Note 12 – Income taxes

The Company did not recognize a provision (benefit) for income taxes for the years ended June 30, 2026 and 2025.

As of June 30, 2026 and 2025, the Company had net deferred tax assets principally arising from the net operating loss carryforward for income tax purposes multiplied by an expected federal rate of 21%. As management of the Company cannot determine that it is more likely than not that the Company will realize the benefit of the deferred tax assets, a valuation allowance equal to the net deferred tax assets was recorded as of June 30, 2026 and 2025.

A reconciliation of the federal statutory income tax rate and amount to the Company’s effective income tax rate and income tax provision for the years ended June 30, 2026 and 2025 is presented below. The reconciliation is presented in both percentages and dollar amounts in accordance with ASC 740-10-50-12 as amended by ASU 2023-09:

The Company paid no federal, state, local or foreign income taxes during either of the years ended June 30, 2026 and 2025. Accordingly, no disaggregation of income taxes paid by jurisdiction is presented.

Net deferred tax assets consist of the following components as of:

The Company’s income tax filings in the United States and state jurisdictions remain open to examination for tax years from inception through tax year 2026. Tax attributes from years prior to that can be adjusted as a result of examinations. In the event that the Company is assessed penalties and/or interest, penalties will be charged to other operating expense, and interest will be charged to interest expense.

Unfiled tax returns

In connection with the change in control, current management determined that the Company’s federal and state income tax returns have not been filed for the tax years ended June 30, 2023 and for each subsequent tax year. The Company is working to prepare and file the delinquent returns as promptly as practicable. Because the Company has incurred losses in each of the periods concerned and has recorded no current tax expense, management does not expect the delinquent filings to result in a material income tax liability. Failure to file returns when due can result in penalties and interest, and the statute of limitations on assessment does not begin to run until a return is filed, so the tax years concerned remain open indefinitely. No liability for penalties or interest has been recorded because the amount, if any, cannot be reasonably estimated at this time. The absence of filed returns also affects the determination of the Company’s net operating loss carryforwards and the Section 382 analysis described below.

Section 382 limitation

The transactions described in Notes 1, Description of business, 7, Debt, 8, Related party transactions, and 9, Stockholders’ equity, resulted in an ownership change within the meaning of Section 382 of the Internal Revenue Code. Section 382 limits the amount of pre-change net operating loss carryforwards and other tax attributes that may be used to offset taxable income in any post-change year. The annual limitation is generally equal to the value of the loss corporation immediately before the ownership change multiplied by the long-term tax-exempt rate. The Company is in the process of completing an analysis to determine the amount of the limitation and the availability of its tax attributes. The gross deferred tax asset presented above has not been reduced for the effect of that limitation; any reduction, when determined, will be offset by an equal reduction in the valuation allowance and will have no effect on the Company’s net deferred tax asset, results of operations or financial position.

As of June 30, 2026, the Company had federal net operating loss carryforwards of approximately $8,610,430, all of which arose in tax years beginning after December 31, 2017 and may be carried forward indefinitely, subject to an annual utilization limitation of 80% of taxable income. Because the Company has not filed federal or state income tax returns for the tax year ended June 30, 2023 or any subsequent tax year, this amount is a management estimate that is subject to change upon the preparation and filing of those returns. The Company is also evaluating the treatment of the $375,751 gain recognized on the settlement of the Eagle Debt and the tax effect of the debt to equity conversion of the Convertible Note, which may constitute cancellation of indebtedness income excludible from taxable income under Section 108(a)(1)(B) of the Internal Revenue Code and subject to the attribute reduction rules of Section 108(b), which would further reduce the Company’s net operating loss carryforwards.