v3.26.3
Income Taxes
 12 Months Ended
Jun. 30, 2026
Income Taxes  
Income Taxes

Note 15. Income Taxes

 

The components of income tax benefit (expense) for the years ended June 30, 2026 and 2025 are as follows:

 

 

 

Year Ended June 30,

 

 

 

2026

 

 

2025

 

 

 

 

 

 

 

 

Current tax provision

 

$13,558

 

 

$13,558

 

Deferred tax provision

 

 

(13,558 )

 

 

(13,558 )

Income tax benefit (expense)

 

$-

 

 

$-

 

 

The reconciliation of the U.S. federal statutory income tax rate to the Company’s effective income tax rate for the year ended June 30, 2026 is as follows:

 

 

 

Amount

 

 

Percentage

 

 

 

 

 

 

 

 

U.S. federal statutory income tax

 

$(51,629,649 )

 

 

21.00%

State and local income taxes, net of federal benefit

 

 

(13,871,476 )

 

 

5.65%

Foreign tax effects

 

 

-

 

 

-

%

Effect of changes in tax laws or rates

 

 

-

 

 

-

%

Effect of cross-border tax laws

 

 

-

 

 

-

%

Tax credits

 

 

-

 

 

-

%

Changes in valuation allowance

 

 

69,709,798

 

 

 

(28.36 )%

Nontaxable or nondeductible items

 

 

29,670

 

 

 

(0.01 )%

Changes in unrecognized tax benefits

 

 

-

 

 

-

%

Other, net

 

 

(4,238,343 )

 

 

1.72%

Income tax benefit (expense)

 

$-

 

 

-

%

 

The reconciliation of the U.S. federal statutory income tax rate to the Company’s effective income tax rate for the years ended June 30, 2026 and 2025 is as follows:

 

 

 

Year Ended June 30,

 

 

 

2026

 

 

2025

 

 

 

 

 

 

 

 

U.S. federal statutory income tax rate

 

 

21.00%

 

 

21.00%

State taxes, net of federal benefit

 

 

5.47%

 

 

4.80%

Nondeductible expenses

 

 

(0.01)%

 

 

(0.03)%

Return-to-provision adjustment

 

-

%

 

-

%

State tax rate change

 

 

0.18%

 

 

0.25%

Other, net

 

 

1.72%

 

 

3.81%

Valuation allowance

 

 

(28.36)%

 

 

(29.83)%

Effective income tax rate

 

-

%

 

-

%

 

The components of the Company’s net deferred tax asset as of June 30, 2026 and 2025 are as follows:

 

 

 

June 30,

 

 

 

2026

 

 

2025

 

 

 

 

 

 

 

 

Net operating loss carryforwards

 

$23,452,438

 

 

$9,601,876

 

Right-of-use assets

 

 

434,706

 

 

 

(28,366 )

Inventory write-offs

 

 

91,164

 

 

 

161,146

 

Unrealized loss (gain) on digital assets

 

 

54,432,275

 

 

 

(27,512 )

Intangible assets

 

 

149,517

 

 

 

2,795,409

 

Stock-based compensation

 

 

5,961,672

 

 

 

2,770,725

 

Capital loss carryforwards

 

 

277,873

 

 

 

271,334

 

Property and equipment

 

 

55,684

 

 

 

306,804

 

Allowance for credit losses

 

 

68,602

 

 

 

172,844

 

Accrued compensation

 

 

783,181

 

 

 

13,784

 

Operating lease payable

 

 

(264,143 )

 

 

-

 

Deferred revenue

 

 

1,262

 

 

 

3,572

 

Other, net

 

 

307,189

 

 

 

7

 

Valuation allowance

 

 

(79,802,562 )

 

 

(10,092,765 )

Deferred tax asset

 

$5,948,858

 

 

$5,948,858

 

 

The following table presents income taxes paid (net of refunds received) for the year ended June 30, 2026:

 

 

 

Income Taxes Paid

 

 

 

 

 

Federal

 

$

-

 

State and local

 

 

11,313

 

Foreign

 

 

-

 

Income tax paid

 

$

11,313

 

 

As of June 30, 2026 and 2025, the Company had aggregate gross temporary differences and tax carryforwards of $305,954,591 and $59,994,500, respectively. Of these amounts, federal net operating loss carryforwards as of June 30, 2026 and 2025 were $82,825,775 and $36,275,274, respectively. The remaining amounts consisted of other gross temporary differences and tax carryforwards of $223,128,816 and $23,719,226, respectively. The Company’s federal net operating loss carryforwards may be carried forward indefinitely, subject to applicable limitations.

 

Future realization of the tax benefits of existing temporary differences and net operating loss carryforwards ultimately depends on the existence of sufficient taxable income during the periods in which the temporary differences reverse or the net operating loss carryforwards are available. As of June 30, 2026 and 2025, the Company performed an evaluation to determine whether a valuation allowance was needed. The Company considered all available evidence, both positive and negative, which included the results of operations for the current and preceding years. The Company also considered whether there was any currently available information about future years. Based on the weight of the available evidence, the Company determined that it is more likely than not that a portion of its deferred tax assets will not be realized. Accordingly, the Company recorded valuation allowances as of June 30, 2026 and 2025 of $79,802,562 and $10,092,765, respectively.

 

The Company had no unrecognized tax benefits as of June 30, 2026 and 2025. The Company recognized no interest or penalties related to uncertain tax positions during the years ended June 30, 2026 and 2025, and no amounts of interest or penalties were accrued as of June 30, 2026 and 2025.

 

We file federal and state income tax returns in jurisdictions with varying statutes of limitations. Income tax returns generally remain subject to examination by federal and most state tax authorities. The Company is currently under examination by the Internal Revenue Service with respect to its federal income tax return for the year ended December 31, 2023.