Note 5 - Income Taxes

9 Months Ended

Jul. 11, 2014

Income Tax Disclosure [Abstract]

Income Tax Disclosure [Text Block]

Note 5 – Income Taxes:

The Company expects its effective tax rate for the 2014 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)		15.8
Change in valuation allowance		(39.4	)
Other		(10.4	)
Total effective tax rate		-

We recorded zero benefit on income taxes for the thirty-six week period ended July 11, 2014, related to federal and state taxes, based on the Company's expected annual effective tax rate. We recorded tax expense for non income related taxes of $41 which are reflected in selling, general and administrative expenses.

Management evaluated the need for a full valuation allowance at the end of the thirty-six weeks ended July 11, 2014. 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 July 11, 2014, the Company had federal and state net operating loss carryforwards of approximately $1,394 and $3,302, respectively, based on the tax return for fiscal year ended November 1, 2013.  These loss carryforwards will expire at various dates from 2019 through 2033.

Our federal income tax returns are open to audit under the statute of limitations for the fiscal years ended October 31, 2009 through 2012. 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, 2009 through 2012.