(8)	Income Taxes

For the three months ended September 29, 2019, the Company recorded an income tax expense of $73 thousand calculated at a rate consistent with the 21% statutory U.S. federal rate. Income tax expense consisted of $3 thousand in current state taxes, $65 thousand in deferred federal taxes and $5 thousand in deferred state taxes. The Company anticipates utilizing net operating loss carryforwards to offset any federal taxes.

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 the 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 the recorded valuation allowance.

As of September 29, 2019, the Company had $6.4 million of deferred tax assets and a valuation allowance of $2.4 million. The Company determined it was not appropriate to increase or decrease the valuation allowance. However, the Company will continue to review the need for an adjustment to the valuation allowance.