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Income Taxes | 12 Months Ended
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Jun. 30, 2012
Income Taxes [Abstract] |
INCOME TAXES | NOTE 7 – INCOME TAXES The provision (benefit) for income taxes for the years ended June 30, 2012 and 2011 are as follows:
|  | 2012 |  |  | 2011 |
Current: |  |  |  |  |  |  |  |
Federal |  | $ | (435,000 | ) |  | $ | 492,000 |
State |  |  | (6,000 | ) |  |  | 38,000 |
Deferred: |  |  |  |  |  |  |  |
Federal |  |  | — |  |  |  | — |
State |  |  | — |  |  |  | — |
Provision for income taxes |  | $ | (441,000 | ) |  | $ | 530,000 |
A reconciliation of the expected tax to the amount computed by applying the federal statutory income tax rates to income (loss) before income taxes for the years ended June 30, 2012 and 2011 is as follows:
|  | 2012 |  |  | 2011 |
Federal income tax provision (benefit) at the statutory rate |  |  | (34 | )% |  |  | 34 | %
Change in valuation allowance against net deferred tax assets |  |  | 26 |  |  |  | (19 | )
State income taxes, net of federal tax benefit |  |  | (9 | ) |  |  | 10 |
State income tax rate adjustment |  |  | (10 | ) |  |  | — |
Tax incentives |  |  | (7 | ) |  |  | (10 | )
Non-deductible items |  |  | 3 |  |  |  | 1 |
Provision for (benefit from) income taxes |  |  | (31 | )% |  |  | 16 | %
Deferred income tax assets and liabilities in the accompanying consolidated balance sheets at June 30, 2012 and 2011 are as follows:
|  | 2012 |  |  | 2011 |
Deferred tax assets/(liabilities) — current: |  |  |  |  |  |  |  |
Accrued expenses |  | $ | 332,000 |  |  | $ | 377,000 |
Inventories |  |  | 282,000 |  |  |  | 406,000 |
Net operating losses |  |  | — |  |  |  | 69,000 |
State taxes |  |  | (19,000 | ) |  |  | 1,000 |
Valuation allowance |  |  | (486,000 | ) |  |  | (690,000 | )
|  | $ | 109,000 |  |  | $ | 163,000 |
Deferred tax assets/(liabilities) — non-current: |  |  |  |  |  |  |  |
Income tax credit carry forwards |  | $ | 1,235,000 |  |  | $ | 743,000 |
Net operating losses |  |  | 534,000 |  |  |  | — |
Intangible assets |  |  | 430,000 |  |  |  | 991,000 |
Deferred rent |  |  | 163,000 |  |  |  | 160,000 |
State taxes |  |  | 37,000 |  |  |  | 20,000 |
Depreciation |  |  | (405,000 | ) |  |  | (406,000 | )
Valuation allowance |  |  | (2,103,000 | ) |  |  | (1,671,000 | )
|  | $ | (109,000 | ) |  | $ | (163,000 | )
We have a federal net operating loss carry forward at June 30, 2012 in the amount of $447,000, which expires in 2032. State net operating loss carry forwards at June 30, 2012 and 2011 amount to $4,581,000 and $1,214,000, respectively, and will expire at various dates from 2018 through 2032. Federal and state tax credit carry forwards amount to $745,000 and $490,000, respectively, at June 30, 2012, and $308,000 and $435,000, respectively, at June 30, 2011. These credit carry forwards will expire at various dates from 2013 through 2032. Significant management judgment is required in determining our provision for income taxes and the recoverability of our deferred tax asset. Such determination is based primarily on our historical taxable income, with some consideration given to our estimates of future taxable income by jurisdictions in which we operate and the period over which our deferred tax assets will be recoverable. Due to cumulative taxable losses in the three years preceding fiscal year 2012, we have maintained a full valuation allowance against our deferred tax assets at June 30, 2012 and 2011, information related to which is as follows:
Balance, July 1, 2011 |  | $ | (2,362,000 | )
Increase in tax asset valuation allowance |  |  | (227,000 | )
Balance, June 30, 2012 |  | $ | (2,589,000 | )
As of June 30, 2012, we have accrued $313,000 of unrecognized tax benefits related to federal and state income tax matters. The amount that would reduce the Company’s income tax expense if recognized and result in a corresponding decrease in the Company’s effective tax rate is $47,000. Information with respect to our accrual for unrecognized tax benefits is as follows:
Balance, July 1, 2011 |  | $ | 277,000 |
Additions related to current year tax positions |  |  | 33,000 |
Additions related to prior year tax positions |  |  | 3,000 |
Balance, June 30, 2012 |  | $ | 313,000 |
We recognize accrued interest and penalties related to unrecognized tax benefits in income tax expense when applicable. As of June 30, 2012, no interest or penalties applicable to our unrecognized tax benefits have been accrued since we have sufficient tax attributes available to fully offset any potential assessment of additional tax. We are subject to U.S. federal income tax, as well as income tax of multiple state tax jurisdictions. We are currently open to audit under the statute of limitations by the Internal Revenue Service for the years ended June 30, 2009 and later. Our state income tax returns are open to audit under the statute of limitations for the years ended June 30, 2008 and later. We do not anticipate a significant change to the total amount of unrecognized tax benefits within the next 12 months.

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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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