Income Taxes (Tables)
|
12 Months Ended |
Dec. 31, 2019 |
|---|
| Income Tax Disclosure [Abstract] |
|
| Schedule of Domestic and Foreign Components of Income (Loss) Before Income Tax Expense |
The following table presents domestic and foreign components income (loss) before income tax expense for the years ended December 31, 2019 and 2018 (in thousands):
|
|
|
Year Ended December 31,
|
|
|
|
|
2019
|
|
|
2018
|
|
|
Domestic
|
|
$
|
(7,857
|
)
|
|
$
|
(635
|
)
|
|
Foreign
|
|
|
4,618
|
|
|
|
(5,041
|
)
|
|
Loss before income tax expense
|
|
$
|
(3,239
|
)
|
|
$
|
(5,676
|
)
|
|
| Schedule of Provision for Federal and State Income Taxes |
The provision for federal and state income taxes consists of the following (in thousands):
|
|
|
Year Ended December 31,
|
|
|
|
|
2019
|
|
|
2018
|
|
|
Current
|
|
|
|
|
|
|
|
|
|
Domestic:
|
|
|
|
|
|
|
|
|
|
US federal corporate income tax
|
|
$
|
—
|
|
|
$
|
—
|
|
|
US state corporate income tax
|
|
|
—
|
|
|
|
—
|
|
|
Foreign:
|
|
|
|
|
|
|
|
|
|
IRES (Italian corporate income tax)
|
|
|
66
|
|
|
|
248
|
|
|
IRAP (Italian regional tax on productive activities)
|
|
|
50
|
|
|
|
107
|
|
|
Foreign (India)
|
|
|
1,977
|
|
|
|
935
|
|
|
Other Italian taxes
|
|
|
194
|
|
|
|
62
|
|
|
Current
|
|
|
2,287
|
|
|
|
1,352
|
|
|
Deferred
|
|
|
(14
|
)
|
|
|
72
|
|
|
Income tax expense
|
|
$
|
2,273
|
|
|
$
|
1,424
|
|
|
| Schedule of Reconciliation of the Statutory Effective Tax Rate |
The differences between income taxes expected by applying the U.S. federal statutory tax rate of 21% and the amount of income taxes provided for are as follows (in thousands):
|
|
|
Year Ended December 31,
|
|
|
|
|
2019
|
|
|
2018
|
|
|
Loss before income taxes
|
|
$
|
(3,239
|
)
|
|
$
|
(5,676
|
)
|
|
Primary tax rate of the Company (1)
|
|
|
21.00
|
%
|
|
|
24.00
|
%
|
|
Tax benefit calculated according to the Company's primary tax rate
|
|
|
(680
|
)
|
|
|
(1,363
|
)
|
|
State income tax, net of Federal
|
|
|
(483
|
)
|
|
|
—
|
|
|
Foreign tax rates differences (2)
|
|
|
319
|
|
|
|
77
|
|
|
Change in applicable tax rates (3)
|
|
|
(513
|
)
|
|
|
—
|
|
|
Change in valuation allowance
|
|
|
2,027
|
|
|
|
213
|
|
|
Non-taxable income
|
|
|
(196
|
)
|
|
|
—
|
|
|
Costs not deductible for tax purposes
|
|
|
541
|
|
|
|
2,103
|
|
|
Costs not deductible associated with investments
|
|
|
36
|
|
|
|
19
|
|
|
CFC (Controlled Foreign Corporation rules) (4)
|
|
|
288
|
|
|
|
93
|
|
|
IRAP (Italian Regional Tax on Productive Activities)
|
|
|
4
|
|
|
|
154
|
|
|
Taxes on undistributed profits
|
|
|
926
|
|
|
|
180
|
|
|
Other taxes
|
|
|
4
|
|
|
|
(52
|
)
|
|
Reported income tax expense
|
|
$
|
2,273
|
|
|
$
|
1,424
|
|
|
|
(1)
|
For the year ended December 31, 2019, “primary tax rate of the Company” means the U.S. federal tax rate (21%); for the year ended December 31, 2018, “primary tax rate of the Company” means the applicable Italian Corporate Income Tax (IRES) rate (24%).
