Taxes on Income

12 Months Ended

Dec. 31, 2023

Taxes on Income [Line Items]

Income Tax Disclosure [Text Block]

9.  Taxes on Income

The components of income tax expense are as follows:

In thousands	2023		2022
Current:
Federal	$	-	$	-
State and local		25		25
Foreign		6		10
	$	31	$	35
Deferred:
Federal	$	-	$	-
State and local		-		-
		-		-
Income tax expense	$	31	$	35

(Loss) income before income taxes from the United States activities was a loss of ($3.9 million) and income of $185,000 for the years ended December 31, 2023 and 2022, respectively.  (Loss) income before income taxes from Canadian operations was a loss of ($116,000) and income of $173,000 for the years ended December 31, 2023 and 2022, respectively.

The effective income tax rate differed from the expected federal statutory income tax benefit rate of 21.0% as follows:

	2023		2022
Statutory federal income tax expense rate		21.0 %		21.0 %
State income taxes, net of federal benefit		2.8		(0.3)
PPP debt forgiven		-		(47.6)
Foreign income taxed at different rates		(0.8)		(7.3)
Deferred tax asset valuation allowance		(17.5)		31.6
Section 382 adjustment to deferred net operating loss		(0.8)		8.7
Other		(4.5)		3.7
Effective income tax expense rate		0.2 %		9.8 %

Deferred income taxes reflect the net effect of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes.  Significant components of the Company’s deferred income tax assets and liabilities are as follows:

In thousands	2023		2022
Deferred income tax asset:
Tax credit carryforwards	$	-	$	-
Operating loss carryforwards		5,252		4,348
Net pension costs		2,127		2,049
Allowance for credit losses		26		65
Other		1		7
Valuation allowance		(6,801)		(6 102)
		605		367
Deferred income tax liability:
Depreciation		326		120
Other		279		247
		605		367
Net deferred income taxes	$	-	$	-

Operating tax loss carryforwards primarily relate to U.S. federal net operating loss carryforwards of approximately $18.8 million, which, for years beginning before 2018, began to expire in 2019.  Additionally, net operating losses created after 2020 do not expire.  The operating loss carryforwards have been limited by changes in ownership, as defined under Section 382 of the Internal Revenue Code.  The change in ownership as of April 10, 2019 limited our operating loss carryforwards at that time to $148,000 per year aggregating $2.9 million.  Losses subsequent to April 10, 2019, have increased the operating loss carryforwards.  Carryforward losses of $591,000 and contribution carryforward expense of $22,000 have expired as of December 31, 2023.

A valuation allowance has been established for the amount of deferred income tax assets as management has concluded that it is more-likely-than-not that the benefits from such assets will not be realized.

The Company’s determinations regarding uncertain income tax positions may be subject to review and adjustment at a later date based upon factors including, but not limited to, an ongoing analysis of tax laws, regulations and interpretations thereof.  The Company does not have any material uncertain tax positions in 2023 and 2022.

The Company is subject to U.S. federal income tax as well as income tax in multiple state and local jurisdictions and Canadian federal and provincial income tax.  Currently, no federal, state or provincial income tax returns are under examination.