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Income Taxes | 12 Months Ended
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Dec. 31, 2017
Income Taxes [Abstract] |
Income Tax Disclosure [Text Block] |
14. | Income Taxes
Income tax provision (benefit) is as follows for the years ended:
|  | DECEMBER 31, |
|  | 2017 |  |  | 2016 |
Current provision (benefit) |  |  |  |  |  |  |  |
State |  | $ | 10,000 |  |  | $ | (63,457 | )
Foreign |  |  | 29,586 |  |  |  | 7,948 |
Total |  |  | 39,586 |  |  |  | (55,509 | )
Deferred provision (benefit) |  |  |  |  |  |  |  |
Foreign |  |  | (1,619) |  |  |  | (17,937 | )
Total |  |  | (1,619) |  |  |  | (17,937 | )
Income tax provision (benefit) |  | $ | 37,967 |  |  | $ | (73,446 | )
Income tax provision (benefit) effective rates, which differs from the federal and state statutory rate as follows for the years ended:
|  | DECEMBER 31,
|  | 2017 |  | 2016
Statutory federal income tax rate |  | 34.0% |  | 34.0%
State, net of federal benefit |  | -0.3% |  | -0.1%
Non-Deductible Expenses |  | -5.4% |  | -0.4%
Change in valuation allowance |  | 6.9% |  | -28.9%
Foreign Rate Differential |  | 0.9% |  | -2.8%
Return to accrual difference true-ups |  | -0.6% |  | -0.4%
Other |  | 3.8% |  | 0.5%
Deferred True-Up |  | 69.2% |  | 0.0%
Change in federal statutory rate |  | -109.5% |  | 0.0%
Combined effective tax rate |  | -1.0% |  | 1.9%
The tax effects of temporary differences that give rise to significant portions of the Company’s deferred tax assets (liabilities) consisted of the following:
|  | DECEMBER 31, |
|  | 2017 |  |  | 2016 |
Deferred tax assets: |  |  |  |  |  |  |  |
Net operating loss carryforwards |  | $ | 10,526,231 |  |  | $ | 10,875,880 |
Alternative minimum tax credit |  |  | 45,650 |  |  |  | 45,650 |
Share-based compensation |  |  | 358,360 |  |  |  | 369,231 |
Intangible amortization |  |  | 740,685 |  |  |  | 1,106,767 |
Foreign depreciation |  |  | - |  |  |  | 16,244 |
Depreciation |  |  | - |  |  |  | - |
Other assets |  |  | 233,447 |  |  |  | 278,247 |
Total deferred tax assets |  |  | 11,904,373 |  |  |  | 12,692,019 |
Less: valuation allowance |  |  | (9,550,279 | ) |  |  | (9,791,680 | )
Total deferred tax assets, net |  |  | 2,354,094 |  |  |  | 2,900,339 |
Deferred tax liabilities: |  |  |  |  |  |  |  |
Goodwill amortization |  |  | 2,203,154 |  |  |  | 2,738,256 |
Depreciation |  |  | 86,506 |  |  |  | 52,974 |
Foreign intangible amortization |  |  | 447,811 |  |  |  | 447,811 |
Other liabilities |  |  | 8,852 |  |  |  | 25,968 |
Foreign capitalized software costs |  |  | - |  |  |  | 34,315 |
Total deferred tax liabilities |  |  | 2,746,323 |  |  |  | 3,299,324 |
Net deferred tax liability |  | $ | (392,229 | ) |  | $ | (398,985 | )
As of December 31, 2017, the Company had approximately $36.7 million in net operating loss (NOL) carry forwards available to offset future taxable income for federal income tax purposes, net of the potential Section 382 limitations. These federal NOL carry forwards expire between 2020 and 2036. Included in the recorded deferred tax asset, the Company had a benefit of approximately $44.0 million available to offset future taxable income for state income tax purposes. These state NOL carry forwards expire between 2024 and 2036. Because of the change of ownership provisions of the Tax Reform Act of 1986, use of a portion of our domestic NOL may be limited in future periods. Further, a portion of the carryforwards may expire before being applied to reduce future income tax liabilities. The Tax Act was enacted on December 22, 2017, most provisions of which will take effect starting in 2018. The Tax Act makes substantial changes to U.S. taxation of corporations, including, lowering the U.S. federal corporate income tax rate from 35% to 21%, and instituting a territorial tax system, along with a one-time tax on accumulated foreign earnings. Upon enactment, the Company remeasured its deferred tax balances to reflect the new 21% U.S. federal corporate income tax rate, which resulted in a reduction of its deferred tax assets and related valuation allowance by approximately $3.8 million. The Company also recorded a provisional one-time U.S. tax on accumulated foreign earning of approximately $0.8 million, which was offset by existing net operations loss carryforward deductions available. Given the significance of the legislation, the