INCOME TAXES

12 Months Ended

Dec. 31, 2022

Income Tax Disclosure [Abstract]

INCOME TAXES

NOTE 8: INCOME TAXES

Income tax expense is comprised of the following: 

	Year Ended December 31,
	2022		2021
Federal:
Current	$	–	$	92
Deferred		–		20
Total		–		112
State:
Current		–		20
Deferred		–		(20	)
Total		–		–
Total income tax expense	$	–	$	112

Income tax expense (benefit) 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,
	2022		2021
Income tax expense (benefit) at federal statutory rate		(21.00)%		21.00%
State tax (benefit) expense, net of federal benefit		(0.01)%		(0.16)%
Valuation allowance		21.10%		(0.38)%
Research and development credits		0.04%		0.48%
Other permanent differences		(0.14)%		0.25%
PPP loan forgiveness		0.00%		(19.13)%
Foreign withholding taxes		0.00%		2.97%
Other, net		0.00%		(0.45)%
Total effective rate		0.01%		4.58%

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,
	2022			2021
Deferred tax assets:
Net operating loss carryforwards	$	5,748		$	5,191
R&D and other credit carryforwards		637			638
Share-based compensation		803			784
Intangible amortization		–			1
Allowance for bad debt		–			115
Right-of-use operating asset		172			–
Other		(12	)		51
Total deferred tax assets		7,348			6,780
Less: valuation allowance		(7,235	)		(6,628	)
Net deferred tax assets	$	113		$	152
Deferred tax liabilities:
Depreciation on property and equipment	$	(113	)	$	(152	)
Total deferred tax liabilities		(113	)		(152	)
Net deferred tax position	$	–		$	–

We have $26,916 of federal and $1,245 of state net operating loss (“NOL”) carry forwards and $637 in research and development and other credits available to offset future taxable income. These federal and state NOLs will expire at various dates through 2034, except for federal NOLs generated in 2018 and subsequent years. 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, 2022. 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 federal tax returns from the tax years ended December 31, 2018 through December 31, 2021 are open to examination by the Internal Revenue Service.