Income Taxes

12 Months Ended

Nov. 04, 2023

Income Tax Disclosure [Abstract]

Income Taxes

NOTE 10 Income Taxes

The Company computes income tax expense using the liability method. Under this method, deferred income taxes are provided, to the extent considered realizable by management, for basis differences of assets and liabilities for financial reporting and income tax purposes.

The Company follows guidance issued by the FASB with respect to accounting for uncertainty in income taxes. A tax position is recognized as a benefit only if it is “more-likely-than-not” that the tax position would be sustained in a tax examination, with a tax examination being presumed to occur. The amount recognized is the largest amount of tax benefit that is greater than 50% likely of being realized on examination. For tax positions not meeting the “more-likely-than-not” test, no tax benefit is recorded.

The Company and its subsidiaries are subject to U.S. federal income tax, as well as income tax of the state of Florida. The Company’s income tax returns for the past three years are subject to examination by tax authorities and may change upon examination.

The Company recognizes the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities. The estimate of the Company’s tax liabilities relating to uncertain tax positions requires management to assess uncertainties and to make judgments about the application of complex tax laws and regulations. We recognize interest and penalties relating to income taxes as components of income tax expense. At November 4, 2023 and November

5, 2022, management has determined there are no material uncertain tax positions, and does not anticipate any significant change within twelve months of this reporting date.

The provision for income taxes for the years ended consists of the following:

	November 4, 2023			November 5, 2022
Current tax expense:
Federal	$	2,920,036		$	2,009,567
State		807,025			338,284
Deferred tax (benefit)		(46,496	)		(143,346	)
Provision for income taxes	$	3,680,565		$	2,204,505

The following table shows the reconciliation between the statutory federal income tax rate and the actual provision for income taxes for the years ended:

	November 4, 2023			November 5, 2022
Provision—federal statutory tax rate	$	3,061,771		$	1,981,672
Increase (decrease) resulting from:
State taxes, net of federal tax benefit		633,495			263,528
Other		(14,701	)		(40,695	)
Provision for income taxes	$	3,680,565		$	2,204,505

The types of temporary differences between the tax bases of assets and liabilities and their financial reporting amounts and the related deferred tax assets and deferred tax liabilities are as follows:

	November 4, 2023			November 5, 2022
Deferred tax assets:
Allowance for doubtful accounts	$	—		$	58,173
Prepaid Expenses .		14,995			14,995
Accrued expenses		236,617			198,633
Other assets		34,399			32,411
Stock-based compensation		63,741			34,789
Total deferred tax assets		349,752			339,001
Deferred tax liabilities:
Depreciation		(100,739	)		(123,033	)
Carrying value of investments		(90,908	)		(106,253	)
Amortization		(39,374	)		(39,206	)
Prepaid expenses		(28,457	)		(26,731	)
Net deferred tax assets (liabilities)	$	90,274		$	43,778

These amounts are included in the accompanying consolidated balance sheets under the following captions:

	November 4, 2023			November 5, 2022
Current assets (liabilities):
Deferred tax assets	$	-		$	-
Deferred tax liabilities		-			-
Net current deferred tax assets		-			-
Non-current assets (liabilities):
Deferred tax assets		349,752			339,001
Deferred tax liabilities		(259,478	)		(295,223	)
Net non-current deferred tax assets (liabilities)		90,274			43,778
Net deferred tax assets (liabilities)	$	90,274		$	43,778

In assessing the ability to realize a portion of the deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. For fiscal years 2023 and 2022, the Company determined that a valuation reserve for the Company’s deferred tax assets was not considered necessary as the deferred tax assets were fully realizable.