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Income Taxes | 12 Months Ended
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Dec. 31, 2022
Income Tax Disclosure [Abstract] |
Income Taxes | Note 15: Income taxes For fiscal years ended December 31, 2022, and January 1, 2022, the Company recorded an income tax benefit from continuing operation of approximately $6.7 million and an income tax provision of $273,000, respectively, and an income tax provision from discontinued operations of approximately $2.2 million and $0, respectively, which consisted of the following (in $000's):
|  | Fiscal Years Ended |
|  | December 31, 2022 |  |  | January 1, 2022 |
Current tax expense: |  |  |  |  |  |
State |  | $ | 32 |  |  | $ | 75 |
Federal |  |  | 45 |  |  |  | — |
Current tax expense |  |  | 77 |  |  |  | 75 |
Deferred tax benefit - domestic |  |  | (4,589 | ) |  |  | 198 |
Total (benefit) provision of income taxes |  | $ | (4,512 | ) |  | $ | 273 |
A reconciliation of the Company's income tax benefit (provision) with the federal statutory tax rate for the fiscal years ended December 31, 2022, and January 1, 2022, respectively, is shown below:
|  | Fiscal Years Ended |
|  | December 31, 2022 |  |  | January 1, 2022 |
U.S statutory rate |  |  | 21.0 | % |  |  | 21.0 | %
Federal income tax for installment sale |  |  | 0.6 | % |  |  | 0.0 | %
State tax rate |  |  | 5.5 | % |  |  | 4.3 | %
Foreign rate differential |  |  | -0.2 | % |  |  | 0.2 | %
Permanent differences |  |  | 0.4 | % |  |  | 2.3 | %
Change in tax rates |  |  | 2.8 | % |  |  | 0.2 | %
Benefit from CARES Act carryback claim |  |  | 0.0 | % |  |  | -1.2 | %
Change in valuation allowance |  |  | -96.4 | % |  |  | -27.5 | %
Other |  |  | 0.4 | % |  |  | -0.9 | %
|  |  | -65.9 | % |  |  | -1.6 | %
Income (l oss) before provision of income taxes was derived from the following sources for fiscal years December 31, 2022 and January 1, 2022, respectively, as shown below (in $000's):
|  | Fiscal Years Ended |
|  | December 31, 2022 |  |  | January 1, 2022 |
United States |  | $ | 6,717 |  |  | $ | (16,074 | )
Canada |  |  | (237 | ) |  |  | (540 | )
Total |  | $ | 6,480 |  |  | $ | (16,614 | )
The components of net deferred tax assets (liabilities) as of December 31, 2022 and January 1, 2022, respectively, are as follows (in $000's):
|  | December 31, 2022 |  |  | January 1, 2022 |
Deferred tax assets (liabilities): |  |  |  |  |  |
Allowance for bad debts |  | $ | — |  |  | $ | 795 |
Accrued expenses |  |  | 1,723 |  |  |  | 2,118 |
Accrued compensation |  |  | 82 |  |  |  | 91 |
Section 174 expenses |  |  | 92 |  |  |  | — |
Prepaid expenses |  |  | (184 | ) |  |  | (375 | )
Net operating loss |  |  | 5,494 |  |  |  | 4,440 |
Lease liability |  |  | 39 |  |  |  | 25 |
Tax credits |  |  | 3 |  |  |  | 92 |
Share-based compensation |  |  | 171 |  |  |  | 219 |
Intangibles |  |  | (4,782 | ) |  |  | (5 | )
Property and equipment |  |  | (483 | ) |  |  | (407 | )
Installment sale |  |  | (2,114 | ) |  |  | — |
Unrealized losses |  |  | 305 |  |  |  | 148 |
Section 163(j) interest |  |  | 363 |  |  |  | 361 |
|  |  | 709 |  |  |  | 7,502 |
Less: valuation allowance |  |  | (904 | ) |  |  | (7,502 | )
Net deferred tax assets (liabilities) |  | $ | (195 | ) |  | $ | — |
As of December 31, 2022, the Company has net operating loss carryforwards of approximately $18.8 million 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. During the fourth quarter, management has released the valuation allowance of approximately $6.6 million which they believe will be utilized in the near future. The Company continues to have a full valuation allowance on certain foreign net operating losses. Management concluded that no valuation allowance was necessary, based on taxable temporary differences reversing in the near future to utilize tax attributes. The Company has recorded a valuation allowance of $0.9 million and $7.5 million as of December 31, 2022, and January 1, 2022, respectfully. The Company annually conducts an analysis of its uncertain tax positions and has concluded that it has no uncertain tax positions as of December 31, 2022. 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 2018 through 2022 tax years remain subject to selection for examination as of December 31, 2022. None of the Company’s income tax returns are currently under audit. During the fourth quarter of fiscal 2022, the Company released the valuation allowance of approximately $6.6 million which they believe will be utilized in the near future. The Company continues to have a full valuation allowance on certain foreign net operating losses. The Company concluded that no valuation allowance was necessary, based on taxable temporary differences reversing in the near future. The Company has recorded a valuation allowance of $0.9 million and $7.5 million as of December 31, 2022 and January 1, 2022, respectfully.

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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 https://asc.fasb.org/extlink&oid=121826272&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 https://asc.fasb.org/extlink&oid=122134291&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 https://asc.fasb.org/extlink&oid=121826272&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 https://asc.fasb.org/extlink&oid=122134291&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 https://asc.fasb.org/extlink&oid=121826272&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 https://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 https://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 https://asc.fasb.org/extlink&oid=6424122&loc=d3e41874-109331 Reference 9: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 235 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SX 210.4-08(h)(2)) -URI https://asc.fasb.org/extlink&oid=120395691&loc=d3e23780-122690 + Details
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