Income Taxes (Tables)

12 Months Ended

Jan. 02, 2016

Income Taxes Tables

Provision for income tax

	2015	2014	2013
Current
Federal	$         -	$          -	$          -
State	4,527	-	-
Deferred (net of valuation allowance)
Federal	-	-	-
State	-	-	-
Income tax provision	$  4,527	$          -	-

Reconciliation of income tax expense (benefit)

	2015	2014	2013
Federal income tax expense at statutory rate	(34.0)%	(34.0)%	(34.0)%
State income tax, net of federal benefit	(5.1)%	(5.3)%	(4.3)%
Permanent differences	5.7%	2.7%	2.6%
Change in tax rates	0.7%	(6.1)%	(3.7)%
Expirations of net operating losses	17.4%	0.0%	0.0%
Change in valuation allowance	13.7%	42.8%	39.2%
Other	1.8%	(0.1)%	0.2%
Effective tax rate	0.2%	0.0%	0.0%

Deferred income tax assets and liabilities

	2015	2014
Deferred tax assets:
Net operating loss carryforward	$    10,860,000	$    10,593,000
Capital loss carryforward	808,000	808,000
Stock options and restricted stock	3,048,000	2,934,000
Inventory reserve	249,000	226,000
Allowance for doubtful accounts	144,000	15,000
Accrued expenses	277,000	125,000
Deferred revenue	-	4,000
Intangibles	23,000	26,000
Deferred rent	54,000	81,000
	15,463,000	14,812,000
Less valuation allowance	(15,050,000)	(14,669,000)
	413,000	143,000
Deferred tax liabilities:
Leasehold improvements and equipment	(284,000)	(108,000)
Prepaid expenses	(129,000)	(35,000)
	(413,000)	(143,000)
	$                   -	$                   -