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NOTE 12 - INCOME TAXES | 12 Months Ended
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Dec. 31, 2018
Income Tax Disclosure [Abstract] |
Income Tax Disclosure [Text Block] | NOTE 12 - INCOME TAXES The Tax Act was enacted in December 2017. The Tax Act significantly changes U.S. tax law by, among other things, lowering U.S. corporate income tax rates, implementing a modified territorial tax system and imposing a one-time transition tax on deemed repatriated earnings of foreign subsidiaries. The Tax Act reduces the U.S. corporate income tax rate from 35% to 21%, effective January 1, 2018. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to reverse. As a result of the reduction in the U.S. corporate income tax rate from 35% to 21% under the Tax Act, we revalued our ending net deferred tax liabilities at December 31, 2017 and recognized a deferred tax benefit of $545. While the Tax Act provides for a modified territorial tax system, beginning in 2018, Global Intangible Low-Taxed Income (“GILTI”) provisions will be applied providing an incremental tax on low taxed foreign income. The GILTI provisions require us to include in our U.S. income tax return foreign subsidiary earnings in excess of an allowable return on the foreign subsidiary’s tangible assets. Under U.S. GAAP, we are required to make an accounting policy election to either (1) treat taxes due related to GILTI as a current-period expense when incurred (the “period cost method”) or (2) factor such amounts into our measurement of our deferred taxes (the “deferred method”). The Company has selected the "period cost method" as its accounting policy with respect to the new GILTI tax rules. The components of pre-tax loss for the years ended December 31, 2018 and 2017 are as follows:
|  | 2018 |  |  | 2017 |
Domestic |  | $ | (14,550 | ) |  | $ | (5,519 | )
Foreign |  |  | (227 | ) |  |  | (107 | )
Total |  | $ | (14,777 | ) |  | $ | (5,626 | )
The components of the provision (benefit) for income taxes attributable to continuing operations for the years ended December 31, 2018 and 2017 are as follows:
|  | 2018 |  |  | 2017 |
Current: |  |  |  |  |  |  |  |
Federal |  | $ | - |  |  | $ | 6 |
State |  |  | 37 |  |  |  | 50 |
Foreign |  |  | 116 |  |  |  | (213 | )
Total current |  |  | 153 |  |  |  | (157 | )
Deferred: |  |  |  |  |  |  |  |
Federal |  |  | (5,747 | ) |  |  | 85 |
State |  |  | (1,554 | ) |  |  | 168 |
Foreign |  |  | (81 | ) |  |  | - |
Total deferred |  |  | (7,382 | ) |  |  | 253 |
|  | $ | (7,229 | ) |  | $ | 96 |
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. Significant components of our deferred taxes at December 31, 2018 and 2017 are as follows:
|  | 2018 |  |  | 2017 |
Deferred tax assets: |  |  |  |  |  |  |  |
Net operating losses |  | $ | 24,330 |  |  | $ | 28,349 |
Research and development credit carryforwards |  |  | 5,147 |  |  |  | 4,659 |
Minimum tax credit carryforwards |  |  | 123 |  |  |  | 123 |
Disallowed interest expense carryforwards |  |  | 1,909 |  |  |  | - |
Stock compensation |  |  | 107 |  |  |  | 11 |
Deferred revenue |  |  | 276 |  |  |  | 299 |
Fixed assets |  |  | 14 |  |  |  | - |
Accrued expenses |  |  | 594 |  |  |  | 318 |
Other |  |  | 526 |  |  |  | 260 |
|  |  | 33,026 |  |  |  | 34,019 |
Valuation allowance |  |  | (19,517 | ) |  |  | (28,849 | )
Net deferred tax assets |  |  | 13,509 |  |  |  | 5,170 |
Deferred tax liabilities: |  |  |  |  |  |  |  |
Acquired intangibles |  |  | (11,216 | ) |  |  | (5,180 | )
Fixed assets |  |  | - |  |  |  | (309 | )
Capitalized software |  |  | (1,268 | ) |  |  | - |
Deferred commission |  |  | (856 | ) |  |  | - |
Goodwill |  |  | (1,735 | ) |  |  | (751 | )
|  |  | (15,075 | ) |  |  | (6,240 | )
Net current deferred tax assets (liabilities) |  | $ | (1,566 | ) |  | $ | (1,070 | )
