Income Taxes (Tables)

12 Months Ended

Dec. 31, 2020

Income Taxes [Abstract]

Income Before Income Taxes by Domestic and Foreign Sources

The consolidated income before income taxes, by domestic and foreign sources, is as follows:

(in thousands)	Years ended December 31,
	2020			2019
Domestic	$	(13,834	)	$	(6,671	)
Foreign		3,652			319
Total	$	(10,182	)	$	(6,352	)

Provision (Benefit) For Income Taxes

The provision (benefit) for income taxes is as follows:

(in thousands)	Years ended December 31,
	2020		2019
Current:
Federal	$	3	$	(30	)
State		67		60
Foreign		285		354
Subtotal		355		384
Deferred:
Federal		-		4,686
State		-		663
Foreign		-		-
Subtotal		-		5,349
Total	$	355	$	5,733

Effective Income Tax Rate Reconciliation

The effective income tax rate for the years ended December 31, 2020 and 2019 differed from the statutory federal income tax rate as presented below:

	Effective Tax Rate percentage (%)
	Years ended December 31,
	2020			2019
Statutory federal income tax rate		21.0	%		21.0	%
State income taxes, net of federal tax benefit		3.7	%		(12.1	)%
Effect of foreign operations		(0.9	)%		(0.3	)%
Effect of foreign restructuring		(6.7	)%		0.0	%
Change in valuation allowance		(15.6	)%		(93.1	)%
Meals and Entertainment		(0.4	)%		(1.4	)%
Stock based compensation		(2.2	)%		(1.4	)%
GILTI Inclusion		(0.2	)%		0.0	%
Other permanent differences		0.0	%		(0.6	)%
Uncertain Tax Positions		(2.5	)%		0.9	%
Prior year reconciling items		0.3	%		(3.3	)%
Effective tax rate		(3.5	)%		(90.3	)%

Deferred Tax Assets and Liabilities

Deferred income taxes arise from temporary differences between the tax bases of assets and liabilities and their reported amounts in the consolidated financial statements. A summary of the tax effect of the significant components of the deferred income tax assets and liabilities is as follows:

(in thousands)	As of December 31,
	2020			2019
Deferred tax assets:
Net operating loss carryforwards	$	5,406		$	4,396
Accruals		387			247
Reserves		309			408
Alternative minimum tax credit carryforwards		69			126
Stock-based compensation expense		251			539
Intangible assets		2,362			1,021
Goodwill		995			1,037
Operating lease liability		747			998
Other		271			464
Total deferred tax asset		10,797			9,236
Valuation allowance		(9,165	)		(7,576	)
Total deferred tax asset less valuation allowance		1,632			1,660
Deferred tax liabilities:
Software development costs		(164	)		(161	)
Fixed assets		(22	)		(7	)
Intangible assets		-			(22	)
Indefinite-lived intangibles		(967	)		(728	)
Operating lease - right of use asset		(379	)		(510	)
Other		(100	)		(175	)
Total deferred tax liability		(1,632	)		(1,603	)
Net deferred tax asset	$	-		$	57

Uncertain Tax Liabilities

The following table outlines the Company's uncertain tax liabilities, including accrued interest and penalties for each jurisdiction:

	China				Ukraine				South Korea				UK				U.S.
(in thousands)	Tax		Interest and Penalties		Tax		Interest and Penalties		Tax		Interest and Penalties		Tax		Interest and Penalties		Tax		Interest and Penalties		Total
Balance, January 1, 2019	$	204	$	285	$	82	$	72	$	461	$	111	$	-	$	-	$	996	$	4	$	2,215
Increases		-		33		-		-		93		67		-		-		-		2		195
Decreases		3		-		4		12		-		-		-		-		203		-		222
Balance, December 31, 2019	$	201	$	318	$	78	$	60	$	554	$	178	$	-	$	-	$	793	$	6	$	2,188
Increases		13		60		-		-		128		96		45		21		-		3		366
Decreases		-		-		64		50		-		-		-		-		-		-		114
Balance, December 31, 2020	$	214	$	378	$	14	$	10	$	682	$	274	$	45	$	21	$	793	$	9	$	2,440