v3.26.1
Income Taxes
 9 Months Ended
Mar. 31, 2026
Income Taxes [Abstract]  
INCOME TAXES

Note 14. 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 three and nine months ended March 31, 2026 and 2025 are as follows:

 

    For the Three Months Ended     For the Nine Months Ended  
    March 31,     March 31,     March 31,     March 31,  
    2026     2025     2026     2025  
Current                
U.S.    
-
      
   -
      
   -
      
   -
  
PRC    
-
      
-
      
-
      
-
  
Total income tax expenses    
-
      
-
      
-
      
-
  

 

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

 

    As of     As of  
    March 31,     June 30,  
    2026     2025  
Allowance for credit losses            
U.S.    
-
      
-
  
PRC     383,000       368,000  
                 
Net operating loss                
U.S.     24,491,000       22,932,000  
PRC     291,000       222,000  
Total deferred tax assets     25,165,000       23,522,000  
Valuation allowance     (25,165,000 )     (23,522,000 )
Deferred tax assets, net - long-term    
-
      
-
  

 

As of March 31, 2026 and June 30, 2025, the Company incurred a cumulative U.S. federal net operating loss (“NOL”) of approximately $116.6 million and $109.5 million, which may be available for reducing future taxable income.

 

As of March 31, 2026 and June 30, 2025, the Company’s operations in China incurred a cumulative NOL of approximately $1.2 million and approximately $0.9 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 March 31, 2026.

The Company’s taxes payable consists of the following:

 

    As of     As of  
    March 31,     June 30,  
    2026     2025  
Corporate income tax payable   $ 2,231,366     $ 2,151,691  
VAT tax payable     1,087,194       1,046,456  
Taxes payable     53,932       52,326  
Total   $ 3,372,492     $ 3,250,473  

 

The corporate income tax payable amount changed was as a result of changes in exchange rates.