Annual report pursuant to Section 13 and 15(d)

Income Taxes

v3.22.1
Income Taxes
12 Months Ended
Dec. 31, 2021
Income Tax Disclosure [Abstract]  
Income Taxes

NOTE 19– INCOME TAXES

The Company’s net deferred tax assets are as follows:

 

 

December 31,

 

 

 

2021

 

 

2020

 

Deferred tax assets:

 

 

 

 

 

 

Net operating loss carryforward

 

$

92,339

 

 

$

56,815

 

Startup/Organization expenses

 

 

176

 

 

 

177

 

Investment in Partnership

 

 

-

 

 

 

70,244

 

Interest expense

 

 

4,066

 

 

 

1,652

 

Property and equipment

 

 

8,752

 

 

 

-

 

Leases

 

 

1,210

 

 

 

-

 

Intangible assets

 

 

26,667

 

 

 

-

 

Sec. 743(b) adjustment

 

 

3,572

 

 

 

-

 

Inventory reserve

 

 

314

 

 

 

-

 

Stock-based compensation

 

 

957

 

 

 

-

 

Accruals and other

 

 

1,224

 

 

 

137

 

Total deferred tax assets

 

 

139,277

 

 

 

129,025

 

 

 

 

 

 

 

 

Deferred tax liabilities:

 

 

 

 

 

 

Prepaids

 

 

(2,078

)

 

 

-

 

Total deferred tax liabilities

 

 

(2,078

)

 

 

-

 

 

 

 

 

 

 

 

Net deferred tax asset

 

 

137,199

 

 

 

129,025

 

Valuation allowance

 

 

(137,199

)

 

 

(129,025

)

Net deferred tax assets

 

$

-

 

 

$

-

 

The income tax provision consists of the following:

 

 

Year Ended December 31,

 

 

 

2021

 

 

2020

 

Current income taxes:

 

 

 

 

 

 

Federal

 

$

(27

)

 

$

(757

)

State

 

 

-

 

 

 

(67

)

Total current

 

 

(27

)

 

 

(824

)

 

 

 

 

 

 

 

Deferred income taxes:

 

 

 

 

 

 

Total deferred

 

 

-

 

 

 

-

 

Income tax benefit

 

$

(27

)

 

$

(824

)

A reconciliation of the federal income tax rate to the Company’s effective tax rate is as follows:

 

 

December 31, 2021

 

Pre-tax book loss

 

$

70,676

 

 

 

 

 

 

 

 

 

 

 

Federal provision (benefit)

 

 

(14,842

)

 

 

-21.00

%

Permanent differences

 

 

(303

)

 

 

-0.43

%

Return to provision, other

 

 

6,665

 

 

 

9.42

%

Valuation allowance

 

 

8,453

 

 

 

11.96

%

Total income tax benefit

 

$

(27

)

 

 

-0.04

%

On March 27, 2020, the President signed the Coronavirus Aid, Relief and Economic Security Act (as amended, the “CARES Act”) into law. The CARES Act contains several corporate income tax provisions, including, among other things, providing a 5-year carryback of net operating loss (“NOL”) tax carryforwards generated in tax years 2018, 2019, and 2020, removing the 80% taxable income limitation on utilization of those NOLs if carried back to prior tax years or utilized in tax years beginning before 2021, temporarily liberalizing the interest deductions rules under Section 163(j) of the Tax Cuts and Jobs Act of 2017, and making corporate alternative minimum tax credits immediately refundable. During 2020, the Company filed an application to carry back its 2018 NOLs, claiming a refund of $757.

As of December 31, 2021, the Company had total U.S. federal net operating loss ("NOL") carryforwards of $388,541 and $307,413 of state NOLs available to offset future taxable income. Federal NOLs of $28,387 would begin to expire in 2036 if unused. Federal NOLs generated after December 31, 2017 do not expire and the state rules vary by state. After consideration of all of the information available, management has established a valuation allowance against the deferred tax assets of the Company's tax loss carryforwards to the extent it is not more likely than not they will be realized. As of December 31, 2021, the valuation allowance totaled $137,199.

In assessing the realization of the deferred tax assets, management considers whether it is more likely than not that some portion of all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which temporary differences representing net future deductible amounts become deductible. Management considers the positive and negative evidence with respect to sources of taxable income for purposes of determining the realization of deferred tax assets. In accordance with Section 382 of the Internal Revenue Code, deductibility of the Company’s NOLs may be subject to an annual limitation in the event of a change in control as defined under the regulations.

The Company files income tax returns in the U.S. federal jurisdiction and various state and local jurisdictions and is subject to examination by the taxing authorities.

We follow guidance issued by the FASB in accounting for uncertainty in income taxes. This guidance clarifies the accounting for income taxes by prescribing the minimum recognition threshold an income tax position is required to meet before being recognized in the consolidated financial statements and applies to all income tax positions. Each income tax position is assessed using a two-step process. A determination is first made as to whether it is more likely than not that the income tax position will be sustained, based upon technical merits, upon examination by the taxing authorities. If the income tax position is expected to meet the more likely than not criteria, the benefit recorded in the consolidated financial statements equals the largest amount that is greater than 50% likely to be realized upon its ultimate settlement.

We have considered our exposure under the standard at both the federal and state tax levels. We did not record any liabilities for uncertain tax positions as of December 31, 2021 or 2020. We record income tax-related interest and penalties, if any, as a component of income tax expense. We did not incur any material interest or penalties on income taxes.