v3.26.1
Income Taxes
 12 Months Ended
Jun. 30, 2026
Income Tax Disclosure [Abstract]  
Income Taxes INCOME TAXES
All income is from continuing operations and is from a single country, the United States of America. Income tax expense (benefit) consists of the following for the periods presented:

Year Ended June 30,
(in thousands)202620252024
Current income taxes:
Federal$273 $(1,527)$2,523 
State1,949 952 1,286 
Total2,222 (575)3,809 
Deferred income taxes:
Federal5,160 1,192 (2,805)
State6,716 314 4,055 
Total11,876 1,506 1,250 
Income tax expense$14,098 $931 $5,059 
Total Federal tax expense (benefit)$5,433 $(335)$(282)
Total State tax expense$8,665 $1,266 $5,341 

In July 2025, the U.S. signed into law the One Big Beautiful Bill Act ("OBBBA"). The OBBBA imposed various changes to U.S. federal income tax regulations, including restoring 100% bonus depreciation, removing the requirement to capitalize and amortize domestic research and development expenditures, and increasing interest deductibility. The effective provisions of the OBBBA were reflected in the Company's financial results for the year ended June 30, 2026, and there was no material impact to income tax expense.
The following reconciles the statutory federal income tax rate to the effective income tax rate for the periods presented:

Year Ended June 30,
202620252024
AmountPercentAmountPercentAmountPercent
Federal statutory income tax rate$16,02021.0%$10,18721.0%$(6,104)21.0%
State income taxes. net of federal effect8,25610.8%1,0652.2%5,422(18.7)%
Domestic federal
Tax credits
Credit for research activities(260)(0.3)%(1,596)(3.3)%——
Work opportunity credit(239)(0.3)%(1,601)(3.3)%(269)0.9%
Changes in valuation allowance940.1%3,3656.9%5,204(17.9)%
Nontaxable or nondeductible items
Executive officer compensation8361.1%1,7723.7%122(0.4)%
Equity compensation6410.8%(1,776)(3.7)%198(0.7)%
Transaction costs——%8591.8%——
Warrant mark-to-market(11,719)(15.3)%(12,500)(25.8)%——
Other3840.5%7441.6%486(1.6)%
Changes in unrecognized tax benefits850.1%4120.8%——
Income tax expense and effective tax rate$14,09818.5%$9311.9%$5,059(17.4)%

In fiscal years 2026 and 2025, Kansas comprised the majority of state income taxes. In fiscal year 2024, California and Kansas comprised the majority of state income taxes.
Significant components of the deferred tax assets and liabilities were as follows as of June 30:
(in thousands)20262025
Deferred tax assets:
  Accruals and other$13,523 $11,165 
Lease liability7,124 8,187 
  Interest expense limitation80,000 75,708 
  Net operating losses147,178 150,643 
  Credit carryforward4,993 5,068 
Basis difference in fixed and amortizable assets11,708 13,289 
Total deferred tax assets264,526 264,060 
Less: Valuation allowance
(30,370)(28,083)
Deferred tax assets, net of valuation allowance
$234,156 $235,977 
Deferred tax liabilities:
  Commissions receivable$(275,816)$(266,600)
Lease right-of-use asset(5,627)(6,617)
Other
(2,166)(632)
  Total deferred tax liabilities
(283,609)(273,849)
Net long-term deferred tax liabilities$(49,453)$(37,872)

The Company has established a valuation allowance on certain deferred tax assets associated with federal and state specific net operating losses (“NOL”) and credits that are not more likely than not to be realized. For the year ended June 30, 2026, the Company increased the valuation allowance by $2.3 million. As the Company is currently in a three-year cumulative loss position, it cannot consider the projections of future income as part of the valuation allowance analysis and have considered the other sources of future taxable income described under ASC 740 when evaluating the need for a valuation allowance. Aside from certain deferred tax assets related to federal and state credits noted above where a valuation allowance has been established, the Company continues to recognize its deferred tax assets as of June 30, 2026 as it believes it is more likely than not that the net deferred tax assets will be realized. The Company will continue to evaluate the realizability of its deferred tax assets.

As of June 30, 2026, the Company has NOL carryforwards for federal and state income tax purposes of $526.5 million and $710.6 million, respectively. All remaining federal NOLs may be carried forward indefinitely. The state NOL carryforwards will expire during tax years 2026 through 2045. As of June 30, 2026, the Company has federal tax credit carryforwards of $1.0 million and state income tax credit carryforwards of $4.1 million. The federal tax credits will begin to expire during tax year 2044, the state tax credits will expire during tax years 2025 through 2038.

The Company is subject to income taxes in the US federal and various state jurisdictions. Tax regulations within each jurisdiction are subject to interpretation of the related tax laws and regulations and require the application of significant judgment. The federal tax returns from tax years 2022 through 2024 and state tax returns from tax years 2021 through 2024 remain open to examination by significant domestic taxing jurisdictions to which the Company is subject. The statute of limitations for federal and state tax returns may be extended upon utilization of NOL carryforwards.
Income Taxes Paid

The following tables present income taxes paid (net of refunds) for the periods presented:
(in thousands)202620252024
Federal$(500)$1,850 $217 
State308 1,306 377 
Total income taxes paid (net of refunds)$(192)$3,156 $594 

Income taxes paid (net of refunds) exceeded 5% of total income taxes paid in the following jurisdictions:
(in thousands)202620252024
State
Alabama65 *— 
Georgia— 227 — 
Illinois— 201 *
Louisiana88 *55 
Massachusetts12 **
North Carolina34 — — 
Oklahoma20 *— 
Pennsylvania46 382 237 
Tennessee21 — — 

*The amount of income taxes paid during the year does not meet the 5% disaggregation threshold.

Uncertain Tax Positions

The benefits of uncertain tax positions are recorded in the Company's consolidated financial statements only after determining a more-likely-than-not probability that the uncertain tax positions will withstand challenge, if any, from taxing authorities.

As of June 30, 2026, the Company had gross unrecognized tax benefits of $0.5 million, consisting of $0.5 million related to prior year tax positions. The gross unrecognized tax benefits as of June 30, 2025 were $0.4 million. If recognized, these benefits would reduce the Company’s effective tax rate in future periods. The Company had no unrecognized tax benefits as of June 30, 2024.

The Company recognizes interest and penalties related to unrecognized tax benefits as a component of income tax expense. As of June 30, 2026, the Company has accrued for the payment of projected interest and penalties.
A reconciliation of the beginning and ending amounts of unrecognized tax benefits for the periods presented is as follows:
Year Ended June 30,
(in thousands)
20262025
Balance at beginning of year$399 $— 
Additions for UTP’s of prior years
65 350 
Decreases for UTP’s of prior years
— — 
Additions for UTP’s of current year
— 49 
Decreases related to audit settlements
— — 
Balance at end of year$464 $399