v3.25.3
Income Taxes
 12 Months Ended
Jun. 30, 2025
Income Taxes [Abstract]  
INCOME TAXES

Note 17. INCOME TAXES

 

On March 27, 2020, the CARES Act was enacted and signed into law and includes, among other things, refundable payroll tax credits, deferment of employer side social security payments, net operating loss carryback periods and alternative minimum tax credit refunds. The Company does not at present expect the provisions of the CARES Act to have a material impact on its tax provision given the amount of net operating losses currently available.

 

The Company’s income tax expenses for years ended June 30, 2025 and 2024 are as follows:

 

   For the Years Ended
June 30,		 
Current  2025   2024 
U.S.  $30,230    
    -
 
PRC   
-
    
-
 
Total income tax expenses  $30,230    
-
 

 

Income tax expense for the years ended June 30, 2025 and 2024 varied from the amount computed by applying the statutory income tax rate to income before taxes. Reconciliations between the expected federal income tax rates using 21% for the years ended June 30, 2025 and 2024 to the Company’s effective tax rate are as follows:

 

   June 30,   June 30, 
   2025   2024 
US Statutory tax rate   21.0%   21.0%
Permanent difference*   
-
    0.7%
Change in valuation allowance   (19.8)%   (21.9)%
Rate differential in foreign jurisdiction   (0.3)%   0.2%
Total   0.9%   
-
 

 

*Permanent difference includes non-deductible expenses mainly stock compensation.

 

The Company’s deferred tax assets are comprised of the following:

 

   June 30,   June 30, 
   2025   2024 
Allowance for credit losses        
U.S.   
-
   $1,212,000 
PRC   368,000    1,649,000 
           
Net operating loss          
U.S.   22,932,000    9,920,000 
PRC   222,000    1,515,000 
Total deferred tax assets   23,522,000    14,296,000 
Valuation allowance   (23,522,000)   (14,296,000)
Deferred tax assets, net - long-term   
-
    
-
 

 

As of June 30, 2025 and 2024, the Company incurred a cumulative U.S. federal net operating loss (“NOL”) of approximately $109.5 million and $47.2 million, which may be available for reducing future taxable income.

 

As of June 30, 2025 and 2024, the Company’s operations in China incurred a cumulative NOL of approximately $0.9 million approximately $6.1 million, which may be available for reducing future taxable income.

The Company periodically evaluates the likelihood of the realization of deferred tax assets (“DTA”) and reduces the carrying amount of the deferred tax assets by a valuation allowance to the extent it believes a portion will not be realized. Management considers new evidence, both positive and negative, that could affect the Company’s future realization of deferred tax assets including its recent cumulative earnings experience, expectation of future income, the carry forward periods available for tax reporting purposes and other relevant factors. The Company determined that it is more likely than not that its deferred tax assets could not be realized due to uncertainty on future earnings as a result of the company’s reorganization and venture into new businesses. The Company provided a 100% allowance for its DTA as of June 30, 2025.

 

The Company’s taxes payable consists of the following:

 

   June 30,   June 30, 
   2025   2024 
Corporate income tax payable  $2,151,691   $2,121,724 
VAT tax payable   1,046,456    1,030,363 
Other taxes payable   52,326    54,806 
Total  $3,250,473   $3,206,893