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

Note 14. Income Taxes

The components of loss before income taxes for the years ended June 30, 2026 and 2025 are as follows:

 

 

June 30,

 

 

 

2026

 

 

2025

 

U.S.

 

$

(8,254,064

)

 

$

(7,111,507

)

Non - U.S.

 

 

(5,337,040

)

 

 

6,273,509

 

Total

 

$

(13,591,104

)

 

$

(837,998

)

 

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

 

 

June 30,

 

 

 

2026

 

 

2025

 

Current:

 

 

 

 

 

 

Current, Non - U.S.

 

$

-

 

 

$

(61

)

Total current

 

$

-

 

 

$

(61

)

 

 

 

 

 

 

 

Deferred:

 

 

 

 

 

 

Deferred, U.S.

 

$

1,533,035

 

 

$

532,004

 

Deferred, state

 

 

474,651

 

 

 

113,698

 

Deferred, Non - U.S.

 

 

1,084,443

 

 

 

(925,293

)

Less: Change in valuation allowance

 

 

(2,952,956

)

 

 

748,018

 

Total deferred

 

$

139,173

 

 

$

468,427

 

 

 

 

 

 

 

 

Total income tax benefit

 

$

139,173

 

 

$

468,366

 

Effective income tax rate

 

 

1.0

%

 

 

55.9

%

The items accounting for the difference between income taxes computed at the U.S. federal statutory rate and our effective rate for the year ended June 30, 2026, pursuant to the requirements of ASU 2023-09, are as follows:

 

 

For the Year Ended

 

 

 

June 30, 2026

 

Federal statutory tax rate

 

$

2,854,131

 

 

 

21.0

%

Effect of:

 

 

 

 

 

 

State and local income tax, net of federal income tax effect (1)

 

 

474,652

 

 

 

3.5

%

Foreign tax effects (Australia):

 

 

 

 

 

 

Statutory tax rate difference

 

 

97,967

 

 

 

0.7

%

Exempt income from government assistance (R&D)

 

 

202,695

 

 

 

1.5

%

Net gain arising on changes in fair value of contingent consideration

 

 

50,335

 

 

 

0.4

%

Research & development expenditures

 

 

(465,964

)

 

 

(3.4

)%

Project costs

 

 

230,030

 

 

 

1.7

%

Temporary difference not recorded as an asset

 

 

455,162

 

 

 

3.3

%

Change in valuation allowance

 

 

(1,084,443

)

 

 

(8.0

)%

Goodwill impairment

 

 

(606,454

)

 

 

(4.5

)%

Other

 

 

(104

)

 

 

-

%

Changes in U.S. valuation allowance

 

 

(1,911,267

)

 

 

(14.1

)%

Nontaxable or nondeductible items:

 

 

 

 

 

 

Warrant arrant liability fair value adjustment

 

 

363,367

 

 

 

2.7

%

Goodwill impairment

 

 

(519,565

)

 

 

(3.8

)%

Other adjustments

 

 

(1,369

)

 

 

-

%

Total income tax benefit

 

$

139,173

 

 

 

1.0

%

(1) State taxes in Massachusetts made up the majority (greater than 50 percent) of the tax effect in this category.

The following table presents a reconciliation of the provision (benefit) for income taxes to taxes computed at the U.S. federal statutory rate before adoption of ASU 2023-09:

 

 

For the Year Ended

 

 

 

June 30, 2025

 

Loss before taxes

 

$

(837,998

)

 

 

 

 

 

 

 

 

 

 

Income tax rate reconciliation:

 

 

 

 

 

 

Benefit at statutory rate

 

$

175,980

 

 

 

21.0

%

State tax expense

 

 

113,698

 

 

 

13.6

%

Fair value adjustment on warrant liability

 

 

200,831

 

 

 

24.0

%

Global intangible low-taxed income inclusion

 

 

(508,437

)

 

 

(60.7

)%

Exempt income from government assistance (R&D)

 

 

76,615

 

 

 

9.1

%

Net gain arising on changes in fair value of contingent consideration

 

 

(183,079

)

 

 

(21.8

)%

Share-based compensation

 

 

(11,463

)

 

 

(1.4

)%

Research & development expenditures

 

 

(231,386

)

 

 

(27.6

)%

Project costs

 

 

301,513

 

 

 

36.0

%

Temporary difference not recorded as an asset

 

