Income Taxes

12 Months Ended

Mar. 31, 2022

Income Tax Disclosure [Abstract]

Income Tax Disclosure [Text Block]

8. Income Taxes

Income tax provision (benefit):

	Fiscal Year Ended
	March 31,			March 31,
	2022			2021
Current:
Federal	$	-		$	-
State and local		-			-
Total current tax provision		-			-
Deferred:
Federal		178,780			(26,788	)
State and local		(3,327	)		(239	)
Release of valuation allowance		-			-
Total deferred tax provision (benefit)		175,453			(27,027	)
Total provision (benefit)	$	175,453		$	(27,027	)

The approximate values of the components of the Company’s deferred taxes on March 31, 2022, and 2021 are as follows:

	March 31,			March 31,
	2022			2021
Deferred tax assets (liabilities):
Net operating loss carryforwards	$	706,643		$	849,387
Tax credits		329,032			329,032
Charitable contributions		52			716
Legal damages		1,291,734			1,243,370
Allowance for doubtful accounts		1,572			1,576
Reserve for inventory obsolescence		108,696			120,815
Vacation accrual		39,349			87,579
Warranty reserve		18,518			19,068
Deferred revenues		86,629			101,514
Stock options		15,819			15,689
Gain on Sale of Asset		350			345
Depreciation		1,193			5,949
Deferred tax asset		2,599,587			2,775,040
Less valuation allowance		(100,000	)		(100,000	)
Deferred tax asset, net	$	2,499,587		$	2,675,040

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  $3,346,299 as of March 31, 2022. These carryforward losses are available to offset future taxable income and begin to expire in the year 2027. New Jersey State NOL carryforwards were  $2,114,223 as of March 31, 2022. New Jersey State NOL carryforwards expire in 20 years, and certain of these amounts begin to expire in 2030.

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 expense (benefit) provision at the statutory Federal tax rate of 21% for the years ended March 31, 2022, and 2021, respectively, to the income tax benefit provision recognized in the financial statements is as follows:

	March 31,			March 31,
	2022			2021
Income tax provision – statutory rate	$	311,492		$	120,704
Income tax expenses – state and local, net of federal benefit		2,949			(14	)
Permanent items		4,144			4,864
PPP loan forgiveness		(151,741	)		(151,741	)
Other		8,609			(840	)
Income tax provision (benefit)	$	175,453		$	(27,027	)