XML 32 R17.htm IDEA: XBRL DOCUMENT
v3.6.0.2

Note 9 - Income Taxes | 12 Months Ended
--- | ---
Dec. 31, 2016
Notes to Financial Statements |
Income Tax Disclosure [Text Block] |
NOTE 9: - |  | INCOME TAXES
| a. | The Company:
The Company is taxed in accordance with U.S. tax laws. As of December 31, 2016, the Company had net operating loss carry-forward for federal, state and foreign tax purposes of approximately $30,577, $35,792 and $1,686, respectively. If not utilized, these carryforwards will expire starting in 2027, 2019 and indefinitely for federal, state and foreign tax purposes, respectively. Included in the net operating loss carryforwards are $20,974 and $15,602 of federal and state net operating loss carryforwards, respectively, associated with a windfall tax benefit that will be recorded as additional paid in capital when realized. In addition, as of December 31, 2016, the Company had federal research credit, retention credit and foreign tax credit carryforwards of approximately $2,565, $24 and $177, respectively. If not utilized, the federal tax carryforwards will begin to expire in 2032, 2031 and 2021, respectively. The Company also has credits in Israel totaling $264. These credits have no expiration date. Utilization of U.S. net operating losses and credits may be subject to substantial annual limitations due to the “change in ownership” provisions of the Internal Revenue Code of 1986, as amended, and similar state provisions. The annual limitation may result in the expiration of net operating losses before utilization and, in the event we have a change of ownership, utilization of the carryforwards could be restricted.
| b. | Loss before taxes on income is comprised as follows:
|  | Year ended December 31,
|  | 2016 |  | 2015 |  | 2014
Domestic |  | $ | (16,898 | ) |  | $ | (20,098 | ) |  | $ | (15,606 | )
Foreign |  |  | 319 |  |  |  | (499 | ) |  |  | (3,416 | )
|  | $ | (16,579 | ) |  | $ | (20,597 | ) |  | $ | (19,022 | )
| c. | Taxes on income (loss) are comprised as follows:
|  | Year ended December 31,
|  | 2016 |  | 2015 |  | 2014
Domestic: |  |  |  |  |  |
Federal |  | $ | 92 |  |  | $ | — |  |  | $ | — |
State |  |  | 109 |  |  |  | 85 |  |  |  | 16 |
Foreign |  |  | 930 |  |  |  | 601 |  |  |  | 360 |
|  | $ | 1,131 |  |  | $ | 686 |  |  | $ | 376 |
| d. | Deferred income taxes:
Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. The Company’s deferred tax assets are derived from its U.S. net operating loss carry forwards and other temporary differences. In assessing the realization of deferred tax assets, the Company considers whether it is more likely than not that all or some portion of the deferred tax assets will not be realized. Based on the Company’s history of losses in the US and Israel, the Company established a valuation allowance on its US and Israeli deferred tax assets.
|  | December 31,
|  | 2016 |  | 2015
Carry forward losses and credits |  | $ | 6,294 |  |  | $ | 9,220 |
Deferred revenues |  |  | 16,774 |  |  |  | 12,223 |
Accrued payroll, commissions, vacation |  |  | 2,078 |  |  |  | 1,247 |
Allowance for doubtful accounts |  |  | 43 |  |  |  | 88 |
Accrued severance pay |  |  | 372 |  |  |  | 328 |
Other |  |  | 2,939 |  |  |  | 2,393 |
Net deferred tax assets before valuation allowance |  |  | 28,500 |  |  |  | 25,499 |
Valuation allowance |  |  | (28,500 | ) |  |  | (25,499 | )
Net deferred tax assets |  | $ | — |  |  | $ | — |
| e. | Reconciliation of the theoretical tax expenses:
A reconciliation between the theoretical tax expense, assuming all income is taxed at the statutory tax rate applicable to income of the Company, and the actual tax expense (benefit) as reported in the consolidated statements of operations is as follows:
|  | Year ended December 31,
|  | 2016 |  | 2015 |  | 2014
Loss before taxes, as reported in the consolidated statements of operations |  | $ | (16,579 | ) |  | $ | (20,597 | ) |  | $ | (19,022 | )
Statutory tax rate |  |  | 34 | % |  |  | 34 | % |  |  | 34 | %
Theoretical tax benefits on the above amount at the US statutory tax rate |  | $ | (5,637 | ) |  | $ | (7,003 | ) |  | $ | (6,468 | )
Income tax at rate other than the U.S. statutory tax rate |  |  | 68 |  |  |  | 333 |  |  |  | 993 |
Tax advances and non-deductible expenses including equity based compensation expenses |  |  | 4,298 |  |  |  | 1,061 |  |  |  | 1,296 |
Operating losses and other temporary differences for which valuation allowance was provided |  |  | 3,001 |  |  |  | 6,558 |  |  |  | 4,596 |
Research and Development Tax Credit |  |  | (1,182 | ) |  |  | - |  |  |  | - |
State tax |  |  | (536 | ) |  |  | (477 | ) |  |  | (409 | )
Impact of rate change |  |  | (360 | ) |  |  | (82 | ) |  |  | 49 |
Change in tax reserve for uncertain tax positions |  |  | 1,209 |  |  |  | 320 |  |  |  | 308 |
Other individually immaterial income tax items |  |  | 270 |  |  |  | (24 | ) |  |  | 11 |
Actual tax expense |  | $ | 1,131 |  |  | $ | 686 |  |  | $ | 376 |
| f. | A reconciliation of the beginning and ending amounts of unrecognized tax benefits in the years ended December 31, 2016 and 2015 are as follows:
Gross unrecognized tax benefits as of January 1, 2015 |  | $ | 577 |
