The Company accounts for income taxes in accordance with the provisions of FASB ASC 740, Accounting for Uncertainty in Income Taxes. Deferred taxes are provided on a liability method whereby deferred tax assets are recognized for deductible temporary differences and operating loss and tax credit carry forwards and deferred tax liabilities are recognized for taxable temporary differences. Temporary differences are the differences between the reported amounts of assets and liabilities and their tax bases. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized. Deferred tax assets and liabilities are adjusted for the effects of changes in tax laws and rates on the date of enactment.

At June 30, 2021 and 2020, the significant components of the deferred tax assets are summarized below:

	2021			2020

Deferred income tax asset
Net operating loss carryforwards	$	3,237,960		$	2,929,710
Book to tax differences in intangible assets		-			(95	)
Total deferred income tax asset		3,237,960			2,929,615
Less: valuation allowance		(3,237,960	)		(2,929,615	)
Total deferred income tax asset	$	—		$	—

Income tax expense reflected in the consolidated statements of income consist of the following for 2021 and 2020:

	2021		2020
Current
Federal	$	—	$	—
State		—		—
		—		—
Deferred
Federal		—		—
State		—		—

Income tax expense	$	—	$	—

The Company periodically evaluates the likelihood of the realization of deferred tax assets, and adjusts the carrying amount of the deferred tax assets by the valuation allowance to the extent the future realization of the deferred tax assets is not judged to be more likely than not. The Company considers many factors when assessing the likelihood of future realization of its deferred tax assets, including its recent cumulative earnings experience by taxing jurisdiction, expectations of future taxable income or loss, the carryforward periods available to the Company for tax reporting purposes, and other relevant factors.

Future changes in the unrecognized tax benefit will have no impact on the effective tax rate due to the existence of the valuation allowance. The Company estimates that the unrecognized tax benefit will not change significantly within the next twelve months. The Company will continue to classify income tax penalties and interest as part of general and administrative expense in its consolidated statements of operations. There were no interest or penalties accrued as of June 30, 2021.