Note 6 - Income Taxes

3 Months Ended

Jun. 30, 2012

Income Tax Disclosure [Text Block]

6.            Income Taxes

At June 30, 2012, the Company had approximately $4,260,000 in federal net operating loss carryforwards to reduce future taxable income.  These carryforwards begin to expire in the Company’s fiscal year ending March 31, 2025.  The Company also has a federal alternative minimum tax credit carryforward of $235,000 which does not expire.  The Company is subject to U.S. federal income tax as well as income tax of multiple state jurisdictions.  No jurisdictions are currently under examination.  No liability was recorded for interest or penalties related to uncertain tax positions at June 30, 2012 or March 31, 2012.

Management evaluates the Company’s deferred tax assets on a regular basis to determine if a valuation allowance should be established based on the consideration of all available evidence using a “more-likely-than-not” standard.  In making such judgments, management must weigh both positive and negative evidence that can be objectively verified.  A cumulative loss in recent years is significant negative evidence in considering whether deferred tax assets are realizable, and also limits projections of future taxable income to that which can be estimated over a reasonable amount of time.  Management’s ability to accurately forecast should be evaluated against recent results, and the reliability of such forecasting inherently decreases as the duration of such forecasting increases.

Based on management’s analysis during the quarter ended March 31, 2012, management increased the valuation allowance against the Company’s net deferred tax assets so that such assets were fully reserved.