Income Taxes (Tables)

12 Months Ended

Dec. 31, 2021

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,
	2021			2020
Domestic	$	13,351		$	(13,834	)
Foreign		(2,581	)		3,652
Total	$	10,770		$	(10,182	)

Provision (Benefit) For Income Taxes

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

(in thousands)	Years ended December 31,
	2021			2020
Current:
Federal	$	(75	)	$	3
State		74			67
Foreign		71			285
Subtotal		70			355
Deferred:
Federal		48			-
State		45			-
Foreign		-			-
Subtotal		93			-
Total	$	163		$	355

Effective Income Tax Rate Reconciliation

The effective income tax rate for the years ended December 31, 2021 and 2020 differed from the statutory federal income tax rate as presented below:

	Effective Tax Rate percentage (%)
	Years ended December 31,
	2021			2020
Statutory federal income tax rate		21.0	%		21.0	%
State income taxes, net of federal tax benefit		2.1	%		3.7	%
Effect of foreign operations		(0.2	)%		(0.9	)%
Effect of foreign restructuring		2.3	%		(6.7	)%
Change in valuation allowance		2.3	%		(15.6	)%
PPP Loan Forgiveness		(19.5	)%		0.0	%
Meals and Entertainment		0.0	%		(0.4	)%
Stock-based compensation		1.0	%		(2.2	)%
GILTI Inclusion		0.0	%		(0.2	)%
Uncertain Tax Positions		(7.5	)%		(2.5	)%
Prior year reconciling items		0.0	%		0.3	%
Effective tax rate		1.5	%		(3.5	)%

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,
	2021			2020
Deferred tax assets:
Net operating loss carryforwards	$	6,180		$	5,406
Accruals		122			387
Reserves		434			309
Alternative minimum tax credit carryforwards		-			69
Stock-based compensation expense		172			251
Intangible assets		2,368			2,362
Goodwill		892			995
Operating lease liability		472			747
Fixed Assets		29			-
Other		243			271
Total deferred tax asset		10,912			10,797
Valuation allowance		(9,410	)		(9,165	)
Total deferred tax asset less valuation allowance		1,502			1,632
Deferred tax liabilities:
Software development costs		(135	)		(164	)
Fixed assets		-			(22	)
Indefinite-lived intangibles		(1,190	)		(967	)
Operating lease - right of use asset		(253	)		(379	)
Other		(17	)		(100	)
Total deferred tax liability		(1,595	)		(1,632	)
Net deferred tax liability	$	(93	)	$	-

Uncertain Tax Liabilities

The following table outlines our 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, 2020	$	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
Increases		6		50		-			-			-			61		-		9		-			3			129
Decreases		-		-		(14	)		(10	)		(38	)		-		-		-		(793	)		(12	)		(867	)
Balance, December 31, 2021	$	220	$	428	$	-		$	-		$	644		$	335	$	45	$	30	$	-		$	-		$	1,702