INCOME TAXES (Tables)

12 Months Ended

Jun. 27, 2021

Provision for income taxes from continuing operations consists of the following (in thousands):

	Fiscal Year Ended
	June 27, 2021			June 28, 2020
Current - Federal	$	—		$	—
Current - State		(29	)		18
Deferred - Federal		—			4,053
Deferred - State		—			7
Provision for income taxes	$	(29	)	$	4,078

Effective Income Tax Rate Reconciliation

The effective income tax rate varied from the statutory rate for the fiscal years ended June 27, 2021 and June 28, 2020 as reflected below (in thousands):

	June 27, 2021			June 28, 2020
Federal income taxes based on a statutory rate of 21%	$	313		$	(33	)
State income tax, net of federal effect		(23	)		20
Permanent adjustments		5			4
PPP loan forgiveness		(138	)		—
Change in valuation allowance		(190	)		4,081
Other		4			6
	$	(29	)	$	4,078

Deferred Tax Assets

The tax effects of temporary differences that give rise to the net deferred tax assets consisted of the following (in thousands):

	June 27, 2021			June 28, 2020
Reserve for bad debt	$	10		$	61
Deferred fees		34			—
Other reserves and accruals		542			568
Operating lease liabilities		525			937
Credit carryforwards		197			171
Net operating loss carryforwards		5,563			5,371
Depreciable assets		—			306
Total gross deferred tax asset		6,871			7,414
Valuation allowance		(6,307	)		(6,515	)
Total deferred tax asset	$	564		$	899

Right-of-use asset		(461	)		(815	)
Other deferred tax liabilities		(103	)		(84	)
Total deferred tax liabilities	$	(564	)	$	(899	)

Net deferred tax asset	$	—		$	—