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Income Taxes | 12 Months Ended
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Dec. 31, 2020
Income Tax Disclosure [Abstract] |
Income Taxes | (5) Income Taxes The components of loss from continuing operations before provision for income taxes consist of the following (in thousands):
|  | Years ended December 31, |
|  | 2019 |  |  | 2020 |
United States |  | $ | (12,619 | ) |  | $ | (38,622 | )
Foreign |  |  | (589 | ) |  |  | (5,313 | )
Loss from continuing operations before provision for income taxes |  | $ | (13,208 | ) |  | $ | (43,935 | )
The provision for income taxes for the Company’s continuing operations consists of the following (in thousands):
|  | Years ended December 31, |
|  | 2019 |  | 2020 |
Current federal provision |  |  |  |  |  |  |
Federal |  | $ | — |  | $ | — |
State |  |  | — |  |  | 21 |
Deferred provision (benefit) |  |  |  |  |  |  |
Federal |  |  | (2,531 | ) |  | (901 | )
State |  |  | (397 | ) |  | (153 | )
Foreign |  |  | (548 | ) |  | (884 | )
Total income tax benefit |  | $ | (3,476 | ) | $ | (1,917 | )
The Company’s income tax benefit from continuing operations differed from the amounts computed by applying the U.S. federal statutory rate to loss before provision for income taxes as a result of the following (in thousands):
| Years ended December 31, |
| 2019 |  | 2020 |
Income tax benefit at U.S. statutory rate | $ | (2,771 | ) | $ | (9,226 | )
State taxes, net of valuation allowance |  | (314 | ) |  | (103 | )
Stock-based compensation (1) |  | 75 |  |  | 154 |
Valuation allowance |  | 306 |  |  | 7,427 |
Foreign tax differential |  | (101 | ) |  | (1,124 | )
Tax credits |  | (279 | ) |  | (167 | )
Impairment |  | — |  |  | 1,410 |
Acquisition/accretion benefits |  | (428 | ) |  | (250 | )
Meals and entertainment |  | 59 |  |  | 1 |
Other expenses |  | (23 | ) |  | (39 | )
Total income tax benefit | $ | (3,476 | ) | $ | (1,917 | )
| (1) | Includes non-deductible stock-based compensation and excess tax benefits and shortfalls from stock-based compensation.
The tax effects of temporary differences that give rise to significant portions of the deferred tax assets and deferred tax liabilities are presented below and reflects the 21% U.S. federal statutory rate for 2019 and 2020 (in thousands):
|  | Years ended December 31, |
|  | 2019 |  | 2020 |
Deferred tax assets: |  |  |  |  |  |  |
Accrued liabilities not currently deductible |  | $ | 381 |  | $ | 651 |
Intangible assets- excess of financial statement over tax amortization |  |  | 139 |  |  | 982 |
Goodwill recognized on financial statements in excess of tax amortization |  |  | 601 |  |  | (18 | )
Stock-based compensation |  |  | 2,033 |  |  | 2,524 |
Federal net operating and capital losses |  |  | 3,499 |  |  | 21,531 |
State, local and foreign net operating and capital loss carryforwards |  |  | 7,133 |  |  | 12,325 |
Research & experimental tax and other credit carryforwards |  |  | 4,129 |  |  | 4,640 |
Lease liability |  |  | 1,899 |  |  | 1,250 |
Other |  |  | 912 |  |  | 735 |
Gross deferred tax assets |  |  | 20,726 |  |  | 44,620 |
Valuation allowance |  |  | (19,126 | ) |  | (43,314 | )
Net deferred tax assets |  | $ | 1,600 |  | $ | 1,306 |
Deferred tax liabilities: |  |  |  |  |  |  |
Intangible assets-excess of tax over financial statement amortization |  |  | (1,044 | ) |  | (532 | )
Right-of-use lease asset |  |  | (1,537 | ) |  | (930 | )
Net deferred tax liabilities |  | $ | (981 | ) | $ | (156 | )
As of December 31, 2020, the Company’s federal NOCL carryforwards were approximately $102.5 million and federal research and development credit carryforwards were $4.5 million. These will begin to expire in 2032 and 2029, respectively, for income tax purposes. These credits are potentially available to offset future tax liabilities. As of December 31, 2020, the Company’s gross state, city, and other foreign jurisdiction NOCL carryforwards were approximately $147.3 million, which begin to expire in 2023. The Tax Reform Act of 1986 limits the use of NOCL and tax credit carryforwards in certain situations where changes occur in the stock ownership of a company. The Company is not aware that any such change has occurred related to these specific NOCL carryforwards, or that the utilization of the carryforwards is limited such that these NOCL carryforwards will likely never be utilized. Accordingly, the Company has included these federal NOCL carryforwards in its deferred tax assets (subject to valuation allowance). The Company has recorded a deferred tax asset for stock-based compensation recorded on unexercised non-qualified stock options and certain restricted shares and restricted share units. The ultimate realization of this asset is dependent upon the fair value of the Company’s stock when the options are exercised and when restricted shares or restricted share units vest, and generation of sufficient taxable income