The Company recorded the following income tax expense for the years ended January 3, 2021:

The overall income tax expense as recorded in the consolidated statements of operations varied from the tax expense calculated using U.S. federal and state income tax rates as follows for the years ended January 3, 2021:

For income tax purposes, income (loss) before income taxes consisted of the following for the years ended January 3, 2021:

Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. The Company’s deferred income tax liabilities and assets are comprised of the following at:

At January 3, 2021, the Company had total net operating loss (“NOL”) carry forwards of $106,455 of which $80,884, $22,155 and $3,416 pertains to loss carry forwards from U.S., Canadian and Asian jurisdictions respectively. Net operating loss carryforwards of $7,581 will expire between 2023 and 2027, $31,239 will expire between 2028 and 2030, $43,119 will expire between 2031 and 2036, $19,972 will expire between 2037 and 3039, and the remainder of $4,544 is available for indefinite carryforward.

Prior to its acquisition by the Company, MCA had NOL carry forwards of $15,300. Pursuant to Section 382 of the Internal Revenue Code, MCA’s "ownership change" on November 8, 2018, within the meaning of this Section, resulted in limits on the Company's ability to utilize these losses. Management has determined NOL utilization to be limited to $3,909 annually, and believes that sufficient losses are otherwise available such that there is little, if any, adverse tax consequence of this limitation.

At January 3, 2021 and December 29, 2019, the Company had no gross unrecognized tax benefits associated with uncertain tax positions. 

On December 22, 2017, the Tax Cuts and Jobs Act ("TCJA") was enacted, which includes a broad range of tax reform proposals, with many provisions significantly differing from current U.S. tax law. Management has considered the impact of these provisions, including a decrease in the federal corporate income tax rate, from 35% to 21% for years beginning after December 31, 2017, substantially reducing the value of the Company's deferred tax assets. The Company has recorded a corresponding reduction to its deferred tax asset of $7,944 as at December 31, 2017. The reduction in the Company's deferred tax assets is fully offset by a corresponding reduction to the valuation allowance.