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INCOME TAXES | 12 Months Ended
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Dec. 31, 2020
Income Tax Disclosure [Abstract] |
INCOME TAXES | 16. INCOME TAXES The components of loss before income taxes are summarized below:
|  | Year Ended December 31, |
|  | 2020 |  |  | 2019 |
Loss before income taxes |  |  |  |  |  |  |  |
U.S. operations |  | $ | (2,981 | ) |  | $ | (10,759 | )
Loss before income taxes |  | $ | (2,981 | ) |  | $ | (10,759 | )
The components of the income tax provision were as follows:
|  | Year Ended December 31, |
|  | 2020 |  |  | 2019 |
Current |  |  |  |  |  |  |  |
State |  | $ | 5 |  |  | $ | 31 |
Deferred |  |  | — |  |  |  | 1,247 |
Total income tax provision |  | $ | 5 |  |  | $ | 1,278 |
A reconciliation from the statutory U.S. income tax rate and the Company’s effective income tax rate, as computed on loss before taxes, is as follows:
|  | Year Ended December 31, |
|  | 2020 |  |  | 2019 |
Federal Income tax at statutory rate |  | $ | (626 | ) |  | $ | (2,259 | )
State and local income tax, net |  |  | (120 | ) |  |  | (452 | )
Other permanent items |  |  | 5 |  |  |  | 60 |
Valuation allowance |  |  | 748 |  |  |  | 3,734 |
True-up |  |  | — |  |  |  | 195 |
Other |  |  | (2 | ) |  |  | — |
Total |  | $ | 5 |  |  | $ | 1,278 |
On December 22, 2017, the United States enacted the Tax Cuts and Jobs Act (“U.S. tax reform”) that lowers the statutory tax rate on U.S. earnings, taxes historic foreign earnings at a reduced rate of tax, establishes a territorial tax system and enacts new taxes associated with global operations. The impact of U.S. tax reform has been recorded on a provisional basis as the legislation provides for additional guidance to be issued by the U.S. Department of the Treasury on several provisions. In addition, analysis performed and conclusions reached as part of the tax return filing process and additional guidance on accounting for U.S. tax reform could affect the provisional amount. As part of the U.S. tax reform, the United States has enacted a minimum tax on foreign earnings (“global intangible low-taxed income”) which is reflected in the income tax expense for 2019. The Company did not have any foreign earnings for the year ended December 31, 2020. The Company’s provision for income taxes reflects an effective tax rate on loss before income taxes of (0.2)% in 2020, as compared to (11.9)% for the year ended December 31, 2019. The (11.9)% effective tax rate for the year ended December 31, 2019 is primarily due to establishment of additional valuation allowances. The net deferred income tax asset (liability) was comprised of the following:
|  | December 31, |
|  | 2020 |  |  | 2019 |
Noncurrent deferred income taxes |  |  |  |  |  |  |  |
Total assets |  | $ | 68 |  |  | $ | 839 |
Total liabilities |  |  | (68 | ) |  |  | (839 | )
Net noncurrent deferred income tax asset |  |  | — |  |  |  | — |
Net deferred income tax asset |  | $ | — |  |  | $ | — |
The tax effect of temporary differences between GAAP accounting and federal income tax accounting creating deferred income tax assets and liabilities were as follows:
|  | December 31, |
|  | 2020 |  |  | 2019 |
Deferred tax assets |  |  |  |  |  |  |  |
U.S. net operating loss carry forward |  | $ | 1,367 |  |  | $ | 967 |
Non-deductible reserves |  |  | 1,609 |  |  |  | 1,892 |
Tax credits |  |  | 4,631 |  |  |  | 4,631 |
Fixed Assets |  |  | 15 |  |  |  | — |
Intangibles |  |  | 1,959 |  |  |  | 2,191 |
Valuation allowance |  |  | (9,513 | ) |  |  | (8,842 | )
Net deferred tax assets |  |  | 68 |  |  |  | 839 |
Deferred tax liabilities |  |  |  |  |  |  |  |
Fixed assets |  |  | (28 | ) |  |  | (46 | )
Other |  |  | (40 | ) |  |  | (793 | )
Net deferred tax liabilities |  |  | (68 | ) |  |  | (839 | )
Deferred asset, net |  | $ | — |  |  | $ | — |
The assessment of the amount of value assigned to our deferred tax assets under the applicable accounting rules is judgmental. We are required to consider all available positive and negative evidence in evaluating the likelihood that we will be able to realize the benefit of our deferred tax assets in the future. Such evidence includes scheduled reversals of deferred tax liabilities, projected future taxable income, tax planning strategies and the results of recent operations. Since this evaluation requires consideration of events that may occur some years into the future, there is an element of judgment involved. Realization of our deferred tax assets is dependent on generating sufficient taxable income in future periods. We do not believe that it is more likely than not that future taxable income will be sufficient to allow us to recover any of the value assigned to our deferred tax assets. Accordingly, we have provided for a valuation allowance of the Company’s foreign tax credits as we do not anticipate generating sufficient foreign source income. In addition, we have provided for a full valuation allowance on the domestic deferred tax assets as the combined effect of future domestic source income and the future reversals of future tax assets and liabilities will likely be insufficient to realize the full benefits of the assets. As of December 31, 2020, the Company had a net operating loss carryforward of $5.4 million. The Company has $9.5 million of deferred tax assets on which it is taking a full valuation allowance. The Company has approximately $4.6 million of foreign tax credits for which it has provided a full valuation allowance and $39 of research and development credits which expire in 2032. Section 382 of the Internal Revenue Code of 1986, as amended, imposes an annual limitation on the amount of net operating loss carryforwards that may be used to offset federal taxable income and federal tax liabilities when a corporation has undergone significant changes in its ownership. If the Company experiences an ownership change as a result of future events, the use of tax attributes may be limited. Management believes that an adequate provision has been made for any adjustments that may result from tax examinations. However, the outcome of tax audits cannot be predicted with certainty. If any issues addressed in the Company’s tax audits are resolved in a manner not consistent with management’s expectations, the Company could be required to adjust its provision for income taxes in the period such resolution occurs. The tax years subject to examination by major tax jurisdiction include the years 2014 and forward by the U.S. Internal Revenue Service and most state jurisdictions, and the years 2015 and forward for the Canadian jurisdiction.

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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 http://asc.fasb.org/extlink&oid=84230637&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 http://asc.fasb.org/extlink&oid=116825942&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 http://asc.fasb.org/extlink&oid=84230637&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 http://asc.fasb.org/extlink&oid=116825942&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 http://asc.fasb.org/extlink&oid=84230637&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 http://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 http://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 http://asc.fasb.org/extlink&oid=6424122&loc=d3e41874-109331 + Details
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