Income Taxes

6 Months Ended

Dec. 31, 2023

Income Taxes [Abstract]

INCOME TAXES

Note 16. INCOME TAXES  

The Company’s income tax expenses for three and six months ended December 31, 2023 and 2022 are as follows:

	For the three months Ended December 31				For the six months Ended December 31
	2023		2022		2023		2022
Current
U.S.	$	-	$	-	$	-	$	103,426
PRC		-		-		-		-
Total income tax expenses		-		-		-		103,426

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

	December 31, 2023			June 30, 2023
Allowance for doubtful accounts
U.S.	$	1,241,000		$	1,241,000
PRC		1,689,000			1,655,000
Net operating loss
U.S.		9,471,000			8,775,000
PRC		1,475,000			1,425,000
Total deferred tax assets		13,876,000			13,096,000
Valuation allowance		(13,876,000	)		(13,096,000	)
Deferred tax assets, net - long-term	$	-		$	-

The Company’s operations in the U.S. incurred cumulative U.S. federal net operating losses (“NOL”) of approximately $41.7 million as of June 30, 2023, which may reduce future federal taxable income. During the three and six months ended December 31, 2023, approximately $1.2 million and $3.3 million of NOL was generated and the tax benefit derived from such NOL was approximately $252,000 and $693,000. As of December 31, 2023, the Company’s cumulative NOL amounted to approximately $45.0 million, which may reduce future federal taxable income.

The Company’s operations in China incurred a cumulative NOL of approximately $1.7 million as of June 30, 2023 which was mainly from net losses. During the three and six months ended December 31, 2023, additional NOL of approximately $0.1 million and $0.2 million was generated. As of December 31, 2023, the Company’s cumulative NO,L which will expire by 2026, amounted to approximately $1.9 million, which may reduce future taxable income.

The Company periodically evaluates the likelihood of the realization of deferred tax assets and reduces the carrying amount of the deferred tax assets by a valuation allowance to the extent it believes a portion will not be realized. Management considers new evidence, both positive and negative, that could affect the Company’s future realization of deferred tax assets including its recent cumulative earnings experience, expectation of future income, the carry forward periods available for tax reporting purposes and other relevant factors. The Company determined that it is more likely than not its deferred tax assets could not be realized due to uncertainty on future earnings as a result of the Company’s reorganization and venture into new businesses. The Company provided a 100% allowance for its deferred tax assets as of December 31, 2023. The net increase in valuation for the three and six months ended December 31, 2023 amounted to approximately $0.3 million and $4.06 million, based on management’s reassessment of the amount of the Company’s deferred tax assets that are more likely than not to be realized.

The Company’s taxes payable consists of the following:

	December 31,		June 30,
	2023		2023
VAT tax payable	$	1,052,455	$	1,016,529
Corporate income tax payable		2,306,496		2,261,131
Others		57,944		57,298
Total	$	3,416,895	$	3,334,958