INCOME TAXES

12 Months Ended

Dec. 31, 2021

Income Tax Disclosure [Abstract]

INCOME TAXES

20. INCOME TAXES

The Company calculates its provision for federal and state income taxes based on current tax law. The provision (benefit) for income taxes consisted of the following (in thousands):

	For the Year Ended December 31,
	2021			2020
Current:
Federal	$	–		$	–
State		–			–
Deferred:
Federal		(5,484	)		(593	)
State		605			(79	)
Change in valuation allowance		4,879			672
Total provision (benefit) for income taxes	$	–		$	–

The difference between income taxes computed at the statutory federal rate and the provision for income taxes related to the following (in thousands, except percentages):

	For the Year Ended December 31,
	2021						2020
	Amount			Percent of Pretax Loss			Amount			Percent of Pretax Loss
Tax (benefit) at federal statutory rate	$	(6,340	)		21	%	$	(8,999	)		21	%
State income taxes, net of federal income taxes		605			(2	)%		(79	)		–	%
Effect of warrant liability		215			(1	)%		(209	)		1	%
Effect of other permanent items		16			–	%		65			–	%
Effect of stock compensation		238			(1	)%		9,032			(21	)%
Change in valuation allowance		4,879			(16	)%		672			(2	)%
Other		387			(1	)%		(482	)		1	%
	$	–			–	%	$	–			–	%

The components of deferred income tax assets (liabilities) were as follows (in thousands):

	December 31,
	2021			2020
Leases	$	17		$	132
Depreciation and amortization		(38	)		(784	)
Compensation expense not deductible until options are exercised		8,343			9,494
All other temporary differences		430			488
Net operating loss carry forwards		47,223			41,766
Less valuation allowance		(55,975	)		(51,096	)
Deferred tax asset (liability)	$	–		$	–

Realization of deferred tax assets, including those related to net operating loss carryforwards, are dependent upon future earnings, if any, of which the timing and amount are uncertain. Accordingly, the net deferred tax assets have been fully offset by a valuation allowance. Based upon the Company’s current operating results management cannot conclude that it is more likely than not that such assets will be realized.

Utilization of the net operating loss carryforwards may be subject to a substantial annual limitation due to the “change in ownership” provisions of the Internal Revenue Code. The annual limitation may result in the expiration of net operating loss carryforwards before utilization. The net operating loss carryforwards available for income tax purposes at December 31, 2021 amounts to approximately $185.8 million. Of this amount, $38.4 million will expire between 2038 and 2039 and $147.4 million will have an indefinite life. Approximately $195.7 million for state income taxes will begin to expire starting in 2034.

The Company files income tax returns in the U.S. and various states. As of December 31, 2021, the Company had no unrecognized tax benefits, which would impact its tax rate if recognized. As of December 31, 2021, the Company had no accrual for the potential payment of penalties. As of December 31, 2021, the Company was not subject to any U.S. federal, and state tax examinations. The Company does not anticipate any significant changes in its unrecognized tax benefits over the next 12 months.