SEC staff issued Staff Accounting Bulletin No. 118 (SAB 118), which allows registrants to record provisional amounts during a one year “measurement period” similar to that used when accounting for business combinations. However, the measurement period is deemed to have ended earlier when the registrant has obtained, prepared and analyzed the information necessary to finalize its accounting. During the measurement period, impacts of the law are expected to be recorded at the time a reasonable estimate for all or a portion of the effects can be made, and provisional amounts can be recognized and adjusted as information becomes available, prepared or analyzed. SAB 118 summarizes a three-step process to be applied at each reporting period to account for and qualitatively disclose: (1) the effects of the change in tax law for which accounting is complete; (2) provisional amounts (or adjustments to provisional amounts) for the effects of the tax law where accounting is not complete, but that a reasonable estimate has been determined; and (3) a reasonable estimate cannot yet be made and therefore taxes are reflected in accordance with law prior to the enactment of the Tax Cuts and Jobs Act. The Company has not completed its accounting for the tax effects of the enactment of the Tax Act. Specifically, the amounts recorded for the U.S. tax on accumulated foreign earnings, net of foreign tax credits and the foreign withholding tax on unremitted foreign earnings, net of foreign tax credits, and the state income tax effects of these two items are provisional amounts based on the Company’s estimates. The Company expects to complete the accounting for these impacts of the Tax Act in the fourth quarter of 2018 as it finalizes its cumulative earnings and profits of its foreign subsidiaries and receives additional guidance from the IRS pertaining to the Tax Act. The impacts of additional guidance and changes in estimates related to the effects of the Tax Act, if any, will be recorded in the period the additional guidance or information is available. Changes in the valuation allowance for the years ended were as follows:
|  | DECEMBER 31, |
|  | 2017 |  |  | 2016 |
Beginning balance |  | $ | (9,791,680 | ) |  | $ | (8,500,622 | )
Decreases (increases) |  |  | 241,401 |  |  |  | (1,291,058 | )
Ending balance |  | $ | (9,550,279 | ) |  | $ | (9,791,680 | )
The Company’s valuation allowance predominantly consisted of domestic net operating loss carryforwards and certain state net operating loss carryforwards. A significant piece of objective negative evidence considered in management’s evaluation of the realizability of its deferred tax assets was the existence of cumulative losses over the latest three-year period. Management forecast future taxable income, but concluded that there may not be enough of a recovery before the end of the fiscal year to overcome the negative objective evidence of three years of cumulative losses. On the basis of this evaluation, management recorded a valuation allowance against all deferred tax assets. If management’s assumptions change and we determine we will be able to realize these deferred tax assets, the tax benefits relating to any reversal of the valuation allowance on deferred tax assets will be accounted for as a reduction of income tax expense. The Company files U.S. federal income tax returns with the Internal Revenue Service (“IRS”) as well as income tax returns in various states and certain foreign countries. The Company may be subject to examination by the IRS for tax years 2003 and forward. The Company may be subject to examinations by various state taxing jurisdictions for tax years 2003 and forward. The Company may be subject to examination by various foreign countries for tax years 2014 forward. As of December 31, 2017, the Company is currently not under examination by the IRS, any state or foreign tax jurisdiction. The Company did not have any unrecognized tax benefits at either December 31, 2017 or 2016. In the future, any interest and penalties related to uncertain tax positions will be recognized in income tax expense.

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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/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -URI http://asc.fasb.org/topic&trid=2144680 + Details
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