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Income Taxes
 12 Months Ended
Dec. 31, 2015
Income Taxes [Abstract]  
INCOME TAXES

NOTE 11: INCOME TAXES

 

Our gross deferred tax assets are primarily related to net federal and state operating loss carryforwards (NOLs). We have substantial NOLs that are limited in its usage by IRC Section 382. IRC Section 382 generally imposes an annual limitation on the amount of NOLs that may be used to offset taxable income when a corporation has undergone significant changes in stock ownership within a statutory testing period. We have performed a preliminary analysis of the annual NOL carryforwards and limitations that are available to be used against taxable income. The estimated NOL carryforward for federal purposes is $18.1 million and foreign NOL carryforward is $5.2 million as of December 31, 2015.

 

For the year ended December 31, 2015, we reported a deferred tax liability of $358 resulting from the goodwill on the acquisition of Wireless Ronin Technologies.  This goodwill has an indefinite life and does not constitute a source of future taxable income as governed by ASC 740-10-30-18.  As such, the deferred tax liability related to this indefinite lived asset cannot be used to offset deferred tax assets when determining the valuation allowance against deferred tax assets that are less likely than not to be realized in the future.

 

A summary of the deferred tax assets and liabilities is included below:

 

  December 31, 
  2015  2014 
       
Deferred tax assets (liabilities):      
Reserves $10  $(72)
Property and equipment  148   (4)
Accrued expenses  909   781 
Severance  245   178 
Non-qualified stock options  422   419 
Net foreign carryforwards  1,359   1,349 
Net operating loss and credit carryforwards  7,514   5,592 
Intangibles  253   57 
         
Total Deferred Tax Assets  10,860   8,300 
Valuation Allowance  (11,218)  (8,300)
         
Net deferred tax assets (liabilities) $(358) $- 

  Year ended December 31, 
  2015  2014 
Tax Provision Summary      
Deferred Provision (Benefit) - Federal $(2,376) $(987)
Deferred Provision (Benefit) - State  (173)  (58)
Deferred Provision (Benefit) - Foreign  (29)  - 
Change in valuation allowance  2,936   1,045 
Tax Expense $358  $- 

 

A reconciliation of the statutory income tax rate to the effective income tax rates as a percentage of income before income taxes is as follows:

 

 -34.00% Federal statutory rate
 -2.26% State taxes
 0.55% Other
 40.32% Changes in valuation allowance
 4.61% Effective tax rate