INCOME TAXES (Tables)

12 Months Ended

Dec. 31, 2022

INCOME TAXES

Summary of provision benefit of income tax and effective tax rate

	Years Ended December 31,
($’s in thousands)	2022		2021
Current:
Federal	$	—	$	—
State		63		67
Total current		63		67
Deferred:
Federal		(6,701)		(7,829)
State		(1,737)		(1,474)
Total deferred		(8,438)		(9,303)
Valuation allowance		8,438		10,870
Total income tax expense	$	63	$	1,634

Schedule of components of the Company's deferred tax assets

	December 31,
($’s in thousands)	2022		2021
Deferred tax assets:
Net operating loss carryforwards	$	6,553	$	3,113
Amortization of license fees		4,951		4,760
R&D capitalization		2,462		—
Stock compensation		1,293		667
Lease liability		48		25
Reserve on sales return, discount and bad debt		2,988		3,573
Accruals and reserves		574		505
Tax credits		1,152		193
Business interest expense deduction limit		322		41
State taxes		13		12
Total deferred tax assets		20,356		12,889
Less: valuation allowance		(19,307)		(10,870)
Deferred tax assets, net	$	1,049	$	2,019
Deferred tax liability:
Section 481(a) adjustment on reserve on sales return, discount and bad debt		(1,001)		(1,996)
Right-of-use asset		(48)		(23)
Deferred tax assets, net	$	—	$	—

Schedule of reconciliation of the statutory tax rates and the effective tax rates

	Years Ended December 31,
	2022		2021
Percentage of pre-tax income:
U.S. federal statutory income tax rate	21	%	21	%
State taxes, net of federal benefit	4	%	4	%
Non-deductible items	(0)	%	(5)	%
Provision to return	0	%	0	%
Change in state rate	0	%	0	%
Change in valuation allowance	(28)	%	(26)	%
Other	3	%	2	%
Effective income tax rate	(0)	%	(4)	%