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Income Taxes
 12 Months Ended
Jun. 30, 2022
IncomeTaxDisclosure [Abstract]  
Income Taxes

Note 7 - Income Taxes

 

For the year ended June 30, 2022 and prior periods since inception, the Company’s activities have not generated taxable income. A valuation allowance has been recorded on tax loss carryforwards and other deferred tax assets. Accordingly, the Company has not recognized any current or deferred income tax expense or benefit for the years ended June 30, 2022 and 2021.

 

A reconciliation of the provision for income taxes to income taxes computed by applying the statutory United States federal rate to income before taxes is as follows:

 

   For the Years Ended
June 30,		 
   2022   2021 
Income tax, at applicable federal tax rate  $(1,894,858)  $(2,433,121)
           
State income tax   (451,344)   (374,728)
Change in valuation allowance   2,440,991    2,070,288 
Permanent differences   125,216    
-
 
Non-deductible interest   
-
    710,560 
Prior period adjustment   (220,005)   
-
 
Other   
-
    27,001 
   $
-
   $
-
 

 

The details of the net deferred tax asset are as follows:

 

   For the Years Ended
June 30,		 
   2022   2021 
Deferred tax assets:        
Net operating loss carryforwards  $6,000,166   $3,863,935 
Stock-based compensation   771,816    522,836 
Capitalization of start-up costs for tax purposes   114,800    125,004 
Depreciation   3,560    5,148 
Accrued payroll   35,559    42,214 
Deferred revenues   17,255    149 
Charitable contributions   3,913    3,777 
Gross deferred tax assets   6,947,069    4,563,063 
Valuation allowance recognized for deferred tax assets   (6,666,179)   (4,225,188)
Net deferred tax assets   280,890    337,875 
Deferred tax liabilities:          
Capitalized software   (280,890)   (337,875)
Gross deferred tax liabilities   (280,890)   (337,875)
Net deferred tax assets   
-
    
-
 

 

The Company has approximately $23.3 million of net operating loss carryforwards for federal and $23.3 million for state, available to reduce future income taxes. Of the $23.3 million of federal net operating losses, approximately $17,000 will expire in 2037 and the balance can be utilized indefinitely but will be limited to 80% utilization. The state net operating losses will begin to expire in 2027. Due to uncertainty as to the realization of the net operating loss carryforwards and other deferred tax assets as a result of the Company’s limited operating history and operating losses since inception, a full valuation allowance has been recorded against the Company’s deferred tax assets. The Company does not have any uncertain tax positions. The net operating loss carryforwards may be subject to an annual limitation as a result of a change of ownership as defined under Internal Revenue Code Section 382. Tax years 2019-2022 remain open to examination for federal income tax purposes and by other major taxing jurisdictions to which the Company is subject.