8. Income Taxes

12 Months Ended

Mar. 31, 2014

Income Tax Disclosure [Abstract]

Income Tax Disclosure [Text Block]

8.                   Income Taxes

Income tax (benefit) provision:

	Fiscal Year Ended
	March 31,		March 31,
	2014		2013
Current:
Federal	$	16,000	$	-
State and local		3,500		3,911
Total current tax provision		19,500		3,911
Deferred:
Federal		401,283		(1,561,076	)
State and local		22,062		13,585
Total deferred tax provision  (benefit)		423,345		(1,547,491	)
Total provision (benefit)	$	442,845	$	(1,543,580	)

The approximate values of the components of the Company’s deferred taxes at March 31, 2014 and 2013 are as follows:

	March 31,			March 31,
	2014			2013
Deferred tax assets:
Net operating loss carryforwards	$	2,662		$	3,086
Tax credits		283			279
Allowance for doubtful accounts		9			7
Reserve for inventory obsolescence		70			69
Inventory capitalization		98			183
Deferred payroll		30			-
Vacation accrual		91			95
Warranty reserve		66			100
Deferred revenues		58			2
Stock options		36			32
Non-compete agreement		12			14
Depreciation		(52	)		(82	)
Deferred tax asset		3,363			3,785
Less valuation allowance		-			1
Deferred tax asset, net	$	3,363		$	3,784
Deferred tax asset – current	$	1,090		$	1,238
Deferred tax asset – long-term		2,273			2,546
Total	$	3,363		$	3,784

The recognized deferred tax asset is based upon the expected utilization of its benefit from future taxable income. The Company has federal net operating loss (“NOL”) carryforwards of approximately $7,819,000 as of March 31, 2014, of which approximately $225,000 is subject to limitations under Section 382 of the Internal Revenue Code. These carryforward losses are available to offset future taxable income, and begin to expire in the year 2027. NJ State NOL carryforwards approximate $7,021,000 as of March 31, 2014. NJ NOL carryforwards expire in 7 years, and certain of these amounts begin to expire in 2014.

The foregoing amounts are management’s estimates and the actual results could differ from those estimates. Future profitability in this competitive industry depends on continually obtaining and fulfilling new profitable sales agreements and modifying products.  The inability to obtain new profitable contracts or the failure of the Company’s engineering development efforts could reduce estimates of future profitability, which could affect the Company’s ability to realize the deferred tax assets.

A reconciliation of the income tax (benefit) provision at the statutory Federal tax rate of 34% to the income tax (benefit) provision recognized in the financial statements is as follows:

	March 31,			March 31,
	2014			2013
Income tax (benefit) provision  – statutory rate	$	239,487		$	(1,467,491	)
Income tax expenses – state and local, net of federal benefit		19,500			3,500
Permanent items		141,474			(38,350	)
True-up of prior years deferred taxes		19,536			(67,246	)
Change in state rate		-			85,945
Change in valuation allowance		(171	)		(49,718	)
Other		23,019			(10,220	)
Income tax provision (benefit)	$	442,845		$	(1,543,580	)