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Note 6 - Income Taxes | 12 Months Ended
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Dec. 31, 2023
Notes to Financial Statements |
Income Tax Disclosure [Text Block] | Note 6 - Income Taxes For the years ended December 31, 2023 and 2022, we recognized an income tax provision (benefit) of $1,951 and ($326), respectively.
|  | Year ended December 31, |
|  | 2023 |  |  | 2022 |
Current: |  |  |  |  |  |  |  |
State |  | $ | 27 |  |  | $ | 19 |
Foreign |  |  | 623 |  |  |  | 617 |
|  |  | 650 |  |  |  | 636 |
Deferred: |  |  |  |  |  |  |  |
Federal |  |  | 1,466 |  |  |  | (661 | )
Foreign |  |  | (165 | ) |  |  | (301 | )
|  |  | 1,301 |  |  |  | (962 | )
Total income tax (benefit) provision |  | $ | 1,951 |  |  | $ | (326 | )
Deferred income taxes reflect the net tax effect of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amount used for income tax purposes. Significant components of our deferred tax assets and liabilities are as follows:
|  | December 31, |
|  | 2023 |  |  | 2022 |
Deferred tax assets: |  |  |  |  |  |  |  |
Net operating loss carryforwards |  | $ | 8,515 |  |  | $ | 11,460 |
Research and development |  |  | 3,536 |  |  |  | 2,812 |
Tax credit carryforwards |  |  | 2,898 |  |  |  | 2,600 |
Accrued expenses, reserves and other |  |  | 2,909 |  |  |  | 2,419 |
Intangible assets |  |  | 1,596 |  |  |  | 1,521 |
Total deferred tax assets |  |  | 19,454 |  |  |  | 20,812 |
Valuation allowance for deferred tax assets |  |  | (2,441 | ) |  |  | (2,416 | )
Net deferred tax assets |  |  | 17,013 |  |  |  | 18,396 |
Deferred tax liabilities: |  |  |  |  |  |  |  |
Intangible assets |  |  | (8,095 | ) |  |  | (8,176 | )
Accrued expenses, reserves and other |  |  | (65 | ) |  |  | (68 | )
Total deferred tax liabilities |  |  | (8,160 | ) |  |  | (8,244 | )
Net deferred tax assets |  | $ | 8,853 |  |  | $ | 10,152 |
Net deferred tax assets (liabilities) are comprised of the following balance sheet amounts:
|  | December 31, |
|  | 2023 |  |  | 2022 |
Deferred tax assets, net |  | $ | 10,567 |  |  | $ | 12,069 |
Deferred tax liabilities |  |  | (1,714 | ) |  |  | (1,917 | )
|  | $ | 8,853 |  |  | $ | 10,152 |
For financial reporting purposes, net income (loss) from continuing operations before income taxes is as follows:
|  | Year ended December 31, |
|  | 2023 |  |  | 2022 |
United States |  | $ | 7,294 |  |  | $ | (2,771 | )
Foreign |  |  | 1,823 |  |  |  | 2,325 |
|  | $ | 9,117 |  |  | $ | (446 | )
The provision for income taxes differs from the amount of income tax determined by applying the applicable U.S. statutory federal income tax rate to income from continuing operations before income taxes as follows:
|  | Year ended December 31, |
|  | 2023 |  |  | 2022 |
Statutory income tax rate |  |  | 21 | % |  |  | 21 | %
Increase (decrease) in tax provision resulting from: |  |  |  |  |  |  |  |
Equity compensation |  |  | 0.4 |  |  |  | (29.7 | )
Global intangible low-taxed income |  |  | 1.4 |  |  |  | (73.1 | )
China R&D deduction |  |  | (1.0 | ) |  |  | 20.6 |
Income tax credits |  |  | (3.3 | ) |  |  | 81.0 |
Foreign tax rate change |  |  | - |  |  |  | 18.3 |
Foreign tax rates |  |  | 1.7 |  |  |  | 11.5 |
States taxes |  |  | 0.8 |  |  |  | (3.4 | )
Other |  |  | 0.4 |  |  |  | 26.9 |
Effective income tax rate |  |  | 21.4 | % |  |  | 73.1 | %
As of December 31, 2023, it was concluded that it is more likely than not that our U.S. deferred tax assets will be fully realized on the basis of management’s assessment. In evaluating the realizability of our U.S. deferred tax assets, management considered all available evidence, both positive and negative, weighted based on objective verifiability. Our assessment also considered our ability to fully utilize before expiration our domestic net operating loss carryforwards, which expire 2031 thru 2035, and our general business tax credit carryforwards, which expire 2028 thru 2043. As of December 31, 2023, our domestic net operating loss carryforwards