XML 36 R20.htm IDEA: XBRL DOCUMENT

Income Taxes

12 Months Ended

Dec. 31, 2018

Income Tax Disclosure [Abstract]

Income Taxes

NOTE 14—INCOME TAXES

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

		Year ended December 31,
		2018				2017
Domestic		$	(2,087	)		$	(2,142	)
Foreign			—				—
		$	(2,087	)		$	(2,142	)

Income tax expense consists of the following:

		Year ended December 31,
		2018				2017
Current:
Federal		$	—			$	—
State and local			—				—
Foreign			―				41
			―				41
Deferred:
Federal			—				—
State and local			—				—
Foreign			—				—
			—				—
Total income tax expense		$	―			$	41

(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,
		2018				2017
Statutory Federal rates			21	%			34	%
Increase (decrease) in income tax rate resulting from:
Tax on foreign activities			―				(2	)
Other, net (primarily permanent differences)			―				(1	)
Valuation allowance			(21	)%			(37	)
Effective income tax rates			―	%			(2	)%

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

		As of December 31,
		2018				2017
Deferred tax assets (liabilities) consist of the following:
Employee benefits and deferred compensation		$	1,035			$	1,089
Investments and asset impairments			1,818				1,772
Other temporary differences			(674	)			(686	)
Net operating loss and capital loss carryforwards			16,136				15,643
			18,315				17,818
Valuation allowance			(18,315	)			(17,818	)
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, 2018, the valuation allowance increased by $497. The increase was primarily the result of the increase in the net operating loss.

(d) Summary of Tax Loss Carryforwards

As of December 31, 2018, the Company had various operating loss carryforwards expiring as follows:

Expiration		Federal				Capital Loss				State
2023		$	—			$	9,356			$	—
2024 – 2031*			1,511				—				—
2032 – 2037			58,549				—				14,898
Unlimited			2,896				—				938
Total		$	62,956			$	9,356			$	15,836

* 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, 2018 and 2017, no interest or penalties were accrued on the balance sheet related to UTP.

During the years ending December 31, 2018 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, 2018, the Company is no longer subject to examination by U.S. Federal taxing authorities for years before 2015, for years before 2014 for state income taxes.