XML 27 R16.htm IDEA: XBRL DOCUMENT
v3.7.0.1

Note 10 - Income Taxes | 12 Months Ended
--- | ---
Jun. 30, 2017
Notes to Financial Statements |
Income Tax Disclosure [Text Block] | NOTE 10 - INCOME TAXES Pursuant to the provisions of FASB ASC Topic No. 740 Income Taxes (“ASC 740” ) , deferred income taxes reflect the net effect of (a) temporary difference between carrying amounts of assets and liabilities for financial purposes and the amounts used for income tax reporting purposes, and (b) net operating loss carryforwards. No net provision for refundable Federal income taxes has been made in the accompanying statement of operations because no recoverable taxes were paid previously. Significant components of the Company’s net deferred tax assets at June 30, 2017 and 2016 are shown below. A valuation allowance of approximately $9,927,000 and $8,107,000 has been established to offset the net deferred tax assets as of June 30, 2017 and 2016, respectively, due to uncertainties surrounding the Company’s ability to generate future taxable income to realize these assets. The Company is subject to taxation in the United States and California. The Company ’s tax years for 2010 and forward are subject to examination by the United States and California tax authorities due to the carry forward of unutilized net operating losses and research and development credits (if any). We have incurred losses since inception, so no current income tax provision or benefit has been recorded. Significant components of our net deferred tax assets are shown in the table below.
|  | Year Ended June 30, |
|  | 201 7 |  |  | 201 6 |
Deferred Tax Assets: |  |  |  |  |  |  |  |
Net operating loss carryforwards |  | $ | 8,126,000 |  |  | $ | 6,473,000 |
Stock compensation |  |  | 1,646,000 |  |  |  | 1,503,000 |
Other, net |  |  | 155,000 |  |  |  | 131,000 |
Net deferred tax assets |  |  | 9,927,000 |  |  |  | 8,107,000 |
Valuation allowance for deferred tax assets |  |  | (9,927,000 | ) |  |  | (8,107,000 | )
Net deferred tax assets |  | $ | - |  |  | $ | - |
The Company recognizes windfall tax benefits associated with the exercise of stock options directly to stockholders' equity only when realized. Accordingly, deferred tax assets are not recognized for net operating loss carryforwards from windfall tax benefits occurring from January 1, 2006 onward. At June 30, 2017, deferred tax assets do not include excess tax benefits from stock-based compensation. At June 30, 2017 , the Company had unused net operating loss carryovers of approximately $20,242,000 and $20,200,000 that are available to offset future federal and state taxable income, respectively. These operating losses begin to expire in 2030. The provision for income taxes on earnings subject to income taxes differs from the statutory federal rat e at June 30, 2017 and 2016, due to the following:
|  | Year Ended June 30, |
|  | 2017 |  |  | 2016 |
Federal income taxes at 34% |  | $ | (1,508,000 | ) |  | $ | (1,554,000 | )
State income taxes, net |  |  | (392,000 | ) |  |  | (404,000 | )
Permanent differences and other |  |  | 83,000 |  |  |  | 121,000 |
Change in the estimated fair market value of derivatives |  |  | 6,000 |  |  |  | (11,000 | )
Other true ups, if any |  |  | (9,000 | ) |  |  | - |
Change in valuation allowance |  |  | 1,820,000 |  |  |  | 1,848,000 |
Provision for income taxes |  | $ | - |  |  | $ | - |
Internal Revenue Code Sections 382 limits the use of our net operating loss carryforwards if there has been a cumulative change in ownership of more than 50% within a three -year period. The Company has not yet completed a Section 382 net operating loss analysis. In the event that such analysis determines there is a limitation on the use on net operating loss carryforwards to offset future taxable income, the recorded deferred tax asset relating to such net operating loss carryforwards will be reduced. However, as the Company has recorded a full valuation allowance against its net deferred tax assets, there is no impact on the Company’s consolidated financial statements as of June 30, 2017 and 2016. We follow FASB ASC Topic No. 740, Income Taxes (“ASC 740” ), which clarifies the accounting for uncertainty in income taxes recognized in an entity's financial statements, and prescribes a recognition threshold and measurement attributes for financial statement disclosure of tax positions taken or expected to be taken on a tax return. Under ASC 740, the impact of an uncertain income tax position on the income tax return must be recognized at the largest amount that is more-likely-than- not to be sustained upon audit by the relevant taxing authority. An uncertain income tax position will not be recognized if it has less than a 50% likelihood of being sustained. Additionally, ASC 740 provides guidance on de-recognition, classification, interest and penalties, accounting in interim periods, disclosure and transition. In accordance with ASC 740, there are no unrecognized tax benefits as of June 30, 2017 or June 30, 2016.

X
- References No definition available. + Details
Name: | us-gaap_DisclosureTextBlockAbstract
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 740 -URI http://asc.fasb.org/topic&trid=2144680 + Details
Name: | us-gaap_IncomeTaxDisclosureTextBlock
Namespace Prefix: | us-gaap_
Data Type: | nonnum:textBlockItemType
Balance Type: | na
Period Type: | duration