The following table summarizes loss before income taxes for the years ended in thousands):

 

		2018				2017
U.S loss		$	(1,138	)		$	(5,419	)
Non-U.S. income			96				162
Loss before income taxes		$	(1,042	)		$	(5,257	)

 

The following table summarizes the Company’s components of the consolidated provision for income taxes for the years ended (in thousands):

 

		2018				2017
U.S Federal income tax benefit (expense)
Current		$	-			$	73
Deferred			62				(13,830	)
Total U.S. Federal income tax benefit (expense)			62				(13,757	)
State and local income tax expense
Current			(84	)			(45	)
Deferred			-				(1,560	)
Total state and local income tax expense			(84	)			(1,605	)
Foreign income tax expense
Current			(31	)			(88	)
Total income tax expense		$	(53	)		$	(15,450	)

 

The following table summarizes activity related to the Company’s valuation allowance for the years ended in thousands):

 

		2018				2017
Valuation allowance at the Beginning of Period		$	(11,435	)		$	-
Income tax expense			-				(11,435	)
Release of valuation allowance			65				-
Valuation allowance at the End of Period		$	(11,370	)		$	(11,435	)

 

The following table summarizes a reconciliation of the effective income tax rate to the U.S. federal statutory rate for the years ended

 

		2018					2017
Income tax expense at the statutory rate			21.0%					34.0%
State and local income tax expense			(14.0%)					4.6%
Foreign income tax			(2.2%)					(1.2%)
Permanent differences			(9.4%)					(8.3%)
Increase in valuation allowance			(0.3%)					(217.5%)
Impacts related to the 2017 Tax Act			0.0%					(106.0%)
Other adjustments			(0.1%)					0.4%
Effective income tax rate			(5.0%)					(293.9%)

 

The following table summarizes the temporary differences and carryforwards that give rise to deferred tax assets and liabilities as of in thousands):

 

		2018				2017
Deferred Federal tax assets –
Bad debt reserves		$	1,178			$	1,375
Stock based compensation			393				305
Net operating loss			8,025				7,319
Accrued compensation			218				249
Inventories			27				18
Accrued rent			31				30
Goodwill and intangible assets			2,507				3,323
Research & development credits			533				533
Other credits			25				5
Other			114				103
Total deferred Federal tax assets			13,051				13,260
Less: valuation allowance			(9,724	)			(9,599	)
Net deferred tax assets			3,327				3,661
Deferred Federal tax liabilities –
Depreciation and asset basis differences			(3,335	)			(3,672	)
Other			8				(51	)
Total deferred Federal tax liabilities			(3,327	)			(3,723	)
Net deferred Federal tax assets (liabilities)			-				(62	)
Net deferred state and local tax assets			1,646				1,836
Less: valuation allowance			(1,646	)			(1,836	)
Net deferred tax assets (liabilities)		$	-			$	(62	)

 

As of and the Company had federal net operating loss carryforwards remaining of approximately million and million, respectively.

 

The Company’s federal net operating loss carryforwards of approximately million will begin to expire in various years beginning in through and million of the federal net operating loss carryforwards have an indefinite life. The state net operating losses of approximately million can be used for a period of to years and vary by state, and if unused, begin to expire in though a substantial portion expires beyond through Tax benefits of operating loss and tax credit carryforwards are evaluated on an ongoing basis, including a review of historical and projected future operating results, the eligible carryforward period, and other circumstances.

 

At the Company continues to carry a full valuation allowance for tax benefits of operating loss and tax credit carryforwards. The Company’s realization of its deferred tax assets is dependent upon many factors, including, but limited to, the Company’s ability to generate sufficient taxable income. Management assesses the available positive and negative evidence to estimate if sufficient future taxable income will be generated to use the existing deferred tax assets. Cumulative losses in recent years and assurance of future taxable income is the basis for the Company’s assessment that the deferred tax assets continue to require a full valuation allowance.

 

The Company had uncertain tax positions for the years ended and

 

The Company is subject to taxation for Federal and various state jurisdictions in the United States and Canada. The Federal income tax returns of the Company for the years through are subject to examination by the Internal Revenue Service. The state income tax returns and other state tax filings of the Company are subject to examination by the state taxing authorities, for various periods generally up to years after they are filed. Canadian income tax returns of the Company for the years through are subject to examination by the Canada Revenue Agency.

 

The Company completed an update to its analysis of past ownership (as defined under Section of the Code) and, as a result, the Company believes that, consistent with previously completed analyses, it has experienced an ownership change since The Company has undertaken a definitive analysis necessary to quantify the effect of ownership change as of on the net operating loss carryforwards generated prior to Based on the analysis, the Company is subject to an annual limitation of million on its use of remaining pre-ownership change net operating loss carryforwards of million (and certain other pre-change tax attributes).