XML 23 R12.htm IDEA: XBRL DOCUMENT
v3.22.2.2

INCOME TAXES | 12 Months Ended
--- | ---
Jun. 30, 2022
Income Tax Disclosure [Abstract] |
INCOME TAXES | NOTE 6 - INCOME TAXES Income tax (benefit) provision for the years ended June 30, 2022, and 2021 consists of the following:
Schedule of Income tax provision from continuing operations |  |  |  |  |  |  |  |
|  | Year Ended June 30, |
|  | 2022 |  |  | 2021 |
Current income tax (benefit) expense: |  |  |  |  |  |  |  |
Federal |  | $ | (127,998 | ) |  | $ | 4,217,883 |
State |  |  | 975 |  |  |  | (525 | )
Foreign |  |  | 49,843 |  |  |  | 256,636 |
Total Current income tax expense (benefit) |  |  | (77,180 | ) |  |  | 4,473,994 |
Deferred income tax (benefit) expense: |  |  |  |  |  |  |  |
Federal |  |  | (876,513 | ) |  |  | 142,242 |
State |  |  | (83,375 | ) |  |  | 155,410 |
Foreign |  |  | – |  |  |  | 267,649 |
Total deferred income tax expense (benefit) |  |  | (959,888 | ) |  |  | 565,301 |
(Benefit) provision for income taxes |  | $ | (1,037,068 | ) |  | $ | 5,039,295 |
The (benefit) provision for income taxes reconciles to the amount computed by applying the effective federal statutory income tax rate to the income before provision for income taxes as follows:
Schedule of effective income tax rate |  |  |  |  |  |  |  |
|  | Year Ended June 30, |
|  | 2022 |  |  | 2021 |
Federal income tax, at statutory rate of 21% applied to (loss) earnings before income taxes and extraordinary items |  | $ | (982,130 | ) |  | $ | 4,929,611 |
State tax, net of federal tax benefit |  |  | (82,840 | ) |  |  | 125,237 |
Nondeductible expenses |  |  | 870 |  |  |  | 22,688 |
R&D credits |  |  | (46,643 | ) |  |  | (56,950 | )
Global intangible low-taxed income |  |  | 152,930 |  |  |  | 95,419 |
Foreign rate difference |  |  | (16,279 | ) |  |  | 39,146 |
Others |  |  | (62,976 | ) |  |  | (13,523 | )
Forgiveness of payroll protection plan loan |  |  | – |  |  |  | (102,333 | )
Change in valuation allowance |  |  | – |  |  |  | – |
(Benefit) provision for income taxes |  | $ | (1,037,068 | ) |  | $ | 5,039,295 |
Deferred income taxes reflect the net effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. Significant components of our deferred tax assets are as follows:
Schedule of deferred tax assets |  |  |  |  |  |  |  |
|  | June 30, 2022 |  |  | June 30, 2021 |
Deferred tax asset: |  |  |  |  |  |  |  |
Net operating losses |  | $ | 737,258 |  |  | $ | 170,649 |
State tax |  |  | – |  |  |  | – |
Lease accounting, net |  |  | 4,299 |  |  |  | 7,035 |
Intangibles |  |  | 156,334 |  |  |  | 84,831 |
Tax credits |  |  | 202,958 |  |  |  | 133,451 |
Inventory reserve |  |  | 155,133 |  |  |  | 30,591 |
Other, net |  |  | 145,679 |  |  |  | 12,693 |
Total deferred tax assets |  |  | 1,401,661 |  |  |  | 439,250 |
Deferred tax liabilities: |  |  |  |  |  |  |  |
Deferred state taxes |  |  | (46,565 | ) |  |  | (29,056 | )
State tax |  |  | (205 | ) |  |  | (110 | )
Property and equipment, net |  |  | (7,865 | ) |  |  | (22,536 | )
Total deferred tax liabilities |  |  | (54,225 | ) |  |  | (51,702 | )
Less valuation allowance |  |  | – |  |  |  | – |
Net deferred tax asset |  | $ | 1,347,436 |  |  | $ | 387,548 |
Deferred income tax assets and liabilities are recorded for differences between the financial statement and tax basis of the assets and liabilities that will result in taxable or deductible amounts in the future based on enacted laws and rates applicable to the periods in which the differences are expected to affect taxable income. Valuation allowances are established when necessary to reduce deferred tax assets to the amount expected to be realized. We have evaluated the available evidence supporting the realization of our gross deferred tax assets, including the amount and timing of forecasted future taxable income. Management determined it is more likely than not that the federal deferred tax assets will be fully realized, and no valuation allowance is necessary as of June 30, 2022 or 2021. As of June 30, 2022, we have federal and state net operating loss carryforwards of approximately $3.3 million and $40,000, respectively. Under the Tax Cuts and Jobs Act, which was signed into law on December 22, 2017, the federal net operating loss of approximately $2.5 million, which was recognized on or after January 1, 2018, will carry forward indefinitely. The federal net operating loss of approximately $0.8 million, which was recognized on or before December 31, 2017, will expire through 2035. The state net operating loss of approximately $40,000 will begin to expire through 2042. The utilization of net operating loss carryforwards may be subject to limitations under provisions of the Internal Revenue Code Section 382 and similar state provisions. We apply the provisions of ASC 740 related to accounting for uncertain tax positions, which prescribes a recognition threshold and measurement process for recording in the financial statements uncertain tax positions taken or expected to be taken in a tax return. Under this provision, the impact of an uncertain income tax position on the income tax return must be recognized at the largest amount that is more-likely-than-not to be sustained upon audit by the relevant taxing authority. Tax benefits of an uncertain tax position will not be recognized if it has less than a 50% likelihood of being sustained based on technical merits. A reconciliation of the beginning and ending balance of unrecognized tax benefits, which have been considered in the Company's computation of its deferred tax assets, is as follows:
Schedule of unrecognized tax benefits |  |  |  |
Balance as of June 30, 2020 |  | $ | 296,832 |
Gross increase |  |  | 38,427 |
Balance as of June 30, 2021 |  |  | 335,259 |
Gross increase |  |  | 29,789 |
Balance as of June 30, 2022 |  | $ | 365,048 |
We do not anticipate any material change in the total amount of unrecognized tax benefits to occur within the next twelve months. ASC 740 requires us to accrue interest and penalties where there is an underpayment of taxes based on our best estimate of the amount ultimately to be paid. Our policy is to recognize interest accrued related to unrecognized tax benefits and penalties as income tax expense. We have not recorded any interest or penalties as the liability associated with the unrecognized tax benefits is immaterial. We are subject to taxation in the U.S., and various state and foreign jurisdictions.

