XML 28 R14.htm IDEA: XBRL DOCUMENT
v3.5.0.2

Income Taxes | 12 Months Ended
--- | ---
Jun. 30, 2016
Income Tax Disclosure [Abstract] |
Income Taxes | Note 8. Income Taxes The provision for income taxes consists of the following for the years ended June 30, 2016 and 2015:
|  | Years Ended June 30, |
|  | 2016 |  | 2015 |
Current |  |  |  |  |  |  |
Federal |  | $ | - |  | $ | - |
State |  |  | 3,796 |  |  | 4,892 |
Foreign (Mexico) |  |  | 24,366 |  |  | 26,000 |
Deferred |  |  |  |  |  |  |
Federal |  |  | - |  |  | - |
Foreign |  |  | - |  |  | - |
State |  |  | - |  |  | - |
Provision for income tax expense |  | $ | 28,162 |  | $ | 30,892 |
During the year ended June 30, 2016, the Company recorded a provision for income tax expense of $28,162 which consisted of $3,796 in state income tax payments and $24,366 in foreign (Mexico) income tax payments. During the year ended June 30, 2015, the Company recorded a provision for income tax expense of $30,892 which consisted of $4,892 in state income tax payments and $26,000 in foreign (Mexico) income tax payments The reconciliation of the effective income tax rate to the federal statutory rate is as follows:
|  | Years Ended June 30, |
|  | 2016 |  | 2015 |
Federal income tax rate |  |  | 34.0 | % |  | 34.0 | %
State tax, net of federal benefit |  |  | (5.0) | % |  | (5.0) | %
Permanent differences |  |  | (5.6) | % |  | 167.1 | %
Effect of reversal of deferred tax liability |  |  | - | % |  | - | %
Change in valuation allowance |  |  | (29.6) | % |  | (200.1) | %
Other |  |  | - | % |  | - | %
Effective income tax rate |  |  | (6.2) | % |  | (4.0) | %
Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial statement purposes and the amounts used for income tax purposes. Significant components of the Company's deferred tax assets and liabilities at June 30, 2016 and 2015 are as follows:
|  | June 30, 2016 |  | June 30, 2015 |
Deferred tax assets: |  |  |  |  |  |  |
Federal net operating loss carryforward |  | $ | 2,016,304 |  | $ | 2,482,321 |
State net operating loss carryforward |  |  | 415,279 |  |  | 536,444 |
Intangibles amortization |  |  | 243,929 |  |  | 239,483 |
Stock based compensation |  |  | 1,378,602 |  |  | 1,135,879 |
Other |  |  | 200,602 |  |  | 166,602 |
Total deferred tax assets |  |  | 4,254,716 |  |  | 4,560,729 |
Deferred tax liability |  |  |  |  |  |  |
Intangible Assets |  |  | - |  |  | - |
Fixed asset depreciation |  |  | 48,252 |  |  | 42,211 |
Net deferred tax assets |  |  | 4,302,968 |  |  | 4,602,940 |
Less valuation allowance |  |  | (4,302,968) |  |  | (4,602,940) |
|  | $ | - |  | $ | - |
The Company has provided a valuation allowance on the deferred tax assets at June 30, 2016 and 2015 to reduce such asset to zero, since there is no assurance that the Company will generate future taxable income to utilize such asset. Management will review this valuation allowance requirement periodically and make adjustments as warranted. The net change in the valuation allowance for the year ended June 30, 2016 was a decrease of $299,972. At June 30, 2016 and 2015, the Company had federal net operating loss (“NOL”) carryforwards of approximately $8,716,000 and $10,086,000, respectively, and state NOL carryforwards of approximately $4,862,000 and $6,232,000, respectively. Federal NOLs could, if unused, expire in 2030. State NOLs, if unused, could expire in 2020. Effective January 1, 2007, the Company adopted FASB guidelines that address the determination of whether tax benefits claimed or expected to be claimed on a tax return should be recorded in the financial statements. Under this guidance, we may recognize the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position. The tax benefits recognized in the financial statements from such a position should be measured based on the largest benefit that has a greater than fifty percent likelihood of being realized upon ultimate settlement. This guidance also provides guidance on derecognition, classification, interest and penalties on income taxes, accounting in interim periods and requires increased disclosures. At the date of adoption, and as of June 30, 2016 and 2015, the Company did not have a liability for unrecognized tax benefits, and no adjustment was required at adoption. The Company files income tax returns in the U.S. federal jurisdiction and various states. The Company is subject to U.S. federal or state income tax examinations by tax authorities for tax years after 2010. The Company’s policy is to record interest and penalties on uncertain tax provisions as income tax expense. As of June 30, 2016 and 2015, the Company has no accrued interest or penalties related to uncertain tax positions. Additionally, tax years 2010 through 2015 remain open to examination by the major taxing jurisdictions to which the Company is subject.

X
- References No definition available. + Details
Name: | us-gaap_IncomeTaxDisclosureAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration

X
- 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/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 235 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SX 210.4-08.(h)) -URI http://asc.fasb.org/extlink&oid=26873400&loc=d3e23780-122690 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 3 -URI http://asc.fasb.org/extlink&oid=65882285&loc=d3e32559-109319 Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 15 -URI http://asc.fasb.org/extlink&oid=65882285&loc=d3e32718-109319 Reference 4: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 9 -URI http://asc.fasb.org/extlink&oid=65882285&loc=d3e32639-109319 Reference 5: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 2 -URI http://asc.fasb.org/extlink&oid=65882285&loc=d3e32537-109319 + Details
Name: | us-gaap_IncomeTaxDisclosureTextBlock
Namespace Prefix: | us-gaap_
Data Type: | nonnum:textBlockItemType
Balance Type: | na
Period Type: | duration