 

(270,470

)

 

 

(32.3

)%

Withholding taxes deducted from fees overseas

 

 

(62

)

 

 

-

%

Effect of different tax rates of subsidiaries operating in other jurisdictions

 

 

(97,032

)

 

 

(11.6

)%

Change in valuation

 

 

748,018

 

 

 

89.3

%

RTP Eclipse true-up

 

 

154,211

 

 

 

18.4

%

Other

 

 

(571

)

 

 

(0.1

)%

Total income tax benefit

 

$

468,366

 

 

 

55.9

%

 

The principal components of the Company’s deferred tax liabilities at June 30, 2026 and 2025 are as follows:

 

 

June 30,

 

 

 

2026

 

 

2025

 

Deferred tax assets:

 

 

 

 

 

 

U.S. Net Operating Loss

 

$

2,823,662

 

 

$

962,686

 

Non - U.S. Net Operating Loss

 

 

22,086,265

 

 

 

23,891,685

 

Undeducted Capital Expenditures

 

 

698,922

 

 

 

1,418,616

 

Provision for leave

 

 

-

 

 

 

78,891

 

Accrued Expenses

 

 

2,512

 

 

 

9,091

 

Patent costs

 

 

410,173

 

 

 

470,594

 

Unrealized loss on foreign currency

 

 

127,126

 

 

 

-

 

U.S. tax Credit

 

 

32,061

 

 

 

32,061

 

Other adjustments

 

 

-

 

 

 

93,152

 

Total deferred tax assets

 

 

26,180,721

 

 

 

26,956,776

 

 

 

 

 

 

 

 

Deferred tax liabilities

 

 

 

 

 

 

Eclipse acquisition

 

 

1,131,611

 

 

 

1,312,669

 

Provision for leave

 

 

4,140

 

 

 

-

 

Other adjustments

 

 

15

 

 

 

-

 

Accrued interest income

 

 

-

 

 

 

60

 

Total deferred tax liability

 

 

1,135,766

 

 

 

1,312,729

 

 

 

 

 

 

 

 

Less: Valuation allowance

 

 

25,400,895

 

 

 

26,139,160

 

Net deferred tax liability

 

$

355,940

 

 

$

495,113

 

At June 30, 2026 and 2025, the Company recorded valuation allowances of approximately $25.4 million and $26.1 million, respectively, against its deferred tax assets since in the judgment of management, these assets are not more than likely to be realized. The decrease in the valuation allowance at June 30, 2026, as compared to June 30, 2025, was due to changes in the foreign currency exchange rates between the U.S. dollar and the Australian dollar.

At June 30, 2026, the Company had a Net Operating Loss ("NOL") carryforward of approximately $123.5 million. The Company has U.S. NOL carryforwards of approximately $1.0 million, with a 20-year carryforward that will start expiring in 2032 and approximately $9.6 million with an indefinite carryforward, state NOL carryforwards of approximately $9.2 million with a 20 year carryforward that starts expiring in 2043, and Australian NOL carryforwards of approximately $103.7 million with an indefinite carryforward.

At June 30, 2025, the Company had U.S. NOL carryforwards of $1.0 million with a 20-year carryforward period that starts expiring in 2032 and $2.8 million with an indefinite carryforward period, state NOL carryforwards of $2.5 million with a 20-year carryforward period that starts expiring in 2043, and Australian NOL carryforwards of $95.6 million with an indefinite carryforward period.

Uncertain Tax Positions

ASC 740 prescribes the accounting for uncertainty in income taxes recognized in the financial statements. We regularly assess the outcome of potential examinations in each of the taxing jurisdictions when determining the adequacy of the amount of unrecognized tax benefit recorded. We recognize tax benefits from uncertain tax positions only if it's more likely than not that the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position. The tax benefits recognized in the financial statements from such positions are then measured based on the largest benefit which is more likely than not to be realized upon ultimate settlement. As of June 30, 2026 the company has no uncertain tax positions.

The Company files taxes in Australia, the U.S., and the Commonwealth of Massachusetts. The Company is not currently under audit for the open years 2022 to 2024 in the U.S. or the Commonwealth of Massachusetts. Carryforward attributes that were generated in earlier periods remain subject to examination to the extent the year in which they were used or will be used remains open for examination. The Company is not currently under audit for the open years 2021 to 2024 in Australia.