v3.26.1
INCOME TAXES
 12 Months Ended
Jun. 30, 2026
Cash paid during the period for income taxes by jurisdiction, net of refunds:  
INCOME TAXES

8. INCOME TAXES

 

The provision for income taxes consists of the following amounts (in thousands):

         
   Years Ended June 30, 
   2026   2025 
Current:        
Federal  $3,685   $2,114 
State   797    826 
Deferred:          
Federal   (99)   76 
State   (30)   64 
Income tax expense   $4,353   $3,080 

 

The effective income tax rate from income from continuing operations differs from the United States statutory income tax rates for the reasons set forth in the table below (in thousands, except percentages).

                 
   Years Ended June 30, 
   2026   2025 
   Amount   Percent Pretax Income   Amount   Percent Pretax Income 
Income before income taxes   $18,015    100%  $12,058    100%
                     
Computed “expected” income tax expense on income before income taxes   $3,783    21%  $2,532    21%
State tax, net of federal benefit    663    3%   964    8%
Tax incentives    (57)   —    (149)   (1%)
Nontaxable or nondeductible items    44    —    —    — 
Uncertain tax position    (73)   —    (116)   (1%)
Stock based compensation    —    —    (164)   (1%)
Other    (7)   —    13    — 
Income tax expense   $4,353    24%  $3,080    26%

 

Deferred income taxes reflect the net effects of loss and credit carryforwards and temporary differences between the carrying amount of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. Significant components of our deferred tax assets and liabilities for federal and state income taxes are as follows (in thousands):

         
   June 30, 
   2026   2025 
Deferred tax assets:          
Federal and state NOL carryforward   $—   $23 
Research and other credits    —    65 
Reserves    211    170 
Accruals    344    436 
Stock based compensation    1,015    1,096 
Section 174 capitalization    40    756 
Unrealized losses    24    — 
Lease liability    166    353 
Inventory    704    614 
Other    1    12 
Total gross deferred tax assets   $2,505   $3,525 
Less: valuation allowance    —    (90)
Total deferred tax assets    2,505    3,435 
Deferred tax liabilities:          
Property and equipment, principally due to differing depreciation methods   $(716)  $(651)
Right of use asset    (146)   (313)
Deferred state tax    (69)   (61)
Intangible assets    (30)   — 
Unrealized gains    —    (995)
Total gross deferred tax liabilities    (961)   (2,020)
Net deferred tax assets   $1,544   $1,415 

 

Realization of our deferred tax assets is dependent upon future earnings, if any, the timing and amount of which are uncertain. As of June 30, 2026, our deferred tax asset valuation allowance was eliminated as it primarily consisted of state net operating loss carryforwards and research and development credits for states in which we have filed a final return and the carryforward period has lapsed. For the fiscal years ended June 30, 2026 and 2025, we recorded a net decrease to our valuation allowance of $90,000 and $0, respectively, on the basis of management’s reassessment of the amount of our deferred tax assets that are more likely than not to be realized.

 

As of June 30, 2026, we did not have any net operating losses for federal and state income tax purposes for state jurisdictions in which we currently operate. We have no federal or state research and development and alternative minimum tax credit carry forwards at June 30, 2026.

 

As of June 30, 2026, we have accrued $103,000 of unrecognized tax benefits related to federal and state income tax matters that would reduce our income tax expense if recognized. If we are eventually able to recognize our uncertain tax positions, our effective tax rate would be reduced. Any adjustment to our uncertain tax positions would result in a cash outlay.

 

 

Information with respect to our accrual for unrecognized tax benefits is as follows (in thousands):

         
   June 30, 
   2026   2025 
Unrecognized tax benefits:          
Beginning balance   $159   $262 
    Additions based on federal tax positions related to the current year    10    11 
    Additions based on state tax positions related to the current year    8    11 
    Reductions for tax positions of prior years    (24)   (10)
    Reductions due to lapses in statutes of limitation    (50)   (115)
Ending balance   $103   $159 

 

Although it is reasonably possible that certain unrecognized tax benefits may increase or decrease within the next twelve months due to tax examinations, settlement activities, expirations of statute of limitations, or the impact on recognition and measurement considerations related to the results of published tax cases or other similar activities, we do not anticipate any significant changes to unrecognized tax benefits over the next twelve months.

 

We recognize accrued interest and penalties related to unrecognized tax benefits in income tax expense when applicable. As of June 30, 2026, $20,000 of interest applicable to our unrecognized tax benefits has been accrued.

 

We are subject to U.S. federal income tax, as well as income tax of California, Colorado, Florida, and Indiana. We are currently open to audit under the statute of limitations by the Internal Revenue Service for the years ended June 30, 2023, and later.  Additionally, we are currently open to audit under the statute of limitations for California for tax years from June 30, 2022 and later.

 

The One Big Beautiful Bill Act of 2025, or the 2025 Act, enacted on July 4, 2025, makes changes to U.S. corporate income taxes including reinstating the option to claim 100% accelerated depreciation deductions on qualified property, with retroactive application beginning January 20, 2025 and immediate expensing of research and development costs, with retroactive application beginning January 1, 2025. Accordingly, the provisions of the 2025 Act impacting the Company have been reflected in the consolidated financial statements.

 

The following table summarizes income taxes paid for the years ended June 30, 2026 and 2025 (in thousands):

        
   June 30, 
   2026   2025 
Income tax payments (refunds):          
Federal   $3,460   $3,030 
    Colorado    (50)   — 
    California    2    1,427 
    Florida    570    — 
    Indiana    130    — 
Total cash payments   $4,112   $4,457