Note 10 - Income Taxes

6 Months Ended

Jul. 31, 2022

Notes to Financial Statements

Income Tax Disclosure [Text Block]

10. Income Taxes

For the six months ended July 31, 2022, the income tax expense from continuing operations was approximately $ 342,000 on a pre-tax loss from continuing operations of $4.2 million. For the six months ended July 31, 2021, the income tax expense from continuing operations was approximately $ 52,000 on a pre-tax loss from continuing operations of $6.4 million. The variance between our actual provision and the expected provision based on the U.S. statutory rate is due primarily to recording valuation allowances against the increase in our deferred tax assets in the respective periods, permanent differences between book income and taxable income, and the effect of foreign withholding taxes.

The Company files U.S. federal and state income tax returns as well as separate returns for its foreign subsidiaries within their local jurisdictions. The Company's U.S. federal tax returns are subject to examination by the Internal Revenue Service for fiscal years ended January 31, 2019 through 2022. The Company’s tax returns may also be subject to examination by state and local tax authorities for fiscal years ended January 31, 2017 through 2022. In addition, the Company's tax returns filed in foreign jurisdictions are generally subject to examination for the fiscal years ended January 31, 2017 through 2022.

The Company has determined that the undistributed earnings of foreign subsidiaries are not deemed to be indefinitely reinvested outside of the United States as of July 31, 2022. Furthermore, the Company has concluded that any deferred taxes with respect to the undistributed foreign earnings would be immaterial. Therefore, the Company has not recorded a deferred tax liability associated with the undistributed foreign earnings as of July 31, 2022.

For the six months ended July 31, 2022 and 2021, the Company did not recognize any tax expense or benefit related to uncertain tax positions.