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Note 11 - Income Taxes | 12 Months Ended
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Jun. 30, 2018
Notes to Financial Statements |
Income Tax Disclosure [Text Block] | 11. Income Taxes
|  | Year Ended June 30, |
|  | 2018 |  |  | 2017 |
Income tax benefit at statutory tax rate |  |  | (1,736,580 | ) |  | $ | (992,759 | )
State tax benefit |  |  | (498,648 | ) |  |  | (175,228 | )
Permanent differences |  |  | (81,455 | ) |  |  | 30,213 |
Stock based compensation |  |  | (251,074 | ) |  |  | (41,218 | )
Impact of federal rate change |  |  | 4,868,970 |  |  |  | — |
Valuation allowance for remeausurement and changes relating to the Tax Cuts and Jobs Act |  |  | (4,868,970 | ) |  |  | — |
Other valuation allowance |  |  | 2,567,757 |  |  |  | 1,178,992 |
Income tax provision/(benefit) |  | $ | — |  |  | $ | — |
The benefit for income taxes for the periods indicated below are comprised of the following:
|  | Year Ended June 30, |
|  | 2018 |  |  | 2017 |
Current: |  |  |  |  |  |  |  |
Federal |  | $ | — |  |  | $ | — |
State |  | $ | — |  |  | $ | — |
Deferred: |  |  |  |  |  |  |  |
Federal |  | $ | — |  |  | $ | — |
State |  | $ | — |  |  | $ | — |
The net deferred tax asset is comprised of the following:
|  | Year Ended June 30, |
|  | 2018 |  |  | 2017 |
Deferred tax asset: |  |  |  |  |  |  |  |
Investment in the Joint Venture Company |  | $ | 5,851,376 |  |  | $ | 8,747,508 |
State deferred tax assets |  |  | 3,122,042 |  |  |  | 2,118,225 |
Stock option expenses |  |  | 523,249 |  |  |  | 125,855 |
Net operating losses |  |  | 2,454,203 |  |  |  | 3,260,495 |
Valuation allowance |  |  | (11,950,870 | ) |  |  | (14,252,083 | )
Net deferred tax assets |  | $ | — |  |  | $ | — |
On December 22, 2017, the United States enacted tax reform legislation known as the H.R.1, commonly referred to as the “Tax Cuts and Jobs Act” (the “Act"), resulting in significant modifications to existing law. The Company has completed the accounting for the effects of the Act during the fiscal year ending June 30, 2018. Our financial statements for the year ending June 30, 2018 reflect certain effects of the Act which includes a reduction in the corporate tax rate from 35% to 21% effective January 1, 2018, as well as other changes. The Act became effective upon passage, so our statutory rate for the current fiscal year ending June 30, 2018 is a blended rate of 28.06%. Due to the Company’s valuation allowance position and as a result of changes in tax law and rates under the Act, the Company recorded a net tax benefit due primarily to the remeasurement of deferred tax assets and liabilities from 35% to 21%. The valuation allowance decreased by $4.9 million in the fiscal year ending June 30, 2018 due to the changes in tax laws and rates under the Act and increased by $2.6 million for normal operations. The Company follows the guidance in SEC Staff Accounting Bulletin 118 (“SAB 118” ), which provides additional clarification regarding the application of ASC Topic 740 in situations where the Company does not have the necessary information available, prepared, or analyzed (including computations) in reasonable detail to complete the accounting for certain income tax effects of the Act for the reporting period in which the Act was enacted. SAB 118 provides for a measurement period beginning in the reporting period that includes the Act’s enactment date and ending when the Company has obtained, prepared, and analyzed the information needed in order to complete the accounting requirements but in no circumstances should the measurement period extend beyond one year from the enactment date. We have calculated the impact of the Act in our year end income tax provision in accordance with our understanding of the Act and guidance available as of the date of this filing. We will continue to gather and evaluate the income tax impact of the Act. The ultimate impact of the Act on our reported results in the fiscal year ending June 30, 2018 and beyond may differ, possibly materially, due to, among other things, changes in interpretations and assumptions we have made, guidance that may be issued, and other actions we may take as a result of the Act. During fiscal year 2018, we had a change in our valuation allowance of approximately $2.3 million. At June 30, 2018, we have U.S. federal tax loss carry-forwards of approximately $11.7 million. These net operating loss carry-forwards ("NOL") will begin expiring in 2031. Use of NOLs, however, may be limited if we undergo an ownership change. Generally, an ownership change occurs if certain persons or groups, increase their aggregate ownership in us by more than 50 percentage points looking back over a rolling three -year period. If an ownership change occurs, our ability to use our NOLs to reduce income taxes is limited to an annual amount, or the Section 382 limitation, equal to the fair market value of our common stock immediately prior to the ownership change multiplied by the long term tax-exempt interest rate, which is published monthly by the Internal Revenue Service. In the event of an ownership change, NOLs can be used to offset taxable income for years within a carry-forward period subject to the Section 382 limitation. The Company performed an evaluation as of June 30, 2018. The Company experienced an ownership change on March 22, 2013. Based upon the Company’s determination of its annual limitation related to this ownership change, management believes that Section 382 should not otherwise limit the Company’s ability to utilize its federal or state NOLs during their applicable carryforward periods.

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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://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -URI http://asc.fasb.org/topic&trid=2144680 + Details
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