Annual report pursuant to Section 13 and 15(d)

Income Taxes

v3.23.1
Income Taxes
 9 Months Ended
Sep. 30, 2022
Income Taxes [Abstract]  
Income Taxes

8. Income Taxes

 

The income tax expense consisted of the following:

 

    Year Ended December 31,  
    2022     2021  
Current income taxes:            
Federal   $                       -     $
 -
  
State and local    
-
      
-
  
Total current tax    
-
      
-
  
                 
Deferred income taxes:                
Federal    
-
      
-
  
State and local    
-
      
-
  
Total deferred tax    
-
      
-
  
Income tax expense   $
-
     $
-
  

 

The effective tax rates on continuing operations for the years ended December 31, 2021 and 2022 were 0% respectively. The table below reconciles these effective tax rates with the U.S. federal statutory income tax rate as follows:

 

    Year Ended December 31,  
    2022     2021  
Income (loss) before income taxes   $ (28,260,571 )   $ (15,127,629 )
Tax at Federal Statutory Rate     (5,934,720 )     (3,176,802 )
Federal Return to Accrual    
-
      
-
  
Non deductible expenses     193,421       1,754,071  
Change in valuation allowance     5,741,299       1,422,731  
Income tax expense    
-
      
-
  
      0.00 %     0.00 %

 

The Company’s deferred tax position reflects the net tax effects of the temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax reporting. Significant components of the deferred tax assets and liabilities are as follows:

 

    Year Ended December 31,  
    2022     2021  
Deferred tax assets:            
Fixed Assets   $ 113,135     $ 103,863  
Stock Compensation     758,306       211,849  
Warrant Liability Gain/Loss     1,356,828       -  
Net Operating Losses     9,666,591       6,262,113  
Business Credit Carryforward     1,426,116       1,426,117  
Capitalized R & D     449,626       -  
Other assets     109,616       13,634  
Total deferred tax assets     13,880,218       8,017,576  
                 
Deferred tax liabilities:                
Unrealized F/X     (54,729 )     -  
Other Liabilities     (66,614 )     -  
Total deferred tax liabilities     (121,343 )     -  
                 
Valuation allowance     (13,758,875 )     (8,017,576 )
Net deferred tax assets   $
-
     $
-
  

 

The Company has federal net operating loss carryforwards of approximately $46.3 million at December 31, 2022, of which about $646,000 begin to expire in 2035 and the remainder have no expiration. The Company has recorded a full valuation allowance against its net deferred tax assets due to recurring net losses.