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

 

		2019				2018
U.S income (loss)		$	1,413			$	(1,138	)
Non-U.S. income			111				96
Income (loss) before income taxes		$	1,524			$	(1,042	)

 

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

 

		2019				2018
U.S Federal income tax (expense) benefit
Current		$	-			$	-
Deferred			(104	)			62
Total U.S. Federal income tax (expense) benefit			(104	)			62
State and local income tax expense
Current			(29	)			(84	)
Deferred			-				-
Total state and local income tax expense			(29	)			(84	)
Foreign income tax expense
Current			(30	)			(31	)
Total income tax expense		$	(163	)		$	(53	)

 

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

 

		2019				2018
Valuation allowance at the Beginning of Period		$	(11,370	)		$	(11,435	)
Income tax expense			-				-
Release of valuation allowance			120				65
Valuation allowance at the End of Period		$	(11,250	)		$	(11,370	)

 

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

 

		2019				2018
Income tax expense at the statutory rate			21.0	%			21.0	%
State and local income tax expense			2.0	%			(14.0	%)
Foreign income tax			2.0	%			(2.2	%)
Permanent differences			(5.8	%)			(9.4	%)
Decrease in valuation allowance			(7.9	%)			(0.3	%)
Other adjustments			(0.6	%)			(0.1	%)
Effective income tax rate			10.7	%			(5.0	%)

 

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

 

		2019				2018
Deferred Federal tax assets –
Bad debt reserves		$	1,459			$	1,178
Stock-based compensation			443				393
Net operating loss			7,991				8,025
Operating lease liabilities			1,271				-
Accrued compensation			451				218
Inventories			27				27
Accrued rent			-				31
Goodwill and intangible assets			1,688				2,507
Research & development credits			533				533
Other credits			25				25
Other			194				114
Total deferred Federal tax assets			14,082				13,051
Less: valuation allowance			(9,553	)			(9,724	)
Net deferred tax assets			4,529				3,327
Deferred Federal tax liabilities –
Depreciation and asset basis differences			(3,366	)			(3,335	)
Right-of-use assets			(1,204	)			-
Other			-				8
Total deferred Federal tax liabilities			(4,570	)			(3,327	)
Net deferred Federal tax liabilities			(41	)			-
Total deferred state and local tax assets (a)			1,634				1,646
Less: valuation allowance			(1,697	)			(1,646	)
Net deferred state and local tax assets			(63	)			-
Net deferred tax liabilities		$	(104	)		$	-

 

 

The Company’s U.S. federal and state operating loss carryforwards for tax purposes were million at resulting in a deferred tax asset of million. Approximately million of the Company’s U.S. federal net operating loss carryforwards will begin to expire in various years beginning in million of the U.S. federal net operating loss carryforwards have an indefinite life. The Company’s deferred tax asset related to 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 Approximately million of the state net operating loss carryforwards have an indefinite life. 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.

 

The Company continues to monitor shifts in past ownership (as defined under Section of the Code). A definitive analysis necessary to quantify the effect of an ownership change was performed 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).

 

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 open to examination by the Internal Revenue Service. Under examination, the Internal Revenue Service redetermine the correct taxable income for a closed year (pre-) to determine either the amount of the federal net operating loss carryforward deduction reported in the open years or the amount of a federal net operating loss deduction that is absorbed in a closed year and supports the determination of the available federal net operating loss deduction for the open years under examination. 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.