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Note 21 - Income Taxes | 12 Months Ended
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Jun. 30, 2024
Notes to Financial Statements |
Income Tax Disclosure [Text Block] | 21. INCOME TAXES (Loss) / Income before provision for income taxes consists of the following:
|  |  | For the Year Ended June 30, |
|  | 2024 |  |  | 2023 |
United States |  |  | (539 | ) |  |  | (550 | )
International |  |  | 2,168 |  |  |  | 2,932 |
Total |  | $ | 1,629 |  |  | $ | 2,382 |
The components of the provision for income taxes are as follows:
|  | For the Year Ended June 30, |
|  | 2024 |  |  | 2023 |
Current: |  |  |  |  |  |  |  |
Federal |  | $ | 76 |  |  | $ | 104 |
State |  |  | 2 |  |  |  | 2 |
Foreign |  |  | 442 |  |  |  | 410 |
|  | $ | 520 |  |  | $ | 516 |
Deferred: |  |  |  |  |  |  |  |
Foreign |  |  | (34 | ) |  |  | 106 |
Total |  | $ | 486 |  |  | $ | 622 |
A reconciliation of income tax benefit compared to the amount of income tax expense that would result by applying the U.S. federal statutory income tax rate to pre-tax income is as follows:
|  | For the Year Ended June 30, |
|  | 2024 |  |  | 2023 |
Statutory federal tax rate |  |  | 21.00 | % |  |  | 21.00 | %
State taxes, net of federal benefit |  |  | 0.75 |  |  |  | (1.19 | )
Permanent items and credits |  |  | 11.04 |  |  |  | 16.08 |
Foreign rate differential |  |  | (4.23 | ) |  |  | (0.44 | )
Other |  |  | 0.34 |  |  |  | 0.09 |
Changes in valuation allowance |  |  | 0.93 |  |  |  | (9.43 | )
Effective rate |  |  | 29.83 | % |  |  | 26.11 | %
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, 2024. 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, 2024. 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 the Company will not realize the benefits of the federal, state, and foreign deductible differences. Accordingly, a valuation allowance has been established against deferred tax assets recorded in the US and various foreign jurisdictions. Temporary differences that give rise to a significant portion of deferred tax assets and deferred tax liabilities are as follows:
|  | For the Year Ended June 30, |
|  | 2024 |  |  | 2023 |
Deferred tax assets: |  |  |  |  |  |  |  |
Net operating losses and credits |  | $ | 599 |  |  | $ | 704 |
Inventory valuation |  |  | 75 |  |  |  | 68 |
Right-of-use assets |  |  | 56 |  |  |  | 61 |
Accrued vacation |  |  | 12 |  |  |  | 11 |
Accrued expense |  |  | 142 |  |  |  | 172 |
Fixed asset basis |  |  | 11 |  |  |  | 9 |
Investment |  |  | 77 |  |  |  | 71 |
General business credit |  |  | 14 |  |  |  | 22 |
Other |  |  | 13 |  |  |  | - |
Total deferred tax assets |  | $ | 999 |  |  | $ | 1,118 |
Deferred tax liabilities: |  |  |  |  |  |  |  |
Depreciation |  | $ | (238 | ) |  | $ | (342 | )
Right-of-use assets |  |  | (56 | ) |  |  | (61 | )
Other |  |  | (1 | ) |  |  | (8 | )
Total deferred tax liabilities |  | $ | (295 | ) |  | $ | (411 | )
Subtotal |  |  | 704 |  |  |  | 707 |
Valuation allowance |  |  | (580 | ) |  |  | (617 | )
Net deferred tax assets |  | $ | 124 |  |  | $ | 90 |
Presented as follows in the balance sheets: |  |  |  |  |  |  |  |
Deferred tax assets |  | $ | 124 |  |  | $ | 100 |
Deferred tax liabilities |  |  | - |  |  |  | (10 | )
Net deferred tax assets |  | $ | 124 |  |  | $ | 90 |
The valuation allowance decreased by $37 in Fiscal 2024 and decreased by $225 in Fiscal 2023. At June 30, 2024, the Company had no federal net operating loss carry-forward and state net operating loss carry-forward of $2,219, which expire through 2034. 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 the Company will not realize the benefits of the federal, state, and foreign deductible differences. Accordingly, a valuation allowance has been established against deferred tax assets recorded in the US and various foreign jurisdictions. Generally, U.S. federal, state, and foreign 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.

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