Note 11 - Income Taxes

6 Months Ended

Sep. 30, 2017

Notes to Financial Statements

Income Tax Disclosure [Text Block]

1

1

.  Income Taxes

The

provision for income taxes is based upon loss before income taxes as follows (in thousands):

	Three Months Ended September 30, 2017			Six Months Ended September 30, 2017
Domestic pre-tax loss	$	(2,820	)	$	(4,623	)
Foreign pre-tax income (loss)		177			(147	)
Total pre-tax loss	$	(2,643	)	$	(4,770	)

The c

omponents of the provision for income taxes are as follows (in thousands):

	Three Months Ended September 30, 2017		Six Months Ended September 30, 2017
US	$	24	$	2
Foreign		4		9
Total provision for income taxes	$	28	$	11

T

he Company accounts for its income taxes in accordance with ASC

740,

Income Taxes. ASC

740

clarifies the accounting for uncertainty in income taxes and prescribes a recognition threshold, measurement attribute for the financial statement recognition and measurement of a tax position taken, or expected to be taken, in a tax return. Under ASC

740,

the Company is required to recognize in the financial statements the impact of a tax position, if that position is more likely than

not

of being sustained on audit, based on the technical merits of the position. ASC

740

also provides guidance on derecognition, classification, interest and penalties, accounting in interim periods and disclosure. The Company policy is to record interest and penalties related to unrecognized tax benefits in income tax expense. 

At

September 30, 2017,

there was

no

material increase in the liability for unrecognized tax benefits nor any accrued interest and penalties related to uncertain tax positions.

In addition, at

September 30, 2017,

the Company had approximately

$1.4

million of unrecognized tax benefits which was netted against deferred tax assets with a full valuation allowance. If these amounts are recognized, there will be

no

effect on the Company’s effective tax rate due to the full valuation allowance.

ASC

740

also requires the allocation of tax benefits recorded in other components of the financial statements to be recorded in continuing operations in interim periods. During the

three

months ended

June 30, 2017,

the Company recorded a deferred tax liability in Other Comprehensive Income related to currency translation gains. Because the Company has a loss and a full valuation allowance in the United States, a tax benefit of

$6,000

was recorded in continuing operations in the U.S. to record the impact of the valuation allowance release related to the currency translation gain during the

six

months ended

September 30, 2017.

 

The Company’s Federal, state and foreign tax returns

may

be subject to examination by the tax authorities for fiscal year ended from

1998

to

2016

due to net operating losses and tax carryforwards unutilized from such years.