Note 5 - Income Taxes

3 Months Ended

Sep. 30, 2018

Notes to Financial Statements

Income Tax Disclosure [Text Block]

5. Income Taxes

The Company's effective tax rate for the

three

months ended

September 30, 2018

and

2017

was

3.4%

and

0.0%,

respectively. For the

three

months ended

September 30, 2018,

the Company calculated income tax expense based upon an annual effective tax rate forecast adjusted for discrete items that specifically relate to the interim period. Changes in tax laws or rates on deferred tax assets and liabilities are recognized as discrete items in the interim period that includes the enactment date. The differences between the effective tax rate and the U.S. federal statutory tax rate of

21%

principally resulted from state and local taxes, federal tax rate reductions, changes in the valuation allowance, non-deductible expenses, and discrete items for the interim period.

At

September 30, 2018,

the Company had a deferred tax asset of approximately

$40,699,000.

Management has considered the realizability of the deferred tax assets and has concluded that a valuation allowance of approximately

$34,883,000

should be recorded, related to net operating loss carryforwards that are

not

anticipated to be realized for a net deferred tax asset of approximately

$5,816,000.

Management determined that a valuation allowance was required with respect to the remaining net deferred tax assets. Realization of these assets is primarily dependent on achieving the forecast of future taxable income, as well as prudent and feasible tax planning strategies.