Income Taxes (Tables)

12 Months Ended

Dec. 31, 2018

Components of Income Tax Expense (Benefit)

The components of income tax expense (benefit) are as follows:

(in thousands)	Year Ended December 31, 2018			Year Ended December 31, 2017
Federal - current	$	-		$	-
State - current		5			6
Total current		5			6

Federal - deferred		312			(6,037	)
State - deferred		(7,755	)		(5,402	)
Change in valuation allowance		6,052			(8,653	)
Total deferred		(1,391	)		(20,092	)
Income tax expense (benefit)	$	(1,386	)	$	(20,086	)

Income Tax Reconciliation

The components of pretax income (loss) and the difference between income taxes computed at the statutory federal rate and the provision for income taxes are as follows:

(in thousands)	Year Ended December 31, 2018			Year Ended December 31, 2017

Income (loss) before income taxes	$	(1,051	)	$	(68,143	)
Tax expense (benefit) :
Tax at statutory federal rate	$	(221	)	$	(23,851	)
State income taxes		(59	)		(5,019	)
Rate change		(5,759	)		16,047
Permanent items, tax credits and other adjustments		118			-
AMT – Sequestration Reversal (change in law)		(1,391	)		1,390
Deferred true-ups		(126	)		-
Change in valuation allowance		6,052			(8,653	)
Income tax expense (benefit)	$	(1,386	)	$	(20,086	)

A reconciliation of the United States federal statutory rate to the Company’s effective income tax rate is as follows:

	Year Ended December 31, 2018			Year Ended December 31, 2017
Tax at statutory federal rate		21.0	%		35.0	%
State income taxes		5.6			7.0
Rate change		548.0			(24.0	)
Permanent difference, tax credits and other adjustments		(11.2	)		-
AMT – Sequestration Reversal (change in law)		132.4			(2.0	)
Deferred true-ups		12.0			-
Change in valuation allowance		(575.9	)		13.0
Effective income tax rate		131.9	%		29.0	%

AMT Credit Carryforwards

AMT credit carryforwards available, which can be used to offset income generated in future years which are not subject to expiration, are as follows:

		Amount
AMT credits carryforwards		$	21,483,000

AMT Credit Carryforwards Projected to be Claimed as Refundable for Each Tax Year

The Company’s AMT credit carryforward amount(s) projected to be claimed as refundable for each tax year are as follows:

Tax Year (a)	Declining balance of the AMT credit carryforward amount(s) available for each tax year (a)(b)		% of AMT credit carryforward amount(s) available to be claimed as refundable for each tax year			AMT credit carryforward amount(s) projected to be claimed as refundable for each tax year (a)(b)

2019	$	10,741,000		50	%	$	5,371,000
2020		5,371,000		50	%		2,685,000
2021		2,685,000		100	%		2,685,000
						$	10,741,000

(a)

Assumes no regular federal income tax liability in tax years presented above which would reduce any AMT credit carryforward amount(s) ultimately refunded.

(b)

See herein with regard the filing of the Company’s 2018 federal income tax return and the March 2019 federal tax refund received.

Calculation of Net Deferred Tax Assets from NOL Carryforwards

The Company has a deferred tax asset arising primarily from NOL carryforwards and AMT credit carryforwards as follows:

	December 31, 2018			December 31, 2017
Deferred tax asset	$	44,501,000		$	47,800,000
Valuation allowance		(33,760,000	)		(27,708,000	)
Net deferred tax asset recognized	$	10,741,000		$	20,092,000

Federal [Member]

Operating Loss Carryforwards [Line Items]

Net Operating Loss Carryforwards

The federal NOL carryforwards as of December 31, 2018, are as follows:

Tax Year Originating	Tax Year Expiring	Amount

2006	2026	$	500,000
2007	2027		12,700,000
2008	2028		4,600,000
2009	2029		2,400,000
2010	2030		1,900,000
2011	2031		1,900,000
2013	2033		3,700,000
2014	2034		4,900,000
2015	2035		4,200,000
2016	2036		3,400,000
2017	2037		68,000,000
2018	-		500,000
		$	108,700,000

State [Member]

Operating Loss Carryforwards [Line Items]

Net Operating Loss Carryforwards

The state NOL carryforwards as of December 31, 2018, are as follows:

Tax Year Originating	Tax Year Expiring	Amount

2011	2031	$	1,800,000
2013	2033		2,700,000
2014	2034		4,200,000
2015	2035		4,100,000
2016	2036		2,800,000
2017	2037		68,000,000
2018	2038		500,000
		$	84,100,000