 34% to income tax expense (benefit) is as follows for the years ended June 30:

 
2012
 
 
2011
 
 
2010
 
Statutory federal income tax benefit
 
(1,695,000
)
 
$
(873,000
)
 
$
(1,766,000
)
Net operating loss with no tax benefit
 
1,695,000
 
 
 
873,000
 
 
 
1,766,000
 
    Total federal income tax
 
$
--
 
 
$
--
 
 
$
--
 

At June 30, 2012, we had net operating loss carryforwards for federal and state income tax purposes of approximately $88,515,000 and $63,735,000 respectively, that are available to offset future income.  The federal and state loss carryforwards expire in various years between 2013 and 2032, and 2013 and 2032, respectively.

At June 30, 2012, we have research and experimentation credit carryforwards of approximately $1,147,000 for federal tax purposes that expire in various years between 2013 and 2032, and $1,244,000 for state income tax purposes that do not have an expiration date.

Significant components of the Company's deferred tax assets and liabilities for federal and state income taxes are as follows:
 
 
 
June 30,
 2012
 
 
June 30,
 2011
 
Deferred tax assets:
 
 
 
 
 
Net operating loss carryforwards
$
33,661,000
 
 
$
33,671,000
 
Income tax credits
1,990,000
 
 
 
1,953,000
 
Other
1,917,000
 
 
 
2,146,000
 
 
 
 
 
 
 
Total deferred taxes
37,568,000
 
 
 
37,770,000
 
Valuation allowance
(37,568,000
)
 
 
(37,770,000
)
Net deferred taxes
$
--
 
 
$
--
 
 
The valuation allowance decreased by approximately $202,000 on 2012, and increased $455,000 and $1,950,000 in 2011 and 2010, respectively.  As of June 30, 2012, we have a benefit of approximately $1,852,000 related to stock option deductions, which will be credited to paid-in capital when realized, of which $1,624,000 is included in the valuation allowance.

Because of the "change of ownership" provisions of the Tax Reform Act of 1986, a portion of the Company's federal net operating loss and credit carryovers may be subject to an annual limitation regarding their utilization against taxable income in future periods.