XML 30 R15.htm IDEA: XBRL DOCUMENT
v3.8.0.1

INCOME TAXES | 12 Months Ended
--- | ---
Dec. 31, 2017
Income Tax Disclosure [Abstract] |
INCOME TAXES | INCOME TAXES The income tax provision (benefit) attributable to our loss before income taxes consisted of the following (in thousands):
|  | Years Ended December 31,
|  | 2017 |  | 2016
Current: | Federal | $ | — |  |  | $ | — |
| State | — |  |  | — |
|  | — |  |  | — |
Deferred: | Federal | 1,278 |  |  | (1,383 | )
| State | (686 | ) |  | (505 | )
| (Decrease) increase in valuation allowance | (742 | ) |  | 2,518 |
|  | (150 | ) |  | 630 |
|  | $ | (150 | ) |  | $ | 630 |
A reconciliation of the federal income tax statutory rate and the Company’s effective tax rate is as follows (in thousands):
| Years Ended December 31,
| 2017 |  | 2016
| Percent |  | Amount |  | Percent |  | Amount
Federal income tax benefit at U.S. statutory rate | 34.0 | % |  | $ | (1,760 | ) |  | 34.0 | % |  | $ | (1,518 | )
State taxes, net of federal benefit | 8.7 | % |  | (452 | ) |  | 7.5 | % |  | (333 | )
Change in valuation allowance, exclusive of Tax Reform impact | (57.5 | )% |  | 2,979 |  |  | (56.5 | )% |  | 2,518 |
Effect of Tax Reform on net deferred taxes | 17.2 | % |  | (890 | ) |  | — | % |  | — |
Permanent differences | (1.7 | )% |  | 91 |  |  | (2.1 | )% |  | 95 |
Credits | 2.2 | % |  | (116 | ) |  | 2.9 | % |  | (129 | )
Other | — | % |  | (2 | ) |  | 0.1 | % |  | (3 | )
| 2.9 | % |  | $ | (150 | ) |  | (14.1 | )% |  | $ | 630 |
Our deferred tax assets (liabilities) consisted of the following (in thousands):
| December 31,
| 2017 |  | 2016
Deferred tax assets: |  |  |
Deferred compensation | $ | 438 |  |  | $ | 655 |
Depreciation of fixed assets | — |  |  | 42 |
Intangible assets and amortization | 4,415 |  |  | 6,830 |
Net operating loss carry-forwards | 4,505 |  |  | 2,861 |
Accrued expenses | 772 |  |  | 1,077 |
Allowance for doubtful accounts | 24 |  |  | 19 |
Credits | 336 |  |  | 220 |
Common stock warrant liability | 541 |  |  | 263 |
Charitable contribution carry-forward | 72 |  |  | 90 |
Valuation allowance | (9,011 | ) |  | (9,753 | )
| 2,092 |  |  | 2,304 |
Deferred tax liabilities: |  |  |  |  |
Depreciation of fixed assets | (910 | ) |  | (631 | )
Amortization of indefinite-lived intangibles | (1,757 | ) |  | (1,907 | )
Prepaid expenses | (651 | ) |  | (1,055 | )
Effect of state taxes on future federal returns | (505 | ) |  | (585 | )
Other | (26 | ) |  | (33 | )
| (3,849 | ) |  | (4,211 | )
| $ | (1,757 | ) |  | $ | (1,907 | )
On December 22, 2017, the U.S. government enacted comprehensive tax legislation commonly referred to as the Tax Cuts and Jobs Act (the “2017 Tax Act”). The 2017 Tax Act makes broad and complex changes to the U.S. tax code that will affect 2017, including bonus depreciation that will allow for full expensing of qualified property purchases. The 2017 Tax Act also establishes new tax laws that will affect 2018 and beyond, including, but not limited to, (1) reduction of the U.S. federal corporate tax rate from 35% to 21%; (2) elimination of the corporate alternative minimum tax; (3) limitation on deductibility of interest expense; (4) limitations on the deductibility of certain executive compensation; and (5) limitations on the use of net operating losses ("NOLs") generated after December 31, 2017 to reduce taxable income. The SEC staff issued Staff Accounting Bulletin ("SAB") 118, which provides guidance on accounting for the tax effects of the 2017 Tax Act. SAB 118 provides a measurement period that should not extend beyond one year from the 2017 Tax Act enactment date for companies to complete the accounting under Accounting Standards Codification ("ASC") 740. In accordance with SAB 118, a company must reflect the income tax effects of those aspects of the Act for which the accounting under ASC 740 is complete. To the extent that a company’s accounting for certain income tax effects of the 2017 Tax Act is incomplete but it is able to determine a reasonable estimate, it must record a provisional estimate in the financial statements. If a company cannot determine a provisional estimate to be included in the financial statements, it should continue to apply ASC 740 on the basis of the provisions of the tax laws that were in effect immediately before the enactment of the 2017 Tax Act. Our accounting for the following elements of the 2017 Tax Act is incomplete. However, we were able to make reasonable estimates of certain effects and, therefore, recorded provisional adjustments as follows: Reduction of US federal corporate tax rate: The 2017 Tax Act reduces the corporate tax rate to 21%, effective January 1, 2018. The carrying value of our net deferred tax assets is determined by the enacted US corporate income tax rate. Consequently, any changes in the US corporate income tax rate will impact the carrying value of our deferred tax assets. Under the new corporate income tax rate, net deferred income tax assets will decrease by $2.8 million and the