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Income Taxes
9 Months Ended
Sep. 30, 2011
Income Taxes [Abstract] 
Income Taxes
6.           INCOME TAXES

The Company records deferred tax assets and liabilities based on the difference between the financial statement and income tax basis of assets and liabilities using the enacted statutory tax rate in effect for the year these differences are expected to be taxable or reversed. Deferred income tax expenses or credits are based on the changes in the asset or liability from period to period. The recorded deferred tax assets are reviewed for impairment on a quarterly basis by reviewing the Company's internal estimates for future net income.

As of September 30, 2011, the Company has established a valuation allowance for its U.S. deferred tax assets of $5.6 million and a valuation allowance for its foreign deferred tax assets of $0.8 million. The Company assesses the continuing need for a valuation allowance that results from uncertainty regarding its ability to realize the benefits of the Company's deferred tax assets. The ultimate realization of deferred income tax assets depends on generation of future taxable income during the periods in which those temporary differences become deductible. If the Company concludes that its prospects for the realization of its deferred tax assets are more likely than not, the Company will then reduce its valuation allowance as appropriate and credit income tax expense after considering the following factors:

 
·  
The level of historical taxable income and projections for future taxable income over periods in which the deferred tax assets would be deductible,
 
·  
Accumulation of net income before tax utilizing a look-back period of three years, and
 
·  
Tax planning strategies.
 
  The income tax provisions are based on estimated full-year earnings for financial reporting purposes adjusted for permanent differences. The Company's provision for income taxes from operations consists of the following:
 
     
For the nine months ended
  
     
September 30,
  
 
Amounts in thousands
  
2011
    
2010
  
 
U.S. Federal - Current
   $ 72     $ 112  
 
U.S. Federal - Deferred
     0       0  
 
Provision for U.S. federal income taxes
     72       112  
                   
 
Foreign - Current
   $ 437     $ 0  
 
Foreign - Deferred
     (113 )     334  
 
Provision for foreign income taxes
     324       334  
 
Total provision for income taxes
   $ 396     $ 446  


The Company's income tax expense by jurisdiction is summarized in the table below:
 
 
 
Amounts in thousands
 For the three months
ended September 30, 2011
  
 For the three months
ended September 30, 2010
   
Pre-tax income (loss)
Income tax
Effective
  
Pre-tax income (loss)
Income tax
Effective
       
tax rate
      
tax rate
 
Canada
$557
($130)
(23.3%)
  
$311
$85
27.3%
 
United States
                (31)
                 20
(64.5%)
  
                403
                 81
20.1%
 
Mauritius
                496
                 27
5.4%
  
                243
                   7
3.0%
 
Austria
                 90
                   1
0.5%
  
               (338)
                   1
(0.3%)
 
Poland *
                229
0
0.0%
  
               (124)
0
0.0%
 
Total
$1,341
($82)
(6.1%)
  
$495
$174
35.2%
 
* Poland includes earnings from the equity investment in CPL.
    
                 
 
Amounts in thousands
 For the nine months
ended September 30, 2011
  
For the nine monhts
ended September 30, 2010
   
Pre-tax income (loss)
Income tax
Effective
  
Pre-tax income (loss)
Income tax
Effective
       
tax rate
      
tax rate
 
Canada
$1,814
$273
15.1%
  
$1,279
$319
25.0%
 
United States
            (1,087)
                 72
(6.6%)
  
               (305)
                112
(36.7%)
 
Mauritius
             1,629
                 49
3.0%
  
                453
                 13
2.9%
 
Austria
               (132)
                   2
(1.5%)
  
               (992)
                   2
(0.2%)
 
South Africa
0
0
0.0%
  
                  (6)
0
0.0%
 
Poland *
$603
$0
0.0%
  
                208
0
0.0%
 
Total
$2,827
$396
14.0%
  
$637
$446
70.0%
 
* Poland includes earnings from the equity investment in CPL.