Annual report pursuant to Section 13 and 15(d)

INCOME TAXES (Tables)

v3.23.1
INCOME TAXES (Tables)
12 Months Ended
Dec. 31, 2022
Income Tax Disclosure [Abstract]  
SUMMARY OF COMPONENTS OF EARNINGS BEFORE INCOME TAXES

The components of earnings before income taxes for the years ended December 31, 2022 and 2021 were as follows:

 

    2022     2021  
    Year Ended  
    December 31,  
    2022     2021  
Net loss after loss in equity method investment and before income taxes:                
Domestic   $

(9,449,000

)   $ (8,188,000 )
Foreign     362,000       80,000  
Income (loss) before income taxes    $

(9,087,000

)   $ (8,108,000 )
SUMMARY OF COMPONENTS OF INCOME TAX PROVISION (BENEFIT)

Income tax provision (benefit) consists of the following for the years ended December 31, 2022 and 2021:

 

    2022     2021  
    Year Ended  
    December 31,  
    2022     2021  
Income tax provision (benefit):                
Current                
Federal   $ -     $ -  
State     -       -  
Foreign     87,000       15,000  
Total current     87,000       15,000  
Deferred:                
Federal     -       -  
State     -       -  
Foreign     -       -  
Total deferred     -       -  
Total income tax provision (benefit)   $ 87,000     $ 15,000  
SUMMARY OF EFFECTIVE TAX RATE AND STATUTORY FEDERAL RATE

A reconciliation of the income tax provision (benefit) by applying the statutory United States federal income tax rate to income (loss) before income taxes is as follows:

 

    Year Ended December 31,  
    2022     2021  
    $     $  
Federal income tax provision (benefit) at statutory rate   $ (1,984,000 )   $ 1,736,000  
State tax expense net of federal tax benefit     (411,000     211,000  
State tax expense federal impact     45,000        29,000  
Non-deductible expenses     -       (320,000 )
State rate change adjustment    

(214,000

)     (138,000 )
Foreign taxes at rate different than US Taxes    

87,000

      (2,000 )
Other true-ups    

106,000

      188,000  
Change in valuation allowance    

2,458,000

      (1,689,000 )
Income tax provision (benefit)   $ 87,000     $ 15,000  
SCHEDULE OF DEFERRED TAX ASSETS AND LIABILITIES

Deferred tax assets and liabilities are provided for significant income and expense items recognized in different years for tax and financial reporting purposes. Temporary differences, which give rise to a net deferred tax asset is as follows:

 

    December 31, 2022     December 31, 2021  
Deferred tax assets:                
Net operating loss carryforward   $

3,658,000

    $ 2,455,000  
Property plant and equipment and intangibles asset    

130,000

      132,000  
Equity method investment loss    

441,000

      -  
Stock-based compensation    

1,949,000

      1,133,000  
Total deferred tax assets   $

6,178,000

    $ 3,720,000  
                 
Deferred tax liabilities:                
Book basis of property and equipment in excess of tax basis   $ -     $ -  
Total deferred tax liabilities   $ -     $ -  
                 
Net deferred tax asset before valuation allowance   $

6,178,000

    $ 3,720,000  
Less: valuation allowance    

(6,178,000

)     (3,720,000 )
Net deferred tax asset   $ -     $ -