Note 13 - Income Taxes

12 Months Ended

Jun. 30, 2022

Notes to Financial Statements

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, 2022, 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. There was no valuation allowance included at June 30, 2022, or June 30, 2021.

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

	Year ended June 30,
(dollars in thousands)	2022			2021
	As Restated
United States	$	5,493		$	17,889
Canada		(525	)		19,549
Total	$	4,968		$	37,438

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

	Year ended June 30,
				% of						% of
(dollars in thousands)	2022			Pretax			2021			Pretax
		As Restated			As Restated
Tax expense at statutory rate	$	1,042			21.0	%	$	7,862			21.0	%
Tax expense (benefit) from change in foreign unrealized gain/loss		(281	)		(5.7	)%		281			0.7	%
Non-taxable investment income (loss)		294			5.9	%		(3,302	)		(8.8	)%
Change in valuation allowance		-			0.0	%		(2,762	)		(7.4	)%
Income from controlled foreign corporation		307			6.2	%		3,534			9.4	%
Rate difference on foreign deferred income (loss)		(262	)		(5.3	)%		777			2.1	%
Rate difference on foreign income (loss)		(29	)		(0.6	)%		1,075			2.9	%
Foreign tax credit		(153	)		(3.1	)%		(1,825	)		(4.9	)%
Other		231			4.7	%		(163	)		(0.4	)%
Total tax expense	$	1,149			23.1	%	$	5,477			14.6	%

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

	Year ended June 30,
(dollars in thousands)	2022			2021
	As Restated
Current tax expense - U.S. Federal	$	3,886		$	2,004
Current tax expense - Non-U.S.		154			2,418
Deferred tax expense (benefit) - U.S. Federal		(2,657	)		576
Deferred tax expense (benefit) - Non-U.S.		(234	)		479
Total tax expense	$	1,149		$	5,477

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)	2022			2021
	As Restated
Deferred Income Tax Assets:
Accumulated depreciation	$	102		$	110
Investments in securities at fair value		837			-
Accrued expenses		407			320
Product start-up costs		99			84
Stock-based compensation expense		164			-
Other		16			25
Total Deferred Tax Assets		1,625			539
Deferred Income Tax Liabilities:
Investments in securities at fair value	$	-		$	(2,600	)
Prepaid expenses		(64	)		(60	)
Other investments		(430	)		(389	)
Equity method investments		-			(40	)
Foreign tax on undistributed earnings		(259	)		(249	)
Total Deferred Tax Liabilities		(753	)		(3,338	)
Net Deferred Tax Asset (Liability)	$	872		$	(2,799	)