Increase/decrease in tax position for prior years |  |  | 460 |
Decrease for lapse of statute of limitations |  |  | (140 | )
Gross unrecognized tax benefits as of December 31, 2015 |  |  | 897 |
Increase/decrease in tax position for current year |  |  | 992 |
Increase/decrease in tax position for prior years |  |  | 217 |
Gross unrecognized tax benefits as of December 31, 2016 |  | $ | 2,106 |
There was $2,106 of unrecognized income tax benefits that, if recognized, approximately $1,593 would impact the effective tax rate in the period in which each of the benefits is recognized. The Company includes interest and penalties related to unrecognized tax benefits within the provision for income taxes on the consolidated statements of operations. The total amount of penalties and interest is approximately $33 as of December 31, 2016.
| g. | Foreign taxation:
1. Israeli tax benefits under the Law for the Encouragement of Capital Investments, 1959 (the “Investment Law”): Conditions for entitlement to the benefits: The benefits available to a Beneficiary Enterprise relate only to taxable income attributable to the specific investment program and are conditioned upon terms stipulated in the Investment Law and the related regulations and the criteria set forth in the applicable certificate of approval (for a Beneficiary Enterprise). If VSL does not fulfill these conditions, in whole or in part, the benefits can be cancelled, and VSL may be required to refund the benefits, in an amount linked to the Israeli consumer price index plus interest. The Office of the Chief Scientist at Israel’s Ministry of Industry, Trade and Labor approved the Israeli subsidiary as an R&D-incentive enterprise for a foreign resident company in accordance with the Encouragement of Capital Investments (Consolidated Version) Law. If cash dividends are distributed out of tax exempt profits in a manner other than upon complete liquidation, VSL will then become liable for tax at the rate of 10% - 25% (depending on the level of foreign investments in VSL) in respect of the amount distributed. 2. Undistributed earnings of foreign subsidiaries: As of December 31, 2016, approximately $2,492 of undistributed earnings from non-U.S. operations held by the Company’s foreign subsidiaries and the Beneficiary Enterprise of VSL are designated as indefinitely reinvested outside the U.S. Accordingly, no additional U.S. income taxes or additional foreign withholding taxes have been provided thereon. Determination of the amount of unrecognized deferred tax liability related to these earnings is not practicable.
| h. | Tax assessments:
We have not been audited by the Internal Revenue Service but are under current audit in various states for tax years 2009 through 2012. As of December 31, 2016, our federal returns for the years ended 2010 through the current period and most state returns for the years ended 2009 through the current period are still open to examination. In addition, all of the net operating losses and research and development credit carryforwards that may be used in future years are still subject to adjustment. In January 2017, the Israeli Tax Authorities initiated a tax assessment audit on VSL for the years 2013 - 2015. The Company believes it has valid arguments to support its positions and intends to defend against any tax assessment. The Company has recorded a provision with respect to its uncertain tax positions in accordance with ASC 740. The Company has final tax assessments for VSL in Israel through 2012, VSUK in UK through 2012 and VSF in France through 2012. VSG in Germany and VSC in Canada do not have final tax assessments since their respective inceptions.

X
- References No definition available. + Details
Name: | us-gaap_DisclosureTextBlockAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration

X
- Definition The entire disclosure for income taxes. Disclosures may include net deferred tax liability or asset recognized in an enterprise's statement of financial position, net change during the year in the total valuation allowance, approximate tax effect of each type of temporary difference and carryforward that gives rise to a significant portion of deferred tax liabilities and deferred tax assets, utilization of a tax carryback, and tax uncertainties information. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 235 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SX 210.4-08.(h)) -URI http://asc.fasb.org/extlink&oid=26873400&loc=d3e23780-122690 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 3 -URI http://asc.fasb.org/extlink&oid=65882285&loc=d3e32559-109319 Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 15 -URI http://asc.fasb.org/extlink&oid=65882285&loc=d3e32718-109319 Reference 4: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 9 -URI http://asc.fasb.org/extlink&oid=65882285&loc=d3e32639-109319 Reference 5: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 2 -URI http://asc.fasb.org/extlink&oid=65882285&loc=d3e32537-109319 + Details
Name: | us-gaap_IncomeTaxDisclosureTextBlock
Namespace Prefix: | us-gaap_
Data Type: | nonnum:textBlockItemType
Balance Type: | na
Period Type: | duration