NOTE 16 - INCOME TAXES

The Company had no current or deferred provision (benefit) for income taxes for the three and six months ended December 31, 2017 or December 31, 2016. The income tax provision for the three and six months ended December 31, 2017 and December 31, 2016 was determined by applying an estimated annual effective tax rate of 0.0% to the loss before income taxes. The estimated effective income tax rate was determined by applying statutory tax rates to pretax loss adjusted for certain permanent book to tax differences and tax credits, and the continuing assessment of a valuation allowance against all of the deferred income tax assets that will not be realized in the foreseeable future. Deferred income tax assets are reviewed for recoverability based on historical taxable income, the expected reversals of existing temporary differences, tax planning strategies and projections of future taxable income. As a result of this analysis, the Company has provided for a valuation allowance against all of its net deferred income tax assets as of December 31, 2017 and June 30, 2017.

On December 22, 2017, the President of the U.S. signed the Tax Cuts and Jobs Act of 2017 (the “Tax Act”) into law. The Tax Act includes several changes to existing tax law, including a permanent reduction in the U.S. federal statutory tax rate from 35% to 21%, further limitations on the deductibility of interest expense and certain executive compensation, repeal of the corporate Alternative Minimum Tax and imposition of a territorial tax system. While some of the new provisions of the Tax Act will impact the Company in fiscal 2019 and beyond, the change in the U.S. federal statutory tax rate was effective January 1, 2018. During the second quarter of fiscal 2018, the Company was required to revalue its U.S. federal deferred tax assets and liabilities at the new U.S. federal statutory tax rate in the period of enactment. As the Company has provided for a valuation allowance against all of its net deferred income taxes, the revaluation resulted in no charge to income tax expense for the three and six months ended December 31, 2017.