v3.20.4

Income Taxes | 3 Months Ended | 12 Months Ended
--- | --- | ---
Sep. 30, 2020 | Jun. 30, 2020
Income Tax Disclosure [Abstract] |  |
Income Taxes | Note 11 - Income Taxes The Company's effective tax rate differed from the federal statutory income tax rate for the three months ended September 30, 2020 and 2019 as follows:
Federal statutory rate |  | 21%
State tax, net of federal tax effect |  | 5.31%
Valuation allowance |  | -26%
Effective tax rate |  | 0%
The Company had no federal or state income tax (benefit) for the three months ended September 30, 2020 or 2019. The Company's deferred tax assets and liabilities as of September 30, 2020 and June 30, 2020, are summarized as follows:
|  |  | September 30, 2020 |  | June 30, 2020
| Federal |  |  |
|  | Deferred tax assets | $ 7,216,100 |  | $ 4,825,100
|  | Less valuation allowance | (7,216,100) |  | (4,825,100)
|  | Deferred tax liabilities | - |  | -
|  |  | - |  | -
| State |  |  |  |
|  | Deferred tax assets | 1,926,900 |  | 1,290,900
|  | Less valuation allowance | (1,926,900) |  | (1,290,900)
|  | Deferred tax liabilities | - |  | -
|  |  | - |  | -
|  | Net Deferred Tax Assets | $ - |  | $ -
The Company's policy is to provide for deferred income taxes based on the difference between the financial statement and tax basis of assets and liabilities using enacted tax rates that will be in effect when the differences are expected to reverse. The Company has not generated taxable income and has not recorded any current income tax expense at September 30, 2020 and 2019, respectively. In assessing the realization of deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. The ultimate realization of deferred taxes is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible. Management considers projected future taxable income and tax planning strategies in making this assessment. The Company's deferred tax assets are primarily comprised of net operating losses ("NOL") that give rise to deferred tax assets. The NOL carryforwards expire over a range from 2020 to 2037, with certain NOL carryforwards that have no expiration. There is no tax benefit for goodwill impairment, which is permanently non-deductible for tax purposes. Additionally, due to the uncertainty of the utilization of NOL carry forwards, a valuation allowance equal to the net deferred tax assets has been recorded. The significant components of deferred tax assets as of September 30, 2020 and June 30, 2020, are as follows:
|  | September 30, 2020 |  | June 30, 2020
Net operating loss carryforwards | $ 8,681,800 |  | $ 5,767,000
Valuation allowance | (9,143,000) |  | (6,116,000)
Goodwill | 273,600 |  | 278,900
Property and equipment | (10,200) |  | (10,500)
Intangible assets | 153,000 |  | 35,800
Inventory allowance | 17,800 |  | 17,800
Warranty accrual and other | 27,000 |  | 27,000
| Net Deferred Tax Assets | $ - |  | $ -
As of September 30, 2020, the Company does not believe that it has taken any tax positions that would require the recording of any additional tax liability nor does it believe that there are any unrealized tax benefits that would either increase or decrease within the next twelve months. As of September 30, 2020, the Company's income tax returns generally remain open for examination for three years from the date filed with each taxing jurisdiction. | Note 9 - Income Taxes The Company’s effective tax rate differed from the federal statutory income tax rate for the years ended June 30, 2020 and 2019 as follows:
Federal statutory rate | 21%
State tax, net of federal tax effect | 5.31%
Valuation allowance | -26%
Effective tax rate | 0%
The Company had no federal or state income tax (benefit) for the years ended June 30, 2020 and 2019. The Company’s deferred tax assets and liabilities as of June 30, 2020 and 2019, are summarized as follows:
| 2020 |  | 2019
Federal |  |  |
Deferred tax assets | $ 4,825,100 |  | $ 2,980,100
Less valuation allowance | (4,825,100) |  | (2,980,100)
Deferred tax liabilities | - |  | -
State |  |  |
Deferred tax assets | 1,290,900 |  | 866,300
Less valuation allowance | (1,290,900) |  | (866,300)
Deferred tax liabilities | - |  | -
| - |  | -
Net Deferred Tax Assets | $ - |  | $ -
The Company’s policy is to provide for deferred income taxes based on the difference between the financial statement and tax bases of assets and liabilities using enacted tax rates that will be in effect when the differences are expected to reverse. The Company has not generated taxable income and has not recorded any current income tax expense at June 30, 2020 and 2019. In assessing the realization of deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. The ultimate realization of deferred taxes is dependent upon the generation of future taxable income during the periods in which those temporary differenced become deductible. Management considers projected future taxable income and tax planning strategies in making this assessment. The Company’s deferred tax assets are primarily comprised of net operating losses (“NOL”) that give rise to deferred tax assets. The NOL carryforwards expire over a range from 2020 to 2037, with certain NOL carryforwards that have no expiration. There is no tax benefit for goodwill impairment, which is permanently non-deductible for tax purposes. Additionally, due to the uncertainty of the utilization of NOL carry forwards, a valuation allowance equal to the net deferred tax assets has been recorded. The significant components of deferred tax assets as of June 30, 2020 and 2019, are as follows:
| 2020 |  | 2019
Net operating loss carryforwards | $ 5,767,000 |  | $ 3,826,100
Valuation allowance | (6,116,000) |  | (3,846,400)
Property and equipment | (10,500) |  | (7,100)
Goodwill | 278,900 |  | -
Intangible assets | 35,800 |  | -
Inventory allowance | 17,800) |  | 5,400
Warranty accrual | 27,000 |  | 22,000
Net Deferred Tax Assets | $ - |  | $ -
As of June 30, 2020, the Company does not believe that it has taken any tax positions that would require the recording of any additional tax liability nor does it believe that there are any unrealized tax benefits that would either increase or decrease within the next twelve months. As of June 30, 2020, the Company’s income tax returns generally remain open for examination for three years from the date filed with each taxing jurisdiction.

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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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