At December 31, 2018, we had federal net operating loss carryforwards of approximately $110,136, research and development credit carryforwards of approximately $6,257 and alternative minimum tax credit carryforwards of approximately $123. The net operating loss and research and development credit carryforwards will expire in varying amounts from 2019 through 2038, if not utilized. Federal net operating losses generated in 2018 and after are carried forward indefinitely. As a result of various acquisitions by us in prior years, we may be subject to a substantial annual limitation in the utilization of the net operating losses and credit carryforwards due to the “change in ownership” provisions of the Internal Revenue Code of 1986. The annual limitation may result in the expiration of net operating losses before utilization. Due to the uncertainty surrounding the timing of realizing the benefits of its favorable tax attributes in future tax returns, we have placed a valuation allowance against our net deferred tax assets, exclusive of goodwill. During the year ended December 31, 2018, the valuation allowance decreased by approximately $9,332 due primarily to the results of operations, acquisitions and the impact of changes in law. We consider undistributed earnings of our foreign subsidiaries as permanently reinvested and, accordingly, we have made no provision for U.S. federal or state income taxes thereon, other than the earnings required to be recognized under IRC Section 956 or Section 965. Our provision for income taxes attributable to continuing operations for the years ending December 31, 2018 and 2017 differ from the expected tax expense (benefit) amount computed by applying the statutory federal income tax rate of 21% to income before income taxes as a result of the following:
|  | 2018 |  |  | 2017 |
Computed at statutory rate |  | $ | (3,103 | ) |  | $ | (1,913 | )
State taxes, net of federal benefit |  |  | (482 | ) |  |  | (6 | )
Permanent items and other |  |  | 392 |  |  |  | 21 |
Credit carryforwards |  |  | (478 | ) |  |  | (181 | )
Foreign income taxed at different rates |  |  | (4 | ) |  |  | (198 | )
Effect of Tax Act |  |  | - |  |  |  | 14,058 |
Change in tax carryforwards not benefitted |  |  | 5,778 |  |  |  | 2,983 |
Change in valuation allowance |  |  | (9,332 | ) |  |  | (14,668 | )
|  | $ | (7,229 | ) |  | $ | 96 |
Under ASC 740-10, Income Taxes, we periodically review the uncertainties and judgments related to the application of complex income tax regulations to determine income tax liabilities in several jurisdictions. We use a “more likely than not” criterion for recognizing an asset for unrecognized income tax benefits or a liability for uncertain tax positions. We have determined we have the following unrecognized assets or liabilities related to uncertain tax positions as of December 31, 2018. We do not anticipate any significant changes in such uncertainties and judgments during the next twelve months. To the extent we are required to recognize interest and penalties related to unrecognized tax liabilities, this amount will be recorded as an accrued liability. The reconciliation of our unrecognized tax benefits is as follows:
Balance at December 31, 2016 |  | $ | 1,219 |
Additions based on tax positions related to the current year |  |  | 99 |
Additions for tax positions of prior years |  |  | 11 |
Reductions for tax positions of prior years |  |  | (155 | )
Balance at December 31, 2017 |  | $ | 1,174 |
Additions based on tax positions related to the current year |  |  | 246 |
Additions for tax positions of prior years |  |  | 15 |
Reductions for tax positions of prior years |  |  | - |
Balance at December 31, 2018 |  | $ | 1,435 |
As of December 31, 2018, we had $1,435 of unrecognized tax benefits, which would affect the effective tax rate if recognized. Our assessment of our unrecognized tax benefits is subject to change as a function of our financial statement audit. Our practice is to recognize interest and/or penalties related to income tax matters in income tax expense. During the twelve months ended December 31, 2018, we recognized $0 of interest and penalties in our income tax expense. We file tax returns in the U.S. federal jurisdiction and in several state and foreign jurisdictions. We are no longer subject to U.S. federal income tax examinations for years ending before December 31, 2015 and are no longer subject to state and local or foreign income tax examinations by tax authorities for years ending before December 31, 2014. We are not currently under audit for federal, state or any foreign jurisdictions.

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