INCOME TAXES

12 Months Ended

Jun. 30, 2021

Income Tax Disclosure [Abstract]

Income Tax Disclosure [Text Block]

NOTE 13. INCOME TAXES

The Company and its non-Canadian subsidiaries file a consolidated U.S. federal income tax return. USCAN files a separate tax return in Canada. Provisions for income taxes include deferred taxes for temporary differences in the bases of assets and liabilities for financial and tax purposes resulting from the use of the liability method of accounting for income taxes.

Carryovers

For U.S. federal income tax purposes at June 30, 2021, the Company has no U.S. federal net operating loss carryovers and no capital loss carryovers.

For Canadian income tax purposes, USCAN has no net operating loss carryovers and no capital loss carryovers.

Additional Disclosures

A valuation allowance is provided when it is more likely than not that some portion of the deferred tax amount will not be realized. At June 30, 2020, a valuation allowance of $2.8 million was included to fully reserve for net operating loss carryovers, other carryovers and certain book/tax differences in the balance sheet. There was no valuation allowance included at June 30, 2021.

The Company's components of income (loss) before tax by jurisdiction are as follows:

	Year ended June 30,
(dollars in thousands)	2021		2020
United States	$	17,889	$	(3,261	)
Canada		19,549		(1,716	)
Total	$	37,438	$	(4,977	)

The reconciliation of income tax computed at U.S. federal statutory rates to income tax expense is as follows:

	Year ended June 30,
(dollars in thousands)	2021			% of Pretax			2020			% of Pretax
Tax expense (benefit) at statutory rate - continuing operations	$	7,862			21.0	%	$	(974	)		21.0	%
Tax expense (benefit) from change in foreign unrealized gain/loss		281			0.7	%		(203	)		4.4	%
Non-taxable investment income		(3,302	)		(8.8	)%		(45	)		1.0	%
Change in valuation allowance		(2,762	)		(7.4	)%		885			(19.1	)%
Income from controlled foreign corporation		3,534			9.4	%		-			0.0	%
Rate difference on foreign deferred income		777			2.1	%		153			(3.3	)%
Rate difference on foreign income		1,075			2.9	%		(76	)		1.6	%
Foreign tax credit		(1,825	)		(4.9	)%		-			0.0	%
Other		(163	)		(0.4	)%		85			(1.8	)%
Total tax expense (benefit) - continuing operations	$	5,477			14.6	%	$	(175	)		3.8	%

Components of total tax expense (benefit) are as follows:

	Year ended June 30,
(dollars in thousands)	2021		2020
Continuing Operations
Current tax expense (benefit) - U.S. Federal	$	2,004	$	(1	)
Current tax expense (benefit) - Non-U.S.		2,418		3
Deferred tax expense (benefit) - U.S. Federal		576		-
Deferred tax expense (benefit) - Non-U.S.		479		(177	)
Total tax expense (benefit) - continuing operations	$	5,477	$	(175	)

Deferred income taxes reflect the net tax effects of temporary differences between the carrying amount of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. Components of the Company’s deferred assets and liabilities are as follows:

	June 30,
(dollars in thousands)	2021			2020
Deferred Income Tax Assets:
Accumulated depreciation	$	110		$	105
Investments in securities at fair value		-			448
Equity method investments		-			14
Accrued expenses		320			148
Product start-up costs		84			60
Other		25			-
Net operating loss carryover		-			1,887
Charitable contributions carryover		-			8
Capital loss carryover		-			226
Total Deferred Tax Assets		539			2,896
Valuation Allowance		-			(2,762	)
Total Net Deferred Tax Assets		539			134
Deferred Income Tax Liabilities:
Investments in securities at fair value	$	(2,600	)	$	-
Prepaid expenses		(60	)		(50	)
Other investments		(389	)		(65	)
Equity method investments		(40	)		-
Foreign tax on undistributed earnings		(249	)		-
Other		-			(19	)
Total Deferred Tax Liabilities		(3,338	)		(134	)
Net Deferred Tax Liability	$	(2,799	)	$	-