Note 8 - Income Taxes

3 Months Ended

Mar. 31, 2019

Notes to Financial Statements

Income Tax Disclosure [Text Block]

8 . Income taxes

During the

three

months ended

March 31, 2019,

we recorded a non-cash reversal to our valuation allowance of

$882,000

decreasing our valuation allowance against deferred tax assets to

$7.6

million at

March 31, 2019.

The primary assets covered by this valuation allowance are net operating losses, which are approximately

$32.1

million at

March 31, 2019.

The Company did

not

make any cash payments for income tax in the

three

month periods ended

March 31, 2019

and

2018

due to our net operating loss.

We maintain a valuation allowance against deferred tax assets that currently exceed our deferred tax liabilities. The primary assets covered by this valuation allowance are net operating loss carry-forwards. The valuation allowance was calculated in accordance with the provisions of ASC

740,

Income Taxes

, which requires an assessment of both positive and negative evidence when measuring the need for a valuation allowance. Our results over the most recent

four

-year period were heavily affected by our business restructuring activities. Our cumulative loss represented sufficient negative evidence to require a valuation allowance. We intend to maintain a valuation allowance until sufficient positive evidence exists to support its reversal, resulting in

no

deferred tax asset balance being recognized. Should we determine that we will

not

be able to realize all or part of our deferred tax asset in the future, an adjustment to the deferred tax asset will be charged to income in the period such determination is made.

As of

March 31, 2019

and

2018,

our deferred tax asset balance is

$494,000

and

$0,

respectively.

Our effective tax rate for the current and prior year

three

month periods were effectively

0%

due to our net operating loss carryforwards.