17. Income Taxes (Tables)

12 Months Ended

Dec. 31, 2017

Income Tax Disclosure [Abstract]

Income tax expense (benefits)

The components of the provision (benefit) for income taxes are as follows for the years ending December 31, 2017 and 2016 (in thousands):

		Year Ended December 31,
		2017		2016
Current:
Federal	$	113	$	455
State		498		356
Foreign		-		(172)
Total current provision		611		639
Deferred Provision:
Federal		(238)		(189)
State		-		(11)
Foreign		-		-
Total deferred provision (benefit)		(238)		(200)
Total	$	373	$	439

Deferred income taxes

The sources of the temporary differences and their effect on deferred taxes are as follows (in thousands): 

		Year Ended December 31,
		2017		2016
Deferred tax assets:
Accruals and other reserves	$	19,752	$	36,064
Intangibles		17,718		4,414
Inventory		504		1,157
Stock awards		3,570		4,531
Net operating loss carryovers		25,030		34,582
Gross deferred tax assets		64,574		80,748
Valuation allowance		(64,560)		(80,725)
Net deferred tax asset		14		23
Deferred tax liabilities:
Fixed Assets		(14)		(23)
Intangibles		-		-
Gross deferred tax liability		(14)		(23)
Net deferred tax asset/(liability)		-		-
Included in consolidated balance sheet:
Deferred income tax assets/(liabilities) - current		-		-
Deferred income tax assets/(liabilities) - long-term		-		-
Net deferred tax asset/(liability)	$	-	$	-

Effective on income tax rate from continuing operations

The effective income tax rate from continuing operations is different from the federal statutory rate for the years ended December 31, 2017 and 2016 for the following reasons:

	Year Ended December 31,
	2017		2016
Expected taxes at statutory rates	35.0	%	35.0	%
State taxes, net of federal tax benefit	(0.4)	%	(0.1)	%
Foreign income tax rate differential	(24.1)	%	(9.8)	%
Amortization and impairment of goodwill	(4.9)	%	(8.5)	%
Mark to market adjustment	0.3	%	4.2	%
Deductible inducement payment	(1.0)	%	3.2	%
Change in valuation allowance	17.3	%	(25.4)	%
Debt Reorganization and Exchangeable notes	1.7	%	-	%
Revaluation of deferred tax balances	(24.5)		-	%
Permanent differences and other	0.1	%	1.1	%
	(0.5)	%	(0.3)	%

Reconciliation of beginning and ending amount of unrecognized tax benefits

The following summarizes the activity related to the Company's unrecognized tax benefits (in thousands):

		Year Ended December 31,
		2017		2016
Balance at beginning of year	$	7,410	$	7,410
Tax positions taken in prior periods		(2,514)		-
Tax positions taken in current year		5,347		-
Accrual of interest related to tax positions taken		-		-
Settlements		-		-
Foreign currency translation		-		-
Balance at end of year	$	10,243	$	7,410