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Note 8 - Income Taxes
 9 Months Ended
Sep. 30, 2020
Notes to Financial Statements  
Income Tax Disclosure [Text Block]

8. Income Taxes

 

The Company did not record a tax provision during the three months ended September 30, 2019 due to the Company having no revenues or income prior to December 2019. During the three months ended September 30, 2020, the Company recorded an income tax benefit of $668 thousand. The Company’s effective income tax rate was 20.9% and 12.6% for the three and nine months ended September 2020, respectively, compared to an effective income tax rate of 0% for the three and nine months ended September 30, 2019.

 

The Company did not record a tax provision during the nine months ended September 30, 2019 due to the Company having no revenues or income prior to December 2019. During the nine months ended September 30, 2020, the Company recorded an income tax benefit of  $1.4 million. The forecasted 2020 annual effective tax rate of 8.0% has been applied to net income before income taxes for the nine months ended September 30, 2020.  Further adjustments have been made for the tax effect of discrete tax benefits of stock compensation and tax expenses of 2019 tax return true-ups realized during the current period, resulting in a  12.6% effective tax rate for the nine months ended September 30, 2020. The difference in the 27% Canadian statutory tax rate and the annual forecasted effective tax rate is primarily a result of the jurisdictional mix of earnings and losses, valuation allowances, and certain non-deductible compensation expenses. The Company maintains a valuation allowance against all deferred tax assets in Switzerland, Germany and Japan and certain deferred tax assets in the US and Canada in the current and forecasted annual periods that we concluded are not more-likely-than-not to be realizable.