Income Taxes

12 Months Ended

Dec. 31, 2021

Income Tax Disclosure [Abstract]

Income Taxes

20. Income Taxes

Loss before provision for income taxes is attributable to the following geographic locations for the years ended December 31: 

	2021			2020			2019
United States	$	(45,860	)	$	(7,525	)	$	(4,926	)
Foreign Countries		2,480			1,718			(10,130	)
	$	(43,380	)	$	(5,807	)	$	(15,056	)

The provision for income taxes consists of the following for the years ended December 31: 

	2021			2020			2019
Current tax:
Federal tax	$	–		$	–		$	–
State tax		4			12			7
Foreign countries		1,672			827			275
Total current tax		1,676			839			282
Deferred tax:
Federal tax	$	–			(22	)		(9	)
State tax		–			–			(4	)
Foreign countries		(222	)		(359	)		(177	)
Total deferred tax		(222	)		(381	)		(190	)
Total provision for income taxes	$	1,454		$	458		$	92

The reconciliation between the actual income tax expense and income tax computed by applying the statutory U.S. Federal income tax rate for the years ended December 31 is as follows: 

	2021			2020			2019
Provision for income taxes at U.S. Federal statutory rate	$	(9,110	)	$	(1,219	)	$	(3,161	)
State taxes, net of federal benefit		(10	)		(411	)		(944	)
Foreign taxes at different rate		869			458			314
Non-deductible expenses		12			211			(936	)
Tax law changes		–			–			–
Valuation allowance		9,645			2,150			6,463
Other		(82	)		(743	)		(209	)
Disposition of subsidiaries		–			–			–
Share Based Compensation		130			12			12
Gain on debt modification		–			–			–
Reversal of tax penalty		–			–			(1,447	)
Total provision for income taxes	$	1,454		$	458		$	92

Deferred income taxes reflect the net tax effects of loss carry forwards and temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. Significant components of the Group’s deferred tax assets and liabilities for federal, state and foreign income taxes are as follows at December 31 are presented below:  

	2021			2020
Deferred tax assets:
Net operating loss carry forwards	$	86,624		$	78,319
Temporary differences due to accrued warranty costs		103			138
Investment in subsidiaries		4,459			4,459
Credits		16			16
Allowance for bad debts		2,076			1,545
Fair value adjustment arising from subsidiaries acquisition		30			29
Stock compensation		1,861			820
Unrealized loss on derivatives		5,095			5,109
Unrealized investment loss		3,407			4,390
Impairment of property and equipment, and project assets		541			541
Other temporary differences		7,726			6,841
Valuation allowance		(111,770	)		(102,125	)
Total deferred tax assets		168			82
Deferred tax liabilities:
Fair value adjustment arising from subsidiaries acquisition		(2,970	)		(3,966	)
Other		–			–
Total deferred tax liabilities		(2,970	)		(3,966	)
Net deferred tax liabilities	$	(2,802	)	$	(3,884	)

As of December 31, 2021, the Group had a net operating loss carry forward for federal income tax purposes of approximately $361,269 which will start to expire in the year 2029. The Group had a total state net operating loss carry forward of approximately $128,485, which will start to expire in the year 2022. The Group has foreign net operating loss carry forward of $14,713, some of which begin to expire in 2022. The Group had a federal AMT credit of $16, which does not expire.

Utilization of the federal and state net operating losses is subject to certain annual limitations due to the “change in ownership” provisions of the Internal Revenue Code of 1986 and similar state provisions. However, the annual limitation may be anticipated to result in the expiration of net operating losses and credits before utilization.

The Group recognizes deferred tax assets if it is more likely than not that those deferred tax assets will be realized. Management reviews deferred tax assets periodically for recoverability and makes estimates and judgments regarding the expected geographic sources of taxable income in assessing the need for a valuation allowance to reduce deferred tax assets to their estimated realizable value. Realization of the Group’s deferred tax assets is dependent upon future earnings, if any, the timing and amount of which are uncertain. Because of the Group’s lack of earnings history, the net deferred tax assets have been fully offset by a valuation allowance in the U.S. The valuation allowance increased by $9,645, $2,150 and $6,453 during the years ended December 31, 2021, 2020 and 2019, respectively.

The Group had no unrecognized tax benefits as of December 31, 2021 and 2020, respectively. The Group currently files income tax returns in the U.S., as well as California, Hawaii, New Jersey, and certain other foreign jurisdictions. The Group is currently not the subject of any income tax examinations. The Group’s tax returns generally remain open for tax years after 2011.

The Group has analyzed the impact of adopting ASC 606 on the Group's financial statements and disclosures. There is no material impact on the financial statements of adopting ASC 606. Therefore, there is no material tax impact either.

The Coronavirus Aid, Relief and Economy Security (CARES) Act (“the CARES Act, H.R. 748”) was signed into law on 27 March 2020. The CARES Act temporarily eliminates the 80% taxable income limitation (as enacted under the Tax Cuts and Jobs Act of 2017) for NOL deductions for 2018-2020 tax years and reinstated NOL carrybacks for the 2018-2020 tax years. Moreover, the CARES Act also temporarily increases the business interest deduction limitations from 30% to 50% of adjusted taxable income for the 2019 and 2020 taxable year. Lastly, the Tax Act technical correction classifies qualified improvement property as 15-year recovery period, allowing the bonus depreciation deduction to be claimed for such property retroactively as if it was included in the Tax Act at the time of enactment. The company does not anticipate a material impact on its financial statements as of December 31, 2021 due to the recent enactment.