9. Income Taxes

12 Months Ended

Dec. 31, 2016

Income Tax Disclosure [Abstract]

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, 2016, our U.S. operation had federal NOL carry-forwards of approximately $930,000 which resulted in a deferred tax asset (“DTA”) of approximately $316,000 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, 2016, our Asian operation, TMM, had NOL carry-forwards of approximately $3,159,000 and certain other deferred tax assets of approximately $3,128,000 which resulted in a DTA of approximately $1,509,000. 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)		2016		2015
Domestic	$	(537)	$	(1,078)
Foreign		1,088		(4,976)
Pretax income (loss)	$	551	$	(6,054)

		Components of Income Tax Expense (Benefit)
		Years Ended December 31,
		2016						2015
(In thousands)		Current		Deferred		Total		Current		Deferred		Total
Federal	$	-	$	(140)	$	(140)	$	-	$	(318)	$	(318)
State		4		-		4		5		-		5
Foreign		247		(4)		243		(73)		696		623
Total Income Tax Expense (Benefit)	$	251	$	(144)	$	107	$	(68)	$	378	$	310

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)		2016		2015
Expense (benefit) computed at statutory rate	$	187	$	(2,059)
Change in valuation allowance - Foreign		(30)		1,703
Effect of items deductible for book not tax, net
Share based compensation		40		45
Other		5		5
Effect of foreign tax credit		11		34
Effect of foreign tax rate differential		(109)		578
State income taxes, net of Federal benefit		3		4
	$	107	$	310
Significant Components of Deferred Taxes		Year Ended December 31,
(In thousands)		2016		2015
Deferred Tax Assets:
Net operating loss carry-forwards - Domestic	$	316	$	414
Net operating loss carry-forwards - Foreign		758		849
Intercompany profit		50		43
Alternative minimum tax credit carry-forwards		65		65
Domestic reserves		33		31
Foreign tax credits		642		675
Unrealized foreign currency losses - Foreign		-		68
Other deferred assets - Domestic		57		21
Other deferred assets - Foreign		107		118
	$	2,028	$	2,284
Valuation Allowance - Foreign		(1,478)		(1,703)
Total deferred tax assets		550		581
Deferred Tax Liabilities:
PP&E - Domestic	$	590	$	732
PP&E - Foreign		52		30
Unrealized foreign currency gains - Domestic		-		59
Unrealized foreign currency gains - Foreign		5		-
Other		3		3
Total deferred tax liabilities		650		824
Net deferred tax asset (liability)	$	(100)	$	(243)