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INCOME TAXES
 3 Months Ended
Sep. 30, 2025
INCOME TAXES [Abstract]  
INCOME TAXES 4.    INCOME TAXES

 

The Company utilizes the liability method of accounting for income taxes. The liability method measures the expected income tax impact of future taxable income and deductions implicit in the condensed consolidated balance sheets. The Company’s income tax expense for the three months ended September 30, 2025 and 2024 consisted of the following:

Three Months Ended September 30,

2025

2024

Federal

$

—

$

—

State

2,760

2,760

Foreign

—

—

Total income tax provision

$

2,760

$

2,760

All income is derived from domestic operations.

For the three months ended September 30, 2025 and 2024, respectively, the effective tax rate was 1.1% and 0.7%, respectively. It is anticipated that the effective rate in future years will continue to be reduced by utilization of a portion or all of the available federal and state net operating loss (NOL) carryforwards that existed as of June 30, 2025.

The effective tax rate for the current quarter differs from the U.S. federal statutory rate of 21% primarily due to:

State income taxes, net of federal benefit

Officer life insurance

Non-deductible meals and entertainment expense

Research and development tax credits

Nondeductible stock options expense

Changes in valuation allowances on deferred tax assets


‎The Company will provide the enhanced annual disclosures required by ASU 2023-09, including the detailed rate reconciliation and jurisdictional income taxes paid, in its Form 10-K for the year ending June 30, 2026.

No material changes in uncertain tax positions or valuation allowances were recorded during the three-month period ended September 30, 2025.