INCOME TAXES (Tables)

12 Months Ended

Dec. 31, 2022

INCOME TAXES [Abstract]

Provision for Income Taxes

The provision for income taxes consists of the following:

(in thousands)	Year Ended December 31,
Income Tax Provision	2022		2021
Current provision:
Federal	$	16	$	640
State		41		98
Foreign		96		-
Related to UTP		28		19
		181		757
Deferred provision:
Federal		-		-
State		-		-
Foreign		-		82
		-		82
Total tax provision	$	181	$	839

Income (Loss) Before Income Taxes

Income (loss) before income taxes was earned in the following tax jurisdictions:

(in thousands)	Year Ended December 31,
Income (Loss) Before Income Taxes	2022			2021
United States	$	733		$	2,552
Spain		(83	)		(135	)
Canada		758			(229	)
Australia		-			(1	)
United Kingdom		-			6
TOTAL	$	1,408		$	2,193

Income Tax Effects of Temporary Differences Impacting Deferred Income Tax Assets and Liabilities

The income tax effects of temporary differences that give rise to significant portions of deferred income tax assets and liabilities are as follows:

Deferred income tax assets:	2022			2021
(in thousands)
Inventory	$	471		$	464
Stock-based compensation		93			59
Accounts receivable		14			4
Sales returns		47			125
Foreign currency translation gain/loss in OCI		689			342
Goodwill and other intangible assets amortization		-			-
Net operating loss		261			646
Accrued expenses		63			359
Leases		152			195
Other		-			2
Total deferred income tax assets		1,790			2,196
Less:  valuation allowance		(1,151	)		(1,489	)
Total deferred income tax assets, net of valuation allowance	$	639		$	707
Property and equipment depreciation	$	639		$	707
Total deferred income tax liabilities		639			707
Net deferred tax asset (liability)	$	-		$	-

Reconciliation of Effective Tax Rate from Statutory Rate

Below is a reconciliation of our effective tax rate from the statutory rate:

	Year Ended December 31,
	2022			2021
Statutory rate – Federal U.S. income tax		21.0	%		21.0	%
State and local taxes		(0.6	)%		9.0	%
Permanent book/tax differences		11.3	%		3.0	%
Difference in tax rates in loss carryback periods		0.0	%		0.0	%
Change in valuation allowance		(20.3	)%		6.0	%
Rate differential on UTP reversals		2.0	%		1.0	%
Other, net		(0.5	)%		(1.7	)%
Effective rate		12.9	%		38.3	%

Reconciliation of Uncertain Tax Positions

A reconciliation of the beginning and ending amount of uncertain tax positions (“UTP”) is as follows:

	2022		2021
UTP at beginning of the year	$	415	$	393
Gross increase to tax positions in current period		7		3
Interest expense		28		19
UTP at end of year	$	450	$	415