INCOME TAXES

12 Months Ended

Jun. 29, 2025

INCOME TAXES [Abstract]

INCOME TAXES

NOTE E - INCOME TAXES:

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

	Fiscal Year Ended
		June 29, 2025			June 30, 2024		June 25, 2023
Current - Federal	$	—		$	—	$	—
Current - State		156			33		107
Deferred - Federal		793			530		394
Deferred - State		(31	)		56		36
Provision for income taxes	$	918		$	619	$	537

The effective income tax rate varied from the statutory rate for the fiscal years ended June 29, 2025, June 30, 2024, and June 25, 2023 as reflected below (in thousands):

	Fiscal Year Ended
		June 29, 2025			June 30, 2024			June 25, 2023
Federal income taxes based on a statutory rate of 21%	$	760		$	649		$	452
State income taxes (net of federal benefit)		99			82			119
Permanent Adjustments		(31	)		(128	)		7
Return to Provision		—			16			(49	)
Other		90			—			8
Provision for income taxes	$	918		$	619		$	537

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

		June 29, 2025			June 30, 2024
Allowance for credit losses	$	7		$	13
Deferred fees		55			58
Other reserves and accruals		420			475
Operating lease liabilities		135			222
Credit carryforwards		56			156
Net operating loss carryforwards		3,503			4,057
Total deferred tax assets	$	4,176		$	4,981
Right-of-use assets		(115	)		(190	)
Other deferred tax liabilities		(66	)		(35	)
Total deferred tax liabilities	$	(181	)	$	(225	)
Net deferred tax asset	$	3,995		$	4,756

The Company utilized net operating losses to offset federal taxes. At the end of tax year June 29, 2025, the Company had federal net operating loss carryforwards totaling $16 million that are available to reduce future taxable income and will begin to expire in 2035. Under the Tax Cuts and Jobs Act, approximately $1.3 million of the loss carryforwards are limited to 80% and do not expire. Tax years that remain subject to examination by the IRS are the years ended June 28, 2022 through June 30, 2024. Tax years that remain subject to examination by state authorities are the years ended June 30, 2021 through June 30, 2024.

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 a 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 any required valuation allowance. As of June 29, 2025 and June 30, 2024, the Company determined that no valuation allowance was necessary.

There are no material uncertain tax positions. Management’s position is that all relevant requirements are met and necessary returns have been filed, and therefore the tax positions taken on the tax returns would be sustained upon examination.