valuation allowance will decrease by $3.7 million. The net effect of the tax reform enactment on the consolidated financial statements is an income tax benefit of $0.9 million. While we are able to make a reasonable estimate of the impact of the reduction in the corporate rate, it may be affected by other analyses related to the 2017 Tax Act, including the state tax effect of adjustments made to federal temporary differences, as well as changes to our valuation allowance. Valuation allowances: The Company must assess whether its valuation allowance analyses are affected by various aspects of the 2017 Tax Act. Since, as discussed herein, the Company has recorded provisional amounts related to certain portions of the 2017 Tax Act, any corresponding determination of the need for or change in a valuation allowance is also provisional. As of December 31, 2017, we had an NOL of $13.7 million and state tax carry-forwards of $27.1 million, which can be carried forward 20 years and begin to expire after 2035. We also have general business credits of $0.3 million, which begin to expire after 2035. Intangible asset impairment charges recorded in prior years resulted in a significant amount of deferred tax assets. In assessing the future realization of the Company’s deferred tax assets, we considered whether it is “more likely than not” that some portion or all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible. We considered the scheduled reversal of deferred tax liabilities, projected future taxable income, and tax planning strategies in making this assessment. We evaluated both positive and negative evidence in determining the need for a valuation allowance. We continue to assess the future realization of deferred tax assets and have concluded that we have not met the "more likely than not" threshold. As of December 31, 2017, we continue to provide a valuation allowance against our remaining deferred tax assets after being utilized by deferred tax liabilities for all jurisdictions. The valuation reserve against deferred tax assets has no effect on the actual taxes paid or owed by the Company. As of December 31, 2017 and 2016, we had $1.8 million and $1.9 million, respectively, of deferred tax liabilities relating to goodwill and other indefinite-lived intangibles for which the timing of the reversal is not determinable and, therefore, does not assure the realization of deferred tax assets or reduce the need for a valuation allowance. The Company’s utilization of NOLs and the general business tax credit carryforwards may be subject to an annual limitation under Section 382 and 383 of the Internal Revenue Code of 1986 ("IRC"), and similar state provisions due to ownership changes that may have occurred or that could occur in the future. These ownership changes may limit the amount of NOL and tax credit carryforwards that can be utilized annually to offset future taxable income and tax, respectively. In general, an ownership change, as defined by Section 382 and 383, results from transactions increasing ownership of certain stockholders or public groups in the stock of the corporation by more than 50 percentage points over a three-year period. While the Company has not completed an IRC Section 382/383 analysis to determine if there are any annual limitations on the utilization of NOLs and tax credit carryforwards, the Company does not believe that there have been greater than 50% ownership change in the last three years that would prohibit the Company from utilizing all of their tax attributes. Management has made an annual analysis of its state and federal tax returns and concluded that the Company has no recordable liability, as of December 31, 2017 or 2016, for unrecognized tax benefits as a result of uncertain tax positions taken. As of December 31, 2017, the Company is subject to U.S. federal income tax examinations for the tax years 2014 through 2017. In addition, the Company is subject to state and local income tax examinations for various tax years in the taxing jurisdictions in which the Company operates.

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://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 235 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SX 210.4-08.(h)) -URI http://asc.fasb.org/extlink&oid=26873400&loc=d3e23780-122690 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 3 -URI http://asc.fasb.org/extlink&oid=65882285&loc=d3e32559-109319 Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 15 -URI http://asc.fasb.org/extlink&oid=65882285&loc=d3e32718-109319 Reference 4: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 9 -URI http://asc.fasb.org/extlink&oid=65882285&loc=d3e32639-109319 Reference 5: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 2 -URI http://asc.fasb.org/extlink&oid=65882285&loc=d3e32537-109319 + Details
Name: | us-gaap_IncomeTaxDisclosureTextBlock
Namespace Prefix: | us-gaap_
Data Type: | nonnum:textBlockItemType
Balance Type: | na
Period Type: | duration