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INCOME TAXES (Tables) | 12 Months Ended
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Dec. 31, 2022
INCOME TAXES [Abstract] |
Provision for Income Taxes | The provision for income taxes consists of the following:
(in thousands) |  | Year Ended December 31, |
Income Tax Provision |  | 2022 |  |  | 2021 |
Current provision: |  |  |  |  |  |
Federal |  | $ | 16 |  |  | $ | 640 |
State |  |  | 41 |  |  |  | 98 |
Foreign |  |  | 96 |  |  |  | - |
Related to UTP |  |  | 28 |  |  |  | 19 |
|  |  | 181 |  |  |  | 757 |
Deferred provision: |  |  |  |  |  |  |  |
Federal |  |  | - |  |  |  | - |
State |  |  | - |  |  |  | - |
Foreign |  |  | - |  |  |  | 82 |
|  |  | - |  |  |  | 82 |
Total tax provision |  | $ | 181 |  |  | $ | 839 |
Income (Loss) Before Income Taxes | Income (loss) before income taxes was earned in the following tax jurisdictions:
(in thousands) |  | Year Ended December 31, |
Income (Loss) Before Income Taxes |  | 2022 |  |  | 2021 |
United States |  | $ | 733 |  |  | $ | 2,552 |
Spain |  |  | (83 | ) |  |  | (135 | )
Canada |  |  | 758 |  |  |  | (229 | )
Australia |  |  | - |  |  |  | (1 | )
United Kingdom |  |  | - |  |  |  | 6 |
TOTAL |  | $ | 1,408 |  |  | $ | 2,193 |
Income Tax Effects of Temporary Differences Impacting Deferred Income Tax Assets and Liabilities | The income tax effects of temporary differences that give rise to significant portions of deferred income tax assets and liabilities are as follows:
Deferred income tax assets: |  | 2022 |  |  | 2021 |
(in thousands) |  |  |  |  |  |
Inventory |  | $ | 471 |  |  | $ | 464 |
Stock-based compensation |  |  | 93 |  |  |  | 59 |
Accounts receivable |  |  | 14 |  |  |  | 4 |
Sales returns |  |  | 47 |  |  |  | 125 |
Foreign currency translation gain/loss in OCI |  |  | 689 |  |  |  | 342 |
Goodwill and other intangible assets amortization |  |  | - |  |  |  | - |
Net operating loss |  |  | 261 |  |  |  | 646 |
Accrued expenses |  |  | 63 |  |  |  | 359 |
Leases |  |  | 152 |  |  |  | 195 |
Other |  |  | - |  |  |  | 2 |
Total deferred income tax assets |  |  | 1,790 |  |  |  | 2,196 |
Less: valuation allowance |  |  | (1,151 | ) |  |  | (1,489 | )
Total deferred income tax assets, net of valuation allowance |  | $ | 639 |  |  | $ | 707 |
Property and equipment depreciation |  | $ | 639 |  |  | $ | 707 |
Total deferred income tax liabilities |  |  | 639 |  |  |  | 707 |
Net deferred tax asset (liability) |  | $ | - |  |  | $ | - |
Reconciliation of Effective Tax Rate from Statutory Rate | Below is a reconciliation of our effective tax rate from the statutory rate:
|  | Year Ended December 31, |
|  | 2022 |  |  | 2021 |
Statutory rate – Federal U.S. income tax |  |  | 21.0 | % |  |  | 21.0 | %
State and local taxes |  |  | (0.6 | )% |  |  | 9.0 | %
Permanent book/tax differences |  |  | 11.3 | % |  |  | 3.0 | %
Difference in tax rates in loss carryback periods |  |  | 0.0 | % |  |  | 0.0 | %
Change in valuation allowance |  |  | (20.3 | )% |  |  | 6.0 | %
Rate differential on UTP reversals |  |  | 2.0 | % |  |  | 1.0 | %
Other, net |  |  | (0.5 | )% |  |  | (1.7 | )%
Effective rate |  |  | 12.9 | % |  |  | 38.3 | %
Reconciliation of Uncertain Tax Positions | A reconciliation of the beginning and ending amount of uncertain tax positions (“UTP”) is as follows:
|  | 2022 |  |  | 2021 |
UTP at beginning of the year |  | $ | 415 |  |  | $ | 393 |
Gross increase to tax positions in current period |  |  | 7 |  |  |  | 3 |
Interest expense |  |  | 28 |  |  |  | 19 |
UTP at end of year |  | $ | 450 |  |  | $ | 415 |

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