Note 5 - Income Taxes

6 Months Ended

Apr. 19, 2013

Income Tax Disclosure [Text Block]

Note 5 – Income Taxes:

The Company expects its effective tax rate for the 2013 fiscal year to be different from the federal statutory rate due to the state taxes and a change in valuation allowance as follows:

Effective tax rate	%
Federal Statutory rate		34.0
State taxes (net of Federal effect)		10.2
Change in valuation allowance		(27.7	)
Other		(7.4	)
Total effective tax rate		9.1

We recorded a provision for income taxes in the amount of $183 for the twenty-four week period ended April 19, 2013, related to federal and state taxes, based on the Company's expected annual effective tax rate.

Management evaluated the need for a full valuation allowance at the end of the twenty-four weeks ended April 19, 2013. Management evaluated both positive and negative evidence.  The weight of negative factors and level of economic uncertainty in our current business continued to support the conclusion that the realization of our deferred tax assets does not meet the more likely than not standard.  Therefore, a full valuation allowance will remain against the net deferred tax assets.

As of November 2, 2012, the Company had federal and state net operating loss carryforwards of approximately $1,681 and $3,506 respectively.  These loss carryforwards will expire at various dates from 2018 through 2032.

Our federal income tax returns are open to audit under the statute of limitations for the fiscal years ended October 31, 2008 through 2011. We are subject to income tax in California and various other state taxing jurisdictions. Our state income tax returns are open to audit under the statute of limitations for the fiscal years ended October 31, 2008 through 2011.