Income Taxes

12 Months Ended

Jun. 30, 2023

Income Tax Disclosure [Abstract]

Income Taxes

Note 9 - Income Taxes

For the years ended June 30, 2023 and 2022, the Company recorded no provision for income taxes due to the Company’s taxable net loss position and available Federal and State net operating loss (NOL) carryforwards that are available to reduce taxable income.

A reconciliation of the effective income tax to statutory US federal income tax is as follows:

	June 30,		June 30,
	2023		2022
Federal statutory rate		(21)%		(21)%
State income taxes, net of Federal benefit		(7)%		(7)%
Valuation allowance		28%		28%
Income tax provision		–		–

Deferred income taxes result from temporary differences in the recognition of income and expenses for the financial reporting purposes and for tax purposes. The components of deferred tax assets are presented below.

At June 30, 2023, the Company had available Federal NOL carryforwards of approximately $12.5 million that are available to reduce future taxable income. The Federal NOL carry forward expires through 2037. The NOLs are subject to statutory limitations under Internal Revenue Code Section 382 regarding substantial changes in ownership of companies with loss carry forwards.

During the year ended June 30, 2023 and 2022, management has determined that it is more likely than not that the Company will not be able to realize the tax benefit of the carryforwards due to recurring operating losses. Based on their valuation, the Company determined that the net deferred tax assets, do not meet the requirements to realize, and as such, the Company has provided a full valuation allowance against them.

At June 30, 2023 and 2022, significant component of the Company’s deferred tax assets and liabilities are as follows:

	June 30,			June 30,
	2023			2022
Net Operating loss carryforwards	$	3,505,000		$	3,063,000
Stock compensation expense		962,000			938,000
Total net deferred tax assets		4,467,000			4,001,000
Less valuation discount		(4,467,000	)		(4,001,000	)
Net deferred tax assets	$	–		$	–

Accounting rules prescribes a recognition threshold that a tax position is required to meet before being recognized in the financial statements and provides guidance on recognition, measurement, classification, interest and penalties, accounting in interim periods, disclosure and transition issues. The Company classifies interest and penalties as a component of interest and other expenses. To date, there have been no interest or penalties assessed or paid.

The Company measures and records uncertain tax positions by establishing a threshold for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. Only tax positions meeting the more-likely-than-not recognition threshold at the effective date may be recognized or continue to be recognized.