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Note 7 - Income Taxes | 12 Months Ended
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Dec. 31, 2022
Notes to Financial Statements |
Income Tax Disclosure [Text Block] | 7. INCOME TAXES The components of income before income taxes consist of the following (in thousands):
|  | Year Ended December 31, |
|  | 2022 |  |  | 2021 |
Domestic |  | $ | (982 | ) |  | $ | (1,127 | )
Foreign |  |  | 1,584 |  |  |  | 2,637 |
Income before income taxes |  | $ | 602 |  |  | $ | 1,510 |
The components of the income tax provision consist of the following (in thousands):
|  | Year Ended December 31, |
|  | 2022 |  |  | 2021 |
Current taxes: |  |  |  |  |  |  |  |
Federal |  | $ | (16 | ) |  | $ | (207 | )
State |  |  | 9 |  |  |  | 9 |
Foreign |  |  | 195 |  |  |  | 267 |
Total current taxes |  |  | 188 |  |  |  | 69 |
Deferred taxes: |  |  |  |  |  |  |  |
Federal |  |  | 58 |  |  |  | 309 |
State |  |  | 4 |  |  |  | 7 |
Foreign |  |  | 39 |  |  |  | 40 |
Total deferred taxes |  |  | 101 |  |  |  | 356 |
Income tax provision |  | $ | 289 |  |  | $ | 425 |
A reconciliation of the reported income tax provision to the provision that would result from applying the domestic federal statutory tax rate to pretax income is as follows (in thousands):
|  | Year Ended December 31, |
|  | 2022 |  |  | 2021 |
Income tax at federal statutory rate |  | $ | 126 |  |  | $ | 317 |
Effect of permanent differences |  |  | 154 |  |  |  | 274 |
U.S. foreign income inclusions |  |  | 89 |  |  |  | 183 |
Change in valuation allowance |  |  | (68 | ) |  |  | (37 | )
Foreign rate differential |  |  | (41 | ) |  |  | (221 | )
Foreign tax credits |  |  | (2 | ) |  |  | (32 | )
Stock-based compensation |  |  | 22 |  |  |  | 10 |
Net operating loss carryback |  |  | — |  |  |  | (84 | )
Other reconciling items |  |  | 9 |  |  |  | 15 |
Income tax provision |  | $ | 289 |  |  | $ | 425 |
Income before income taxes and the statutory tax rate for each country that materially contributed to the foreign rate differential presented above is as follows (in thousands):
|  |  |  |  |  | Year Ended December 31, |
|  | Statutory Tax Rate |  |  | 2022 |  |  | 2021 |
Cayman Islands |  |  | — | % |  | $ | 1,104 |  |  | $ | 2,696 |
Hong Kong |  |  | 16.5 | % |  |  | 1,105 |  |  |  | 742 |
China |  |  | 25.0 | % |  |  | 143 |  |  |  | 152 |
Deferred income taxes consist of the following (in thousands):
|  | December 31, |
|  | 2022 |  |  | 2021 |
Deferred tax assets: |  |  |  |  |  |  |  |
Net operating losses |  | $ | 411 |  |  | $ | 490 |
Stock-based compensation |  |  | — |  |  |  | 170 |
Operating lease liabilities |  |  | 451 |  |  |  | 396 |
Other |  |  | 70 |  |  |  | 51 |
Total deferred tax assets |  |  | 932 |  |  |  | 1,107 |
Valuation allowance |  |  | (235 | ) |  |  | (303 | )
Net deferred tax assets |  |  | 697 |  |  |  | 804 |
Deferred tax liabilities: |  |  |  |  |  |  |  |
Operating lease assets |  |  | (419 | ) |  |  | (376 | )
Foreign deferreds |  |  | (141 | ) |  |  | (153 | )
Prepaids |  |  | (83 | ) |  |  | (113 | )
Other |  |  | — |  |  |  | (6 | )
Total deferred tax liabilities |  |  | (643 | ) |  |  | (648 | )
Net deferred tax assets |  | $ | 54 |  |  | $ | 156 |
The effective income tax rate for the year ended December 31, 2022 includes estimates for foreign income inclusions such as global intangible low-taxed income (“GILTI”) and Subpart F income. The effect of permanent differences in 2022 and 2021 is mainly due to compensation-related limitations under Internal Revenue Code Section 162(m). As of December 31, 2022, the Company does not have a valuation allowance against its U.S. deferred tax assets. The Company analyzed all sources of available income and determined that they are more likely than not to realize the tax benefits of their deferred assets. As of December 31, 2022, the Company has a valuation allowance against deferred taxes in certain foreign jurisdictions with an overall net operating loss. The valuation allowance will be reduced at such time as management believes it is more likely than not that the deferred tax assets will be realized. Any reductions in the valuation allowance will reduce future income tax provision. As of December 31, 2022, the Company has U.S. federal net operating loss carryforwards of $197,000 that do not expire. The Company has post-apportioned U.S. state net operating loss carryforwards of $438,000 that begin expiring in 2038. At December 31, 2022, the Company has foreign net operating loss carryforwards of approximately $1.4 million in various jurisdictions with various expirations. As of December 31, 2022, income taxes payable for the repatriation tax on the deemed repatriation of deferred foreign income required the U.S. Tax Cuts and Jobs Act (the “Tax Act”), enacted in 2017 by the U.S. government, totaled $12.1 million, of which $9.1 million is reflected as a noncurrent liability. As a result of capital return activities, the Company determined that a portion of its current undistributed foreign earnings is no longer deemed reinvested indefinitely by its non-U.S. subsidiaries. For state income tax purposes, the Company will continue to periodically reassess the needs of its foreign subsidiaries and update its indefinite reinvestment assertion as necessary. To the extent that additional foreign earnings are not deemed permanently reinvested, the Company expects to recognize additional income tax provision at the applicable state corporate income tax rate(s). As of December 31, 2022, the Company has not recorded a state deferred tax liability for earnings that the Company plans to repatriate out of accumulated earnings in future periods because all earnings as of December 31, 2022 have already been repatriated. Due to the Tax Act, repatriation from foreign subsidiaries will be offset with a dividends received deduction, resulting in little to no impact on federal tax expense. All undistributed earnings in excess of 50% of current earnings on an annual basis are intended to be reinvested indefinitely as of December 31, 2022. The Company and its subsidiaries file tax returns in the United States, California, New Jersey, Texas and various foreign jurisdictions. During the fourth quarter of 2018, the Company was notified that it was selected for audit of the 2016 tax year by the U.S. Internal Revenue Service (the "IRS"). The audit was subsequently expanded to also include the 2017, 2018 and 2019 tax years. On October 12, 2021, the Company received notification from the IRS that it had completed the audit process for all tax years with no changes made to the Company's previously reported tax. The Company is no longer subject to state income tax examinations for years prior to 2018. The Company is not aware of any other jurisdictions that are currently examining any income tax returns of the Company.

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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 https://asc.fasb.org/extlink&oid=121826272&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 https://asc.fasb.org/extlink&oid=122134291&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 https://asc.fasb.org/extlink&oid=121826272&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 https://asc.fasb.org/extlink&oid=122134291&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 https://asc.fasb.org/extlink&oid=121826272&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 https://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 https://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 https://asc.fasb.org/extlink&oid=6424122&loc=d3e41874-109331 Reference 9: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 235 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SX 210.4-08(h)(2)) -URI https://asc.fasb.org/extlink&oid=120395691&loc=d3e23780-122690 + Details
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