Gaia, Inc. Annual report pursuant to Section 13 and 15(d)

Income Taxes (Tables)

12 Months Ended

Dec. 31, 2014

Our provision for income tax expense (benefit) is comprised of the following:


	For the Years Ended December 31,
(in thousands)	2014		2013			2012
Current:
Federal	$	887	$	536		$	184
State		157		(68	)		(88	)
International		175		223			196

		1,219		691			292

Deferred:
Federal		—		22,418			(5,590	)
State		—		1,538			(374	)
International		—		73			(3	)

		—		24,029			(5,967	)

Total income tax expense (benefit)	$	1,219		24,720			(5,675	)

The components of our income taxes consisted of the following:


(in thousands)	2014			2013			2012
Income tax expense (benefit) from continuing operations	$	1,369		$	25,974		$	(9,444	)
Income tax (benefit) expense from discontinued operations		(150	)		209			3,769
Income tax benefit from loss on disposal of discontinued operations		—			(1,463	)		—

Total income tax expense (benefit)	$	1,219			24,720			(5,675	)

Variations from the federal statutory rate are as follows:


(in thousands)	2014			2013		2012
Expected federal income tax (benefit) expense at statutory rate of 34%	$	(2,631	)	$	898	$	(807	)
Effect of 2008 State NOL’s and option forfeitures		—			49		—
Effect of permanent enhanced charitable donation differences		—			—		(31	)
Effect of permanent other differences		37			213		106
Effect of change in financial statement carrying value of investment		—			—		(5,077	)
State income tax expense (benefit), net of federal benefit		(150	)		24		(40	)
Establishment of valuation allowance on net deferred tax assets		4,071			23,153		—
Other		(70	)		278		209
Effect of differences between U.S. taxation and foreign taxation		(38	)		105		(35	)

Total income tax expense (benefit)	$	1,219			24,720		(5,675	)

The components of the net accumulated deferred income tax assets as of December 31, 2014 and 2013 are as follows:


	December 31,
(in thousands)	2014			2013
Deferred tax assets (liabilities):
Current:
Provision for doubtful accounts	$	1,211		$	171
Inventory-related expense		483			950
Accrued liabilities		2,641			3,341
Net operating loss carryforward		—			820
Worthless stock deduction		206			3,055
Prepaid and deferred catalog costs		—			(103	)
Other		263			35
Exit activity accruals		—			1,603

Total current deferred tax assets		4,804			9,872
Valuation allowance		(4,804	)		(9,872	)

Total current deferred tax assets, net of valuation allowance	$	—		$	—

Non-current:
Depreciation and amortization	$	(1,506	)	$	(825	)
Section 181 qualified production expense		(2,770	)		(850	)
Net operating loss carryforward		26,966			15,297
Charitable carryforward		1,414			1,567
Loss (gain) from change in financial statement carrying value of investment, net		48			55
Gain from foreign business acquisition		(347	)		(347	)
Impairment of intangibles		367			—
Tax credits		921			920
Other		(3	)		69

Total non-current deferred tax assets		25,090			15,886
Valuation allowance		(25,090	)		(15,886	)

Total non-current deferred tax assets, net of valuation allowance		—			—

Total net deferred tax assets	$	—		$	—

The sources of income (loss) before income taxes are as follows: