Income Taxes (Tables)

12 Months Ended

Dec. 31, 2023

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,
	2023			2022
Domestic	$	(8,584	)	$	(15,128	)
Foreign		(118	)		(164	)
Total	$	(8,702	)	$	(15,292	)

Benefit from Income Taxes

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

(in thousands)	Years ended December 31,
	2023			2022
Current:
Federal	$	-		$	-
State		33			42
Foreign		(23	)		95
Subtotal		10			137
Deferred:
Federal		-			(47	)
State		12			(39	)
Foreign		-			-
Subtotal		12			(86	)
Total	$	22		$	51

Effective Income Tax Rate Reconciliation

The effective income tax rate for the years ended December 31, 2023 and 2022 differed from the statutory federal income tax rate as presented below:

	Effective Tax Rate percentage (%)
	Years ended December 31,
	2023			2022
Statutory federal income tax rate		21.0	%		21.0	%
State income taxes, net of federal tax benefit		2.4	%		2.4	%
Effect of foreign operations		(0.3	)%		(0.3	)%
Change in valuation allowance		(16.5	)%		(20.7	)%
Stock-based compensation		(2.1	)%		(0.9	)%
Convertible Note transactions		(5.0	)%		(1.2	)%
Uncertain tax positions		0.3	%		(0.7	)%
Other		(0.1	)%		0.1	%
Effective tax rate		(0.3	)%		(0.3	)%

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,
	2023			2022
Deferred tax assets:
Net operating loss carryforwards	$	9,372		$	7,853
Accruals		330			62
Reserves		139			409
Stock-based compensation expense		228			283
Intangible assets		2,228			2,356
Goodwill		1,687			1,551
Operating lease liability		121			132
Fixed assets		27			65
Sec. 174 R&D costs		228			129
Other		196			231
Total deferred tax asset		14,556			13,071
Valuation allowance		(14,008	)		(12,572	)
Total deferred tax asset less valuation allowance		548			499
Deferred tax liabilities:
Software development costs		(17	)		(59	)
Indefinite-lived intangibles		(440	)		(346	)
Operating lease - right of use asset		(109	)		(100	)
Other		-			-
Total deferred tax liability		(566	)		(505	)
Net deferred tax liability	$	(18	)	$	(6	)

Uncertain Tax Liabilities

The following table outlines our uncertain tax liabilities, including accrued interest and penalties for each jurisdiction:

	China					South Korea					UK
(in thousands)	Tax			Interest and Penalties		Tax			Interest and Penalties		Tax			Interest and Penalties			Total
Balance, January 1, 2022	$	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
Increases		-			25		-			57		-			-			82
Decreases		(5	)		-		(19	)		-		(40	)		(91	)		(155	)
Balance, December 31, 2023	$	198		$	457	$	603		$	443	$	-		$	-		$	1,701