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

Note 17 — Income taxes 

 

Loss before income tax by jurisdiction for the years ended June 30, 2026 and 2025 are as following:

 

    For the Years Ended
June 30,		  
    2026     2025  
             
Domestic   $ (52,407,037 )   $ (117,477 )
Foreign     (272,599 )     (8,825,916 )
Total loss before income tax   $ (52,679,636 )   $ (8,943,393 )

 

The Company’s income tax expenses for years ended June 30, 2026 and 2025 are as follows: 

 

    For the Years Ended
June 30,		  
    2026     2025  
Federal            
Current   $ (40,254 )   $ 40,254  
Deferred     —       —  
State                
Current     50,556       36,489  
Deferred     —       —  
Total provision for income taxes     10,302       76,743  

 

Income tax expense for the years ended June 30, 2026 and 2025 varied from the amount computed by applying the statutory income tax rate to income before taxes. Reconciliations between the expected federal income tax rates using 21% for the years ended June 30, 2026 and 2025 to the Company’s effective tax rate are as follows:

 

    For the Years Ended
June 30, 2026		  
             
Federal statutory tax rate   $ (11,062,723 )     21.0 %
State and local statutory tax rate, net of deduction on federal tax return (Texas and other states)     50,559       (0.1 )%
Foreign tax effects (Singapore and other foreign country)     57,246       (0.1 )%
Permanent difference     4,075       (0.0 )%
Others     (2,062,747 )     4.0 %
Change in valuation allowance     13,023,892       (24.8 )%
Effective tax rate   $ 10,302       (0.0 )%

 

    For the Years Ended
June 30, 2025*		  
             
Federal statutory tax rate   $ (1,877,934 )     21.0 %
State statutory tax rate, net of deduction on federal tax return     8,622       (0.1 )%
Permanent difference     1,199,632       (13.5 )%
Others     102,599       (1.1 )%
Change in valuation allowance     643,824       (7.2 )%
Effective tax rate   $ 76,743       (0.9 )%

 

* This is based on the prior method before the ASU 2023-09 adoption.

 

The Company had a cumulative net operating loss carryforward (“NOL”) for federal, state and foreign income tax purpose of approximately $66.6 million, $5.3 million, and $0, respectively, as of June 30, 2026. Based on the Company’s history of earnings and its assessment of future earnings, management believes that it is not more likely than not that future taxable income will be sufficient to realize the deferred tax assets. Therefore, the Company applied a full valuation allowance to deferred tax assets for the years ended June 30, 2026 and 2025, and incurred approximately $13.2 million and $0.7 million allowance on deferred tax assets, respectively. The Company’s NOL is limited to 80% of the excess of taxable income on federal level, and no limitation on the state level. The Company’s federal NOL and state NOL of approximately $66.6 million and $$1.8 million, respectively, will last indefinitely. The federal NOL and state NOL of approximately $53,000 and $3.6 million, respectively, will expire on December 31, 2027 and June 30, 2044, respectively. The valuation allowance increased by approximately $13.2 million from approximately $2.7 million on June 30, 2025 to approximately $15.9 million on June 30, 2026.

 

The utilization of the Company’s net operating losses may be subject to a U.S. federal limitation due to the “change in ownership provisions” under Section 382 of the Internal Revenue Code and other similar limitations in various state jurisdictions. Such limitations may result in a reduction of the amount of net operating loss carryforwards in future years and possibly the expiration of certain net operating loss carryforwards before their utilization.  

 

The Company’s deferred tax accounts are comprised of the following as of:

 

    June 30,
2026		     June 30,
2025		  
Deferred tax assets            
Net operating loss   $ 14,312,592     $ 1,721,161  
Capitalized R&D expense     835,625       516,994  
Accrued warranty expense     92,911       70,385  
Lease liabilities     8,085,755       236,020  
Allowance for credit losses     584,498       195,696  
Stock-based compensation expenses     -       166,847  
Depreciation of property and equipment     3,863       -  
Less:  valuation allowance     (15,892,452 )     (2,678,143 )
Total deferred tax assets     8,022,792       228,960  
                 
Deferred tax liabilities:                
Depreciation of property and equipment   $ -     $ (1,066 )
Right of use assets     (8,022,792 )     (227,894 )
Total deferred tax liability     (8,022,792 )     (228,960 )
Total deferred tax accounts, net   $ -     $ -  

 

The following is a supplemental schedule of cash paid for income taxes:

 

    Year Ended June 30,  
    2026      2025  
Cash paid during the period for income taxes, net of refunds:            
Federal   $ —     $ —  
State                
Arizona     —       50  
California     6,400       800  
New Jersey     4,000       —  
Texas     28,929       —  
Verginia     3,000       —  
Total cash paid during the period for income taxes   $ 42,329     $ 850  

 

Uncertain tax positions

 

The Company evaluates each uncertain tax position (including the potential application of interest and penalties) based on the marketing performance and measures the unrecognized benefits associated with the tax positions. As of June 30, 2026 and 2025, the Company did not have any significant unrecognized uncertain tax positions.