Income Taxes
 12 Months Ended
Dec. 31, 2015
Income Tax Disclosure [Abstract]  
Income Taxes

6. Income Taxes

 

The following table summarizes the tax provision (benefit) for U.S. federal, state, and foreign taxes on income for the years noted below:

 

         
    2015   2014
Current        
  Federal $ - $ -
  State   57   50
  Foreign   58   99
         
Current tax expense   115   149
         
Deferred        
  Federal   -   (7,853)
  State   -   -
   Foreign   7   (12)
         
Deferred tax expense   7   (7,860)
         
Total income tax expense $ 122 $ (7,716)

 

Income taxes differed from the amounts computed by applying the U.S. federal income tax rate of 34% to income (loss) before income taxes as follows:

 

         
    2015   2014
Computed expected tax expense (benefit) $ (3,385) $ (27,273)
State tax expense, net of federal benefit   (431)   (2,014)
Non-taxable income charge   (1,241)   (1,003)
Nondeductible expenses, principally goodwill & impairment   60   7,478
Change in valuation allowance   5,054   14,997
         
Foreign income tax   65   99
         
Total $ 122 $ (7,716)

 

The tax effects of temporary differences that give rise to significant portions of the deferred tax assets (liabilities) at December 31 are as follows:

 

         
    2015   2014
Deferred revenue $ (396) $ 400
Deferred rent   788   705
Accrued wages   119   -
Deferred state sales tax   19   30
Bad debt reserve   62   78
Foreign currency loss   40   38
Other   106   (15)
Current deferred tax assets   738   1,236
         
Depreciation and Amortization   (393)   (371)
Equity Based Compensation   2,131   1,477
Intangible Assets   (3,478)   4,931
Net operating loss carryforwards   25,078   10,413
Other   239   1,025
Net non-current deferred tax assets   23,577   17,475
Total Deferred tax assets non-current   24,315   18,711
Valuation allowance   (24,315)   (18,704)
         
Net deferred tax assets $ - $ 7

 

The Company evaluates the recoverability of the deferred income tax assets and the associated valuation allowances on a regular basis. The ultimate realization of deferred income tax assets is dependent upon the generation of future taxable income during the period in which those temporary differences become deductible. The increase in the valuation allowance from 2014 to 2015 was $5,611 and is primarily due to intangible asset impairment and changes in net operating loss carryforwards.

 

At December 31, 2015, the Company had federal net operating loss carryforwards of approximately $66,096 which expire in 2032-2035. Of the $25,078 in non-current net operating losses above, approximately $2,605 relates to state net operating losses. The Company evaluates a variety of factors on a regular basis to determine the amount of deferred income tax assets to recognize in the financial statements. These factors include the Company’s recent earnings history, projected future taxable income, the number of years the Company’s net operating loss and tax credits can be carried forward, the existence of taxable temporary differences, and available tax planning strategies.

 

The Company accounts for uncertain tax positions in accordance with FASB ASC Topic 740. This guidance prescribes a comprehensive model as to how a company should recognize, present, and disclose in its financial statement uncertain tax positions that a company has taken or expects to take on its tax return. Symon’s open tax years are for the years ended January 31, 2012 and 2013 and the short period ending April 19, 2013. All RMG tax years within the statute of limitations are open. As of December 31, 2015 and 2014, the Company had no accruals recorded for uncertain tax positions. The Company has elected to recognize accrued interest and penalties related to income tax matters as a component of income tax expense if incurred. For the years ended December 31, 2015 and 2014, there were no such costs related to income taxes. It is determined not to be reasonably likely for the amounts of unrecognized tax benefits to significantly increase or decrease within the next 12 months. The Company is currently subject to a three year statute of limitation by major tax jurisdictions.