INCOME TAXES (Tables)

12 Months Ended

Dec. 31, 2021

INCOME TAXES [Abstract]

Components of Income Tax Benefit (Expense)

The following represent components of the income tax benefit (expense) for the years ended December 31, 2021, 2020 and 2019:

	Year Ended December 31,
	2021			2020			2019
	(in thousands)
Current:
U.S. federal	$	(91	)	$	(61	)	$	-
U.S. state		(2	)		(2	)		-
Foreign		(2,195	)		(2,014	)		(3,176	)
Total current tax expense		(2,288	)		(2,077	)		(3,176	)
Deferred:
U.S. federal		2,089			7,325			3,728
U.S. state		-			-			-
Foreign		65			(2,866	)		(34	)
Total deferred tax benefit		2,154			4,459			3,694
Total income tax benefit (expense)	$	(134	)	$	2,382		$	518

Deferred tax Assets

Tax effects of temporary differences that give rise to significant portions of the Company’s deferred tax assets at December 31, 2021 and 2020 are presented below:

	Year Ended December 31,
	2021			2020			2019
Deferred tax assets:
Net operating loss carry forwards (offshore)	$	522		$	323		$	216
Net operating loss carry forwards (U.S.) and credit		12,173			9,981			3,218
Deferred revenue (offshore)		361			556			1,181
Accruals (U.S.)		15			22			15
Reserves and other (offshore)		1,528			884			426
Stock-based compensation (U.S.)		2,283			1,599			1,168
Property and equipment (U.S.)		1			164			3
Lease liability		559			659			-
Total gross deferred tax assets		17,442			14,188			6,227
Less: valuation allowance		(919	)		(848	)		(896	)
Total deferred tax assets		16,523			13,340			5,331
Deferred tax liabilities:
Fixed assets		(589	)		(697	)		-
Deferred revenue (offshore)		(1,486	)		(967	)		-
Unrealized gain on trading securities		-			(1,886	)		-
Equity Investments		(2,584	)		-			-
Total deferred tax liabilities		(4,659	)		(3,550	)		-
Translation difference		-			-			-
Deferred tax assets, net	$	11,864		$	9,790		$	5,331

Effective Income Tax Rate

Income tax expense for the years ended December 31, 2021, 2020 and 2019 differed from the amounts computed by applying the statutory U.S. federal income tax rate of 21% to pretax income as a result of the following:

	Year Ended December 31,
	2021			2020			2019
Effective tax rate reconciliation:
Income tax provision at statutory rate		21.00	%		21.00	%		21.00	%
Stock Compensation		(12.75	)		(36.99	)		(1.05	)
Foreign rate differential		(11.60	)		(5.07	)		(6.44	)
Other permanent difference		(0.23	)		11.71			2.82
Foreign income taxed in US		10.32			6.05			6.94
Foreign Research Expense		(6.59	)		(8.80	)		(5.82	)
Change in valuation allowance		0.16			(0.25	)		(20.19	)
Total income tax expense (benefit)		0.31	%		(12.35	)%		(2.74	)%

Aggregate Changes in Balance of Gross Unrecognized Tax Benefits

Tax positions are evaluated in a two-step process. The Company first determines whether it is more likely than not that a tax position will be sustained upon examination. If a tax position meets the more-likely-than-not recognition threshold it is then measured to determine the amount of benefit to recognize in the financial statements. The tax position is measured as the largest amount of benefit that is greater than 50% likely of being realized upon ultimate settlement. The aggregate changes in the balance of gross unrecognized tax benefits, which excludes interest and penalties, for the years ended December 31, 2021 and 2020, were as follows:

	Year Ended December 31,
	2021			2020		2019
Beginning balance	$	570		$	44	$	44
Increase of unrecognized tax benefits taken in prior years		52			116		-
Increase of unrecognized tax benefits related to current year		5,476			410		-
Reductions for tax positions related to prior years		(32	)		-		-
Reductions to unrecognized tax benefits related to lapsing statute of limitations		-			-		-
Ending balance	$	6,066		$	570	$	44