Income taxes

12 Months Ended

Dec. 31, 2021

Income Tax Disclosure [Abstract]

Income taxes

9. Income taxes:

Management regularly assesses the ability to realize deferred tax assets recorded based upon the weight of available evidence, including such factors as recent earnings history and expected future taxable income on a jurisdiction by jurisdiction basis. In the event that the Company changes its determination as to the amount of realizable deferred tax assets, the Company will adjust its valuation allowance with a corresponding impact to the provision for income taxes in the period in which such determination is made. The Company’s management believes that, based on a number of factors, it is more likely than not, that all or some portion of the deferred tax assets will not be realized; and accordingly, for the year ended December 31, 2021, the Company has provided a valuation allowance against the Company’s U.S. net deferred tax assets.

At December 31, 2021, the Company had net operating loss carryforwards of $53,031 for federal income tax purposes which will begin to expire in 2022 if unused. The Company had net operating loss carryforwards for state income tax purposes of approximately $37,850. These state net operating losses carryforwards will begin to expire in the year 2028 if unused.

Deferred tax assets and liabilities at December 31 consist of the following:

	2021			2020
Deferred tax assets:
Net operating loss carry-forwards	$	13,780		$	16,281
Accruals and reserves		333			366
Deferred revenue		57			60
Intangibles		130			188
Other, net		198			228
Fixed assets		-			-
Gross tax assets		14,498			17,123
Valuation allowance		(14,498	)		(17,123	)
Realizable deferred tax asset		-			-

The Company’s provision for income taxes differs from the amount computed by applying the statutory U.S. federal income tax rate to loss before taxes as follows for the years ended December 31, 2021 and December 31, 2020:

The components of the net deferred tax assets and liabilities are as follows:

	2021			2020
Income tax benefit at the federal statutory rate	$	(102	)	$	(142	)
State income tax benefit		(33	)		(47	)
NOL expiration		2,703			-
Prior year true-ups		49			(79	)
Permanent items and other		-			4
Tax cuts and Jobs Act Rate Change		9			-
Change in valuation allowance		(2,625	)		265
Income tax expense	$	1		$	1

A full valuation allowance has been established for the Company’s net deferred tax assets since the realization of such assets through the generation of future taxable income is uncertain.

Current tax laws impose substantial restrictions on the utilization of net operating losses and credit carryforwards in the event of an “ownership change”, as defined by the Internal Revenue Code (IRC). If there should be an ownership change, the Company’s ability to utilize its carryforwards could be limited.

On March 27, 2020, the Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”) was passed into law. The CARES Act includes several significant business tax provisions including modification to the taxable income limitation for utilization of net operating losses (“NOLs”) incurred in 2019 and 2020 and the ability to carry back NOLs from those years for a period of up to five years, an increase to the limitation on deductibility of certain business interest expense, bonus depreciation for purchases of qualified improvement property and special deductions on certain corporate charitable contributions. We analyzed the provisions of the CARES Act and determined there was no net effect on our provision for the year ended December 31, 2021.