XML 37 R25.htm IDEA: XBRL DOCUMENT
v3.19.1

Income Taxes | 12 Months Ended
--- | ---
Dec. 31, 2018
Income Tax Disclosure [Abstract] |
Income Taxes | 19. INCOME TAXES During the year ended December 31, 2018, the Company recognized income tax expense of $12 thousand and the effective tax rate was 0.24%. During the year ended December 31, 2017, the Company recognized income tax expense of $38 thousand and the effective tax rate was 0.91%. 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. The Company recorded valuation allowances for certain tax attributes and other deferred tax assets. At this time, sufficient uncertainty exists regarding the future realization of these deferred tax assets through future taxable income. If, in the future, the Company believes that it is more likely than not that these deferred tax benefits will be realized, the valuation allowances will be reversed. With a full valuation allowance, any change in the deferred tax asset or liability is fully offset by a corresponding change in the valuation allowance. The Tax Cuts and Jobs Act was enacted on December 22, 2017, resulting in significant changes to the taxation of corporations and individuals. For corporate taxpayers, the Tax Act lowers the corporate tax rate, from 35% to 21%, which requires the Company to re-measure net deferred tax assets in the period of enactment as a discrete item within the income tax provision. As of result of the decrease in the federal tax rate, a decrease of net deferred tax assets of approximately $20 million was recorded. This decrease is substantially offset by the Company’s valuation allowance. The Company currently has approximately $147 million in federal and state Net Operating Losses (“NOLs), which based on current statutory tax rates, including the lower corporate tax rate enacted by the Tax Act. If unused, these NOLs will begin expiring in 2027. Under Code Section 382 (“Section 382”) rules, if a change of ownership is triggered, the Company’s NOL assets and possibly certain other deferred tax assets may be impaired. We estimate that as of December 31, 2018, the three-year cumulative shift in ownership of the Company’s stock has not triggered an impairment of our NOL asset. However, if an ownership change were to occur, the Section 382 limitation would not be expected to materially impact the Company’s financial position or results of operations as of December 31, 2018, because the Company has recorded a full valuation allowance on substantially all of its net deferred tax assets. The Company’s ability to use its NOLs (and in certain circumstances, future built-in losses and depreciation deductions) can be negatively affected if there is an “ownership change” as defined under Section 382. In general, an ownership change occurs whenever there is a shift in ownership by more than 50 percentage points by one or more 5% stockholders over a specified time period (generally three years). Given Section 382’s broad definition, an ownership change could be the unintended consequence of otherwise normal market trading in the Company’s stock that is outside of the Company’s control. In an effort to preserve the availability of these NOLs, Comstock adopted a Section 382 rights agreement, which expired in May 2014. In June 2015, at the 2015 Annual Meeting of Stockholders, the Company’s stockholders approved a new Internal Revenue Code Section 382 Rights Agreement (the “Rights Agreement”) to protect stockholder value. The Rights Agreement expires on March 27, 2025. The Rights Agreement was adopted to reduce the likelihood of such an unintended “ownership change”, thus preserving the value of these tax benefits. Similar plans have been adopted by a number of companies holding similar significant tax assets over the past several years. The Company has not recorded any accruals related to uncertain tax positions as of December 31, 2018 and 2017, respectively. We file U.S. and state income tax returns in jurisdictions with varying statutes of limitations. The 2015 through 2017 tax years remain subject to examination by federal and most state tax authorities. The income tax provision consists of the following as of December 31:
|  | 2018 |  |  | 2017 |
Current: |  |  |  |  |  |  |  |
Federal |  | $ | — |  |  | $ | — |
State |  |  | 18 |  |  |  | 24 |
|  |  | 18 |  |  |  | 24 |
Deferred: |  |  |  |  |  |  |  |
Federal |  |  | (607 | ) |  |  | 15,171 |
State |  |  | (111 | ) |  |  | 2,724 |
|  |  | (718 | ) |  |  | 17,895 |
Valuation allowance |  |  | 712 |  |  |  | (17,881 | )
Total income tax expense |  | $ | 12 |  |  | $ | 38 |
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. Components of the Company’s deferred tax assets and liabilities at December 31, 2018 and 2017 are as follows:
|  | 2018 |  |  | 2017 |
Deferred tax assets: |  |  |  |  |  |  |  |
Inventory |  | $ | 500 |  |  | $ | 834 |
Warranty |  |  | 63 |  |  |  | 67 |
Net operating loss and tax credit carryforwards |  |  | 37,937 |  |  |  | 37,045 |
Accrued expenses |  |  | 4 |  |  |  | 4 |
Stock based compensation |  |  | 379 |  |  |  | 352 |
Investment in affiliates |  |  | — |  |  |  | 48 |
|  |  | 38,883 |  |  |  | 38,350 |
Less - valuation allowance |  |  | (38,809 | ) |  |  | (38,328 | )
Net deferred tax assets |  |  | 74 |  |  |  | 22 |
Deferred tax liabilities: |  |  |  |  |  |  |  |
Depreciation and amortization |  |  | (11 | ) |  |  | (21 | )
Investment in affiliates |  |  | (28 | ) |  |  | — |
Goodwill amortization |  |  | (44 | ) |  |  | (15 | )
Net deferred tax liabilities |  |  | (83 | ) |  |  | (36 | )
Net deferred tax assets (liabilities) |  | $ | (9 | ) |  | $ | (14 | )
A reconciliation of the statutory rate and the effective tax rate after adjustments for non-includable partnership income arising from non-controlling interest follows:
|  | 2018 |  |  | 2017 |
Federal statutory rate |  |  | (21.00 | %) |  |  | (35.00 | %)
State income taxes - net of federal benefit |  |  | (4.74 | %) |  |  | (3.90 | %)
Permanent differences |  |  | 16.52 | % |  |  | (10.94 | %)
Return to provision adjustments |  |  | (4.29 | %) |  |  | 5.18 | %
Change in valuation allowance |  |  | 14.32 | % |  |  | (417.08 | %)
Current state income tax |  |  | 0.36 | % |  |  | 0.56 | %
Change in enacted rate |  |  | 1.52 | % |  |  | 462.23 | %
Other, net |  |  | (2.45 | %) |  |  | (0.15 | %)
Effective tax rate |  |  | 0.24 | % |  |  | 0.91 | %

X
- References No definition available. + Details
Name: | us-gaap_IncomeTaxDisclosureAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration

X
- 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
Name: | us-gaap_IncomeTaxDisclosureTextBlock
Namespace Prefix: | us-gaap_
Data Type: | nonnum:textBlockItemType
Balance Type: | na
Period Type: | duration