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INCOME TAXES | 12 Months Ended
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Jun. 30, 2022
Income Tax Disclosure [Abstract] |
INCOME TAXES | INCOME TAXES On December 21, 2020, Congress approved the Consolidated Appropriations Act, 2021 (the “Appropriations Act”), which was signed into law by the President on December 27, 2020. The Appropriations Act funds the federal government to the end of the fiscal year and provides further COVID-19 economic relief. Some of the business provisions included in the Appropriations Act are additional Paycheck Protection Program ("PPP") loans, clarification of the deductibility of business expenses that were paid for with PPP funds, expansion of the employee retention credit, and temporary full deduction for business expenses for food and beverages provided by a restaurant. The Appropriations Act did not have a material impact on the Company’s income taxes. The Company will continue to monitor for additional legislation related to COVID-19 and its impact on our results of operations. The Company has significant deferred tax assets, a substantial amount of which result from operating loss carryforwards. The Company routinely evaluates its ability to realize the benefits of these assets to determine whether it is more likely than not that such benefit will be realized. In accordance with the history of losses generated, the Company believes that for the year ended June 30, 2022 and 2021, it is more likely than not that its deferred tax assets will not be realized. Accordingly, the Company re-established a full valuation allowance on its net deferred tax assets. The provision for income taxes for the years ended June 30, 2022, 2021 and 2020 is comprised of the following:
| Year ended June 30,
($ in thousands) | 2022 |  | 2021 |  | 2020
Current: |  |  |  |  |
Federal | $ | — |  |  | $ | — |  |  | $ | 126 |
State | (179) |  |  | (328) |  |  | (57) |
Total current | (179) |  |  | (328) |  |  | 69 |
Deferred: |  |  |  |  |
Federal | (18) |  |  | (12) |  |  | (156) |
State | 11 |  |  | (30) |  |  | 86 |
Total deferred | (7) |  |  | (42) |  |  | (70) |
Total income tax provision | $ | (186) |  |  | $ | (370) |  |  | $ | (1) |
A reconciliation of the provision for income taxes for the years ended June 30, 2022, 2021 and 2020 to the indicated provision based on income (loss) before the provision for income taxes at the federal statutory rate of 21.0% for the fiscal years ended June 30, 2022, June 30, 2021, and June 30, 2020 is as follows:
| Year ended June 30,
($ in thousands) | 2022 |  | 2021 |  | 2020
Indicated benefit at federal statutory rate | $ | 319 |  |  | $ | 1,648 |  |  | $ | 8,514 |
Effects of permanent differences |  |  |  |  |
Stock compensation | (184) |  |  | 168 |  |  | (226) |
Other permanent differences | (106) |  |  | 608 |  |  | (106) |
State income taxes, net of federal benefit | (275) |  |  | 116 |  |  | 1,393 |
Changes related to prior years | — |  |  | — |  |  | 489 |
Changes in valuation allowances | 184 |  |  | (2,927) |  |  | (10,139) |
Other | (124) |  |  | 17 |  |  | 74 |
Provision for income taxes | $ | (186) |  |  | $ | (370) |  |  | $ | (1) |
As of June 30, 2022 the Company had federal and state operating loss carryforwards of approximately $190 million and $222 million, respectively, to offset future taxable income. As of June 30, 2021 the Company had federal and state operating loss carryforwards of approximately $187 million and $221 million, respectively, to offset future taxable income. The timing and extent to which the Company can utilize operating loss carryforwards in any year may be limited because of provisions of the Internal Revenue Code regarding changes in ownership of corporations (i.e. IRS Code Section 382). Federal and state operating loss carryforwards start to expire in 2022 and certain state operating loss carryforwards are currently expiring. The net deferred tax assets arose primarily from net operating loss carryforwards, as well as the use of different accounting methods for financial statement and income tax reporting purposes as follows:
| As of June 30,
($ in thousands) | 2022 |  | 2021
Deferred tax assets: |  |  |
Net operating loss carryforwards | $ | 47,984 |  |  | $ | 46,851 |
Asset reserves | 6,666 |  |  | 7,231 |
Deferred research and development | 1,503 |  |  | 1,420 |
Stock-based compensation | 3,416 |  |  | 2,620 |
Other | (143) |  |  | 2,135 |
| 59,426 |  |  | 60,257 |
Deferred tax liabilities: |  |  |
Intangibles | (4,316) |  |  | (4,956) |
Deferred tax assets, net | 55,110 |  |  | 55,301 |
Valuation allowance | (55,296) |  |  | (55,480) |
Deferred tax liabilities | $ | (186) |  |  | $ | (179) |
As of June 30, 2022, the Company had total unrecognized income tax benefits of $0.6 million related to its nexus in certain state tax jurisdictions. If recognized in future years, $0.6 million of these currently unrecognized income tax benefits would impact the income tax provision and effective tax rate. The following table summarizes the activity related to unrecognized income tax benefits:
| Year ended June 30,
($ in thousands) | 2022 |  | 2021 |  | 2020
Balance at the beginning of the year | $ | 444 |  |  | $ | 207 |  |  | $ | 210 |
Gross increases and decreases related to current period tax positions | — |  |  | — |  |  | — |
Gross increases and decreases related to prior period tax positions | 128 |  |  | 237 |  |  | (3) |
Balance at the end of the year | $ | 572 |  |  | $ | 444 |  |  | $ | 207 |

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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/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 21 -URI https://asc.fasb.org/extlink&oid=121826272&loc=d3e32857-109319 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section S99 -Paragraph 2 -Subparagraph (SAB Topic 11.C) -URI https://asc.fasb.org/extlink&oid=122134291&loc=d3e330215-122817 Reference 3: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 17 -Subparagraph (b) -URI https://asc.fasb.org/extlink&oid=121826272&loc=d3e32809-109319 Reference 4: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SAB TOPIC 6.I.5.Q1) -URI https://asc.fasb.org/extlink&oid=122134291&loc=d3e330036-122817 Reference 5: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 14 -URI https://asc.fasb.org/extlink&oid=121826272&loc=d3e32705-109319 Reference 6: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 270 -Section 50 -Paragraph 1 -URI https://asc.fasb.org/extlink&oid=6424409&loc=d3e44925-109338 Reference 7: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -URI https://asc.fasb.org/topic&trid=2144680 Reference 8: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 30 -Section 50 -Paragraph 2 -Subparagraph (a) -URI https://asc.fasb.org/extlink&oid=6424122&loc=d3e41874-109331 Reference 9: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 235 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SX 210.4-08(h)(2)) -URI https://asc.fasb.org/extlink&oid=120395691&loc=d3e23780-122690 + Details
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