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INCOME TAXES (Notes) | 12 Months Ended
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Jun. 30, 2013
Income Tax Disclosure [Abstract] |
Income Taxes | INCOME TAXES The Company utilizes the liability method of accounting for income taxes. The liability method measures the expected income tax impact of future taxable income and deductions implicit in the consolidated balance sheets. The income tax provision in 2013 and 2012 consisted of the following:
Year Ended June 30, |  | 2013 |  | 2012
Current: |  |  |  |  |  |
Federal |  | $ | 1,697,085 |  |  | $ | 953,682 |
State |  | (156,039 | ) |  | (194,875 | )
Deferred |  | 729,720 |  |  | 341,284 |
Total income tax provision |  | $ | 2,270,766 |  |  | $ | 1,100,091 |
The 2013 and 2012 tax results in an effective rate different than the federal statutory rate because of the following:
Year Ended June 30, |  | 2013 |  | 2012
Federal income tax expense at statutory rate |  | $ | 2,617,484 |  |  | $ | 1,373,772 |
State income tax expense, net of federal income tax benefit |  | 147,516 |  |  | 80,810 |
Increase (decrease) in valuation allowance |  | 21,890 |  |  | (471,254 | )
Research and development credits |  | — |  |  | (34,835 | )
Stock-based compensation |  | 49,561 |  |  | 32,442 |
Adjustments for unrecognized tax benefits |  | (449,938 | ) |  | — |
Other |  | (115,747 | ) |  | 119,156 |
Total income tax provision |  | $ | 2,270,766 |  |  | $ | 1,100,091 |
Temporary differences which give rise to deferred income tax assets and liabilities at June 30 include:
|  | 2013 |  | 2012
Deferred income tax assets: |  |  |  |  |  |
Deferred compensation |  | $ | 886,750 |  |  | $ | 812,639 |
Stock-based compensation |  | 524,387 |  |  | 362,585 |
Accrued expenses and reserves |  | 1,177,771 |  |  | 1,249,817 |
Package design and trademarks |  | — |  |  | 46,997 |
Unauthorized transactions |  | — |  |  | 458,284 |
Federal and state net operating loss carryforwards |  | 267,944 |  |  | 1,500,198 |
AMT and research and development credit carryforwards |  | — |  |  | 153,045 |
Valuation allowance |  | (222,409 | ) |  | (200,486 | )
Total deferred income tax asset |  | 2,634,443 |  |  | 4,383,079 |
Deferred income tax liabilities: |  |  |  |  |  |
Equipment and leasehold improvements |  | (22,025 | ) |  | (466,250 | )
Capitalized research and development costs |  | (1,015,838 | ) |  | (1,592,415 | )
Other |  | (5,597 | ) |  | (3,711 | )
Net deferred income tax asset |  | $ | 1,590,983 |  |  | $ | 2,320,703 |
Deferred income tax assets as presented on the consolidated balance sheets:
|  | 2013 |  | 2012
Current deferred income tax assets |  | $ | 1,171,453 |  |  | $ | 963,303 |
Noncurrent deferred income tax assets |  | 419,530 |  |  | 1,357,400 |
Net deferred income tax assets |  | $ | 1,590,983 |  |  | $ | 2,320,703 |
Deferred income tax balances reflect the effects of temporary differences between the tax bases of assets and liabilities and their carrying amounts. These differences are stated at enacted tax rates expected to be in effect when taxes are actually paid or recovered. The recognition of these deferred tax balances will be realized through normal recurring operations and, as such, the Company has recorded the full value of such expected benefits. The Company utilized all of the federal net operating loss carryforwards in the fiscal year ended June 30, 2013. The Company has net operating loss carryforwards in the state of Wisconsin totaling $3,997,796 which expire in fiscal year 2025. ASC Topic 740 "Income Taxes" prescribes a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken, or expected to be taken, in a tax return. There were no additional significant matters determined to be unrecognized tax benefits taken or expected to be taken in a tax return that have been recorded on the Company’s consolidated financial statements for the year ended June 30, 2013. As part of the unauthorized transactions, the Company has accrued interest of $49,150 and $150,624 as of June 30, 2013 and 2012, respectively.
|  | 2013 |  | 2012
Accrued interest at beginning of year |  | $ | 150,624 |  |  | $ | 498,806 |
Interest charges to expense |  | 44,014 |  |  | 44,015 |
Interest charges paid |  | — |  |  | (140,712 | )
Interest charges reversed |  | (145,488 | ) |  | (251,485 | )
Accrued interest at end of year |  | $ | 49,150 |  |  | $ | 150,624 |
Additionally, ASC Topic 740 provides guidance on the recognition of interest and penalties related to income taxes. There were no penalties related to income taxes that have been accrued or recognized as of and for the years ended June 30, 2013 and 2012. The Company records interest related to unrecognized tax benefits in interest expense. For the year ended June 30, 2013, the Company decreased the interest it had accrued related to its tax reporting of the unauthorized transactions. The Company reversed the accrued interest related to the tax return that was filed for the year ended June 30, 2007 because the statute of limitations expired for this return. During the year ended June 30, 2013, the Company accrued interest related to the tax reporting of the unauthorized transactions for years ending after June 30, 2007. A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows:
|  | 2013 |  | 2012
Unrecognized tax benefits at beginning of year |  | $ | 1,146,051 |  |  | $ | 599,938 |
Gross increases - tax positions in prior years |  | — |  |  | 546,113 |
Reductions due to lapse in statute |  | (249,938 | ) |  | — |
Reductions based on settlements with taxing authorities |  | (200,000 | ) |  | — |
Unrecognized tax benefits at end of year |  | $ | 696,113 |  |  | $ | 1,146,051 |
All of the Company's unrecognized tax benefits as of June 30, 2013 and 2012 would affect the effective tax rate. During the next twelve months, it is reasonably possible that federal and state tax audit resolutions could reduce unrecognized tax benefits and income tax expense by up to $550,000, either because the Company's tax positions are sustained on audit or settled, or the applicable statute of limitations closes. The Company files income tax returns in the United States federal jurisdiction and in several state jurisdictions. The Company’s federal tax returns through tax year June 30, 2007 are settled and the income tax returns for tax years beginning July 1, 2007 are open. For states in which the Company files state income tax returns, the statue of limitations is generally open for tax years ended June 30, 2008 and forward. The Company is not currently under examination in any jurisdiction. The following are the changes in the valuation allowance:
Year Ended June 30, |  | Balance, beginning of year |  | Increase in valuation allowance |  | Release of valuation allowance |  | Balance, end of year
2013 |  | $ | (200,486 | ) |  | (21,923 | ) |  | — |  |  | $ | (222,409 | )
2012 |  | $ | (671,740 | ) |  | — |  |  | 471,254 |  |  | $ | (200,486 | )

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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 15 -URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32718-109319 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 9 -URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32639-109319 Reference 5: 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 6: 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 7: 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 8: 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. + Details
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