Income tax provision (Tables)

12 Months Ended

Oct. 31, 2017

Schedule of components of income tax expense (benefit)

The provision (benefit) for income taxes for the fiscal years ended October 31, 2017 and 2016 consists of the following (in thousands):

	2017		2016
Current:
Federal	$	400	$	(332)
State		24		(13)
		424		(345)

Deferred:
Federal		(293)		(179)
State		3		(128)
		(290)		(307)

	$	134	$	(652)

Schedule of Effective Income Tax Rate and Amount Reconciliation

Income tax at the federal statutory rate is reconciled to the Company’s actual net provision (benefit) for income taxes as follows (in thousands, except percentages):

	2017					2016
			% of Pretax					% of Pretax
	Amount		Income			Amount		Income

Income taxes at federal statutory rate	$	136		34.0	%	$	(1,592)		34.0	%
State tax provision, net of federal tax benefit		16		4.0	%		(53)		1.1	%
Nondeductible differences:
Goodwill and other intangible asset impairment		-		0.0	%		916		-19.6	%
Rel-Tech earn-out		(9)		-2.3	%		52		-1.1	%
Qualified domestic production activities deduction		(66)		-16.5	%		46		-1.0	%
ISO stock options		33		8.3	%		52		-1.1	%
Meals and entertainment		21		5.3	%		29		-0.6	%
Temporary true-ups		26		6.4	%		-		0.0	%
State tax refunds, net of federal expense		(4)		-0.8	%		(38)		0.8	%
R&D credits		(37)		-9.3	%		(46)		1.0	%
Other		18		4.4	%		(18)		0.4	%
	$	134		33.5	%	$	(652)		13.9	%

Schedule of deferred tax assets and liabilities

The Company’s total deferred tax assets and deferred tax liabilities at October 31, 2017 and 2016 are as follows (in thousands):

	2017		2016

Deferred Tax Assets:
Reserves	$	375	$	216
Accrued vacation		122		134
Stock-based compensation awards		184		159
Uniform capitalization		130		148
Other		70		43
Total deferred tax assets		881		700

Deferred Tax Liabilities:
Amortization / intangible assets		(805)		(864)
Depreciation / equipment and furnishings		(195)		(211)
Other		-		(34)
Total deferred tax liabilities		(1,000)		(1,109)

Total net deferred tax assets (liabilities)	$	(119)	$	(409)