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

Note 9 – Income Taxes

 

The Company adopted Accounting Standards Update (“ASU”) 2023-09, Improvements to Income Tax Disclosures, effective for its annual reporting period ended June 30, 2026, using a retrospective approach. The adoption primarily impacted presentation and disclosure requirements, resulting in enhanced income tax disclosures, including the effective tax rate reconciliation and related tax information. The adoption did not have an impact on the Company’s income tax provision, effective tax rate, deferred tax assets or liabilities, or overall financial position and results of operations.

 

The Company evaluated the impact of tax law changes enacted under the One Big Beautiful Bill Act (“OBBBA”). The Company determined that the provisions related to bonus depreciation were applicable and elected to claim 100% bonus depreciation on qualified property placed in service during the year. The impact of this provision was reflected in the Company’s current tax depreciation deductions and related deferred tax balances.

 

At June 30, 2026, the Company has approximately $75,748,574 of operating loss carryforwards for federal and $75,744,135 for Florida state tax purposes that may be applied against future taxable income. Of the $75.7 million of net operating losses, $8.4 million will begin to expire in the year 2032 if not utilized prior to that date. The remaining amount of $67.3 million will not have an expiration date but will be limited to 80% of taxable income. There is no provision for income taxes because the Company has historically incurred operating losses and maintains a full valuation allowance against its net deferred tax assets. The valuation allowance increased by approximately $3,347,033 and $3,328,960 during the years 2026, and 2025, respectively. The deferred tax assets are approximately $22,452,000 and $19,123,000 at June 30, 2026, and 2025, respectively.

 

A reconciliation of the statutory U.S. Federal rate to the Company’s effective tax rate is as follows:

 

    June 30, 2026     June 30, 2025  
    Amount     %     Amount     %  
U.S. Federal statutory tax rate   $ (2,739,408 )     21.00 %   $ (2,953,849 )     21.00 %
State and local income tax, net of federal income tax effect                                
Florida     (570,698 )     4.37 %     (653,777 )     4.65 %
Changes in state valuation allowance     570,698       (4.37 )%     653,777       (4.65 )%
Change in valuation allowance     2,758,262       (21.14 )%     3,159,795       (22.46 )%
Nontaxable or nondeductible items                                
Permanent - M&E     2,056       (0.02 )%     1,803       (0.01 )%
Permanent - Fines/penalties     1,326       (0.01 )%     5,947       (0.04 )%
Stock-based compensation     14,705       (0.11 )%     -       0.00 %
Return to provision adjustments     (916 )     0.01 %     1,763       (0.01 )%
Prior period adjustments     (36,025 )     0.28 %     (215,460 )     1.53 %
Provision from income taxes     —       —       —       —  

 

The tax effect of temporary differences that gave rise to significant portion of the deferred tax assets / (liabilities) were as follows:

 

    June 30, 2026     June 30, 2025  
    Amount     Amount  
Net Operating loss carryforwards - Federal   $ 15,907,201     $ 13,222,565  
Net Operating loss carryforwards - State     3,291,276       2,735,812  
Stock based compensation     3,168,901       3,120,915  
Deferred Revenue     (13,231 )     (34,971 )
Accrued Liabilities     (11,987 )     (30,443 )
Depreciation and Amortization     (6,038 )     810  
Allowance for doubtful accounts     115,749       108,222  
Valuation allowance     (22,451,870 )     (19,122,910 )
Net deferred tax assets   $ —     $ —  

 

In assessing the realizability of deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax asset will not be realized. The Company’s ability to realize its deferred tax assets depends upon the generation of sufficient future taxable income to allow for the utilization of the deductible temporary difference carryforwards. At this time, based on current facts and circumstances, management believes that is not likely that the Company will realize the benefits for its deferred tax assets, and a valuation allowance has been recorded on the same.

 

The Company does not have any recorded unrecognized tax benefit for uncertain tax positions as of June 30, 2026, and 2025.