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

Note 10 - Income Taxes

 

For the year ended June 30, 2026 the Company recorded no provision for income taxes due to the Company’s taxable net loss position. For the year ended June 30, 2025 the Company recorded no provision for income taxes due to the application of the Company’s available Federal and State net operating loss (NOL) carryforwards that are available to reduce taxable income.

 

As of June 30, 2026 and 2025, a reconciliation of the Company’s effective income tax rate to the U.S. statutory and its deferred tax assets are as follows:

                          
   Year ended Jun 30,  
   2026    2025  
Tax benefit (expense) at the federal statutory rate  $294,000      21%    $24,000      21%  
State income taxes, net of Federal benefit   98,000      7%     8,000      7%  
Prior year net operating loss true up   –      –%     9,000      8%  
Valuation allowance   (392,000)     (28% )   (41,000)     (36% )
Income tax provision  $–      –%    $–      –%  

 

Deferred income taxes result from temporary differences in the recognition of income and expenses for the financial reporting purposes and for tax purposes. The components of deferred tax assets are presented below.

 

At June 30, 2026, the Company had available Federal NOL carryforwards of approximately $12.0 million that are available to reduce future taxable income. The Federal NOL carry forward of approximately $8.5 million expires through 2037, the remaining NOL of $3.5 million has no expiry date. The NOLs are subject to statutory limitations under Internal Revenue Code Section 382 regarding substantial changes in ownership of companies with loss carry forwards.

 

At June 30, 2026 and 2025, significant component of the Company’s deferred tax assets and liabilities are as follows:

        
   June 30,   June 30, 
   2026   2025 
Net Operating loss carryforwards  $3,163,000   $2,956,000 
Stock compensation expense   1,203,000    1,018,000 
Total net deferred tax assets   4,366,000    3,974,000 
Less valuation allowance   (4,366,000)   (3,974,000)
Net deferred tax assets  $–   $– 

 

The provisions of ASC Topic 740, Accounting for Income Taxes, require an assessment of both positive and negative evidence when determining whether it is more likely than not that deferred tax assets are recoverable. For the years ended June 30, 2026 and 2025, based on all available objective evidence, including the existence of cumulative losses, the Company determined that it was more likely than not that the net deferred tax assets were not fully realizable. Accordingly, the Company established a full valuation allowance against its net deferred tax assets. The Company intends to maintain a full valuation allowance on net deferred tax assets until sufficient positive evidence exists to support reversal of the valuation allowance.

 

Accounting rules prescribe a recognition threshold that a tax position is required to meet before being recognized in the financial statements and provides guidance on recognition, measurement, classification, interest and penalties, accounting in interim periods, disclosure and transition issues. The Company classifies interest and penalties as a component of interest and other expenses. To date, there have been no interest or penalties assessed or paid.

  

The Company measures and records uncertain tax positions by establishing a threshold for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. Only tax positions meeting the more-likely-than-not recognition threshold at the effective date may be recognized or continue to be recognized.

 

Our income tax filings are periodically examined by various U.S. federal and state jurisdictions. There are no open examinations by federal and state income tax jurisdictions. The Company’s U.S. federal income tax return remains open to examination for the years ended June 30, 2023 through June 30, 2026.