Consolidated Loss Before Income Taxes |
For financial reporting purposes, the
Company’s consolidated income from continuing operations before income taxes for the U.S. and foreign entities, in the aggregate, is as follows:
|
|
For the Years Ended December 31,
|
|
|
|
2023 |
|
|
2022 |
|
United States
|
|
$ |
1,819,170 |
|
|
$
|
(19,168,010
|
)
|
Foreign
|
|
|
— |
|
|
|
—
|
|
Total loss before provision for income taxes
|
|
$ |
1,819,170 |
|
|
$
|
(19,168,010
|
)
|
|
Components of Income Tax Expense |
The income tax expense for continuing
operations consisted of the following for the years ending December 31, 2023 and December 31, 2022:
|
|
For the Years Ended December 31,
|
|
|
|
2023 |
|
|
2022
|
|
Current:
|
|
|
|
|
|
|
Federal
|
|
$
|
7,348 |
|
|
$
|
—
|
|
State
|
|
|
78,392 |
|
|
|
23,980
|
|
Foreign
|
|
|
— |
|
|
|
—
|
|
|
|
$
|
85,740 |
|
|
$
|
23,980
|
|
|
|
|
|
|
|
|
|
|
Deferred:
|
|
|
|
|
|
|
|
|
Federal
|
|
|
— |
|
|
|
— |
|
State
|
|
|
— |
|
|
|
— |
|
Foreign
|
|
|
— |
|
|
|
— |
|
|
|
|
— |
|
|
|
— |
|
Total
|
|
$
|
85,740 |
|
|
$
|
23,980
|
|
|
Statutory to Effective Federal Income Tax Rate Reconciliation |
The reconciliation between the Company’s
effective tax rate on income from continuing operations and statutory tax rate for the years ended December 31, 2023 and 2022 is as follows:
|
|
For the Years Ended December 31,
|
|
|
|
2023 |
|
|
|
|
Income tax expense (benefit) at federal statutory rate
|
|
|
21.0% |
|
|
|
21.0%
|
|
Nondeductible/nontaxable items
|
|
|
(0.63)% |
|
|
|
0.34% |
|
Stock-based compensation
|
|
|
260.39% |
|
|
|
—%
|
|
Gain on sale of operations
|
|
|
—% |
|
|
|
0.89%
|
|
State taxes
|
|
|
12.90% |
|
|
|
7.49%
|
|
Rate change
|
|
|
(4.46)% |
|
|
|
(0.87)%
|
|
|
|
|
(38.24)% |
|
|
|
(0.44)%
|
|
Valuation
allowance
|
|
|
(246.77)% |
|
|
|
(28.54)% |
|
Income tax expense
|
|
|
4.19% |
|
|
|
(0.13)%
|
|
|
Components of Net Deferred Tax Assets and Liabilities |
The following items comprise the Company’s net
deferred tax assets and liabilities from continuing operations as of December 31, 2023 and December 31, 2022:
|
|
As of December 31,
|
|
|
|
2023
|
|
|
|
|
Deferred tax assets
|
|
|
|
|
|
|
Allowance for credit losses
|
|
$
|
—
|
|
|
$
|
21,421
|
|
Reserves
|
|
|
—
|
|
|
|
49,827
|
|
Accrued expenses
|
|
|
237,689
|
|
|
|
357,441
|
|
Lease liability
|
|
|
2,910
|
|
|
|
9,007
|
|
Stock compensation
|
|
|
2,028,170
|
|
|
|
5,514,035
|
|
Depreciation
|
|
|
3,380
|
|
|
|
10,813
|
|
Amortization
|
|
|
56,882
|
|
|
|
65,021
|
|
Capitalized Sec. 174 expenses
|
|
|
1,138,021
|
|
|
|
914,390
|
|
Net operating loss carry forwards
|
|
|
5,140,001
|
|
|
|
10,517,739
|
|
Deferred income tax assets
|
|
$
|
8,607,053
|
|
|
$
|
17,459,694
|
|
|
|
|
|
|
|
|
|
|
Valuation allowance
|
|
|
(8,119,492
|
)
|
|
|
(17,332,381
|
)
|
Total net deferred income tax assets
|
|
$
|
487,561
|
|
|
$
|
127,313
|
|
|
|
|
|
|
|
|
|
|
Prepaid expenses
|
|
|
(29,302
|
)
|
|
|
(43,741
|
)
|
Unrealized FX gain/ loss
|
|
|
(1,951
|
)
|
|
|
(74,565
|
)
|
Installment sale receivable
|
|
|
(453,398
|
)
|
|
|
—
|
|
Right-of-use asset
|
|
|
(2,910
|
)
|
|
|
(9,007
|
)
|
Deferred income tax liability
|
|
$
|
(487,561
|
)
|
|
$
|
(127,313
|
)
|
|
|
|
|
|
|
|
|
|
Net deferred taxes
|
|
$
|
—
|
|
|
$
|
—
|
|
|