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Income Taxes | 12 Months Ended
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Jun. 30, 2012
Income Taxes [Abstract] |
Income Taxes | Note 6 — Income Taxes As of June 30, 2012, the Company had a net operating loss (“NOL”) carry-forward of approximately $5,445,000. The NOL may be offset against future taxable income, if any, through the year ended June 30, 2030. A portion of the NOL carryforward begins to expire in 2024, is subject to review by the Internal Revenue Service, and is subject to U.S. Internal Revenue Code Section 382 limitations. The income tax expense (benefit) for the years ended June 30, 2012 and 2011 consists of the following:
|  | 2012 |  |  | 2011 |
Income / (Loss) Before Income Taxes: |  |  |  |  |  |  |  |
Domestic |  | $ | 14,557,000 |  |  | $ | (50,534,720 | )
International |  |  | 116,000 |  |  |  | (165,030 | )
|  | $ | 14,673,000 |  |  | $ | (50,699,750 | )
Current Taxes |  |  |  |  |  |  |  |
Federal |  | $ | 3,758,000 |  |  | $ | — |
State |  |  | 1,121,000 |  |  |  | 92,000 |
Foreign |  |  | 47,000 |  |  |  | — |
Total Current Income Tax Provision |  | $ | 4,926,000 |  |  | $ | 92,000 |
Deferred Taxes |  |  |  |  |  |  |  |
Federal |  |  | (2,110,000 | ) |  |  | — |
State |  |  | (602,000 | ) |  |  | — |
Foreign |  |  | (12,000 | ) |  |  | — |
Total Deferred Income Tax Provision |  | $ | (2,724,000 | ) |  | $ | — |
Net Income Tax Provision |  | $ | 2,202,000 |  |  | $ | 92,000 |
The effective income tax rate for the years ended June 30, 2012 and 2011 differs from the U.S. Federal statutory income tax rate due to the following:
|  | 2012 |  |  | 2011 |
Federal statutory income tax rate |  |  | 35.00 | % |  |  | (34.00 | %)
State income taxes, net of federal benefit |  |  | 5.50 | % |  |  | .24 | %
Tax return to provision true-up |  |  | (1.01 | )% |  |  | (1.35 | %)
Permanent differences: |  |  |  |  |  |  |  |
— interest on convertible debt |  |  | 0.00 | % |  |  | 3.44 | %
— change in derivative liability |  |  | 16.14 | % |  |  | 32.44 | %
— stock option compensation |  |  | 0.30 | % |  |  | .21 | %
— other |  |  | 0.44 | % |  |  | 0.12 | %
Decrease in valuation allowance |  |  | (39.45 | )% |  |  | (0.91 | %)
Net income tax provision (benefit) |  |  | 16.04 | % |  |  | (0.18 | %)
The components of the deferred tax assets and liabilities as of June 30, 2012 and 2011 are as follows:
|  | 2012 |  |  | 2011 |
Deferred tax assets: |  |  |  |  |  |  |  |
Federal and state net operating loss carryovers |  | $ | 2,453,000 |  |  | $ | 4,832,000 |
Research and development tax credits |  |  | — |  |  |  | 31,000 |
Contribution carryover |  |  | — |  |  |  | 13,000 |
Stock option compensation |  |  | 988,000 |  |  |  | 722,000 |
Accrued vacation, allowance for returns, bonuses & other |  |  | 600,000 |  |  |  | 540,000 |
Deferred tax asset |  | $ | 4,041,000 |  |  | $ | 6,138,000 |
Deferred liabilities |  |  |  |  |  |  |  |
Patents and trademarks |  |  | (587,000 | ) |  |  | (625,000 | )
Change in tax accounting methods |  |  | (44,000 | ) |  |  | (36,000 | )
Property & equipment |  |  | (540,000 | ) |  |  | (6,000 | )
Total deferred liabilities |  |  | (1,171,000 | ) |  |  | (667,000 | )
Net deferred tax asset |  |  | 2,870,000 |  |  |  | 5,471,000 |
Less: valuation allowance |  |  | (147,000 | ) |  |  | (5,471,000 | )
Deferred tax assets |  | $ | 2,723,000 |  |  | $ | — |
The Company has adopted accounting guidance for uncertain tax positions which provides that in order to recognize an uncertain tax benefit, the taxpayer must be more likely than not of sustaining the position, and the measurement of the benefit is calculated as the largest amount that is more than 50% likely to be realized upon recognition of the benefit. We believe the Company has no material uncertain tax positions and do not expect significant changes in the amount of unrecognized tax benefits that may occur within the next twelve months. Accordingly, we have not reserved for interest or penalties. The tax years open for examination by the Internal Revenue Service (“IRS”) include returns for fiscal years June 30, 2009 through present and the open tax years by state tax authorities include returns for fiscal years June 30, 2008 through present. In addition, the IRS and state tax authorities may examine NOLs for any previous years if utilized by the Company. The total recognized tax benefit from settlement of stock based awards for the period ending June 30, 2011 was $579,000.

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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 Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 2 -URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32537-109319 Reference 2: 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 3: 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 4: http://www.xbrl.org/2003/role/presentationRef -Publisher SEC -Name Regulation S-X (SX) -Number 210 -Section 08 -Paragraph h -Article 4 Reference 5: 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 Reference 6: 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 7: 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 8: 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 + Details
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