XML 25 R13.htm IDEA: XBRL DOCUMENT
v3.22.2.2

INCOME TAXES | 12 Months Ended
--- | ---
May 31, 2022
Income Tax Disclosure [Abstract] |
Income Tax Disclosure [Text Block] | NOTE 7: INCOME TAXES Provision for income taxes for the years ended May 31 consists of the following:
|  | For the year ended May 31,
|  | 2022 |  | 2021
Current: |  |  |  |  |  |
U.S. Federal |  | $ | - |  | $ | -
Foreign Taxes Subsidiaries |  |  | (23,000) |  |  | (12,000)
State and local |  |  | (1,000) |  |  | (1,000)
Total current |  |  | (24,000) |  |  | (13,000)
Deferred: |  |  |  |  |  |
U.S. Federal |  |  | - |  |  | -
State and local |  |  | - |  |  | -
Total deferred |  |  | - |  |  | -
Income tax expense |  | $ | (24,000) |  | $ | (13,000)
Provision for income taxes differs from the amounts computed by applying the U.S. Federal income tax rate applicable for each year (21% for 2022 and 2021) to pretax income as a result of the following:
|  | For the year ended May 31,
|  | 2022 |  | 2021
Computed "expected" tax benefit |  | $ | 947,000 |  | $ | 1,561,000
Increase (reduction) in income taxes resulting from: |  |  |  |  |  |
Change in valuation allowance |  |  | (1,022,000) |  |  | (2,292,000)
State income taxes, net of federal benefit |  |  | 300,000 |  |  | 217,000
Research and development tax credits |  |  | 50,000 |  |  | 456,000
Permanent tax differences and other |  |  | (217,000) |  |  | (88,000)
Stock based compensation benefit |  |  | 11,000 |  |  | 145,000
Foreign taxes of subsidiaries |  |  | (113,000) |  |  | (12,000)
Income tax expense |  | $ | (24,000) |  | $ | (13,000)
The tax effect of significant temporary differences is presented below:
|  | May 31,
|  | 2022 |  | 2021
Deferred tax assets: |  |  |  |  |  |
Accounts receivable, principally due to allowance for doubtful accounts |  | $ | 43,000 |  | $ | 200,000
Inventory valuation |  |  | 237,000 |  |  | 387,000
Compensated absences |  |  | 120,000 |  |  | 85,000
Net operating loss carryforwards |  |  | 4,349,000 |  |  | 3,194,000
Tax credit carryforwards |  |  | 1,096,000 |  |  | 1,055,000
Deferred rent expense/Capitalized leases |  |  | 20,000 |  |  | 15,000
Stock Options |  |  | 1,035,000 |  |  | 613,000
Losses of foreign subsidiaries & Other, net |  |  | 41,000 |  |  | 370,000
Accumulated depreciation and amortization |  |  | 26,000 |  |  | (15,000)
Total deferred tax assets |  |  | 6,967,000 |  |  | 5,904,000
Less valuation allowance |  |  | (6,967,000) |  |  | (5,904,000)
Net deferred tax asset |  | $ | - |  | $ | -
The Company has provided a valuation allowance of approximately $6,967,000 and $5,904,000 as of May 31, 2022 and 2021, respectively. The net change in the valuation allowance for the years ended May 31, 2022 and 2021, was an increase of $1,063,000 and $2,292,000, respectively. On May 31, 2022, the Company has Federal income tax net operating loss carryforwards of approximately $17,116,000. On May 31, 2022, the Company has California state income tax net operating loss carryforwards of approximately $10,805,000. For tax reporting purposes, operating loss carryforwards are available to offset future taxable income; such carryforwards expire in varying amounts beginning in 2023 and 2037 for federal and state purposes, respectively. Federal net operating losses beginning in 2018 have no expiration date. On May 31, 2022, the Company has Federal research and development tax credit carryforward of approximately $784,000. The Federal credits begin to expire in 2027. The Company also had similar credit carryforwards for state purposes of $395,000 on May 31, 2022, which don’t expire. Pursuant to Internal Revenue Code (“IRC”) Sections 382 and 383, annual use of the Company's net operating loss ("NOL") and credit carryforwards may be limited by statute because of a cumulative change in ownership of more than 50%. Pursuant to Sections 382 and 383 of the IRC, the annual use of the Company's NOLs and credit carryforwards would be limited if there is a cumulative change of ownership (as that term is defined in Section 382(g) of the IRC of greater than 50% in a three-year period. Management has not performed an analysis to determine if the Company has had a cumulative change in ownership of greater than 50%. For the year ended May 31, 2022, the Company did an analysis of its ASC 740 position and has not identified any uncertain tax positions as defined under ASC 740. Should such position be identified in the future, and should the Company owe interest and penalties as a result of this, these would be recognized as interest expense and other expense, respectively, in the consolidated financial statements. The Company is no longer subject to any significant U.S. federal tax examinations by tax authorities for years before fiscal 2018.

X
- References No definition available. + Details
Name: | us-gaap_IncomeTaxDisclosureAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration

X
- 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/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 21 -URI https://asc.fasb.org/extlink&oid=121826272&loc=d3e32857-109319 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section S99 -Paragraph 2 -Subparagraph (SAB Topic 11.C) -URI https://asc.fasb.org/extlink&oid=122134291&loc=d3e330215-122817 Reference 3: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 17 -Subparagraph (b) -URI https://asc.fasb.org/extlink&oid=121826272&loc=d3e32809-109319 Reference 4: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SAB TOPIC 6.I.5.Q1) -URI https://asc.fasb.org/extlink&oid=122134291&loc=d3e330036-122817 Reference 5: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 14 -URI https://asc.fasb.org/extlink&oid=121826272&loc=d3e32705-109319 Reference 6: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 270 -Section 50 -Paragraph 1 -URI https://asc.fasb.org/extlink&oid=6424409&loc=d3e44925-109338 Reference 7: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -URI https://asc.fasb.org/topic&trid=2144680 Reference 8: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 30 -Section 50 -Paragraph 2 -Subparagraph (a) -URI https://asc.fasb.org/extlink&oid=6424122&loc=d3e41874-109331 Reference 9: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 235 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SX 210.4-08(h)(2)) -URI https://asc.fasb.org/extlink&oid=120395691&loc=d3e23780-122690 + Details
Name: | us-gaap_IncomeTaxDisclosureTextBlock
Namespace Prefix: | us-gaap_
Data Type: | dtr-types:textBlockItemType
Balance Type: | na
Period Type: | duration