X
- References No definition available. + Details
Name: | us-gaap_IncomeTaxDisclosureAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration

X
- Definition The entire disclosure for income taxes. Disclosures may include net deferred tax liability or asset recognized in an enterprise's statement of financial position, net change during the year in the total valuation allowance, approximate tax effect of each type of temporary difference and carryforward that gives rise to a significant portion of deferred tax liabilities and deferred tax assets, utilization of a tax carryback, and tax uncertainties information. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 21 -URI https://asc.fasb.org/extlink&oid=121826272&loc=d3e32857-109319 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section S99 -Paragraph 2 -Subparagraph (SAB Topic 11.C) -URI https://asc.fasb.org/extlink&oid=122134291&loc=d3e330215-122817 Reference 3: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 17 -Subparagraph (b) -URI https://asc.fasb.org/extlink&oid=121826272&loc=d3e32809-109319 Reference 4: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SAB TOPIC 6.I.5.Q1) -URI https://asc.fasb.org/extlink&oid=122134291&loc=d3e330036-122817 Reference 5: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 14 -URI https://asc.fasb.org/extlink&oid=121826272&loc=d3e32705-109319 Reference 6: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 270 -Section 50 -Paragraph 1 -URI https://asc.fasb.org/extlink&oid=6424409&loc=d3e44925-109338 Reference 7: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -URI https://asc.fasb.org/topic&trid=2144680 Reference 8: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 30 -Section 50 -Paragraph 2 -Subparagraph (a) -URI https://asc.fasb.org/extlink&oid=6424122&loc=d3e41874-109331 Reference 9: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 235 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SX 210.4-08(h)(2)) -URI https://asc.fasb.org/extlink&oid=120395691&loc=d3e23780-122690 + Details
Name: | us-gaap_IncomeTaxDisclosureTextBlock
Namespace Prefix: | us-gaap_
Data Type: | dtr-types:textBlockItemType
Balance Type: | na
Period Type: | duration