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INCOME TAXES | 12 Months Ended
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Jun. 30, 2017
Income Tax Disclosure [Abstract] |
Income Tax Disclosure [Text Block] | NOTE 12. INCOME TAXES The Company and its non-Canadian subsidiaries file a consolidated U.S. federal income tax return. USCAN and Galileo file separate tax returns in Canada. The current applicable U.S. statutory rate for the consolidated U.S. federal income tax return is approximately 34 percent and the current applicable Canadian statutory rate for the Canadian subsidiaries is approximately 26.5 percent. Provisions for income taxes include deferred taxes for temporary differences in the bases of assets and liabilities for financial and tax purposes, resulting from the use of the liability method of accounting for income taxes. The Company has not recognized deferred income taxes on undistributed earnings of Galileo since such earnings are considered to be reinvested indefinitely. For U.S. federal income tax purposes at June 30, 2017, the Company has charitable contribution carryovers totaling approximately $147,000 with $68,000; $34,000; $19,000; $5,000; and $21,000 expiring in fiscal years 2018, 2019, 2020, 2021, and 2022, respectively. The Company has U.S. federal net operating loss carryovers of $4.7 million with $2.0 million expiring in fiscal year 2035 and $2.7 million expiring in fiscal year 2036. For Canadian income tax purposes, Galileo has cumulative eligible capital carryovers of $254,000 with no expiration and net operating loss carryovers of $66,000; $120,000; $45,000; $123,000 and $7,000 expiring in fiscal 2025, 2027, 2030, 2036, and 2037, respectively. If certain changes in the Company’s ownership should occur, there could be an annual limitation on the amount of net operating loss carryovers that could be utilized. A valuation allowance is provided when it is more likely than not that some portion of the deferred tax amount will not be realized. At June 30, 2017, and 2016, a valuation allowance of $3.3 million and $3.1 million, respectively, was included to fully reserve for net operating loss carryovers, other carryovers and book/tax differences in the balance sheet. The Company’s components of income (loss) before tax by jurisdiction are as follows:
|  | Year ended June 30, |
(dollars in thousands) |  | 2017 |  |  | 2016 |  |  | 2015 |
United States |  | $ | (188 | ) |  | $ | (3,496 | ) |  | $ | (3,400 | )
Canada |  |  | (339 | ) |  |  | (213 | ) |  |  | 246 |
Total |  | $ | (527 | ) |  | $ | (3,709 | ) |  | $ | (3,154 | )
The reconciliation of income tax computed for continuing operations at the U.S. federal statutory rates to income tax expense is as follows:
|  | Year ended June 30, |
(dollars in thousands) |  | 2017 |  |  | % of Pretax |  |  | 2016 |  |  | % of Pretax |  |  | 2015 |  |  | % of Pretax |
Tax expense (benefit) at statutory rate - continuing operations |  | $ | (179 | ) |  |  | 34.0 | % |  | $ | (1,255 | ) |  |  | 34.0 | % |  | $ | (1,045 | ) |  |  | 34.0 | %
Valuation allowance |  |  | 144 |  |  |  | (27.3 | )% |  |  | 1,067 |  |  |  | (28.9 | )% |  |  | 1,857 |  |  |  | (60.4 | )%
Income from controlled foreign corporation |  |  | 33 |  |  |  | (6.3 | )% |  |  | 51 |  |  |  | (1.4 | )% |  |  | - |  |  |  | 0.0 | %
Other |  |  | 19 |  |  |  | (3.6 | )% |  |  | 131 |  |  |  | (3.6 | )% |  |  | 10 |  |  |  | (0.3 | )%
Total tax expense (benefit) - continuing operations |  | $ | 17 |  |  |  | (3.2 | )% |  | $ | (6 | ) |  |  | 0.1 | % |  | $ | 822 |  |  |  | (26.7 | )%
Components of total tax expense (benefit) are as follows:
|  | Year ended June 30, |
(dollars in thousands) |  | 2017 |  |  | 2016 |  |  | 2015 |
Continuing Operations |  |  |  |  |  |  |  |  |
Current tax expense (benefit) - U.S. Federal |  | $ | 6 |  |  | $ | - |  |  | $ | (21 | )
Current tax expense (benefit) - Non-U.S. |  |  | 11 |  |  |  | (6 | ) |  |  | 36 |
Deferred tax expense - U.S. Federal |  |  | - |  |  |  | - |  |  |  | 807 |
Total tax expense (benefit) - continuing operations |  |  | 17 |  |  |  | (6 | ) |  |  | 822 |
Discontinued Operations |  |  |  |  |  |  |  |  |  |  |  |
Current tax benefit - U.S. Federal |  |  | - |  |  |  | - |  |  |  | - |
Total tax expense (benefit) |  | $ | 17 |  |  | $ | (6 | ) |  | $ | 822 |
Deferred income taxes reflect the net tax effects of temporary differences between the carrying amount of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. The Company’s deferred assets and liabilities using the effective U.S. statutory tax rate are as follows:
|  | Year ended June 30, |
(dollars in thousands) |  | 2017 |  |  | 2016 |
Book/tax differences in the balance sheet |  |  |  |  |  |
Trading securities |  | $ | 316 |  |  | $ | 321 |
Prepaid expenses |  |  | (92 | ) |  |  | (73 | )
Accumulated depreciation |  |  | 166 |  |  |  | 142 |
Available-for-sale securities |  |  | 228 |  |  |  | 436 |
Other investments |  |  | 355 |  |  |  | 83 |
Accrued expenses |  |  | 126 |  |  |  | 99 |
Product start-up costs |  |  | 117 |  |  |  | 63 |
Stock-based compensation expense |  |  | 6 |  |  |  | 6 |
Tax Carryovers |  |  |  |  |  |  |  |
Net operating loss carryover |  |  | 1,690 |  |  |  | 1,953 |
Cumulative eligible capital carryover |  |  | 67 |  |  |  | 67 |
Charitable contributions carryover |  |  | 50 |  |  |  | 43 |
Capital loss carryover |  |  | 255 |  |  |  | - |
Valuation Allowance |  |  | (3,284 | ) |  |  | (3,140 | )
Net deferred tax asset |  | $ | - |  |  | $ | - |
In November 2015, the FASB issued accounting guidance that simplifies the presentation of deferred income taxes. The guidance requires that deferred tax balances be classified as non-current in a statement of financial position. The Company adopted this guidance effective September 30, 2016, on a prospective basis. As a full reserve valuation allowance is recorded for deferred tax balances, adoption of the guidance did not result in any changes or reclassifications in the Consolidated Balance Sheets as of September 30, 2016. No prior periods were retrospectively adjusted.

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- Definition The entire disclosure for income taxes. Disclosures may include net deferred tax liability or asset recognized in an enterprise's statement of financial position, net change during the year in the total valuation allowance, approximate tax effect of each type of temporary difference and carryforward that gives rise to a significant portion of deferred tax liabilities and deferred tax assets, utilization of a tax carryback, and tax uncertainties information. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -URI http://asc.fasb.org/topic&trid=2144680 + Details
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