22.  INCOME TAXES

Income before provision for income taxes consists of the following:

The components of the provision for income taxes are as follows:

Beginning in the fiscal year ended June 30, 2026, we adopted ASU 2023-09 on a prospective basis. The reconciliation of the U.S. federal statutory income tax rate to our effective income tax rate pursuant to the disclosure requirements of ASU 2023-09 for the fiscal year ended June 30, 2026 was as follows:

The reconciliation of the U.S. federal statutory income tax rate to our effective income tax rate was as follows:

Cash paid for income taxes, net of refunds received, by jurisdiction pursuant to the disclosure requirements of ASU 2023-09 for the year ended June 30, 2026 was as follows

The provision for income taxes has been determined based upon the tax laws and rates in the countries in which we operate. The Company is subject to income taxes in the U.S. and numerous foreign jurisdictions. Significant judgment is required in determining the provision for income taxes and income tax assets and liabilities, including evaluating uncertainties in the application of accounting principles and complex tax laws.

Due to the enactment of Tax Cuts and Jobs Act, the Company is subject to a tax on global intangible low-taxed income (“GILTI”). GILTI is a tax on foreign income in excess of a deemed return on tangible assets of foreign corporations. Companies subject to GILTI have the option to account for the GILTI tax as a period cost if and when incurred, or to recognize deferred taxes for temporary differences including outside basis differences expected to reverse as GILTI. The Company has elected to account for GILTI as a period cost, and therefore has included GILTI expense in its effective tax rate calculation for the year ended June 30, 2026.

The Company accrues penalties and interest related to unrecognized tax benefits when necessary as a component of penalties and interest expenses, respectively. The Company had no unrecognized tax benefits or related accrued penalties or interest expenses at June 30, 2026.

Temporary differences that give rise to a significant portion of deferred tax assets and deferred tax liabilities are as follows:

The valuation allowance decreased by $180 in Fiscal 2026 and increased by $62 in Fiscal 2025. The decrease was primarily attributable to improved operating results and management's expectation of future taxable income, which resulted in a change in the assessment of the realizability of certain deferred tax assets and a corresponding reduction in the related valuation allowance.

At June 30, 2026, the Company had $65 federal net operating loss carry-forward and had state net operating loss carry-forward of $2,529, which expire through 2039. These carryovers may be subject to limitations under I.R.C. Section 382. In assessing the ability to realize the deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible. Management considers the scheduled reversal of deferred tax liabilities, projected future taxable income, and tax planning strategies in making this assessment. Based on these criteria, management believes it is more likely than not that some portion of the Company's deferred tax assets in certain U.S. and foreign jurisdictions will not be realized. Accordingly, a valuation allowance has been maintained against deferred tax assets recorded in the US and various foreign jurisdictions.

Generally, U.S. federal, state, and foreign taxing authorities may examine the Company’s tax returns for three years, four years, and five years, respectively, from the date an income tax return is filed. However, the taxing authorities may continue to adjust the Company’s net operating loss carry-forwards until the statute of limitations closes on the tax years in which the net operating losses are utilized. Foreign tax authorities are currently conducting audits of our subsidiaries in Malaysia and China.