14.

INCOME TAXES

(Loss) income before income taxes consisted of the following:

(In thousands)	For the Years Ended December 31,
	2019			2018			2017
Continuing operations	$	(16,582	)	$	(22,666	)	$	(16,196	)
Discontinued operations		12,908			5,135			2,001
Loss before income taxes	$	(3,674	)	$	(17,531	)	$	(14,195	)

Loss from continuing operations before taxes consisted of the following:

(In thousands)	For the Years Ended December 31,
	2019			2018			2017
U.S. operations	$	(11,278	)	$	(9,684	)	$	(8,792	)
Foreign operations		(5,304	)		(12,982	)		(7,404	)
Loss before income taxes	$	(16,582	)	$	(22,666	)	$	(16,196	)

The income tax (benefit) expense allocation for the years ended

December 31, 2019,

2018,

and

2017

consisted of the following:

(In thousands)	For the Years Ended December 31,
	2019			2018			2017
Continuing operations	$	(2,956	)	$	(1,342	)	$	(2,251	)
Discontinued operations		411			1,136			645
Total income tax (benefit)	$	(2,545	)	$	(206	)	$	(1,606	)

The income tax (benefit) from continuing operations consisted of the following:

(In thousands)	For the Years Ended December 31,
	2019			2018			2017
Current:
Federal	$	—		$	—		$	—
State and local		—			—			—
Foreign		—			—			—
Total current provision		—			—			—
Deferred:
Federal		(2,368	)		(894	)		(1,370	)
State and local		(588	)		(142	)		(1	)
Foreign		—			(306	)		(880	)
Total deferred (benefit)		(2,956	)		(1,342	)		(2,251	)
Total income tax (benefit)	$	(2,956	)	$	(1,342	)	$	(2,251	)

The following table provides a reconciliation of the federal statutory tax at

21%

to the recorded tax expense (benefit) from continuing operations for the years ended

December 31, 2019

and

2018,

respectively, and

34%

to the recorded tax expense (benefit) for the year ended

December

31,

2017:

(In thousands)	For the Years Ended December 31,
	2019			2018			2017
Computed federal income taxes at the statutory rate (benefit)	$	(3,482	)	$	(4,760	)	$	(5,507	)
Permanent tax differences		(23	)		(122	)		(262	)
Foreign tax rates and tax credits differing from USA		435			747			1,021
Purchased goodwill and intangible impairments		—			828			1,072
Change in valuation allowance		114			1,965			1,425
Total income tax (benefit)	$	(2,956	)	$	(1,342	)	$	(2,251	)

Effective tax rate		17.83	%		5.92	%		13.90	%

The Company accounts for income taxes under the asset-liability method. Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. Valuation allowances are provided when it is “more likely than

not”

that the benefits of existing deferred tax assets will

not

be realized in a future period. Significant components of the Company’s deferred tax assets and liabilities as of

December

31,

2019

and

2018,

respectively, are as follows:

(In thousands)	As of December 31,
	2019			2018
Deferred tax assets:
Net operating loss carryforwards	$	12,130		$	12,317
Inventory and accounts receivable reserves		306			234
Other		1,956			569
Valuation allowance		(12,447	)		(12,333	)
Deferred tax assets after valuation allowance		1,945			787
Deferred tax liabilities
Intangible assets		(476	)		(848	)
Property, plant and equipment		(1,469	)		61
Total deferred tax liabilities		(1,945	)		(787	)
Net deferred tax asset (liability)	$	—		$	—

The Company adopted the provisions of ASU

2015

2015.

ASU

2015

requires that all deferred tax assets and liabilities be classified as noncurrent on the balance sheet. The net deferred tax liability is recorded as of

December 31, 2019

and

December 31, 2018

as follows were

zero

for both year-end dates:

As of

December

31,

2019

and

2018,

the Company recorded a valuation allowance of

$12.4

million and

$12.3

million, respectively. During the year ended

December

31,

2019

and

2018,

the Company recorded an increase in valuation allowance of

$0.1

million and

$2.0

million, respectively. As of

December

31,

2019,

the Company has available federal, state and foreign net operating loss carry forwards of approximately

$37.2

million,

$32.3

million and

$15.5

million, respectively which have various expiration dates beginning in

2027

through

2038.

The Company files consolidated income tax returns for federal and many state jurisdictions in addition to separate subsidiary income tax returns in Canada, Japan and the United Kingdom. As of

December 31, 2019,

the Company is

not

under examination by any income tax jurisdiction. The Company is

longer subject to examination in the USA for years prior to

2016.

The Company accounts for income tax uncertainties using a threshold of "more-likely-than-

not"

in accordance with the provisions of ASC Topic

740,

Income Taxes ("ASC

740"

). As of

December 31, 2019,

the Company has reviewed all of its tax filings and positions taken on its returns and has

not

identified any material current or future effect on its consolidated results of operations, cash flows or financial position. As such, the Company has

not

recorded any tax, penalties or interest on tax uncertainties. It is Company policy to record any interest on tax uncertainties as a component of income tax expense.