Annual report pursuant to Section 13 and 15(d)

Income Taxes

v3.10.0.1
Income Taxes
12 Months Ended
Dec. 31, 2018
Income Taxes  
Income Taxes

12.  Income Taxes

 

The Company has temporary differences between the carrying amount of assets and liabilities for financial reporting purposes and their respective income tax basis, as measured by enacted state and federal rates as follows:

 

 

 

 

 

 

 

 

 

 

 

 

December 31

    

2018

 

2017

  

2016

  

 

 

 

 

 

 

 

 

 

 

 

Deferred tax assets:

 

 

 

 

 

 

 

 

 

 

 Net operating loss carryforwards

 

$

30,588

 

$

27,578

 

$

38,299

 

 Charitable contributions

 

 

 —

 

 

 —

 

 

 1

 

 Inventory write down

 

 

273

 

 

206

 

 

361

 

 Depreciation

 

 

117

 

 

 —

 

 

 —

 

 Amortization

 

 

 —

 

 

23

 

 

90

 

 Interest limitation

 

 

336

 

 

 —

 

 

 —

 

 Allowance for doubtful accounts

 

 

285

 

 

117

 

 

102

 

 Stock-based compensation

 

 

2,335

 

 

520

 

 

341

 

Total deferred tax assets

 

 

33,934

 

 

28,444

 

 

39,194

 

Deferred tax liabilities:

 

 

 

 

 

 

 

 

 

 

 Depreciation

 

 

 —

 

 

(81)

 

 

(83)

 

 Amortization

 

 

(43)

 

 

 —

 

 

 —

 

 Contract liabilities

 

 

(15)

 

 

(6)

 

 

 —

 

Net deferred tax assets

 

 

33,876

 

 

28,357

 

 

39,111

 

Valuation allowance

 

$

(33,876)

 

$

(28,357)

 

$

(39,111)

 

 

As of December 31, 2018, the Company had tax-affected net operating loss carry forwards of approximately $30,588 to offset future taxable income which expire in various years through 2038. A portion of the net operating loss carry forwards may expire due to limitations imposed by section 382 of the Internal Revenue Code.  A valuation allowance is recorded to reduce the deferred tax assets reported if, based on the weight of the evidence, it is more-likely-than-not that a portion or none of the deferred tax assets will be realized. After consideration of all the evidence, including reversal of deferred tax liabilities, future taxable income and other factors, management has determined that a full valuation allowance is necessary as of December 31, 2018, 2017 and 2016.  The valuation allowance increased by $5,519 during 2018, primarily as a result of current year increase in the net operating loss carry forward.  During 2017, the valuation allowance decreased by $10,754,  primarily due to the remeasurement of the Company’s deferred tax assets and liabilities as a result of the Tax Reform enacted on December 22, 2017.  During 2016, the valuation allowance increased $5,097, to offset the deferred tax benefit in that year.  The difference between the financial statement income tax and the income tax benefit using statutory rates is primarily due to the decrease in the valuation allowance.

 

The Company had no income tax expense or income tax benefit for 2016, 2017 and 2018 due to incurrence of net operating losses.  The Company does not believe there are any additional tax refund opportunities currently available.