8. INCOME TAXES

12 Months Ended

Dec. 31, 2019

Income Tax Disclosure [Abstract]

INCOME TAXES

NOTE 8: INCOME TAXES

Income tax (benefit) expense is comprised of the following:

	Year Ended December 31,
	2019			2018
Federal:
Current	$	–		$	–
Deferred		5			2
Total	$	5		$	2
State:
Current	$	(8	)	$	8
Deferred		(5	)		(2	)
Total	$	(13	)	$	6
Total income tax (benefit) expense	$	(8	)	$	8

Income tax (benefit) expense differs from the amount computed by applying the U.S. statutory income tax rate to loss before income taxes for the reasons set forth below.

	Year Ended December 31,
		2019			2018
Income tax benefit at federal statutory rate			(21.00	)%		(21.00	)%
State taxes, net of federal benefit			(0.50	)%		0.10	%
Valuation allowance			19.98	%		25.08	%
Research and development credits			0.79	%		(3.87	)%
Other permanent differences			0.44	%		0.31	%
Other, net			0.00	%		(0.42	)%
Total effective rate			(0.29	)%		0.20	%

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, as well as operating loss and tax credit carry forwards. The tax effects of the temporary differences and carry forwards are as follows:

	December 31,
	2019			2018
Deferred tax assets:
Net operating loss carryforwards	$	4,521		$	4,245
R&D and other credit carryforwards		663			685
Share-based compensation		757			730
Intangible amortization		11			16
Allowance for bad debt		2			2
Other		193			16
Total deferred tax assets	$	6,147		$	5,694
Less: valuation allowance		(5,385	)		(4,837	)
Net deferred tax assets	$	762		$	857
Deferred tax liabilities:
Depreciation on property and equipment	$	(762	)	$	(857	)
Amortization of intangibles		–			–
Total deferred tax liabilities	$	(762	)	$	(857	)
Net deferred tax position	$	–		$	–

We have $21,114 of federal and $1,109 of state NOL carry forwards and $663 in research and development and other credits available to offset future taxable income. These federal and state NOL’s will expire at various dates through 2036. Management analyzed its current operating results and future projections and determined that a full valuation allowance was needed due to our cumulative losses in recent years. We have no uncertain tax positions at December 31, 2019. Accordingly, we do not have any accruals for penalties or interest related to our tax returns. Should an examination or audit arise, we would evaluate the need for an accrual and record one, if necessary. Our tax returns from the tax years ended December 31, 2016 through December 31, 2019 are open to examination by the IRS.