INCOME TAXES

9 Months Ended

Mar. 31, 2026

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 and nine months ended March 31, 2026 and 2025 consisted of the following:

	Three Months Ended				Nine Months Ended
	March 31,				March 31,
		2026		2025		2026		2025
Federal	$	—	$	707	$	—	$	707
State		1,825		5,204		7,345		10,724
Foreign		—		—		—		—
Total income tax provision	$	1,825	$	5,911	$	7,345	$	11,431

All income is derived from domestic operations.

For both the three and nine months ended March 31, 2026, the effective tax rate was less than 1%. The effective tax rate for the three and nine months ended March 31, 2025 was 1.9% and 1.8%, 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 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- and nine-month periods ended March 31, 2026 or 2025.