Note 5 - Income Taxes

3 Months Ended

Mar. 31, 2017

Notes to Financial Statements

Income Tax Disclosure [Text Block]

Note

5.

Income Taxes

Deferred tax assets and liabilities are recorded based on the difference between financial reporting and tax bases of assets and liabilities and are measured by the enacted tax rates and laws that are expected to be in effect when the differences are expected to reverse. Deferred tax assets are computed with the presumption that they will be realizable in future periods when taxable income is generated. Predicting the ability to realize these assets in future periods requires a great deal of judgment by management. U.S. generally accepted accounting principles prescribe a recognition threshold and measurement attribute for a tax position taken or expected to be taken in a tax return. Income tax benefits that meet the “more likely than not” recognition threshold should be recognized. Goodwill is amortized over

15

years for tax purposes.

The Company has recognized a deferred tax asset of

$1.6

million and has recorded a valuation allowance of

$12.7

million to reduce the other deferred tax assets. The Company will review the assessment of the deferred tax asset and valuation allowance for the period ending

June

30,

2017.

At

December

31,

2016,

the company had available net operating loss carryforwards of approximately

$40.2

million, which expire beginning in the year

2020.

Approximately

$0.1

million of the total net operating loss carryforward is subject to an IRS Section

382

limitation from

1999.

Management is not aware of any tax positions that would have a significant impact on the Company’s financial position.