Income Taxes

12 Months Ended

Dec. 31, 2015

Income Tax Disclosure [Abstract]

Income Taxes

9. Income Taxes

The Company provides for deferred taxes on temporary differences between the financial statements and tax bases of assets using the enacted tax rates that are expected to apply to taxable income when the temporary differences are expected to reverse.

At December 31, 2015, our U.S. operation had federal NOL carry-forwards of approximately $1,217,000 which resulted in a deferred tax asset (“DTA”) of approximately $414,000 which will begin to expire in 2033. We have determined that it is not necessary to provide a valuation allowance for our U.S. NOL as we believe the DTA is fully recoverable.

At December 31, 2015, our Asian operation, TMM, had NOL carry-forwards of approximately $3,395,000 and certain other deferred tax assets of approximately $3,445,000 which resulted in a DTA of approximately $1,700,000. Due to the uncertainties regarding TMM’s ability to utilize these DTAs, the Company established a valuation allowance to fully reserve against these DTAs.

The undistributed earnings of the Company’s foreign subsidiaries are considered to be indefinitely reinvested. Accordingly, no provision for U.S. federal and state income taxes or foreign withholding taxes has been provided on approximately $4,000,000 of such cumulative undistributed earnings. Determination of the potential amount of unrecognized deferred U.S. income tax liability and foreign withholding taxes is not practicable because of the complexities associated with its hypothetical calculation.

Components of Pretax Income (Loss)		Years Ended December 31,
(In thousands)		2015		2014
Domestic	$	(1,078)	$	132
Foreign		(4,976)		(873)
Pretax (loss)	$	(6,054)	$	(741)

		Components of Income Tax Expense (Benefit)
		Years Ended December 31,
		2015						2014
(In thousands)		Current		Deferred		Total		Current		Deferred		Total
Federal	$	-	$	(318)	$	(318)	$	-	$	94	$	94
State		5		-		5		8		-		8
Foreign		(73)		696		623		455		(744)		(289)
Total Income Tax Expense (Benefit)	$	(68)	$	378	$	310	$	463	$	(650)	$	(187)

The following table accounts for the difference between the actual tax provision and the amounts obtained by applying the statutory U.S. federal income tax rate of 34% to income before taxes.

Effective Tax Rate Reconciliation		Years Ended December 31,
(In thousands)		2015		2014
Expense (benefit) computed at statutory rate	$	(2,059)	$	(252)
Change in valuation allowance - Foreign		1,703		-
Effect of items deductible for book not tax, net
Share based compensation		45		44
Other		5		(64)
Effect of foreign tax credit		34		-
Effect of foreign tax rate differential		578		80
State income taxes, net of Federal benefit		4		5
	$	310	$	(187)
Significant Components of Deferred Taxes		Year Ended December 31,
(In thousands)		2015		2014
Deferred Tax Assets:
Net operating loss carry-forwards - Domestic	$	414	$	241
Net operating loss carry-forwards - Foreign		849		824
Intercompany profit		43		59
Alternative minimum tax credit carry-forwards		65		65
Domestic reserves		31		16
Foreign tax credits		675		506
Unrealized foreign currency losses - Foreign		68		4
Other deferred assets - Domestic		21		35
Other deferred assets - Foreign		118		154
	$	2,284	$	1,904
Valuation Allowance - Foreign		(1,703)		-
Total deferred tax assets		581		1,904
Deferred Tax Liabilities:
PP&E - Domestic	$	732	$	924
PP&E - Foreign		30		826
Unrealized gain on derivatives		-		5
Unrealized foreign currency gains - Domestic		59		11
Other		3		3
Total deferred tax liabilities		824		1,769
Net deferred tax asset (liability)	$	(243)	$	135