XML 28 R15.htm IDEA: XBRL DOCUMENT
v3.20.4

Income Taxes | 12 Months Ended
--- | ---
Dec. 31, 2020
Income Tax Disclosure [Abstract] |
Income Taxes | NOTE 9 —Income Taxes The following table presents the income (loss) before income taxes for domestic and foreign operations, and the components of the provision (benefit) for income taxes for the years ended December 31:
| 2020 |  |  | 2019 |
Domestic loss | $ | (31,390 | ) |  | $ | (26,964 | )
Foreign subsidiaries income |  | 937 |  |  |  | 2,518 |
Income (loss) before income taxes | $ | (30,453 | ) |  | $ | (24,446 | )
| 2020 |  |  | 2019 |
Current income tax expense: |  |  |  |  |  |  |
Federal | $ | (53 | ) |  | $ | — |
State |  | 5 |  |  |  | (3 | )
Foreign |  | (494 | ) |  |  | 1,282 |
Total Current |  | (542 | ) |  |  | 1,279 |
Deferred income tax expense: |  |  |  |  |  |  |
Federal |  | 54 |  |  |  | — |
State |  | — |  |  |  | — |
Foreign |  | (33 | ) |  |  | 109 |
Total Deferred |  | 21 |  |  |  | 109 |
Total provision (benefit) for income taxes | $ | (521 | ) |  | $ | 1,388 |
The Company’s effective tax rate differs from the federal statutory rate due to the following for the years ended December 31:
| 2020 |  |  | 2019 |
Statutory federal income tax rate |  | 21 | % |  |  | 21 | %
State income taxes, net of federal tax benefits |  | -0.54 | % |  |  | 0.61 | %
Stock compensation |  | -0.74 | % |  |  | -1.27 | %
Foreign rate differential |  | 2.38 | % |  |  | -3.53 | %
Tax credits |  | 0.00 | % |  |  | 0.68 | %
GILTI Inclusion |  | -0.81 | % |  |  | -0.76 | %
Section 382 limits |  | -27.71 | % |  |  | 0.00 | %
Non-deductible expenses |  | -0.17 | % |  |  | -4.58 | %
Valuation allowance |  | 8.30 | % |  |  | -14.58 | %
Other, net |  | 0.00 | % |  |  | -3.25 | %
Effective tax rate |  | 1.71 | % |  |  | -5.68 | %
Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. The following table presents the significant components of the Company’s deferred tax assets and liabilities at December 31:
| 2020 |  |  | 2019 |
Gross deferred tax assets: |  |  |  |  |  |  |
Net operating loss carryforward | $ | 12,684 |  |  | $ | 9,587 |
Tax credits |  | 92 |  |  |  | 725 |
Accruals and reserves |  | 2,113 |  |  |  | 2,461 |
Property and equipment |  | 83 |  |  |  | — |
Alternative minimum tax credits |  | 21 |  |  |  | 89 |
Total gross deferred tax assets |  | 14,993 |  |  |  | 12,862 |
Less: valuation allowance |  | (14,281 | ) |  |  | (11,814 | )
Total deferred tax assets net of valuation allowance |  | 712 |  |  |  | 1,048 |
Deferred tax liabilities: |  |  |  |  |  |  |
Property and equipment |  | — |  |  |  | (37 | )
Accrual and reserves |  | (678 | ) |  |  | (1,025 | )
Net deferred tax assets (liabilities) | $ | 34 |  |  | $ | (14 | )
A valuation allowance is provided for deferred tax assets where the recoverability of the assets is uncertain. The determination to provide a valuation allowance is dependent upon the assessment of whether it is more likely than not that sufficient future taxable income will be generated to utilize the deferred tax assets. Based on the weight of the available evidence, which includes the Company’s historical operating losses, lack of taxable income, and the accumulated deficit, the Company provided a full valuation allowance against the U.S. deferred tax assets resulting from the accruals and reserves along with the net operating loss and credits carried forward. The valuation allowance was $14,281 as of December 31, 2020 compared to $11,814 as of December 31, 2019, a change in valuation of $2,467. The valuation allowance was $11,814 as of December 31, 2019 compared to $8,088 as of December 31, 2018, a change in valuation of $3,726. We have not provided U.S. Federal and State income taxes, nor foreign withholding. taxes on approximately $9,156 of undistributed earnings for certain non-US subsidiaries, because such earnings are intended to be indefinitely reinvested. If these earnings were distributed to the U.S. in the form of dividends or otherwise, or if the shares of the relevant foreign subsidiaries were sold or otherwise transferred, we would not be subject to U.S. income tax due to the transition tax of IRC Section 965 or via the Global Intangible Low-Taxed Income (“GILTI”) provision, enacted as part of the 2017 U.S. Tax Act. The Company would be subject to U.S. state tax and potential foreign withholding taxes on a repatriation of the foreign earnings. The amount of unrecognized deferred income tax liability related to these earnings is not material. Estimate of cumulative foreign earnings is as follows as of December 31:
| 2020 |  |  | 2019 |
China | $ | 4,195 |  |  | $ | 5,818 |
India |  | 4,961 |  |  |  | 4,580 |
Total | $ | 9,156 |  |  | $ | 10,398 |
The Company had net operating loss carryovers (NOL) for federal and state income tax purposes of approximately $56,805 and $12,418, respectively, as of December 31, 2020. Approximately $9,938 of federal NOLs will expire beginning in 2037, while approximately $46,866 generated beginning in 2018 have an indefinite life. The state NOLs will expire if unused in years 2026 through 2040:
