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Income Taxes | 12 Months Ended
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Jun. 30, 2022
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 2022 and 2021 consisted of the following:
Year Ended June 30, |  | 2022 |  | 2021
Current: |  |  |  |  |  |
Federal |  | $ | — |  | $ | —
State |  |  | 7,517 |  |  | 4,125
Deferred |  |  | — |  |  | —
Total income tax provision |  | $ | 7,517 |  | $ | 4,125
The 2022 and 2021 tax results in an effective rate different than the federal statutory rate because of the following:
Year Ended June 30, |  | 2022 |  | 2021
Federal income tax liability at statutory rate |  | $ | 267,945 |  | $ | 104,522
State income tax liability, net of federal income tax effect |  |  | 5,938 |  |  | 3,259
Increase in valuation allowance |  |  | 1,486,001 |  |  | 7,741,570
Stock option (deduction) |  |  | (1,966,822) |  |  | (8,326,662)
Non-deductible officers' compensation |  |  | 127,612 |  |  | 657,464
All other permanent items |  |  | (50,573) |  |  | (172,863)
R&D credit |  |  | (34,936) |  |  | (30,000)
Return-to-provision |  |  | (38,863) |  |  | (3,303)
Expiration of stock options and tax credits |  |  | 7,573 |  |  | 40,572
State tax rate change |  |  | 157,716 |  |  | (30,887)
Other |  |  | 45,926 |  |  | 20,453
Total income tax provision |  | $ | 7,517 |  | $ | 4,125
Temporary differences which give rise to deferred income tax assets and liabilities at June 30, 2022 and June 30, 2021 include:
|  | 2022 |  | 2021
Deferred income tax assets: |  |  |  |  |  |
Deferred compensation |  | $ | 479,340 |  | $ | 664,705
Stock-based compensation |  |  | 107,499 |  |  | 116,582
Accrued expenses and reserves |  |  | 551,562 |  |  | 543,940
Deferred revenue |  |  | 176,447 |  |  | 222,341
Federal and state net operating loss carryforwards |  |  | 9,942,511 |  |  | 8,333,391
Credit carryforwards |  |  | 292,155 |  |  | 252,192
Equipment and leasehold improvements |  |  | 122,764 |  |  | 57,639
Lease liability |  |  | 803,603 |  |  | 580,053
Valuation allowance |  |  | (11,671,606) |  |  | (10,185,605)
Total deferred income tax assets |  |  | 804,275 |  |  | 585,238
Deferred income tax liabilities: |  |  |  |  |  |
ROU asset |  |  | (803,603) |  |  | (580,053)
Other |  |  | (672) |  |  | (5,185)
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 $38,202,000 which can be carried forward indefinitely. The Company has state net operating loss carryforwards totaling approximately $12,323,000 in Wisconsin, which expire in tax years 2029 through 2041, and approximately $17,961,000 in other states. In the year ended June 30, 2022, the Company generated federal net operating losses of approximately $7,199,000. At the state level, the fiscal 2022 net operating loss generated in Wisconsin was approximately $1,144,000 and approximately $3,536,000 in all other states combined. The need for a valuation allowance is evaluated each accounting period based on the Company’s evaluation of positive and negative evidence concerning the usage of their deferred tax assets. As of the end of the period, the Company has evaluated all evidence concerning the usage of their deferred tax assets and the determination has been made to maintain a full valuation allowance on the Company’s net deferred tax asset. The need for a valuation allowance is an estimate at period-end, which is subject to change once additional evidence is obtained in future periods. Future evidence includes, but is not limited to, license agreement proceeds which are expected to be recorded into earnings in the subsequent period. This is a subsequent event that was not known or knowable at June 30, 2022. When the license proceeds are recognized in a future period, the evidence will be considered in determining the Company's expected usage of their deferred tax assets, and may have a material impact on the Company's financial statements. 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, 2022 and 2021. 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, 2022 or 2021. 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, 2022 or 2021. Any changes to the Company's unrecognized tax benefits during the fiscal years ended June 30, 2022 and 2021 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 statutory 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
2022 |  | $ | (10,185,605) |  | $ | (1,486,001) |  | $ | (11,671,606)
2021 |  | $ | (2,444,035) |  | $ | (7,741,570) |  | $ | (10,185,605)

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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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