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Income Taxes
 12 Months Ended
Feb. 29, 2020
Income Tax Disclosure [Abstract]  
Income Taxes

NOTE 11: INCOME TAXES

 

The annual provision (benefit) for income taxes differs from amounts computed by applying the maximum U.S. Federal income tax rate of 21% to pre-tax income as follows:

 

   February 29,
2020		   February 28,
2019		 
Expected federal income tax  $254,898   $38,101 
State tax, net of federal   19,758    11,430 
Research and development tax credits   (213,521)   (19,588)
Permanent timing difference   29,632    2,272 
Change in valuation allowances   15,238    (36,425)
Other adjustments   —    24,057 
Income tax expense  $106,005   $19,847 

 

The deferred tax asset and liability are comprised of the following:

 

   February 29,
2020		   February 28,
2019		 
Deferred tax asset          
Inventory  $41,000   $74,000 
Allowance for accounts receivable   15,000    13,000 
Accrued expenses and other   94,000    37,000 
Research tax credits   27,000    208,000 
   Deferred tax asset – Long Term   177,000    332,000 
           
Deferred tax liability          
Intangible asset amortization   —    (25,000)
Building and leasehold depreciation   (252,000)   (346,000)
   Deferred tax liability – Long Term  $(252,000)  $(371,000)

 

Deferred income taxes have been provided by temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for tax purposes. To the extent allowed by GAAP, the Company provides a valuation allowance against the deferred tax assets for amounts when the realization is uncertain.

 

Tax returns for the prior three years are subject to examination by the IRS.