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INCOME TAXES
 12 Months Ended
Jun. 30, 2026
Income Tax Disclosure [Abstract]  
INCOME TAXES

NOTE 8 — INCOME TAXES

 

The Company accounts for income taxes in accordance with FASB ASC Topic 740, Accounting for Income Taxes; which requires the Company to provide a net deferred tax asset or liability equal to the expected future tax benefit or expense of temporary reporting differences between book and tax accounting and any available operating loss or tax credit carryforwards. The amount of and ultimate realization of the benefits from the deferred tax assets for income tax purposes is dependent, in part, upon the tax laws in effect, the Company’s future earnings, and other future events, the effects of which cannot be determined. 

 

As of June 30, 2026 and 2025, the Company had net operating loss carryforwards of approximately $546,391,356 and $541,603,425, respectively, giving rise to deferred tax assets of $77,665,260 and $76,296,814, respectively. The net operating loss carryforwards generated prior to January 1, 2018 expire over various dates from 2031 to 2038. All subsequent net operating loss carryforwards are indefinite. 

 

The Company files Danish and U.S. income tax returns and these returns are generally no longer subject to tax examinations for years prior to 2022 for the Danish tax returns and 2023 for the U.S. tax returns.

 

The temporary differences, tax credits and carry forwards gave rise to the following deferred tax assets (liabilities) at June 30, 2026 and 2025:

 

 

               
    June 30
    2026   2025
Depreciation   $ (40,975 )   $ (24,619 )
Excess of tax over book depreciation of patents     —       —  
Stock/options compensation     288,638       463,099  
Depreciation and amortization     —       —  
Net operating loss carryforwards     77,665,260       76,296,814  
Impairment expense     —       —  
Contingent consideration fair value     —       —
Amortization of Intangibles     1,706,788       1,961,747  
Section 174 R&E Capitalization     2,493,776       3,292,075  
ROU Assets and Lease Liabilities     99,152       14,227  
Section 481(a) Adjustment     (20,447 )     (40,895 )
R&D Tax Credits     1,718,415       1,718,415  
Other     418       —  
Change in tax rate     —       —
Valuation Allowance   $ (83,911,025 )   $ (83,680,863 )

 

In accordance with prevailing accounting guidance, the Company is required to recognize and disclose any income tax uncertainties. The guidance provides a two-step approach to recognizing and measuring tax benefits and liabilities when realization of the tax position is uncertain. The first step is to determine whether the tax position meets the more-likely-than-not condition for recognition, and the second step is to determine the amount to be recognized based on the cumulative probability that exceeds 50%. The amount of and ultimate realization of the benefits from the deferred tax assets for income tax purposes is dependent, in part, upon the tax laws in effect, the Company’s future earnings, and other future events, the effects of which can be difficult to determine and can only be estimated. Management estimates that it is more likely than not that the Company will not generate adequate net profits to use the deferred tax assets; and consequently, a valuation allowance was recorded for all deferred tax assets.

 

Income (loss) from continuing operations before income taxes was as follows:

 

          
   Years ended June 30,
   2026  2025
       
Domestic  $(1,898,710)  $(4,531,153)
Foreign  $(1,663,769)  $(173,476,336)
Total income (loss) before income taxes  $(3,562,479)  $(178,007,489)

 

A reconciliation of income tax expense (benefit) at the U.S. federal statutory rate to income tax expense (benefit) at the Company’s effective rate is as follows:

 

                    
           Years ended June 30,
   2026 Amount  2026 Rate  2025 Amount  2025 Rate
Federal income tax benefit at statutory rate  $(748,120)   21.000%  $(37,381,573)   21.000%
State and local income taxes, net of federal benefit   1,106    (0.031)   1,164    (0.001)
Foreign tax effects — Canada   173,281    (4.864)   28,855    (0.016)
Foreign tax effects — Denmark   75,267    (2.113)   138,724    (0.078)
Foreign tax effects — United Kingdom   100,843    (2.831)   36,262,452    (20.371)
Nondeductible meals and entertainment   494    (0.014)   909    (0.001)
Stock warrants expense   —    —    259,463    (0.146)
Nontaxable contingent consideration adjustment   (123,900)   3.478   (2,307,900)   1.297 
Change in valuation allowance   522,435    (14.665)   2,999,380    (1.685)
Income tax expense  $1,406    (0.039)%  $1,474    (0.001)%

 

Foreign tax effects reflect the tax effect of foreign pretax losses for which no foreign income tax benefit was recognized. The significant foreign jurisdictions were Canada, Denmark and the United Kingdom. State and local income taxes were primarily attributable to state-level filing obligations in the United States.

The components of income tax expense (benefit) from continuing operations for the years ended June 30, 2026 and 2025 consisted of the following: 

 

Schedule of components of income tax expense (benefit) from continuing operations                
    Years ended June 30,
    2026   2025
Current Income Tax Expense                
Federal income tax (benefit)     —       —  
State income tax (benefit)     1,406       1,474  
Foreign income tax (benefit)   $ —     $ —  
Total Current Tax Expense (Benefit)   $ 1,406     $ 1,474  
                 
Deferred Income Tax Expense Federal income tax (benefit)     (161,592 )     101,609,457  
State income tax (benefit)     (68,572 )     (14,302,006  
Foreign income tax (benefit)     —       —  
Change in valuation allowance     230,164       (87,307,451 )
Total Deferred Tax Expense     —       —  
                 
Total Tax Expense     1,406       1,474  

 

Income taxes paid, net of refunds received, were as follows:

          
   Years ended June 30,
   2026  2025
Current Income Tax Expense          
U.S. federal   —    — 
State and local   1,406    1,474 
Foreign  $—   $— 
Total income taxes paid, net of refunds received  $1,406   $1,474 

 

Deferred income tax expense (benefit) results primarily from the reversal of temporary timing differences between tax and financial statement income.