Note 10 - Income Taxes

12 Months Ended

Jun. 30, 2016

10. INCOME TAXES:

The reconciliation between the expected federal income tax benefit computed by applying the Federal statutory rate to loss before income taxes and the actual benefit for taxes on loss for the years ended June 30, 2016 and 2015 is as follows:

	2016			2015
Expected income tax benefit at statutory rate	$	(1,537,000	)	$	(1,918,000	)
State taxes, net of federal benefit		(138,000	)		(173,000	)
Permanent differences and other		(13,000	)		(19,000	)
Change in valuation allowance		1,688,000			2,110,000
Income tax benefit	$	-		$	-

The Company has net operating loss carry-forwards (“NOLs”) for tax purposes of approximately $51,824,000 as of June 30, 2016. These NOLs expire on various dates through 2036.

The utilization of the NOLs may be limited under Section 382 of the Internal Revenue Code.

The Company’s deferred tax assets for the years ended June 30, 2016 and 2015 are estimated as follows:

	2016			2015
NOLs – noncurrent	$	19,705,000		$	19,083,000
Stock-based compensation - current		5,392,000			5,255,000
Property and equipment – noncurrent		2,014,000			1,390,000
Deferred compensation - noncurrent		1,688,000			1,383,000
Gross deferred tax assets		28,799,000			27,111,000
Valuation allowance		(28,799,000	)		(27,111,000	)
Net deferred tax assets	$	-		$	-

The Company has provided a valuation allowance of 100% of its net deferred tax asset due to the uncertainty of generating future profits that would allow for the realization of such deferred tax assets.