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Income Taxes | 12 Months Ended
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Jan. 02, 2021
Income Tax Disclosure [Abstract] |
Income Taxes |
Note 1 3: | Income taxes
For fiscal year 2020 and 2019, we recorded an income tax benefit of $427 and $3,197, respectively, which consisted of the following:
|  | Fiscal Years Ended |
|  | January 2, 2021 |  |  | December 28, 2019 |
Current tax expense: |  |  |  |  |  |  |  |
State |  | $ | (46 | ) |  | $ | (80 | )
Federal |  |  | 203 |  |  |  | — |
Current tax expense |  | $ | 157 |  |  | $ | (80 | )
Deferred tax benefit - domestic |  |  | 270 |  |  |  | 3,277 |
Benefit of income taxes |  | $ | 427 |  |  | $ | 3,197 |
A reconciliation of our benefit of income taxes with the federal statutory tax rate for fiscal years 2020 and 2019 is shown below:
|  | Fiscal Years Ended |
|  | January 2, 2021 |  |  | December 28, 2019 |
U.S statutory rate |  |  | 21.0 | % |  |  | 21.0 | %
State tax rate |  |  | 7.5 | % |  |  | 1.8 | %
Foreign rate differential |  |  | 0.4 | % |  |  | 0.2 | %
Permanent differences |  |  | -0.1 | % |  |  | -0.1 | %
Change in valuation allowance |  |  | -24.5 | % |  |  | -0.7 | %
Other |  |  | 0.6 | % |  |  | -0.6 | %
|  |  | 4.9 | % |  |  | 21.6 | %
Loss before benefit of income taxes was derived from the following sources for fiscal years 2020 and 2019 as shown below:
|  | Fiscal Years Ended |
|  | January 2, 2021 |  |  | December 28, 2019 |
United States |  | $ | (8,270 | ) |  | $ | (14,497 | )
Canada |  |  | (655 | ) |  |  | (664 | )
|  | $ | (8,925 | ) |  | $ | (15,161 | )
The components of net deferred tax assets (liabilities) as of January 2, 2021 and December 28, 2019, are as follows:
|  | January 2, 2021 |  |  | December 28, 2019 |
Deferred tax assets (liabilities): |  |  |  |  |  |  |  |
Allowance for bad debts |  | $ | 823 |  |  | $ | 802 |
Accrued expenses |  |  | 1,769 |  |  |  | 1,623 |
Accrued compensation |  |  | 76 |  |  |  | 62 |
Prepaid expenses |  |  | (304 | ) |  |  | (93 | )
Net operating loss |  |  | 3,477 |  |  |  | 2,045 |
Lease liability |  |  | 35 |  |  |  | 504 |
Tax credits |  |  | 290 |  |  |  | 256 |
Share-based compensation |  |  | 176 |  |  |  | 125 |
Intangibles |  |  | (3,717 | ) |  |  | (4,585 | )
Property and equipment |  |  | (214 | ) |  |  | (652 | )
Unrealized losses (gains) |  |  | 140 |  |  |  | 141 |
Section 163(j) interest |  |  | 387 |  |  |  | 288 |
|  |  | 2,938 |  |  |  | 516 |
Less: valuation allowance |  |  | (2,938 | ) |  |  | (786 | )
Net deferred tax assets (liabilities) |  | $ | — |  |  | $ | (270 | )
As of January 2, 2021, the Company has net operating loss carryforwards of approximately $10,221 for federal income tax purposes, which will be available to offset future taxable income. Due to recent tax legislation, these net operating losses are eligible for indefinite carryforward, limited by certain taxable income limitations. The Company evaluates all available evidence to determine if a valuation allowance is needed to reduce its deferred tax assets. Management has concluded that it is more likely than not that its existing tax benefits in the U.S. and Canada will not be realized. Accordingly, the Company has recorded a valuation allowance $2,938 at January 2, 2021 to reduce its deferred tax assets. The Company annually conducts an analysis of its uncertain tax positions and has concluded that it has no uncertain tax positions as of January 2, 2021. The Company’s policy is to record uncertain tax positions as a component of income tax expense. The Company files U.S. and state income tax returns in jurisdictions with differing statutes of limitations. The 2017 through 2020 tax years remain subject to selection for examination as of January 2, 2021. None of the Company’s income tax returns are currently under audit.

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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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