INCOME TAXES – DEFERRED TAX ASSET

6 Months Ended

Dec. 31, 2025

11. INCOME TAXES – DEFERRED TAX ASSET

Income Tax

For the six months ended December 31, 2025, and the fiscal year ended June 30, 2025, the Company recorded no current or deferred income tax expense.

As of December 31, 2025, the Company had net operating loss (“NOL”) carryforwards of approximately $14,368,692, which are available to offset future taxable income, subject to applicable limitations under the Internal Revenue Code, including the change of ownership limitations of IRC Section 382. The related gross deferred tax asset is approximately $3,017,425, calculated using a U.S. federal tax rate of 21%.

In accordance with ASC 740, Accounting for Income Taxes, deferred tax assets are recognized only to the extent that realization of such assets is more likely than not. In evaluating the realizability of its deferred tax assets, the Company considered both positive and negative evidence, including cumulative historical losses and the absence of objectively verifiable sources of future taxable income as well as the early stage nature of operations and variability of projected future profitability. Based on this evaluation, management concluded that it is not more likely than not that the deferred tax assets will be realized at this time.

Accordingly, the Company recorded a full valuation allowance against its deferred tax assets, resulting in no net deferred tax asset recognized in the consolidated financial statements as of December 31, 2025.

The Company will continue to assess the realizability of its deferred tax assets at each reporting date and will adjust the valuation allowance in future periods if evidence becomes available that indicates it is more likely than not that some portion of the deferred tax assets will be realized.

Valuation Allowance Roll forward

Component	December 31, 2025
Net operating loss carryforwards (NOLs)	$	14,368,692

Gross deferred tax asset @ 21%	$	3,017,425
Less: Valuation allowance	$	(3,017,425	)
Net deferred tax asset recognized	$	0

- Definition

The entire disclosure for income tax.

+ References

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+ Details

Awaysis Capital, Inc. 10-Q