Note 9 - Income Taxes

3 Months Ended

Mar. 31, 2020

Notes to Financial Statements

Income Tax Disclosure [Text Block]

NOTE

9:

     INCOME TAXES

The Company’s foreign subsidiary, Tantaline CVD ApS incurred a loss of approximately

$122,000

for the

three

months ended

March 31, 2020

which would provide a

$27,000

deferred tax asset, based on the standard corporate tax rate of

22%

in Denmark. For the

three

months ended

March 31, 2019

Tantaline CVD ApS incurred a loss of

$79,000

which would provide a

$17,000

deferred tax asset. However, sufficient uncertainty exists as to the realizability of these assets such that a full valuation allowance has been necessary.

For the year ended

December 31, 2019,

the Company has provided a full valuation allowance against all of the net deferred tax assets in the amount of

$2,497,414.

This was based on management’s assessment, including the last

two

years of operating losses, that it is more likely than

not

that the net deferred tax assets

may

not

be realized in the future. On

March 27, 2020,

the Coronavirus Aid, Relief and Economic Security Act (the “CARES Act”) was enacted by the United States Congress. As a result of the enactment of the CARES Act, net operating losses (“NOL’s”) can now be carried back for

five

years and resulted in the Company recognizing approximately

$1.5

million of a tax receivable. We continue to evaluate for potential utilization of the Company’s deferred tax asset, which has been fully reserved for, on a quarterly basis, reviewing our economic models, including projections and timing of orders, the commencement of operations of the new CVD Materials segment and cost containment measures.