v3.26.3
INCOME TAXES
 12 Months Ended
Jun. 30, 2026
INCOME TAXES  
INCOME TAXES

NOTE 11 – INCOME TAXES

 

The Company did not provide any current or deferred US federal income tax provision or benefit for the periods ending June 30, 2025, as they incurred a tax loss during that period. The Company did provide a deferred US federal income tax provision for the years ended June 30, 2026 as they did have net income.

 

When it is more likely than not that a tax asset cannot be realized through future income, the Company must record an allowance against any future potential future tax benefit. The Company has provided a full valuation allowance against the net deferred tax asset, consisting of net operating loss carry forwards, because management has determined that it is more likely than not that the Company will not earn income sufficient to realize the deferred tax assets during the carry forward periods.

 

The Company has not taken a tax position that, if challenged, would have a material effect on the consolidated financial statements for the years ended June 30, 2026 and 2025 as defined under ASC 740, “Accounting for Income Taxes.”

 

The provision for income taxes differs from the amount computed by applying the statutory federal income tax rate to income before provision for income taxes.

 

The sources and tax effects of the differences for the periods presented are as follows:

 

 

 

Years Ended

 

 

 

June 30,

2026

 

 

June 30,

2025

 

U.S. statutory federal income tax rate

 

 

21%

 

 

21%

State income taxes, net of federal income tax

 

 

5.5%

 

 

5.5%

Change in valuation allowance

 

 

(26.5 )%

 

 

(26.5 )%

Effective income tax rate

 

 

0%

 

 

0%

 

A reconciliation of the income taxes computed at the statutory rate is as follows:

 

 

 

Years Ended

 

 

 

June 30,

2026

 

 

June 30,

2025

 

 

 

 

 

 

 

 

Tax credit (expense) at statutory rate (26.5%)

 

$(79,405 )

 

$431,868

 

Increase (decrease) in valuation allowance

 

 

63,524

 

 

 

(431,868 )

Income tax expense

 

$(15,881 )

 

$—

 

 

At June 30, 2026, and June 30, 2025, the significant components of the deferred tax assets are summarized below:

 

 

 

June 30,

 

 

June 30,

 

 

 

2026

 

 

2025

 

 

 

 

 

 

 

 

Net operating loss carry-forward

 

$7,446,207

 

 

$7,509,731

 

Valuation allowance

 

 

(7,446,207 )

 

 

(7,509,731 )

Net deferred tax asset (liability)

 

$-

 

 

$-

 

 

As of June 30, 2026, and 2025, the Company had a federal net operating loss carryforward of $28,038,965 and $28,338,606, respectively. The federal net operating loss carryforwards do not expire but may only be used against taxable income to 80%. No tax benefit has been reported in the consolidated financial statements. The annual offset of this carryforward loss against any future taxable profits may be limited under the provisions of Internal Revenue Code Section 381 upon any future change(s) in control of the Company.