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Income Taxes (Tables)

12 Months Ended

Dec. 31, 2018

Loss before income tax for the years ended December 31, 2018, 2017 and 2016 consisted of the following (in thousands):


	2018		2017		2016
U.S. operations	$	(32,183)	$	(21,938)	$	(9,514)
Foreign operations	(4,135)		6,662		(2,184)

Global Total	$	(36,318)	$	(15,276)	$	(11,698)

Components of Income Tax Expense (Benefit)

The (credit) provision for income taxes attributable to continuing operations before income taxes for the years ended December 31, 2018, 2017 and 2016 is as follows (in thousands):


	2018		2017		2016
Current tax expense (benefit):
Federal	$	—	$	(86)	$	26
State and local	30		20		35
Foreign	(157)		42		272
Total current tax (benefit) expense	(127)		(24)		333
Deferred tax expense:
Federal	—		—		—
State and local	—		—		—
Foreign	65		(61)		(46)
Total deferred tax expense (benefit)	65		(61)		(46)

Total income tax (benefit) expense	$	(62)	$	(85)	$	287

Effective Income Tax Rate Reconciliation

A comparison of income tax (benefit) expense at the U.S. statutory rate of 21% in 2018 and 35% in 2017 and 2016 to the Company's effective rate is as follows (in thousands):


	2018		2017		2016
Expected Statutory expense (benefit)	$	(7,627)	$	(5,195)	$	(3,977)
U.S. TCJA recovery of alternative minimum tax credits	—		(73)		—
Change in the fair values of derivative and amortization of debt discount	—		2,939		2,584
Other non-deductible expenses	256		24		63
Change in valuation allowance including U.S. TCJA rate reduction	6,572		(2,012)		590
Reduction in deferred tax assets related to U.S. TCJA rate reduction	—		7,504		—
Change to Accounting for Equity Compensation Windfalls	—		(1,112)		—
Tax rate differential - foreign vs. U.S.	791		(2,276)		822
State income taxes, net of federal benefit	23		13		23
Shortfalls related to stock compensation expense	—		129		154
Prior year true-up	(93)		(13)		—
Exchange gain	16		(13)		28
	$	(62)	$	(85)	$	287

Deferred Tax Balances

Deferred tax balances included in the Consolidated Balance Sheets as of December 31, 2018 and 2017 consisted of the following (in thousands):


	2018		2017
Deferred Tax Assets:
Sales allowances and doubtful accounts	$	1,964	$	506
Inventory reserve	962		619
Deferred revenue	590		—
Accrued expenses	23		664
Property, plant and equipment	258		214
Tax operating loss carryforwards	9,951		9,327
Tax credit and other carryforwards	1,299		168
Stock compensation	538		1,817
Total deferred tax assets	15,585		13,315
Less valuation allowance	(12,120)		(13,309)
Net deferred tax assets	3,465		6

Deferred Tax Liabilities:
Convertible debt conversion features	(3,514)		—
Foreign exchange	(28)		—
Intangible assets	(138)		(165)
Total deferred tax liabilities	(3,680)		(165)
Net deferred tax liability	$	(215)	$	(159)

Operating Loss and Tax Credit Carryforward

Operating loss, tax credit and other carry forwards as of December 31, 2018 and 2017 were as follows (in thousands):


	2018		2017
Federal:
Net operating losses (see below)	$	45,081	$	41,688
Disallowed interest expense (no expiration)	5,018		—
Contributions (expiring through 2023)	524		210
Research tax credits (expiring through 2025)	135		168

State:
New Jersey (expiring in 2038)	2,976		4,320
Other states (expiring through 2038)	2,307		1072

Foreign
Net operating losses (no expiration)	$	257	$	255

Operating Loss Carryforwards Expiration

At December 31, 2018, the Company’s U.S. federal net operating loss carryforwards will expire as follows (in thousands):


Year	Net Operating Loss
2020 - 2023	$	8,227
2024 - 2029	9,063
2030 - 2032	9,926
2033 - 2036	6,296
2037	8,116
No expiration but subject to limitation	3,453
Total	$	45,081