Income Taxes

9 Months Ended

Mar. 31, 2025

Income Taxes [Abstract]

INCOME TAXES

Note 15. INCOME TAXES

The Company’s income tax expenses for three and nine months ended March 31, 2025 and 2024 are as follows:

	For the three months Ended March 31				For the nine months Ended March 31
	2025		2024		2025		2024
Current
U.S.	$	-	$	-	$	-	$	-
PRC		-		-		-		-
Total income tax expenses	$	-		-	$	-	$	-

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

	March 31, 2025			June 30, 2024
Allowance for credit losses
U.S.	$	332,000		$	1,212,000
PRC		1,650,000			1,649,000
Net operating loss
U.S.		1,593,000			9,920,000
PRC		10,161,000			1,515,000
Total deferred tax assets		13,736,000			14,296,000
Valuation allowance		(13,736,000	)		(14,296,000	)
Deferred tax assets, net - long-term	$	-		$	-

The Company’s operations in the U.S. incurred cumulative U.S. federal net operation losses (“NOL”) of approximately $47,200,000 as of June 30, 2024, which may reduce future federal taxable income. During the three and nine months ended March 31, 2025, approximately $5,400,000 and $6,600,000 of NOL was generated and the tax benefit derived from such NOL was approximately $1,134,000 and $1,386,000. As of March 31, 2025, the Company’s cumulative NOL amounted to approximately $53,800,000, which may reduce future federal taxable income.

The Company’s operations in China incurred a cumulative NOL of approximately $2,062,000 as of June 30, 2024 which was mainly from net loss. During the three and nine months ended March 31, 2024, additional NOL of approximately $536,000 and $672,000 was generated. As of March 31, 2025, the Company’s cumulative NOL amounted to approximately $2,734,000 which may reduce future taxable income which will expire by 2026.

The Company periodically evaluates the likelihood of the realization of deferred tax assets (“DTA”) 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 DTA as of March 31, 2025. The net increase in valuation for the three months ended March 31, 2025 amounted to approximately $390,000, and the net decrease in valuation for the nine months ended March 31, 2025 amounted to approximately $560,000, 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:

	March 31,		June 30,
	2025		2024
VAT tax payable	$	1,031,880	$	1,030,363
Corporate income tax payable		2,119,406		2,121,724
Others		56,288		54,806
Total	$	3,207,574	$	3,206,893