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Income Taxes

12 Months Ended

Dec. 31, 2017

Income Tax Disclosure [Abstract]

Income Taxes

NOTE 17—INCOME TAXES

(a) Composition of income (loss) from continuing operations before income taxes is as follows:

		Year ended December 31,
		2017				2016
Domestic		$	(2,142	)		$	(142	)
Foreign			—				60
		$	(2,142	)		$	(82	)

Income tax expense consists of the following:

		Year ended December 31,
		2017				2016
Current:
Federal		$	—			$	—
State and local			—				—
Foreign			41				—
			41				—
Deferred:
Federal			—				—
State and local			—				—
Foreign			—				19
			—				19
Total income tax expense		$	41			$	19

(b) Effective Income Tax Rates

Set forth below is a reconciliation between the federal tax rate and the Company’s effective income tax rates with respect to continuing operations:

		Year ended December 31,
		2017				2016
Statutory Federal rates			34	%			34	%
Increase (decrease) in income tax rate resulting from:
Tax on foreign activities			2				(2	)
Other, net (primarily permanent differences)			(1	)			(200	)
Valuation allowance			(37	)			145
Effective income tax rates			(2	)%			(23	)%

(c) Analysis of Deferred Tax Assets and (Liabilities)

		As of December 31,
		2017				2016
Deferred tax assets (liabilities) consist of the following:
Employee benefits and deferred compensation		$	1,089			$	1,745
Investments and asset impairments			1,772				2,619
Other temporary differences			(686	)			(807	)
Net operating loss and capital loss carryforwards			15,643				21,977
			17,818				25,534
Valuation allowance			(17,818	)			(25,534	)
Net deferred tax assets		$	--			$	--

Valuation allowances relate principally to net operating loss carryforwards related to the Company's consolidated tax losses as well as state tax losses related the Company's OmniMetrix subsidiary and book-tax differences related asset impairments and stock compensation expense of the Company. During the year ended December 31, 2017, the valuation allowance decreased by $7,716. The decrease was primarily the result of the decrease in corporate Federal Income Tax rates from 34% to 21% (see Note 17(e) below).

(d) Summary of Tax Loss Carryforwards

As of December 31, 2017, the Company had various net operating loss carryforwards expiring as follows:

Expiration		Federal				Capital Loss				State
2022		$	—			$	8,717			$	—
2023 – 2031*			1,748				—				—
2032 – 2034			45,957				—				8,872
2035 – 2036			14,776				—				4,179
Total		$	62,481			$	8,717			$	13,051

* The utilization of a portion of these net operating loss carryforwards is limited due to limits on utilizing net operating loss carryforwards under Internal Revenue Service regulations following a change in control.

(e) Taxation in the United States

The Tax Cuts and Jobs Act (the “Act”) was enacted on December 22, 2017. The Act reduces the U.S. federal corporate tax rate from 35% to 21%, requires companies to pay a one-time transition tax on earnings of certain foreign subsidiaries that were previously tax deferred and creates new taxes on certain foreign sourced earnings. The most significant impact of the legislation for the Company was a reduction of the value of the Company’s net deferred tax assets (which represent future tax benefits) as a result of lowering the U.S. corporate income tax rate from 35% to 21% (see Note 17(c) above). The Act also includes a requirement to pay a one-time transition tax (the “Transition Tax”) on the cumulative value of earnings and profits that were previously not repatriated for U.S. income tax purposes. The Company does not believe that it will be required to pay any Transition Tax on its previously unrepatriated earnings and profits of its previously consolidated foreign subsidiaries.

As a holding company without other business activity in Delaware, the Company is exempt from Delaware state income tax. Thus, the Company’s statutory income tax rate on domestic earnings is the federal rate of 21%.

(f) Uncertain Tax Positions (UTP)

As of December 31, 2016 and 2017, no interest or penalties were accrued on the balance sheet related to UTP.

During the years ending December 31, 2016 and 2017, the Company had no changes in unrecognized tax benefits or associated interest and penalties as a result of tax positions made during the current or prior periods with respect to its continuing or discontinued operations.

The Company is subject to U.S. Federal and state income tax. As of January 1, 2017, the Company is no longer subject to examination by U.S. Federal taxing authorities for years before 2014, for years before 2013 for state income taxes.