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Note 6 - Income Taxes | 12 Months Ended
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Dec. 31, 2017
Notes to Financial Statements |
Income Tax Disclosure [Text Block] | Note 6 – Income Taxes Income taxes are recognized for the amount of taxes payable or refundable for the current year and deferred tax liabilities and assets are established for the future tax consequences of events that have been recognized in our consolidated financial statements or tax returns. The effects of income taxes are measured based on enacted tax laws and rates. The provision/(benefit) for income taxes from continuing operations consists of the following (in $’000 ):
|  | Year Ended December 31, |
|  | 201 7 |  |  | 201 6 |
Current: |  |  |  |  |  |  |  |
Federal |  | $ | - |  |  | $ | - |
State |  |  | 19 |  |  |  | 12 |
Deferred: |  |  |  |  |  |  |  |
Federal |  |  | 6,290 |  |  |  | (217 | )
State |  |  | (4 | ) |  |  | 1 |
Total provision (benefit) for income taxes before valuation allowance |  | $ | 6,305 |  |  | $ | (204 | )
Change in valuation allowance |  |  | (6,296 | ) |  |  | 223 |
Total provision for income taxes |  | $ | 9 |  |  | $ | 19 |
The significant components of our deferred tax assets and liabilities are as follows (in $’000 ):
|  | December 31, |
|  | 201 7 |  |  | 201 6 |
Deferred tax assets : |  |  |  |  |  |  |  |
Accrued expense s |  | $ | 65 |  |  | $ | 69 |
Net operating loss carryove r |  |  | 8,792 |  |  |  | 13,387 |
Goodwill and other intangible s |  |  | 1,665 |  |  |  | 3,254 |
Deferred compensatio n |  |  | 135 |  |  |  | 247 |
Depreciatio n |  |  | 39 |  |  |  | 55 |
Other carryovers and credit s |  |  | 12 |  |  |  | 10 |
Total deferred tax asset s |  |  | 10,708 |  |  |  | 17,022 |
Deferred tax liabilities : |  |  |  |  |  |  |  |
Prepaid expense s |  | $ | ( 20 | ) |  | $ | ( 38 | )
Depreciatio n |  |  | - |  |  |  | - |
Total deferred tax liabilitie s |  |  | ( 20 | ) |  |  | ( 38 | )
Valuation allowanc e |  |  | ( 10,688 | ) |  |  | ( 16,984 | )
Net deferred tax asset (liability ) |  | $ | - |  |  | $ | - |
At December 31, 201 7 and 2016, we had net operating losses (“NOL”) totaling $37.7 million and $36.9 million, respectively, to be carried forward 20 years to offset future taxable income and any unused NOL will begin to expire in 2027. We do not believe our NOL will be limited under Internal Revenue Code (“IRC”) Section 382 and believe it will also be available for state income tax purposes subject to state carryforward limitations. IRC Section 382 limits the utilization of net operating loss in years subsequent to an owner shift based upon the value of the Company at the date of the owner shift. We have not undertaken a detailed study in connection with IRC Section 382 in order to determine if there is any limitation of the utilization of our NOL carryforward. If IRC Section 382 limitation were deemed to apply, our gross deferred tax asset and its corresponding valuation allowance could be reduced. The 2017 Tax cuts and Jobs Act revised the use of net operating loss carryforwards and limits them to 80% of taxable income each year, but removed the limitation on years carried forward. Our provision for income taxes reflects the establishment of a full valuation allowance against deferred tax assets as of December 31,2017 and 2016. Accounting Standards Codification Topic 740 Income Taxes requires management to evaluate its deferred tax assets on a regular basis to reduce them to an amount that is realizable on a more likely than not basis. In determining our provision/(benefit) for income taxes, net deferred tax assets, liabilities and valuation allowances, we are required to make judgments and estimates related to projections of profitability, the timing and extent of the utilization of net operating loss carryforwards and applicable tax rates. Judgments and estimates related to our projections and assumptions are inherently uncertain; therefore, actual results could differ materially from the projections. We have adopted the provisions of the guidance related to accounting for uncertainties in income taxes. We have analyzed our current tax reporting compliance positions for all open years and have determined that it does not have any material unrecognized tax benefits. Accordingly, we have omitted the tabular reconciliation schedule of unrecognized tax benefits. We do not expect a material change in unrecognized tax benefits over the next 12 months. All of our prior federal and state tax filings from the 2014 tax year forward remain open under statutes of limitation. Operating losses generated in years prior to 2014 remain open to adjustment until the statute closes for the tax year in which the net operating losses are utilized. The Company’s provision (benefit) for income taxes attributable to continuing operations differs from the expected tax benefit amount computed by applying the statutory federal income tax rate of 34% to income (loss) before taxes for the years ended December 31, 2017 and 2016, primarily as a result of the following::
|  | Year Ended December 31 , |
|  | 201 7 |  |  | 201 6 |
Federal statutory rat e |  |  | 34 | % |  |  | 34 | %
State tax, net of income tax benefi t |  |  | 4 | % |  |  | 1.9 | %
Effect of permanent difference s |  |  | 11 | % |  |  | (11.7 | )%
Change in valuation allowanc e |  |  | (48.0 | )% |  |  | (26.2 | )%
Tota l |  |  | 1 | % |  |  | (2.0 | )%
The Tax Cuts and Jobs Act was enacted on December 22, 2017. The Act reduces the US federal corporate tax rate from 35% to 21%. We remeasured certain deferred tax assets and liabilities based on the rates at which they are expected to reverse in the future, which is generally 21%. The remeasurement of our deferred tax balance was fully offset by the application of our valuation allowance. The accounting for the effects of the rate change on deferred tax balances is expected to be complete, and consequently no provisional amounts were recorded for this item.

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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/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -URI http://asc.fasb.org/topic&trid=2144680 + Details
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