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INCOME TAXES | 12 Months Ended
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Mar. 31, 2014
INCOME TAXES |
INCOME TAXES | NOTE 9 - INCOME TAXES We account for income taxes under the provisions of FASB ASC 740, Income Taxes. The following table reflects loss from continuing operations by location, and the provision and benefit for income taxes and the effective tax rate for fiscal:
|  | 2014 |  | 2013 |
U.S. operations |  | $ | (6,722,696 | ) | $ | (1,796,789 | )
Foreign operations |  | (558,168 | ) | (142,817 | )
Loss from operations before tax |  | (7,280,864 | ) | (1,939,606 | )
Income tax (benefit) expense provision |  | (185,473 | ) | 472,331 |
Net Loss |  | $ | (7,095,391 | ) | $ | (2,411,937 | )
The provision (benefit) for income taxes consists of the following as of March 31:
|  | 2014 |  | 2013 |
Current |  |  |  |  |
Federal |  | $ | 28,450 |  | $ | (332,580 | )
State |  | 702 |  | 12,987 |
Foreign |  | (214,625 | ) | 96,162 |
Total Current |  | (185,473 | ) | (223,431 | )
Deferred |  |  |  |  |
Federal |  | — |  | 606,757 |
State |  | — |  | (47,458 | )
Foreign |  | — |  | 136,463 |
Total Deferred |  | — |  | 695,762 |
Income tax expense (benefit) provision |  | $ | (185,473 | ) | $ | 472,331 |
Reconciliation between income taxes computed at the federal statutory rate for fiscal years ended March 31, 2014 and 2013 to the effective income tax rates applied to the net loss reported in the Consolidated Statements of Operations and Other Comprehensive Loss:
|  | 2014 |  | 2013 |
Federal statutory income tax rate |  | 34 | % | 34 | %
State income tax, net of federal benefit |  | — | % | 1 | %
Change in valuation allowance |  | (32 | )% | (53 | )%
Stock based compensation |  | (1 | )% | (6 | )%
Other |  | 2 | % | — | %
Effective income tax rate |  | 3 | % | (24 | )%
The following table summarizes the components of deferred income tax assets and liabilities:
|  | 2014 |  | 2013 |
Current Deferred Tax Assets: |  |  |  |  |
Compensation |  | $ | 32,965 |  | $ | 177,703 |
Allowance for doubtful accounts |  | 9,866 |  | 9,824 |
Loss on uncompleted contracts |  | 1,272,070 |  | 106,123 |
Net operating loss carryforward |  | 30,145 |  | 30,145 |
Interest rate swaps |  | 95,479 |  | 152,792 |
Other liabilities not currently deductible |  | 310,089 |  | 341,726 |
Valuation allowance |  | (759,518 | ) | (562,548 | )
Total Current Deferred Tax Asset |  | $ | 991,096 |  | $ | 255,765 |
Noncurrent Deferred Tax Asset (Liability): |  |  |  |  |
Share based compensation awards |  | 369,880 |  | 323,734 |
Net operating loss carryforward |  | 3,315,221 |  | 1,662,848 |
Valuation allowance |  | (3,647,070 | ) | (1,062,741 | )
Total Noncurrent Deferred Tax Assets |  | $ | 38,031 |  | $ | 923,841 |
Accelerated depreciation |  | (1,029,127 | ) | (1,179,606 | )
Net Noncurrent Deferred Tax Asset (Liability) |  | $ | (991,096 | ) | $ | (255,765 | )
Net Deferred Tax Asset |  | $ | — |  | $ | — |
In assessing the recoverability of deferred tax assets, we consider whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. We have determined that it is more likely than not that certain future tax benefits may not be realized. Accordingly, a valuation allowance has been recorded against deferred tax assets that are unlikely to be realized. Realization of the remaining deferred tax assets will depend on the generation of sufficient taxable income in the appropriate jurisdiction, the reversal of deferred tax liabilities, tax planning strategies and other factors prior to the expiration date of the carryforwards. A change in the estimates used to make this determination could require an increase in deferred tax assets if they become realizable. The following table summarizes carryforwards of net operating losses and tax credits as of March 31, 2014:
|  | Amount |  | Begins to Expire: |
Federal net operating losses |  | $ | 5,865,609 |  | 2025 |
Federal alternative minimum tax credits |  | $ | 76,185 |  | Indefinite |
State net operating losses |  | $ | 20,016,690 |  | 2032 |
The Internal Revenue Code provides for a limitation on the annual use of net operating loss carryforwards following certain ownership changes that could limit our ability to utilize these carryforwards on a yearly basis. We experienced an ownership change in connection with the acquisition of Ranor. Accordingly, our ability to utilize certain carryforwards is limited. Additionally, U.S. tax laws limit the time during which these carryforwards may be applied against future taxes. Therefore, we may not be able to take full advantage of these carryforwards for Federal or state income tax purposes. The following table provides a reconciliation of our unrecognized tax benefits as of March 31, 2014:
Unrecognized tax benefits at March 31, 2013 |  | $ | 17,206 |
Increases based on tax positions related to 2014 |  | — |
Increases based on tax positions prior to 2014 |  | 702 |
Decreases from expiration of statute of limitations |  | — |
Unrecognized tax benefits at March 31, 2014 |  | $ | 17,908 |
We recognized $702 in interest expense related to uncertain tax positions in the tax provision (benefit) on the Consolidated Statements of Operations and Other Comprehensive Income (Loss). We have not accrued any penalties with respect to uncertain tax positions. We file income tax returns in the U.S. federal jurisdiction, and various state jurisdictions. Our foreign subsidiary files separate income tax returns in the foreign jurisdiction in which it is located. Tax years 2010 and forward remain open for examination. We recognize interest and penalties accrued related to income tax liabilities in selling, general and administrative expense in its Consolidated Statements of Operations.

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- Definition The entire disclosure for income taxes. Disclosures may include net deferred tax liability or asset recognized in an enterprise's statement of financial position, net change during the year in the total valuation allowance, approximate tax effect of each type of temporary difference and carryforward that gives rise to a significant portion of deferred tax liabilities and deferred tax assets, utilization of a tax carryback, and tax uncertainties information. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 15 -URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32718-109319 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 235 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SX 210.4-08.(h)) -URI http://asc.fasb.org/extlink&oid=26873400&loc=d3e23780-122690 Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher SEC -Name Regulation S-X (SX) -Number 210 -Section 08 -Paragraph h -Article 4 Reference 4: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 9 -URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32639-109319 Reference 5: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 2 -URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32537-109319 Reference 6: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 3 -URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32559-109319 + Details
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