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Income Taxes: Deferred income taxes reflect the expected future tax consequences of temporary differ- ences between the tax basis amounts and financial statement carrying amounts of assets and liabilities at each year end and the expected future benefits of net operating loss carryforwards, tax credits and other carryforwards. 

## 2. PROPERTY AND EQUIPMENT 

The carrying value of the Company’s property and equipment consists of the following components at June 30, 2001 and 2000: 

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Reclassifications: Certain accounts in the prior period financial statements have been reclassified for compara- tive purposes to conform with the presentation in the current period financial statements. 

Earnings (Loss) Per Share: Basic earnings (loss) per share is computed by dividing the net income or loss by the weighted average number of common shares out- standing during each year. Diluted earnings per share reflects the effect of dilutive options and warrants. 

