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Income Taxes | 12 Months Ended
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Jun. 30, 2021
Income Taxes [Abstract] |
Income Taxes | 6. 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 2021 and 2020 consisted of the following:
Year Ended June 30, |  | 2021 |  | 2020
Current: |  |  |  |  |  |
Federal |  | $ | — |  | $ | (15,037)
State |  |  | 4,125 |  |  | 3,501
Deferred |  |  | — |  |  | 13,276
Total income tax provision |  | $ | 4,125 |  | $ | 1,740
The 2021 and 2020 tax results in an effective rate different than the federal statutory rate because of the following:
Year Ended June 30, |  | 2021 |  | 2020
Federal income tax liability (benefit) at statutory rate |  | $ | 104,522 |  | $ | (97,409)
State income tax liability, net of federal income tax effect |  |  | 3,259 |  |  | 2,765
Increase in valuation allowance |  |  | 7,741,570 |  |  | 61,948
Stock option (deduction) addback |  |  | (8,326,662) |  |  | 86,541
Non-deductible offier's compensation |  |  | 657,464 |  |  | —
All other permanent items |  |  | (172,863) |  |  | (50,610)
R&D credit |  |  | (30,000) |  |  | (22,568)
Return-to-provision |  |  | (3,303) |  |  | (30,040)
Expiration of stock options and tax credits |  |  | 40,572 |  |  | 44,790
State tax rate change |  |  | (30,887) |  |  | 18,962
Other |  |  | 20,453 |  |  | (12,639)
Total income tax provision |  | $ | 4,125 |  | $ | 1,740
Temporary differences which give rise to deferred income tax assets and liabilities at June 30, 2021 and June 30, 2020 include:
|  | 2021 |  | 2020
Deferred income tax assets: |  |  |  |  |  |
Deferred compensation |  | $ | 664,705 |  | $ | 614,018
Stock-based compensation |  |  | 116,582 |  |  | 249,313
Accrued expenses and reserves |  |  | 543,940 |  |  | 479,112
Deferred revenue |  |  | 222,341 |  |  | 146,841
Federal and state net operating loss carryforwards |  |  | 8,333,391 |  |  | 606,730
Credit carryforwards |  |  | 252,192 |  |  | 216,484
Equipment and leasehold improvements |  |  | 57,639 |  |  | 134,045
Lease liability |  |  | 580,053 |  |  | 638,472
Valuation allowance |  |  | (10,185,605) |  |  | (2,444,035)
Total deferred income tax assets |  |  | 585,238 |  |  | 640,980
Deferred income tax liabilities: |  |  |  |  |  |
ROU asset |  |  | (580,053) |  |  | (638,472)
Other |  |  | (5,185) |  |  | (2,508)
Net deferred income tax assets |  | $ | - |  | $ | -
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 value of such expected benefits. The Company has federal net operating loss carryforwards of approximately $352,000 which expire in fiscal year 2037 and approximately $31,310,000 which can be carried forward indefinitely. The Company has state net operating loss carryforwards totaling approximately $15,153,000 in Wisconsin, which expire in fiscal years 2025 through 2040, and approximately $13,499,000 in other states. In the year ended June 30, 2021, the Company generated federal net operating losses of approximately $30,777,000. At the state level, the fiscal 2021 net operating loss generated in Wisconsin was approximately $8,795,000 and approximately $11,855,000 in all other states combined. Generally accepted accounting principles in the United States (“GAAP”) prescribe 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 years ended June 30, 2021 and 2020. Additionally, GAAP provides guidance on the recognition of interest and penalties related to income taxes. No interest or penalties related to income taxes has been accrued or recognized as of and for the years ended June 30, 2021 or 2020. The Company records interest related to unrecognized tax benefits in interest expense. The Company does not believe it has any unrecognized tax benefits as of June 30, 2021 or 2020. Any changes to the Company's unrecognized tax benefits during the fiscal years ended June 30, 2021 and 2020 would have impacted the effective tax rate. The Company files income tax returns in the United States federal jurisdiction and in several state jurisdictions. The Company’s federal tax returns for tax years and state income tax returns are open for the standard regulatory period. The following are the changes in the valuation allowance:
|  | Balance, |  | Decrease (Increase) |  |  |
|  | beginning |  | in valuation |  | Balance,
Year Ended June 30, |  | of year |  | allowance |  | end of year
2021 |  | $ | (2,444,035) |  | $ | (7,741,570) |  | $ | (10,185,605)
2020 |  | $ | (2,382,087) |  | $ | (61,948) |  | $ | (2,444,035)

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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 http://asc.fasb.org/extlink&oid=84230637&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 http://asc.fasb.org/extlink&oid=116825942&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 http://asc.fasb.org/extlink&oid=84230637&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 http://asc.fasb.org/extlink&oid=116825942&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 http://asc.fasb.org/extlink&oid=84230637&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 http://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 http://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 http://asc.fasb.org/extlink&oid=6424122&loc=d3e41874-109331 + Details
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