v3.25.2
Income Taxes
 12 Months Ended
Jun. 30, 2024
Income Taxes  
Income Taxes

14. Income Taxes

 

The components of the provision for income taxes are as follows:

 

 

 

2024

 

 

2023

 

 

 

 

 

 

 

 

Current tax provision

 

$12,700

 

 

$349,260

 

Deferred tax provision

 

 

(344,801 )

 

 

(3,601,298 )

 

 

 

 

 

 

 

 

 

Provision for income taxes (benefit)

 

$(332,101 )

 

$(3,049,293 )

 

The differences between income taxes calculated at the statutory US federal income tax rate and the Company’s provision for income taxes are as follows:

 

 

 

2024

 

 

2023

 

 

 

 

 

 

 

 

Income tax provision at statutory federal and state tax rate

 

 

21%

 

 

21.00%

State taxes, net of federal benefit

 

 

0.27%

 

 

5.04%

Nondeductible expense

 

 

(0.05 )%

 

 

(0.24 )%

Tax return to provision

 

 

0.00%

 

 

(2.67 )%

State tax rate change

 

 

.07%

 

 

1.81%

Other, net

 

 

5.53%

 

 

0.90%

Valuation allowance

 

 

(25.43 )%

 

-

% 

 

 

 

 

 

 

 

 

 

Provision for income taxes

 

 

1.38%

 

 

25.83%

The net deferred income tax asset balance related to the following:

 

 

 

2024

 

 

2023

 

 

 

 

 

 

 

 

Net operating losses carry forward

 

$4,405,547

 

 

$752,863

 

 

 

 

 

 

 

 

 

 

Right of use assets

 

 

98,987

 

 

 

-

 

Inventory write off

 

 

981,758

 

 

 

-

 

Impairment loss

 

 

3,159,477

 

 

 

1,015,997

 

Intangible assets

 

 

1,034,959

 

 

 

1,741,870

 

Stock Options

 

 

2,323,784

 

 

 

1,999,688

 

Allowance for doubtful accounts

 

 

16,797

 

 

 

56,112

 

Accrued compensation

 

 

27,540

 

 

 

19,323

 

Deferred revenue

 

 

-

 

 

 

18,196

 

Other, net

 

 

7

 

 

 

7

 

Valuation allowances

 

 

(6,100,000 )

 

 

-

 

 

 

 

 

 

 

 

 

 

Deferred tax asset

 

$5,948,858

 

 

$5,604,056

 

 

There were approximately $44,916,500 and $21,258,000 of losses available to reduce federal taxable income in future years and can be carried forward indefinitely as of June 30, 2024 and June 30, 2023, respectively.

 

Future realization of the tax benefits of existing temporary differences and net operating loss carryforwards ultimately depends on the existence of sufficient taxable income within the carryforward period. As of June 30, 2024 and 2023, the Company performed an evaluation to determine whether a valuation allowance was needed. The Company considered all available evidence, both positive and negative, which included the results of operations for the current and preceding years. The Company also considered whether there was any currently available information about future years. The Company determined that it is more likely than not that the Company will have future taxable income. The Company used $2,506,514 of the federal net operating loss carryover during the year ended June 30, 2022.  During the years ended June 30, 2024 and June 30, 2023 the federal net operating loss increased significantly and management recorded a valuation reserve of $6,100,000.

 

We file federal and state income tax returns in jurisdictions with varying statutes of limitations. Income tax returns generally remain subject to examination by federal and most state tax authorities. We are not currently under examination in any federal or state jurisdiction.