v3.26.1
Income Taxes
12 Months Ended
Jun. 30, 2026
Income Taxes  
Income Taxes

Note 8.   Income Taxes

The components of income before provision of income taxes are as follows:

Years Ended

June 30, 

  ​ ​ ​

2026

  ​ ​ ​

2025

United States

$

2,821,968

$

1,299,850

Foreign

 

133,142

 

48,514

Total income before provision for income taxes

$

2,955,110

$

1,348,364

The provision for income taxes consists of the following for the years ended June 30, 2026 and 2025:

Years Ended

June 30, 

  ​ ​ ​

2026

  ​ ​ ​

2025

Current

 

  ​

 

  ​

Federal

$

$

State

 

86,990

 

33,613

Foreign

 

46,052

 

49,198

Deferred

 

 

Federal

 

 

State

 

 

Foreign

 

 

Provision for income tax expense

$

133,042

$

82,811

The reconciliation from the federal statutory income tax rate to our effective income tax rate for the fiscal year ended June 30, 2026, applying ASU 2023-09 prospectively, is as follows:

Amount

%

U.S. federal statutory income tax

$

620,573

21.0

%  

State tax, net of federal benefit

 

69,858

2.3

%  

Cross border laws

8,354

0.3

%  

Foreign tax effects

18,092

0.6

%  

Tax credits

(120,343)

(4.1)

%  

Non-taxable or non-deductible items:

 

Equity compensation

233,104

7.9

%  

Change in earnout

218,462

7.4

%  

Other

8,346

0.3

%  

Change in valuation allowance

 

(923,404)

(31.2)

%  

Total

$

133,042

4.5

%  

The reconciliation from the federal statutory income tax rate to the effective income tax rate for the fiscal year ended June 30, 2025, applying ASC 740 prior to the adoption of AUS 2023-09, is as follows:

%

Federal income tax rate

 

21.0

%

State tax, net of federal benefit

 

2.4

%

Change in earnout

22.9

%

Adjustment to prior year

(157.2)

%

Executive compensation

(11.6)

%

Other permanent differences

 

3.1

%

Foreign rate differential

2.9

%

Tax credits

(15.3)

%

Change in valuation allowance

 

137.9

%

Effective income tax rate

 

6.1

%

For the year ended June 30, 2025, the majority of the adjustment to the prior year, primarily offset by the change in valuation allowance, was due to recording additional federal and state net operating losses (“NOL”) from stock acquisitions in prior years. This was precipitated by the finalization of a study to determine the amount of NOLs available after the change in ownership under Internal Revenue Code Section 382.

Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial statement purposes and the amounts used for income tax purposes. Significant components of the Company’s deferred tax assets and liabilities at June 30, 2026 and 2025 are as follows:

  ​ ​ ​

June 30, 

  ​ ​ ​

June 30, 

2026

2025

Deferred tax assets:

 

  ​

 

  ​

Federal net operating loss carryforward

$

3,090,317

$

3,475,943

State net operating loss carryforward

 

498,731

 

479,222

Stock based compensation

 

953,875

 

1,164,121

Tax attributes

289,986

196,809

Research costs

994,054

1,713,966

Other

 

18,906

 

63,948

Total deferred tax assets

 

5,845,869

 

7,094,009

Deferred tax liability:

 

 

Depreciation and amortization

 

(1,825,304)

 

(2,102,792)

Net deferred tax assets

 

4,020,565

 

4,991,217

Less valuation allowance

 

(4,020,565)

 

(4,991,217)

$

$

The Company has provided a valuation allowance on the deferred tax assets at June 30, 2026 and 2025 to reduce such assets to zero, since it is not deemed more likely than not that the Company will generate future taxable income to utilize such assets. Management will review this valuation allowance requirement periodically and adjust as warranted. The net change in the valuation allowance for the years ended June 30, 2026 and 2025 was a decrease of $970,652 and an increase of $1,858,749, respectively.

At June 30, 2026 and 2025, the Company had federal NOL carryforwards of approximately $14,716,000 and $16,552,000, respectively, and state NOL carryforwards of approximately $7,410,000 and $7,502,000, respectively. Federal NOLs generated after 2018 can be carried forward indefinitely with some limitations. Federal NOLs generated prior to that have a 20-year carryforward period. At June 30, 2026, all remaining federal NOLs can be carried forward indefinitely; however, of these NOLs, approximately $11,400,000 relate to companies acquired in prior years and are subject to annual limitations under IRC Section 382. State NOLs will begin to expire in 2031.

The Company is subject to taxation in the United States, various states and Mexico. The Company is subject to United States federal or state income tax examinations by certain tax authorities for fiscal year 2015 and forward, in part due to utilization of NOLs in the current fiscal year. The Company is currently not under examination in any jurisdiction.

Cash paid for income taxes (net of refunds) in the year ended June 30, 2026 consisted of the following:

  ​ ​ ​

Amount

United States

$

State:

 

CA

3,210

FL

 

8,220

GA

 

3,950

IL

 

7,000

MA

 

11,938

MN

3,105

TX

 

3,964

Other

3,603

Foreign

 

26,223

Total

$

71,213

The state taxes were made up primarily of FL, GA, IL, MA, and TX.  The foreign taxes were solely Mexico. Cash paid for income taxes (net of refunds) in the year ended June 30, 2025 were $82,811.

As of June 30, 2026 and 2025, the Company had no uncertain tax positions.

The Company’s policy is to record interest and penalties on uncertain tax provisions as income tax expense. As of June 30, 2026 and 2025, the Company has no accrued interest or penalties related to uncertain tax positions.