Note 3 - Summary of Significant Accounting Policies

6 Months Ended

Dec. 31, 2018

Notes to Financial Statements

Significant Accounting Policies [Text Block]

3.

Summary of Significant Accounting Policies

The Company

’s significant accounting policies are described below

.

Management Estimates.

 The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates

.

Cash Equivalents.

 Cash equivalents are considered to be highly liquid securities having an original maturity of

90

days or less at the date of acquisition

.

Stock-Based Compensation

. The Company applies the fair value method of accounting for stock-based compensation. Under this method, compensation cost is measured at the grant date based on the fair value of the award and is recognized over the award vesting period. The Company classifies the benefits of tax deductions in excess of the compensation cost recognized for the options (excess tax benefit) as financing cash flows. The fair value of each option award is estimated as of the date of grant using the Black-Scholes option-pricing model.  The fair value of each restricted stock award is equal to the Company’s stock price on the date the award is granted

.

Income Taxes.

 The Company follows the liability method of accounting for income taxes under which deferred tax assets and liabilities are recognized for the future tax consequences of (i) temporary differences between the tax basis of assets and liabilities and their reported amounts in the consolidated financial statements and (ii) operating loss and tax credit carry-forwards for tax purposes. Deferred tax assets are reduced by a valuation allowance when, based upon management’s estimates, it is more likely than

not

that a portion of the deferred tax assets will

not

be realized in a future period. The Company recognized a full valuation allowance as of

December 31, 2018

and

June 30, 2018 

and has

not

recognized any tax provision or benefit for any of the periods. The Company reviews its tax positions quarterly for tax uncertainties. The Company did

not

have any uncertain tax positions as of 

December 31, 2018

or

June 30, 2018.  

The Tax Cuts and Jobs Act was signed into law on

December 22, 2017, 

and enacts significant changes to U.S. income tax and related laws. Among other things, the Tax Cuts and Jobs Act reduces the top U.S. corporate income tax rate from

35.0%

to

21.0%,

and makes changes to certain other business-related exclusions, deductions and credits.

The Company has assessed the impact of the tax bill on the financial statements as of

December 31, 2018.   

Due to the Company’s full valuation allowance, the changes to the income tax provision as a result of the bill are

not

expected to have a consolidated financial statement impact.  

Investment in the Joint Venture Company.

The Company’s consolidated financial statements include the investment in the Joint Venture Company which is accounted for under the equity method. The Company has designated

one

of the

three

members of the Management Committee and on December

31

,

2018

held a

60.0%

ownership interest in the Joint Venture Company. Royal Gold will initially serve as the Manager of the Joint Venture Company and will manage, direct, and control operations of the Joint Venture Company. The Company recorded its investment at the historical cost of the assets contributed. The cumulative losses of the Joint Venture Company exceed the historical cost of the assets contributed to the Joint Venture Company; therefore the Company’s investment in the Joint Venture Company as of

December 31, 2018

and

June 30, 2018 

is 

zero

. The portion of the cumulative loss that exceeds the Company’s investment will be suspended and recognized against earnings, if any, from the investment in the Joint Venture Company in future periods

.

Recently Issued Accounting Pronouncements.  

In

August 2016,

the Financial Accounting Standards Board (“the FASB”)

 issued Accounting Standards Update (“ASU“)

No.

2016

-

15:

Statement of Cash Flows (Topic

230

), Classification of Certain Cash Receipts and Cash Payments. The main objective of this update is to reduce the diversity in practice in how certain cash receipts and cash payments are presented and classified in the statement of cash flows under Topic

230,

Statement of Cash Flows, and other Topics. This update addresses

eight

specific cash flow issues with the objective of reducing the existing diversity in practice. The

eight

cash flow updates relate to the following issues:

1

) debt prepayment or debt extinguishment costs;

2

) settlement of

zero

-coupon debt instruments or other debt instruments with coupon interest rates that are insignificant in relation to the effective interest rate of the borrowing;

3

) contingent consideration payments made after a business combination;

4

) proceeds from the settlement of insurance claims;

5

) proceeds from the settlement of corporate-owned life insurance policies, including bank-owned life insurance policies;

6

) distributions received from equity method investees;

7

) beneficial interest in securitization transactions; and

8

) separately identifiable cash flows and application of the predominance principle. The amendments in this update are effective for public business entities for fiscal years beginning after

December 15, 2017,

and interim periods within those fiscal years. The Company will continue to assess the impact this

may

have on its consolidated statement of cash flows

.

The Company has evaluated all other recent acco

unting pronouncements and believes that

none

of them will have a significant effect on the Company’s consolidated financial statements

.