v3.23.1
Income Taxes
 12 Months Ended
Dec. 31, 2022
Income Taxes [Abstract]  
Income Taxes

9. Income Taxes

 

No amounts were recorded for income tax expense during the years ended December 31, 2022 or 2021. A reconciliation of the expected statutory federal tax and the total income tax expense from continuing operations was as follows:

 

   Year Ended December 31, 
   2022   2021 
Federal statutory rate  $(1,462,067)  $(2,056,480)
State income taxes, net   (141,438)   (198,940)
Change in valuation allowance   1,630,110    3,655,210 
Change in state tax rates   
-
    (178,644)
True-up of prior year deferred items   
-
    (929,450)
Other, net   (26,605)   (291,696)
Total income tax expense  $
-
   $
-
 

 

The tax effect of temporary differences that gave rise to significant components of deferred tax assets and liabilities consisted of the following:

 

   December 31, 
   2022   2021 
Assets:        
Net operating loss carryforwards  $5,471,098   $4,960,487 
Stock-based compensation   2,142,362    1,046,464 
Property and equipment   (24,310)   33,803 
Intangible assets   216,726    135,012 
Subtotal   7,805,876    6,175,766 
Valuation allowance   (7,805,876)   (6,175,766)
Net deferred tax asset  $
-
   $
-
 

 

The Company has federal net operating loss (“NOL”) carryforwards of approximately $23.8 million at December 31, 2022, of which approximately $6.5 million begin to expire in 2034 and the remainder have no expiration. The Company estimates that a majority of its NOL carryforwards are subject to annual limitations under Internal Revenue Code Section 382 as a result of ownership changes at various times including in the Transaction. These NOL carryforwards may never be utilized by the Company.

 

The Company is delinquent in filing its 2021 Federal and state tax returns.