Income Taxes (Tables)

12 Months Ended

Dec. 31, 2022

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,
	2022			2021
Domestic	$	(15,128	)	$	13,351
Foreign		(164	)		(2,581	)
Total	$	(15,292	)	$	10,770

Provision for (Benefit from) Income Taxes

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

(in thousands)	Years ended December 31,
	2022			2021
Current:
Federal	$	-		$	(75	)
State		42			74
Foreign		95			71
Subtotal		137			70
Deferred:
Federal		(47	)		48
State		(39	)		45
Foreign		-			-
Subtotal		(86	)		93
Total	$	51		$	163

Effective Income Tax Rate Reconciliation

The effective income tax rate for the years ended December 31, 2022 and 2021 differed from the statutory federal income tax rate as presented below:

	Effective Tax Rate percentage (%)
	Years ended December 31,
	2022			2021
Statutory federal income tax rate		21.0	%		21.0	%
State income taxes, net of federal tax benefit		2.4	%		2.1	%
Effect of foreign operations		(0.3	)%		(0.2	)%
Effect of foreign restructuring		0.0	%		2.3	%
Change in valuation allowance		(20.7	)%		2.3	%
PPP loan forgiveness		0.0	%		(19.5	)%
Stock-based compensation		(0.9	)%		1.0	%
Convertible Note transactions		(1.2	)%		0.0	%
Uncertain tax positions		(0.7	)%		(7.5	)%
Other		0.1	%		0.0	%
Effective tax rate		(0.3	)%		1.5	%

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,
	2022			2021
Deferred tax assets:
Net operating loss carryforwards	$	7,853		$	6,180
Accruals		62			122
Reserves		409			434
Stock-based compensation expense		283			172
Intangible assets		2,356			2,368
Goodwill		1,551			892
Operating lease liability		132			472
Fixed assets		65			29
Sec. 174 R&D costs		129			-
Other		231			243
Total deferred tax asset		13,071			10,912
Valuation allowance		(12,572	)		(9,410	)
Total deferred tax asset less valuation allowance		499			1,502
Deferred tax liabilities:
Software development costs		(59	)		(135	)
Indefinite-lived intangibles		(346	)		(1,190	)
Operating lease - right of use asset		(100	)		(253	)
Other		-			(17	)
Total deferred tax liability		(505	)		(1,595	)
Net deferred tax liability	$	(6	)	$	(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, 2021	$	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
Increases		-			4		-			-			-			51		-			61		-			-			116
Decreases		(17	)		-		-			-			(22	)		-		(5	)		-		-			-			(44	)
Balance, December 31, 2022	$	203		$	432	$	-		$	-		$	622		$	386	$	40		$	91	$	-		$	-		$	1,774