INCOME TAXES

6 Months Ended

Jun. 30, 2024

INCOME TAXES

INCOME TAXES

NOTE 8 – INCOME TAXES

Income tax benefit (expense) primarily relates to foreign and state taxes.  For the comparison period of 2024, the second quarter of 2024 included dividend withholding taxes of approximately $337,000 due to a $3.4 million dividend repatriation from our China subsidiary operation.

The effective tax rate differed from the statutory tax rate primarily due to valuation allowances effect, as well as foreign taxes.  We have a valuation allowance of $9.3 million as of June 30, 2024.  As of June 30, for both 2024 and 2023, our deferred tax assets and valuation allowance have been reduced by approximately $437,000 and $437,000, respectively.  Given the uncertainty created by our loss history, as well as the volatile and uncertain economic outlook for our industry and capital spending, we have limited the recognition of net deferred tax assets including our net operating losses and credit carryforwards and continue to maintain a valuation allowance for the full amount of the net deferred tax asset balance.