Note 14 - Income Taxes

12 Months Ended

Nov. 30, 2016

Income Tax Disclosure [Text Block]

(14)

Income Taxes

Total income tax expense (benefit) for the years ended

November

30,

2016

and

2015

consists of the following:

	November 30, 2016			November 30, 2015
Current Expense (benefit)	$	(288,935	)	$	(126,301	)
Deferred expense (benefit)		(29,939	)		(180,919	)
	$	(318,874	)	$	(307,220	)

The reconciliation of the statutory Federal income tax rate is as follows:

	November 30, 2016			November 30, 2015
Statutory federal income tax rate		34.0	%		34.0	%
Permanent Differences and Other		(6.00	)		1.5
		28.0	%		35.5	%

Tax effects of temporary differences that give rise to significant portions of the deferred tax assets (liabilities) at

November

30,

2016

and

2015

are presented below:

	November 30
	2016			2015
Current deferred tax assets (liabilities):
Accrued expenses	$	110,000		$	126,000
NOL and tax credit carryforward		133,000			-
Inventory capitalization		16,000			21,000
Inventory obsolescence and other asset reserves		808,000			999,000
Total current deferred tax assets	$	1,067,000		$	1,146,000
Non-current deferred tax assets
Property, plant, and equipment	$	(737,000	)	$	(847,000	)
Total non-current deferred tax assets (liabilities)	$	(737,000	)	$	(847,000	)

In assessing the realizability of 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. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible. Based on these assessments, in fiscal

2016

we have recorded a reserve against our deferred tax assets related to our net operation loss of our Canadian operations of approximately

$75,000

From the time of acquisition we have not yet generated taxable income from these operations, and now believe that it is more likely than not that the amount of this deferred tax asset will not be realized. Our net operating loss and tax credit carryforward for our US operations expires on

November

30,

2036.

We believe that we will be able to utilize the US net operating losses before their expiration.