| 2020 |  |  | 2019 |
Federal NOL | $ | 56,805 |  |  | $ | 42,415 |
State NOL | $ | 12,418 |  |  | $ | 11,492 |
The Company had research and development (“R&D”) credit carryforwards as follows as of December 31:
| 2020 |  |  | 2019 |
Federal R&D credits | $ | — |  |  | $ | 632 |
California R&D credits | $ | 117 |  |  | $ | 117 |
At December 31, 2020, the Company had approximately zero of federal and $117 of California research and development tax credit and other tax credit carryforwards available to offset future taxable income. The California research credits have no expiration dates. Federal and state laws impose restrictions on the utilization of net operating loss carryforwards and R&D credit carryforwards in the event of a change in ownership of the Company, which constitutes an 'ownership change' as defined by Internal Revenue Code Section 382 and 383. The Company experienced an ownership change in 2020 that caused the Company to de-recognize $37,206 and $7,319 of federal and state net operating losses, respectively. The amounts indicated in the above tables reflect the reduction of net operating losses and credit carryforwards as a result of previous ownership changes that the Company experienced. Should there be additional ownership changes in the future, the Company's ability to utilize existing carryforwards could be substantially restricted. Uncertain Tax Positions The Company accounts for uncertainty in income taxes in accordance with the Financial Accounting Standards Board guidance for income taxes, as provided in ASC 740, Accounting for Income Taxes. Tax positions are evaluated in a two-step process. The Company first determines whether it is more likely than not that a tax position will be sustained upon examination by the tax authority, including resolutions of any related appeals or litigation processes, based on technical merit. If a tax position meets the more-likely-than-not recognition threshold it is then measured to determine the amount of benefit to recognize, in the financial statements. The tax position is measured as the largest amount of benefit that is greater than 50% likely of being realized upon ultimate settlement. The following table summarizes the activity related to unrecognized tax benefits as follows as of December 31:
In thousands | 2020 |  |  | 2019 |
Unrecognized benefit-beginning of period | $ | 6.900 |  |  | $ | 5,957 |
Gross increases-prior period tax positions |  | 96 |  |  |  | 400 |
Gross (decreases)-prior period tax positions |  | (5,818 | ) |  |  | — |
Settlements prior period tax positions |  | (95 | ) |  |  | — |
Gross increases -current period tax positions |  | 107 |  |  |  | 543 |
Unrecognized benefit-end of period | $ | 1,190 |  |  | $ | 6,900 |
The Company reported a $5,818 reduction in prior period uncertain tax positions in 2020, consisting of $5,042 of reductions in prior period uncertain tax positions related to de-recognized net operating losses and tax credits following the Section 382 ownership change in 2020, as discussed above and $776 of the reduction related to remeasuring uncertain tax positions following the completion of a tax audit. The unrecognized tax benefits at December 31, 2020 of $31 are accounted for as a reduction in the Company’s deferred tax assets. Due to the Company’s valuation allowance, only $1,159 of the $1,190 of unrecognized tax benefits would affect the Company’s effective tax rate, if recognized. The Company does not believe it is reasonably possible that its unrecognized tax benefits will significantly change in the next twelve months. The Company recognizes interest and penalties related to unrecognized tax benefits as income tax expense. The Company reported a tax benefit of ($262) in December 31, 2020 and accrued $229 of interest and penalties in December 31, 2019. The Company has accrued a $84 and $346 liability for accrued interest and penalties related to unrecognized tax benefit as of December 31, 2020 and 2019, respectively. The Company's material income tax jurisdictions are the United States (federal and California), China and India. As a result of net operating loss and credit carryforwards, the Company is subject to audit for tax years 2014 and forward for federal and California purposes. The China and India tax years are open under the statute of limitations from 2015 and forward. The Company completed an audit in China in 2020, paying approximately $95 of tax to settle prior year uncertain tax positions. The Company has no ongoing tax audits.

X
- References No definition available. + Details
Name: | us-gaap_IncomeTaxDisclosureAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration

X
- 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
Name: | us-gaap_IncomeTaxDisclosureTextBlock
Namespace Prefix: | us-gaap_
Data Type: | nonnum:textBlockItemType
Balance Type: | na
Period Type: | duration