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Income Taxes | 12 Months Ended
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Jan. 30, 2021
Income Tax Disclosure [Abstract] |
Income Taxes | NOTE 10—INCOME TAXES The Company is subject to U.S. federal income tax, as well as income tax in multiple states and foreign jurisdictions. For all major taxing jurisdictions, the tax years 2016 through 2020 remain open to examination by the taxing authorities due to the carryforward of unutilized net operating losses. As of January 30, 2021, the Company does not expect any material changes to unrecognized tax positions within the next twelve months. Components of the income tax provision are as follows for the fiscal years ended January 30, 2021 and December 31, 2019 and the transition period from January 1, 2020 to February 1, 2020 (in thousands):
|  | Fiscal Year Ended January 30, 2021 |  |  | Fiscal Year Ended December 31, 2019 |  |  | Transition Period January 1 to February 1, 2020 |
Current tax provision: |  |  |  |  |  |  |  |  |  |  |  |
Federal |  | $ | — |  |  | $ | — |  |  | $ | — |
State |  |  | 51 |  |  |  | 1 |  |  |  | — |
Total |  |  | 51 |  |  |  | 1 |  |  |  | — |
Deferred tax provision: |  |  |  |  |  |  |  |  |  |  |  |
Federal |  |  | — |  |  |  | — |  |  |  | — |
State |  |  | — |  |  |  | — |  |  |  | — |
Total |  |  | — |  |  |  | — |  |  |  | — |
Total provision for income taxes |  | $ | 51 |  |  | $ | 1 |  |  | $ | — |
A reconciliation of income taxes computed by applying the federal statutory income tax rate of 21.0% to income (loss) from continuing operations before income taxes to the recognized income tax provision reported in the accompanying consolidated statements of operations is as follows for the fiscal years ended January 30, 2021 and December 31, 2019 and the transition period from January 1, 2020 to February 1, 2020 (in thousands):
|  | Fiscal Year Ended January 30, 2021 |  |  | Fiscal Year Ended December 31, 2019 |  |  | Transition Period January 1 to February 1, 2020 |
Income tax at U.S. federal statutory rate |  | $ | 936 |  |  | $ | (3,475 | ) |  | $ | (460 | )
State taxes, net of federal benefit |  |  | 51 |  |  |  | 1 |  |  |  | — |
Non-deductible (non-taxable) items, net |  |  | (2,475 | ) |  |  | 908 |  |  |  | 1 |
Foreign income tax rate differential |  |  | — |  |  |  | 37 |  |  |  | — |
Valuation allowance |  |  | 13 |  |  |  | 2,013 |  |  |  | 456 |
Expiration of net operating losses |  |  | 1,966 |  |  |  | — |  |  |  | — |
Other |  |  | (440 | ) |  |  | 517 |  |  |  | 3 |
Total provision for income taxes |  | $ | 51 |  |  | $ | 1 |  |  | $ | — |
Deferred income taxes reflect the net 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 has recorded a full valuation allowance against its deferred tax assets, as realization of such assets is uncertain based on the Company’s history of operating losses. Significant components of deferred tax assets and liabilities are shown below (in thousands):
|  | January 30, 2021 |  |  | February 1, 2020 |
Non-current deferred tax assets: |  |  |  |  |  |  |  |
Net operating loss |  | $ | 3,959 |  |  | $ | 5,676 |
Accrued compensation |  |  | 527 |  |  |  | 354 |
Lease liability |  |  | 2,396 |  |  |  | 2,250 |
Derivative liability |  |  | — |  |  |  | 641 |
Interest expense |  |  | 597 |  |  |  | 553 |
Intangible assets |  |  | 1,131 |  |  |  | 856 |
Other accruals and reserves |  |  | 470 |  |  |  | 370 |
Total |  |  | 9,080 |  |  |  | 10,700 |
Valuation allowance |  |  | (6,009 | ) |  |  | (7,060 | )
Net deferred tax assets |  |  | 3,071 |  |  |  | 3,640 |
Deferred tax liabilities: |  |  |  |  |  |  |  |
Depreciation |  |  | (761 | ) |  |  | (740 | )
Right of use assets |  |  | (2,310 | ) |  |  | (2,224 | )
Debt discount |  |  | — |  |  |  | (676 | )
Net deferred tax liabilities |  |  | (3,071 | ) |  |  | (3,640 | )
Net deferred tax accounts |  | $ | — |  |  | $ | — |
At January 30, 2021, the Company had available net operating loss carryforwards of approximately $26,000,000 for federal income tax purposes, of which $17,000,000 were generated after 2017 and can be carried forward indefinitely under the Tax Cuts and Jobs Act. The remaining federal net operating losses of $9,000,000, which were generated prior to 2018, will start to expire in 2027 if not utilized. Approximately $17,800,000 of the Company’s federal net operating loss carryforward was attributable to continuing operations, and approximately $8,200,000 was attributable to discontinued operations. At January 30, 2021, the Company had available net operating loss carryforwards for state tax purposes of approximately $6,500,000 that will begin to expire in 2023 if not utilized. Utilization of the net operating loss carryforwards may be subject to a substantial annual limitation due to ownership change limitations that may have occurred, or that occur in the future, as required by Section 382 of the Internal Revenue Code of 1986, as amended, as well as similar state provisions. These ownership changes may limit the amount of the net operating loss carryover that can be utilized annually to offset future taxable income. In general, an “ownership change” as defined by Section 382 results from a transaction or series of transactions over a three-year period resulting in an ownership change of more than 50 percentage points of the outstanding stock of a company by certain stockholders. The Company believes that ownership changes occurred in December 2016, March 2018 and August 2018. As a result, the deferred tax asset associated with the Company’s federal and state net operating loss carryforward has been reduced based on the estimated amount of the Section 382 limitation. The Company estimates that approximately $17.3 million of its federal and state net operating loss carryforwards cannot be used in future years. Following the Company’s adoption on January 1, 2007 of ASC 740-10 regarding accounting for uncertainty in income taxes, the Company made a comprehensive review of its portfolio of uncertain tax positions in accordance with the guidance. In this regard, an uncertain tax position represents the Company’s expected treatment of a tax position taken in a filed tax return, or planned to be taken in a future tax return, that has not been reflected in measuring income tax expense for financial reporting purposes. As a result of that review, the Company concluded there were no uncertain tax positions and no cumulative effect on retained earnings at the time of adoption. Subsequent to that date of adoption through January 30, 2021, the Company has continued to evaluate its tax positions and concluded that it has not had any material uncertain tax positions.

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- 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/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 21 -URI http://asc.fasb.org/extlink&oid=84230637&loc=d3e32857-109319 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section S99 -Paragraph 2 -Subparagraph (SAB Topic 11.C) -URI http://asc.fasb.org/extlink&oid=116825942&loc=d3e330215-122817 Reference 3: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 17 -Subparagraph (b) -URI http://asc.fasb.org/extlink&oid=84230637&loc=d3e32809-109319 Reference 4: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SAB TOPIC 6.I.5.Q1) -URI http://asc.fasb.org/extlink&oid=116825942&loc=d3e330036-122817 Reference 5: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 14 -URI http://asc.fasb.org/extlink&oid=84230637&loc=d3e32705-109319 Reference 6: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 270 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=6424409&loc=d3e44925-109338 Reference 7: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -URI http://asc.fasb.org/topic&trid=2144680 Reference 8: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 30 -Section 50 -Paragraph 2 -Subparagraph (a) -URI http://asc.fasb.org/extlink&oid=6424122&loc=d3e41874-109331 + Details
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