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INCOME TAXES | 12 Months Ended
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Jun. 30, 2024
INCOME TAXES [Abstract] |
INCOME TAXES | NOTE E - INCOME TAXES: Provision for income taxes from continuing operations consists of the following (in thousands):
|  | Fiscal Year Ended |
|  | June 30, 2024 |  |  | June 25, 2023 |
Current - Federal |  | $ | — |  |  | $ | — |
Current - State |  |  | (33 | ) |  |  | (107 | )
Deferred - Federal |  |  | (530 | ) |  |  | (394 | )
Deferred - State |  |  | (56 | ) |  |  | (36 | )
Provision for income taxes |  | $ | (619 | ) |  | $ | (537 | )
The effective income tax rate varied from the statutory rate for the fiscal years ended June 30, 2024 and June 25, 2023 as reflected below (in thousands):
|  | June 30, 2024 |  |  | June 25, 2023 |
Federal income taxes based on a statutory rate of 21% |  | $ | (649 | ) |  | $ | (452 | )
State income taxes (net of federal benefit) |  |  | (82 | ) |  |  | (119 | )
Permanent adjustments |  |  | 128 |  |  |  | (7 | )
Return to provision |  |  | (16 | ) |  |  | 49 |
Other |  |  | — |  |  |  | (8 | )
Provision for income taxes |  | $ | (619 | ) |  | $ | (537 | )
The tax effects of temporary differences that give rise to the net deferred tax assets consisted of the following (in thousands):
|  | June 30, 2024 |  |  | June 25, 2023 |
Allowance for bad debt |  | $ | 13 |  |  | $ | 13 |
Deferred fees |  |  | 58 |  |  |  | 49 |
Other reserves and accruals |  |  | 475 |  |  |  | 619 |
Operating lease liabilities |  |  | 222 |  |  |  | 330 |
Credit carryforwards |  |  | 156 |  |  |  | 156 |
Net operating loss carryforwards |  |  | 4,057 |  |  |  | 4,521 |
Total deferred tax assets |  | $ | 4,981 |  |  | $ | 5,688 |
Right-of-use asset |  |  | (190 | ) |  |  | (285 | )
Other deferred tax liabilities |  |  | (35 | ) |  |  | (61 | )
Total deferred tax liabilities |  | $ | (225 | ) |  | $ | (346 | )
Net deferred tax asset |  | $ | 4,756 |  |  | $ | 5,342 |
The Company utilized net operating losses to offset federal taxes. At the end of tax year June 30, 2024, the Company had federal net operating loss carryforwards totaling $18.9 million that are available to reduce future taxable income and will begin to expire in 2035.Under the Tax Cuts and Jobs Act, approximately $1.3 million of the loss carryforwards are limited to 80% and do not expire. Tax years that remain subject to examination by the IRS are the years ended June 28, 2021 through June 25, 2023. Tax years that remain subject to examination by state authorities are the years ended June 30, 2020 through June 25, 2023. The Company continually reviews the realizability of its deferred tax assets, including an analysis of factors such as future taxable income, reversal of existing taxable temporary differences, and tax planning strategies. In assessing the need for a valuation allowance, the Company considers both positive and negative evidence related to the likelihood of realization of deferred tax assets. Future sources of taxable income are also considered in determining the amount of any required valuation allowance. As of June 30, 2024 and June 25, 2023, the Company determined that no valuation allowance was necessary. There are no material uncertain tax positions. Management’s position is that all relevant requirements are met and necessary returns have been filed, and therefore the tax positions taken on the tax returns would be sustained upon examination.

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