Jamba Juice 2008 Annual Report Download - page 105

Table of Contents
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The deferred tax asset consisted of the following temporary differences as of November 28, 2006 and June 30, 2006 (in thousands):
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Reserves and accruals $4,692 $ 4,772
Deferred franchise revenue 702 591
Class action payable 270 546
Total current deferred tax asset 5,664 5,909
Net operating losses 10 10
Deferred franchise revenue 35 —
Deferred rent 2,788 2,487
Tax credit attributes 619 688
Basis difference in fixed assets 6,498 5,444
Basis difference in investments (283) (308)
Total non-current deferred tax asset 9,667 8,321
Total net deferred tax asset $ 15,331 $14,230
A valuation allowance is provided for deferred tax assets when it is more likely than not that some portion of the deferred tax asset will not be realized.
Jamba Juice Company has not recorded a valuation allowance as of November 28, 2006.
The Company recognized a tax benefit for various state tax credits. The tax benefit for these credits will not be finalized until an examination of the
Company’s state returns is complete. Accordingly, the Company has recorded a reserve of $579,000 for the estimated future resolution of these uncertain tax
matters. While the Company believes the recorded reserve is adequate, the ultimate resolution of these uncertain tax matters may exceed or be below the recorded
reserve.
As of November 28, 2006, Jamba Juice Company had utilized all of its net operating loss carryforwards for both federal and California state tax
purposes of approximately $1.4 million and $623,000, respectively.
As of November 28, 2006, Jamba Juice Company had credit carryforwards for state tax purposes of approximately $619,000, which do not expire.
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From 1994 through 2002, Jamba Juice Company sold 3,000,000, 2,250,053, 7,415,206, 10,028,905, and 2,482,726 shares of Series A, Series B,
Series C, Series D, and Series E convertible redeemable preferred stock (the “Preferred Stock”), respectively, at prices of $1.00, $1.33, $2.00, $2.47, and
$2.00 per share, as adjusted respectively, and received $49.6 million in net proceeds. In December of 2001, when Jamba Juice Company completed its Series
E offering, the conversion price for the Series C and Series D were reduced to $2.00 and $2.47 from $2.18 and $2.50, respectively. This reduction in the
conversion price was a result of the Series E offering being less than the conversion price of the Series C and Series D. The difference between the redemptive
value of $52.2 million and the net proceeds received was $2.6 million. In fiscal 2006, Jamba Juice Company, in accordance with Accounting Principles
Board Opinion No. 20, Accounting Changes, modified its accounting for the accretion of its convertible redeemable preferred stock to conform to Securities
and Exchange Commission (“SEC”) public company reporting requirements. Previously, Jamba Juice Company did not accrete the carrying
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