INCOME TAXES

6 Months Ended

Dec. 31, 2024

INCOME TAXES [Abstract]

INCOME TAXES

8. INCOME TAXES

For the three and six months ended December 31, 2024, the Company’s statutory tax rate was 23.07% and consisted of the federal income tax rate of 21.00% and a blended state income tax rate of 2.07% net of the federal benefit. For both the three and six months ended December 31, 2024, the Company’s average effective tax rate was zero. For the three and six months ended December 31, 2023, the Company’s effective tax rate was 22.94% and consisted of the federal income tax rate of 21.00% and a blended state income tax rate of 1.94% net of the federal benefit. The Company’s effective income tax rate reflects the effect of federal and state income taxes on earnings and the impact of differences in book and tax accounting arising primarily from the permanent tax benefits associated with stock-based compensation transactions during the accounting period then ended.

The Company recognized zero net income tax benefits for the three and six months ended December 31, 2024 and 2023, respectively.

As of each reporting date, the Company’s management considers new evidence, both positive and negative, that could impact its view with regard to future realization of deferred tax assets. As of December 31, 2024, the Company’s management determined that sufficient negative evidence continued to exist to conclude it was uncertain that the Company would have sufficient future taxable income to utilize its deferred tax assets, and therefore, the Company maintained a full valuation allowance against its deferred tax assets.