and general business tax credits were $27,200 and $2,900, respectively. As of December 31, 2023, for certain past operations in the U.K., we continue to report a valuation allowance for net operating loss carryforwards of approximately $9,800, nearly all of which can be carried forward indefinitely. Management has concluded that utilization of the U.K. net operating losses may be limited due to the change in the past U.K. operation, and that they cannot currently be used to reduce taxable income of our other U.K. subsidiary, Accutronics Ltd. There are no other deferred tax assets related to the past U.K. operations. As of December 31, 2023, we have not recognized a valuation allowance against our other foreign deferred tax assets, including net operating loss carryforwards of $1,300 which expire 2028 thru 2033, as we believe that it is more likely than not that they will be fully realized. There were no unrecognized tax benefits related to uncertain tax positions at December 31, 2023 and 2022. As of December 31, 2023, the Company maintains its assertion that all foreign earnings will be indefinitely reinvested in those operations, other than earnings generated in the U.K. As a result of our operations, we file income tax returns in various jurisdictions including U.S. federal, U.S. state and foreign jurisdictions. We are routinely subject to examination by taxing authorities in these various jurisdictions. Our U.S. tax matters for 2020 thru 2022 remain subject to IRS examination. Our U.S. tax matters for 2001-2002, 2005-2007, 2009, and 2011-2015 also remain subject to IRS examination due to the remaining availability of net operating loss carryforwards generated in those years. Our U.S. tax matters for 2013 thru 2022 remain subject to examination by various state and local tax jurisdictions. Our tax matters for the years 2013 thru 2022 remain subject to examination by the respective foreign tax jurisdiction authorities.

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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 -Topic 946 -SubTopic 20 -Name Accounting Standards Codification -Section 50 -Paragraph 13 -Publisher FASB -URI https://asc.fasb.org//1943274/2147480990/946-20-50-13 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Topic 235 -SubTopic 10 -Name Accounting Standards Codification -Section S99 -Paragraph 1 -Subparagraph (SX 210.4-08(h)(2)) -Publisher FASB -URI https://asc.fasb.org//1943274/2147480678/235-10-S99-1 Reference 3: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org//740/tableOfContent Reference 4: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 14 -Publisher FASB -URI https://asc.fasb.org//1943274/2147482685/740-10-50-14 Reference 5: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 21 -Publisher FASB -URI https://asc.fasb.org//1943274/2147482685/740-10-50-21 Reference 6: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -SubTopic 270 -Name Accounting Standards Codification -Section 50 -Paragraph 1 -Publisher FASB -URI https://asc.fasb.org//1943274/2147482526/740-270-50-1 Reference 7: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 17 -Subparagraph (b) -Publisher FASB -URI https://asc.fasb.org//1943274/2147482685/740-10-50-17 Reference 8: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -SubTopic 10 -Name Accounting Standards Codification -Section S99 -Paragraph 1 -Subparagraph (SAB TOPIC 6.I.5.Q1) -Publisher FASB -URI https://asc.fasb.org//1943274/2147479360/740-10-S99-1 Reference 9: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -SubTopic 10 -Name Accounting Standards Codification -Section S99 -Paragraph 2 -Subparagraph (SAB Topic 11.C) -Publisher FASB -URI https://asc.fasb.org//1943274/2147479360/740-10-S99-2 Reference 10: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -SubTopic 30 -Name Accounting Standards Codification -Section 50 -Paragraph 2 -Subparagraph (a) -Publisher FASB -URI https://asc.fasb.org//1943274/2147482603/740-30-50-2 + Details
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