to realize the benefit of the related taxdeduction. Federal and state net operating and capital losses included in Deferred tax assets include $16.3 million of losses related to the 2020 Divestiture. The Company is in the process of analyzing this transaction to determine classification for tax purposes. At December 31, 2019 and 2020, the Company recorded a valuation allowance of $19.1 million, and $43.3 million, respectively, against its federal, state, city and foreign net deferred tax assets for continuing operations, as it believes it is more likely than not that these benefits will not be realized. The net change in the total valuation allowance for each of the years ended December 31, 2019 and 2020 was $(15.9) million and $24.2 million, respectively. The Company regularly reviews deferred tax assets to assess whether it is more likely than not that the deferred tax assets will be realized and, if necessary, establishes a valuation allowance for portions of such assets to reduce the carrying value. In assessing whether it is more likely than not that the Company’s deferred tax assets will be realized, factors considered included: historical taxable income, historical trends related to customer usage rates, projected revenues and expenses, macroeconomic conditions, issues facing the industry, existing contracts, the Company’s ability to project future results and any appreciation of its other assets. The Company incurred taxable losses from 2016 through 2020. Based on the level of historical taxable losses and the uncertainty of projections for future taxable income over the periods for which the deferred tax assets are deductible, with the exception of certain insignificant foreign deferred tax assets, the Company concluded that it is not more likely than not that the gross deferred tax assets will be realized. From time to time, various state, federal and other jurisdictional tax authorities undertake audits of the Company and its filings. In evaluating the exposure associated with various tax filing positions, the Company on occasion accrues charges for uncertain positions. Resolution of uncertain tax positions will impact the Company’s effective tax rate when settled. The Company does not have any significant interest or penalty accruals. The provision for income taxes includes the impact of contingency provisions and changes to contingencies that are considered appropriate. The following table summarizes activity related to tax contingencies from January 1, 2019 to December 31, 2020 which are recorded as an offset to deferred tax assets (in thousands):
Gross tax contingencies—January 1, 2019 |  | $ | 1,158 |
Gross increases to tax positions associated with prior periods |  |  | — |
Gross increases to current period tax positions |  |  | 110 |
Gross decreases to tax positions associated with prior periods |  |  | — |
Settlements |  |  | — |
Lapse of statute of limitations |  |  | — |
Gross tax contingencies—December 31, 2019 |  |  | 1,268 |
Gross increases to tax positions associated with prior periods |  |  | — |
Gross increases to current period tax positions |  |  | 97 |
Gross decreases to tax positions associated with prior periods |  |  | — |
Settlements |  |  | — |
Lapse of statute of limitations |  |  | — |
Gross tax contingencies—December 31, 2020 |  | $ | 1,365 |
The Company files U.S. federal, certain U.S. states, and certain foreign tax returns. Generally, U.S. federal, U.S. state, and foreign tax returns filed for years after 2012 are within the statute of limitations and are under examination or may be subject to examination.

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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 -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 21 -URI http://asc.fasb.org/extlink&oid=84230637&loc=d3e32857-109319 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section S99 -Paragraph 2 -Subparagraph (SAB Topic 11.C) -URI http://asc.fasb.org/extlink&oid=116825942&loc=d3e330215-122817 Reference 3: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 17 -Subparagraph (b) -URI http://asc.fasb.org/extlink&oid=84230637&loc=d3e32809-109319 Reference 4: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SAB TOPIC 6.I.5.Q1) -URI http://asc.fasb.org/extlink&oid=116825942&loc=d3e330036-122817 Reference 5: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 14 -URI http://asc.fasb.org/extlink&oid=84230637&loc=d3e32705-109319 Reference 6: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 270 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=6424409&loc=d3e44925-109338 Reference 7: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -URI http://asc.fasb.org/topic&trid=2144680 Reference 8: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 30 -Section 50 -Paragraph 2 -Subparagraph (a) -URI http://asc.fasb.org/extlink&oid=6424122&loc=d3e41874-109331 + Details
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