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Income Taxes (Tables) | 12 Months Ended
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Dec. 31, 2020
Income Taxes |
Schedule of components of the provision for income taxes | The significant components of the provision for income taxes for the years ended December 31, 2020 and 2019 were as follows (in thousands):
|  | 2020 |  | 2019
Current income tax expense (benefit): |  |  |  |  |  |
Foreign |  | $ | 1,065 |  | $ | 1,333
Federal |  |  | 15 |  |  | 71
State and local |  |  | (61) |  |  | —
|  |  | 1,019 |  |  | 1,404
Deferred income tax expense (benefit): |  |  |  |  |  |
Foreign |  |  | (628) |  |  | (323)
Federal |  |  | 10 |  |  | 10
State and local |  |  | — |  |  | —
|  |  | (618) |  |  | (313)
Provision for income taxes |  | $ | 401 |  | $ | 1,091
Schedule of Effective Income Tax Rate Reconciliation | The reconciliation of the U.S. statutory rate with the Company’s effective tax rate for the years ended December 31, 2020 and 2019 is summarized as follows:
|  | 2020 |  | 2019 |
Federal income tax expense (benefit) at statutory rate |  | 21.0 | % | (21.0) | %
Effect of: |  |  |  |  |
Change in valuation allowance |  | 137.7 |  | 22.4 |
Increase in unrecognized tax benefits (ASC 740) |  | 31.5 |  | 55.1 |
Tax effects of foreign operations |  | 57.7 |  | 59.7 |
Foreign operations permanent differences - foreign exchange gains and losses |  | (1.3) |  | (12.2) |
Deemed interest |  | (2.1) |  | — |
State income tax net of federal benefit |  | (4.3) |  | 1.3 |
Foreign rate differential |  | (8.6) |  | 0.8 |
Effect of share based compensation |  | (10.9) |  | — |
Return to provision true up |  | (10.8) |  | (2.6) |
Change in rates |  | (172.7) |  | — |
Withholding tax |  | 1.5 |  | 6.0 |
Other |  | (0.3) |  | (7.3) |
Effective tax rate |  | 38.4 | % | 102.2 | %
Schedule of deferred tax assets and liabilities | Deferred tax assets and liabilities are classified as non-current. Significant components of the Company’s deferred tax assets and liabilities as of December 31, 2020 and 2019 were as follows (in thousands):
|  | December 31,
|  | 2020 |  | 2019
Deferred income tax assets: |  |  |  |  |  |
Allowances not currently deductible |  | $ | 192 |  | $ | 223
Depreciation and amortization |  |  | 334 |  |  | 297
Equity compensation not currently deductible |  |  | 778 |  |  | 966
Net operating loss carryforwards |  |  | 6,751 |  |  | 5,317
Expenses not deductible until paid |  |  | 1,691 |  |  | 1,245
Other |  |  | 358 |  |  | 379
Total gross deferred income tax assets before valuation allowance |  |  | 10,104 |  |  | 8,427
Valuation allowance |  |  | (7,917) |  |  | (6,521)
Deferred income tax assets, net |  |  | 2,187 |  |  | 1,906
Deferred income tax liabilities: |  |  |  |  |  |
Intangibles from acquisition of MediaMiser |  |  | — |  |  | (316)
Other |  |  | (44) |  |  | (47)
Total deferred income tax liabilities |  |  | (44) |  |  | (363)
Net deferred income tax assets |  | $ | 2,143 |  | $ | 1,543
Net deferred income tax assets |  | $ | 2,187 |  | $ | 1,906
Net deferred income tax liability |  |  | (44) |  |  | (363)
Net deferred income tax assets |  | $ | 2,143 |  | $ | 1,543
Schedule of United States and foreign components of income (loss) before provision for income taxes | United States and foreign components of income (loss) before provision for income taxes for each of the two years ended December 31, were as follows (in thousands):
|  | 2020 |  | 2019
United States |  | $ | 930 |  | $ | (537)
Foreign |  |  | 115 |  |  | (531)
Totals |  | $ | 1,045 |  | $ | (1,068)
Schedule Of unrecognized Tax Benefits | The following table represents a roll forward of the Company’s unrecognized tax benefits and associated interest for the years ended (amounts in thousands):
|  | December 31,
|  | 2020 |  | 2019
Balance at January 1 |  | $ | 2,957 |  | $ | 2,424
Increase for current year tax position |  |  | 308 |  |  | 355
Decrease for prior year tax position |  |  | (161) |  |  | —
Interest accrual |  |  | 199 |  |  | 234
Foreign currency revaluation |  |  | (72) |  |  | (56)
Balance at December 31 |  | $ | 3,231 |  | $ | 2,957

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