Note 11 - Income Taxes

9 Months Ended

Oct. 31, 2023

Notes to Financial Statements

Income Tax Disclosure [Text Block]

11. Income Taxes

For the three- and nine-month periods ended October 31, 2023, the income tax expense from continuing operations was approximately $112,000 and $ 590,000, respectively, on a pre-tax loss from continuing operations of approximately$1.6 million and $2.0 million, respectively. For the three- and nine-month periods ended October 31, 2022, the income tax expense from continuing operations was approximately $38,000 and $ 380,000, respectively, on a pre-tax loss from continuing operations of $2.8 million and $6.4 million, respectively. 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 and permanent differences between book income and taxable income.

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 2023. The Company’s tax returns may also be subject to examination by state and local tax authorities for fiscal years ending  January 31, 2017 through 2023. 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 2023.

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 October 31, 2023. 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 October 31, 2023.

For the three- and nine-month periods ended October 31, 2023 and 2022, the Company did not recognize any tax expense or benefit related to uncertain tax positions.