Income Taxes

12 Months Ended

Sep. 29, 2020

Income Tax Disclosure [Abstract]

Income Taxes

7. Income Taxes:

Deferred tax assets (liabilities) are comprised of the following at the period end (in thousands):

	September 29, 2020 Long Term			September 24, 2019 Long Term
Deferred income tax assets (liabilities):
Tax effect of net operating loss carry-forward	$	2,686		$	4,631
General business credits		3,618			3,065
Partnership/joint venture basis differences		(2	)		(58	)
Deferred revenue		80			89
Property and Equipment basis differences		(1,866	)		(1,315	)
Intangibles basis differences		1,087			(1,107	)
ROU asset		(10,516	)		-
Long-term lease liability		12,549			-
Other accrued liability and asset difference		(232	)		1,335
Deferred tax assets		7,404			6,640
Less valuation allowance		(7,404	)		(6,640	)
Net deferred tax asset (liabilities)	$	-		$	-

The Company has net operating loss carry-forwards available for future periods, as discussed below, of approximately $8,994,000 from 2019 and $1,686,000 from 2011 and prior for income tax purposes. The net operating loss carry-forwards from periods prior to 2019 expire between 2030 and 2032. Based on the change in control, which occurred in 2011, the utilization of the loss carry-forwards incurred for periods prior to 2012 is limited to approximately $160,000 per year. The Company has general business tax credits of $3,618,000 from 2015 through 2020 which expire from 2034 through 2039.

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. The Company assessed whether a valuation allowance should be recorded against its deferred tax assets based on consideration of all available evidence using a "more likely than not" standard. In assessing the need for a valuation allowance, the company considered both positive and negative evidence related to the likelihood of realization of deferred tax assets. In making such assessment, more weight was given to evidence that could be objectively verified, including recent cumulative losses. Future sources of taxable income were also considered in determining the amount of the recorded valuation allowance. Based on the Company's review of this evidence, management determined that a full valuation allowance against all of the Company's deferred tax assets was appropriate.

The following table summarizes the components of the provision for income taxes (in thousands):

	Fiscal 2020		Fiscal 2019
Current income tax benefit (expense)	$	-	$	-
Deferred income tax benefit (expense)		-		-
Total income tax benefit (expense)	$	-	$	-

Total income tax expense for the years ended September 29, 2020 and September 24, 2019 differed from the amounts computed by applying the U.S. Federal statutory tax rate to pre-tax income as follows (in thousands):

	Fiscal 2020			Fiscal 2019
Total benefit computed by applying statutory federal rate	$	(2,922	)	$	(1,079	)
State income tax, net of federal tax benefit		(51	)		(153	)
FICA/WOTC tax credits		(550	)		(702	)
Effect of change in valuation allowance		763			1,787
Permanent differences		2,510			87
Other		250			60
Provision for income taxes	$	-		$	-

The Company has adopted Accounting Standards Update (ASU) No. 2015-17, Income Tax (Topic 740): Balance Sheet Classification of Deferred Taxes, which requires that all deferred tax assets and liabilities, along with any related valuation allowance, be classified as noncurrent on the balance sheet. The Company will apply this ASU retrospectively to all periods presented.