v3.26.1
Income Taxes
 12 Months Ended
Jun. 30, 2026
Income Tax Disclosure [Abstract]  
Income Taxes

 

11. Income Taxes

 

The U.S. and foreign components of pretax loss are as follows:

 

        
   June 30, 2026   June 30, 2025 
         
Pretax Loss          
U.S.  $(22,072,863)  $(17,542,120)
Foreign   -    - 
Total Pretax Loss  $(22,072,863)  $(17,542,120)

 

Significant components of the Company’s deferred tax assets (liabilities) are as follows:

 

          
   June 30, 2026   June 30, 2025 
Deferred tax assets (liabilities):          
Tax loss carryforward  $68,090,002   $58,323,950 
Intangible assets   -    (49,935)
Stock based compensation   7,336,369    6,531,784 
R&D capitalized   6,933,926    10,134,322 
Valuation Allowance   (82,360,297)   (74,940,121)
Net deferred tax assets  $-   $- 

 

At June 30, 2026 and 2025, the Company has recorded a full valuation against its net deferred tax assets of approximately $82.4 million and $74.9 million, respectively, since in the judgement of management, these assets are not more than likely to be realized. The increase in the valuation allowance during the year ended June 30, 2026 was approximately $7.4 million.

 

At June 30, 2026, the Company had a Net Operating Loss (“NOL”) carryforward of approximately $243 million. NOL’s generated prior to 2018 have expiration dates ranging from 2032 to 2037. Utilization of the Company’s historical NOL are subject to limitations under Internal Revenue Code Section 382 as a result of multiple ownership changes through the Company’s capital raises.

 

The Company has no current tax expense due to its net losses and a full valuation allowance. The Company has not made payments or received refunds for income taxes for the years ended June 30, 2026 and 2025.

 

The state and local income tax reconciling item is primarily driven by California state income taxes, which represented more than 50% of the total state and local income tax effect for the year ended June 30, 2026. The Company is incorporated in Nevada; however, Nevada does not impose a corporate income tax. Accordingly, the Company's state income tax provision primarily reflects apportionment of taxable income to California based on the Company's operational footprint.

 

Reconciliation of the differences between income tax benefit computed at the federal tax rates and the provision for income tax benefit for the years ended June 30, 2026 and 2025 is as follows:

 

                
   2026   2025 
                 
Income tax expense at federal statutory rate  $(4,635,301)   21%  $(3,683,845)   21%
State taxes, net of federal benefit   (1,545,100)   7%   (1,227,948)   7%
Effect of changes in tax laws enacted in current period   3,096,085    (14%)   -    0%
Change in valuation allowance   3,084,316    (14%)   4,911,793    (28%)
Effective tax rate  $-    -   $-    - 

 

On July 4, 2025, the One Big Beautiful Bill Act was enacted into law. Among other changes, the legislation permits immediate expensing of domestic research and experimental expenditures for tax years beginning after December 31, 2024. In connection with enactment, the Company remeasured its deferred tax balances and recorded a discrete tax benefit of approximately $3.1 million during the year ended June 30, 2026, primarily related to a reduction in deferred tax assets associated with capitalized domestic research and experimental expenditures. The effect of this remeasurement was offset by a corresponding change in the valuation allowance, and accordingly no net income tax expense or benefit was recognized.