INCOME TAXES

3 Months Ended

Sep. 30, 2024

Cash paid during the period for income taxes:

INCOME TAXES

NOTE 7. INCOME TAXES

Deferred income taxes are provided on a liability method whereby deferred tax assets and liabilities are recognized for temporary differences. Temporary differences are the differences between the reported amounts of assets and liabilities and their tax bases. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more-likely-than-not that some portion or all of the deferred tax assets will not be realized. Deferred tax assets and liabilities are adjusted for the effects of changes in tax laws and rates on the date of enactment.

Significant management judgment is required in determining our provision for income taxes and the recoverability of our deferred tax assets. Such determination is based primarily on our historical taxable income or loss, with some consideration given to our estimates of future taxable income or loss by jurisdictions in which we operate and the period over which our deferred tax assets would be recoverable. Our deferred tax asset is net of a valuation allowance in the amount of $71,000 as of September 30, 2024 and June 30, 2024.

We recognize accrued interest and penalties related to unrecognized tax benefits when applicable. As of September 30, 2024 and 2023, we recognized accrued interest of $6,000 and $7,000, respectively, related to unrecognized tax benefits. Our effective tax rate for both the three months ended September 30, 2024 and 2023, is 26% and is slightly less than our combined expected federal and applicable state corporate income tax rates due primarily to federal and state research credits.

We are subject to U.S. federal income tax, as well as income tax of California and Colorado, as well as Massachusetts through fiscal year ended June 30, 2024. We are currently open to audit under the statute of limitations by the Internal Revenue Service for the years ended June 30, 2021, and later.  However, because of our prior net operating losses and research credit carryovers, our tax years from June 30, 2013, are open to audit. We do not anticipate a significant change to the total amount of unrecognized tax benefits within the next 12 months.