Note 16 – Income Taxes

Loss from continuing operations before income taxes was $84,651,162 and $7,936,184 for the years ended June 30, 2026 and 2025, respectively, all of which was domestic. The Company recorded no current or deferred income tax expense or benefit for the years ended June 30, 2026 and 2025 and paid no income taxes in either year. The components of the income tax benefit and the related valuation allowance for the years ended June 30, 2026 and 2025 were approximately as follows:

 Schedule of Components of the Income Tax Benefit

Deferred Tax Assets and Liabilities

The components of deferred tax assets and liabilities at June 30, 2026 and 2025 were approximately as follows:

 Schedule of Deferred Tax Assets and Liabilities

A full valuation allowance was recorded at both dates because the Company has a history of cumulative losses and there is not sufficient positive evidence that the deferred tax assets will be realized. The valuation allowance increased by $20,088,000 during the year ended June 30, 2026, consisting of $13,864,000 related to federal deferred tax assets and $6,224,000 related to state deferred tax assets.

Rate Reconciliation

A reconciliation of the income tax benefit computed at the U.S. federal statutory rate of 21% to the income tax provision (benefit), in amounts and as a percentage of loss from continuing operations before income taxes, for the years ended June 30, 2026 and 2025 is as follows:

 Schedule of Reconciliation of Provision for Income Tax

Net Operating Loss Carryforwards

The Company has not filed its federal and state income tax returns for the fiscal years ended June 30, 2016 through June 30, 2025. Net operating losses for these years will not be available to reduce future taxable income until the returns are filed. The Company expects to file delinquent tax returns in the upcoming reporting periods and updated values will be disclosed in these following reporting periods. Assuming these returns are filed, the Company has net operating loss carryforwards for federal income tax purposes of approximately $48,144,000 and $29,665,000 as of June 30, 2026 and 2025, respectively. Of the June 30, 2026 amount, approximately $2.6 million expires between 2031 and 2037 and the remaining approximately $45.5 million arose in tax years beginning after December 31, 2017, may be carried forward indefinitely and is limited to 80% of taxable income in the year used. State net operating loss carryforwards of approximately $48,144,000 and $29,665,000, respectively, expire between 2031 and 2046. The Company has not completed an analysis under Section 382 of the Internal Revenue Code; an ownership change, including one resulting from the Company’s equity issuances, may limit the annual utilization of the carryforwards.

Valuation Allowance

For financial reporting purposes, the entire amount of net deferred tax assets has been offset by a valuation allowance, due to uncertainty regarding realization. The net change in the valuation allowance for the years ended June 30, 2026 and 2025 was an increase of $20,088,000 and $1,243,000, respectively.

Uncertain Tax Positions

The Company follows ASC 740-10-25, which requires a company to evaluate whether a tax position is “more likely than not” to be sustained upon examination. Management has reviewed all filing positions in jurisdictions where the Company is subject to income tax. The Company believes its positions would be sustained upon audit and therefore has not recorded any reserves for uncertain tax positions.

Section 382 Limitations

The Company may not be able to utilize the net operating loss carryforwards for its US income taxes in future periods should it experience a change in ownership as defined in Section 382 of the Internal Revenue Code (“IRC”). Under section 382, should the Company experience a more than 50% change in its ownership over a 3 year period, the Company would be limited based on a formula as defined in the IRC to the amount per year it could utilize in that year of the net operating loss carryforwards.

As of June 30, 2026 and 2025, the Company had not performed an analysis to determine if the Company was subject to the provisions of Section 382. The Company is subject to U.S. federal income tax including state and local jurisdictions. Currently, no federal or state income tax returns are under examination by the respective taxing jurisdictions.

Tax Returns and Examinations

The Company is subject to U.S. federal and various state income taxes. As of June 30, 2025, no federal or state tax returns are under examination. The Company has not yet filed its federal and state income tax returns for the fiscal years ended June 30, 2016 through 2026. However, because the Company has incurred cumulative losses, management does not expect a material liability. All unfiled and filed years remain open to examination.

Interest and Penalties

The Company’s accounting policy is to record interest and penalties related to uncertain tax positions as income tax expense. No such amounts have been accrued as of June 30, 2026 and 2025.