|
|
|
(2)
|
For the year ended December 31, 2019, “foreign” relates to tax jurisdictions outside the United States; for the year ended December 31, 2018, “foreign” relates to tax jurisdictions outside Italy.
|
|
|
(3)
|
During 2019, applicable tax rate for Solutions Infini was reduced from 29.12% to 25.17%, resulting in a tax benefit for the period.
|
|
|
(4)
|
Recorded by the Company in relation with the Dubai subsidiary (FZE).
|
|
| Components of Deferred Tax Assets and Liabilities |
The following table presents the significant components of the Company’s deferred tax assets and liabilities (in thousands):
|
|
|
As of December 31,
|
|
|
|
|
2019
|
|
|
2018
|
|
|
Deferred tax assets:
|
|
|
|
|
|
|
|
|
|
Startup costs
|
|
$
|
2,755
|
|
|
$
|
—
|
|
|
Deferred compensation liabilities
|
|
|
398
|
|
|
|
128
|
|
|
Property and equipment
|
|
|
70
|
|
|
|
148
|
|
|
Goodwill
|
|
|
119
|
|
|
|
134
|
|
|
Net operating loss carryforward
|
|
|
3,370
|
|
|
|
1,736
|
|
|
Other
|
|
|
422
|
|
|
|
173
|
|
|
Total deferred tax assets
|
|
|
7,134
|
|
|
|
2,319
|
|
|
Less: valuation allowance
|
|
|
(5,591
|
)
|
|
|
(723
|
)
|
|
Total deferred tax assets, net
|
|
|
1,543
|
|
|
|
1,596
|
|
|
Deferred tax liabilities:
|
|
|
|
|
|
|
|
|
|
Intangible assets
|
|
|
2,351
|
|
|
|
3,389
|
|
|
Undistributed profits
|
|
|
1,093
|
|
|
|
180
|
|
|
Property and equipment
|
|
|
134
|
|
|
|
140
|
|
|
Other
|
|
|
10
|
|
|
|
6
|
|
|
Total deferred tax liabilities
|
|
|
3,588
|
|
|
|
3,715
|
|
|
Net deferred tax liabilities
|
|
$
|
(2,045
|
)
|
|
$
|
(2,119
|
)
|
|
| Summary of Valuation Allowance |
The following table sets forth movement in the valuation allowance for the year ended December 31, 2019 and 2018 (in thousands):
|
|
|
Year Ended December 31,
|
|
|
|
|
2019
|
|
|
2018
|
|
|
Balance at the beginning of the period
|
|
$
|
723
|
|
|
$
|
206
|
|
|
Change in scope of consolidation
|
|
|
2,836
|
|
|
|
305
|
|
|
Increase during the period
|
|
|
2,027
|
|
|
|
213
|
|
|
Effect of exchange rate changes
|
|
|
5
|
|
|
|
(1
|
)
|
|
Balance at the end of the period
|
|
$
|
5,591
|
|
|
$
|
723
|
|
|
| Summary of Gross Unrecognized Tax Benefits |
A reconciliation of the beginning and ending amounts of gross unrecognized tax benefits as of December 31, 2019 and 2018 is as follows (in thousands):
|
|
|
As of December 31,
|
|
|
|
|
2019
|
|
|
2018
|
|
|
Gross unrecognized tax benefits, beginning of the year
|
|
$
|
190
|
|
|
$
|
91
|
|
|
Additions for tax positions of prior years
|
|
|
—
|
|
|
|
—
|
|
|
Additions for tax positions related to the current year
|
|
|
193
|
|
|
|
93
|
|
|
Change in scope of consolidation
|
|
|
—
|
|
|
|
—
|
|
|
Effect of exchange rate
|
|
|
(6
|
)
|
|
|
2
|
|
|
Subtotal
|
|
|
377
|
|
|
|
186
|
|
|
Interest and penalties
|
|
|
91
|
|
|
|
4
|
|
|
Total gross unrecognized tax benefits, end of the year
|
|
$
|
468
|
|
|
$
|
190
|
|
|