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INCOME TAXES
 12 Months Ended
Dec. 31, 2021
Income Tax Disclosure [Abstract]  
INCOME TAXES INCOME TAXES
The components for income tax expense included in the accompanying consolidated statements of operations for the years ended December 31, 2021 and 2020 are as follows (in thousands):
December 31, 2021December 31, 2020
Current state income tax expense$267 $45 
Current foreign income tax expense541 211 
Deferred federal income tax expense— — 
Total income tax expense$808 $256 

A reconciliation of income taxes computed using the 21% U.S. federal statutory rate to the amount reflected in the accompanying consolidated statement of operations for the years ended December 31, 2021 and 2020 is as follows (in thousands):
December 31, 2021December 31, 2020
Income tax benefit using U.S. federal statutory rate$(1,468)$(1,352)
State income tax expense211 35 
Foreign income tax expense205 210 
Foreign tax rate difference226 29 
Non-deductible expenses(31)(26)
Change in valuation allowance1,458 1,383 
Other207 (23)
$808 $256 
The effects of temporary differences and carryforwards that give rise to deferred tax assets (liabilities) are as follows (in thousands):
December 31, 2021December 31, 2020
Federal net operating loss carryforward$13,446 $12,203 
Accrued interest to related parties, not deductible until paid119 570 
Difference in compensation expense from stock options109 — 
Accrued compensation357 69 
Basis of intangible assets250 309 
Other35 — 
Valuation allowance(8,097)(6,639)
    Total deferred tax assets6,219 6,512 
Basis of property, plant and equipment5,612 6,000 
Bad debt expense33 — 
Prepaid expenses215 155 
Basis in foreign entity325 357 
Other34 — 
    Total deferred tax liabilities6,219 6,512 
    Net deferred tax liabilities$— $— 
On March 27, 2020, President Trump signed into law the "Coronavirus Aid, Relief, and Economic Security Act" ("CARES ACT"). The CARES Act, among other things, includes provisions relating to net operating loss carryback periods. The Company is evaluating the impact, if any, that the CARES Act may have on the Company's future operations, financial position, and liquidity.
At December 31, 2021, the Company has net operating loss carry forwards of approximately $64 million which may be used to offset future taxable income. The net operating loss carryforwards includes $42.8 million of losses arising prior to December 31, 2017 that expire in 2028 through 2037. Those arising in tax years after 2017 can be carried forward indefinitely. Also, for losses arising in taxable years beginning after December 31, 2017 the operating loss deduction is limited to 80% of taxable income (determined without regard to the deduction). Since the Company has not yet generated significant taxable income, a valuation allowance has been established to fully reserve the Company's net deferred tax assets at December 31, 2021. A change in ownership eliminated substantially all net operating loss carryforwards of an acquired subsidiary at July 26, 2019.
The Company recognizes the tax benefit or obligation from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities, based not only on the technical merits of the tax position based on tax law, but also past administrative practices and precedents of the taxing authority. The tax benefits or obligations are recognized in our financial statements if there is a greater than 50% likelihood of the tax benefit or obligation being realized upon ultimate resolution. As of the years ended December 31, 2021 and 2020, the Company had no uncertain tax positions that required recognition.
As of December 31, 2021, the Company's tax returns for years 2018 to 2020 remain subject to examination for both federal and state filings.