Note 15

Income Taxes:

	Years Ended December 31,
	2020		2019
Current:
Federal	$	-	$	(58	)
State		21		20
		21		(38	)
Deferred:
Federal		129		(86	)
State		125		(25	)
		254		(111	)
Income tax expense (benefit)	$	275	$	(149	)

The provision for income taxes includes federal, state and local income taxes currently payable and deferred taxes resulting from net operating loss carryforwards and temporary differences between the financial statement and tax bases of assets and liabilities. Valuation allowances are recorded to reduce deferred tax assets when it is not more likely than not that a tax benefit will be realized.

The CARES ACT, among other things contains numerous income tax provisions. Some of these tax provisions are effective retroactively for the years ending before the date of enactment. The Company analyzed the impact of the CARES ACT and does not foresee a significant impact on its consolidated financial position, results of operations, effective tax rate and cash flows.

The difference between the actual income tax expense (benefit) and that computed by applying the U.S. federal income tax rate to pretax loss from continuing operations is summarized below:

	For the Years Ended December 31,
	2020				2019

Computed expected tax expense (benefit)		$	(869	)		$	(827	)
State tax (benefit)expense, net of federal effect			(272	)			(106	)
Other			221				377
Net increase (decrease) in valuation allowance			1,195				407
Provision for income taxes		$	275			$	(149	)

The computed expected tax benefit was calculated using the U.S. federal income tax rates of 21% for the years ended December 31, 2020, and 2019, respectively.

The tax effects of temporary differences that give rise to significant portions of the deferred tax assets and liabilities as of December 31, 2020, and 2019 are as follows:

	December 31,
	2020			2019

Deferred tax assets/(liabilities):
Net operating loss carryforward	$	45,819		$	43,433
Intangible assets		1,450			2,046
Inventory		51			51
Reserves & accrued expenses		896			992
Property & equipment		(178	)		389
Non-cash compensation		808			850
Goodwill		(815	)		(667	)
Right of use asset		(249	)		(331	)
Lease liability		272			350
Total net deferred tax assets		48,054			47,113
Less: valuation allowance		(48,308	)		(47,113	)
Net deferred tax assets/(liabilities)	$	(254	)	$	-

The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible. Based on the Company’s historical net losses, management does not believe that it is more-likely-than not that the Company will realize the benefits of these deferred tax assets and, accordingly, nearly a full valuation allowance has been recorded against the deferred tax assets as of December 31, 2020 and 2019. The Company’s valuation allowance against its deferred tax assets increased by $1,195 for the year ended December 31, 2020 and increased by $407 for the year ended December 31, 2019.

At December 31, 2020, and 2019, the Company has federal net operating loss carryforwards of approximately $200,976 to offset future taxable income. Net operating loss carryforwards prior to 2019 begin to expire in 2021 through 2036. The Company has experienced certain ownership changes which, under the provisions of Section 382 of the Internal Revenue Code of 1986, as amended, result in annual limitations on the Company’s ability to utilize its net operating losses in the future. The February 2014, July 2014, June 2015 and May 2018 equity raises by the Company will limit the annual use of these net operating loss carryforwards. Although the Company has not performed a Section 382 study, any limitation of its pre-change net operating loss carryforwards that would result in a reduction of its deferred tax asset would also have an equal and offsetting adjustment to the valuation allowance.

FASB ASC 740 “Income Taxes” contains guidance with respect to uncertain tax positions which applies to all tax positions and clarifies the recognition of tax benefits in the financial statements by providing for a two-step approach of recognition and measurement. The first step involves assessing whether the tax position is more-likely-than-not to be sustained upon examination based upon its technical merits. The second step involves measurement of the amount to recognize. Tax positions that meet the more-likely-than-not threshold are measured at the largest amount of tax benefit that is, greater than 50%, likely of being realized upon ultimate finalization with the taxing authority.

The Company does not have any uncertain income tax positions or accrued penalties and interest. If such matters were to arise, the Company would recognize interest and penalties related to income tax matters in income tax expense. The Company files tax returns as prescribed by the tax laws of the jurisdictions in which it operates. In the normal course of business, the Company is subject to examination by federal, state, and foreign jurisdictions, where applicable. The Company’s tax years are still under open status from 2016 to present. All open years may be examined to the extent that net operating loss carryforward are used in future periods.