Deferred Tax Assets and Liabilities

12 Months Ended

Dec. 31, 2020

Income Tax Disclosure [Abstract]

Deferred Tax Assets and Liabilities

10. Deferred Tax Assets and Liabilities 

The provision for income taxes results in effective tax rates which are different than the U.S. federal income tax statutory rate. A reconciliation of the differences for the years ended December 31, 2020 and 2019 was as follows:

	2020			2019
Expected income tax benefit at federal statutory rate	$	2,727,696		$	1,785,829
Expected income tax benefit at state statutory rates net of federal tax benefit		792,175			364,820
Stock based compensation		(592,048	)		(231,609	)
Change in valuation allowances—net		(2,978,937	)		(2,176,799	)
Other—net		51,114			257,759
Benefit from income taxes	$	—		$	—
Effective tax rate		0	%		0	%

The Company had a tax net loss for the years ended December 31, 2020 and 2019, and therefore expects no assessment of income taxes for such periods. Additionally, the net deferred tax assets are fully allowed for. Accordingly, there was no provision for, or benefit from, income taxes reported for the years ended December 31, 2020 and 2019. The Company’s deferred tax assets and liabilities consisted of the following as of December 31, 2020 and 2019:

	December 31,			December 31,
	2020			2019
Noncurrent deferred tax assets:
Federal net operating loss carryforwards	$	5,332,738		$	3,470,371
State net operating loss carryforwards		2,112,119			1,285,488
Federal depreciation and amortization		458,203			53,525
State depreciation and amortization		213,359			—
Accrued—PTO		75,702			—
Other		106,526			—
Total noncurrent deferred tax assets		8,298,647			4,809,384
Noncurrent deferred tax liabilities:
Federal depreciation and amortization	$	—		$	179,720
State depreciation and amortization		—			45,490
Deferred rent asset		735,537			—
Total noncurrent deferred tax liabilities		735,537			225,210
Net noncurrent deferred tax assets	$	7,563,110		$	4,584,174
Valuation allowance		(7,563,110	)		(4,584,174	)
Total net noncurrent deferred tax assets	$	—		$	—

The Company assesses its deferred tax assets and liabilities to determine if it is more likely than not they will be realized; if not, a valuation allowance is required to be recorded. Based on this guidance, the Company provided a valuation allowance for the full amount. The net increase in the valuation allowance for deferred tax assets and liabilities for the years ended December 31, 2020 and 2019 was $2,978,937 and $2,176,799, respectively. This valuation allowance included the estimated tax liability of $2,983 related to the unrealized gain on investment securities available-for-sale as of December 31, 2020. As of December 31, 2020 and 2019, the Company had U.S. federal net operating losses (“NOLs”) totaling approximately $27,528,486 and $17,117,760, respectively. The Company had federal NOLs as of December 31, 2020 and 2019 totaling approximately $1,868,077 from 2017 and prior years that can be carried forward for 20 years, which begin to expire in 2036. As of December 31, 2020 and 2019 the Company had federal NOLs totaling approximately $25,660,409 and $15,249,683, respectively, from 2018 through 2020 that can be carried forward indefinitely.

GAAP requires management to evaluate and report information regarding its exposure to various tax positions taken by the Company. The Company has determined whether there are any tax positions that have met the recognition threshold and has measured the Company’s exposure to those tax positions. Management believes that the Company has adequately addressed all relevant tax positions and that there are no unrecorded tax liabilities.

The Company files income tax returns in the U.S. federal jurisdiction and various state jurisdictions. U.S. and state jurisdictions have statutes of limitations that generally range from three to five years.