XML 30 R18.htm IDEA: XBRL DOCUMENT
v3.23.1

Income Taxes | 12 Months Ended
--- | ---
Dec. 31, 2022
Income Taxes |
Income Taxes | Note 11 – Income Taxes The following table sets forth the expense or (benefit) for income taxes:
|  | Year Ended December 31, |
|  | 2022 |  |  | 2021 |
Current income tax expense (benefit) |  |  |  |  |  |  |  |
U.S. federal |  | $ | (50,000 | ) |  | $ | — |
U.S. state |  |  | 2,827 |  |  |  | 4,300 |
Foreign |  |  | 6,308 |  |  |  | 6,270 |
Total current income taxes |  |  | (40,865 | ) |  |  | 10,570 |
Deferred income tax benefit |  |  |  |  |  |  |  |
U.S. federal |  | $ | (675,290 | ) |  | $ | (2,274,295 | )
U.S. state |  |  | — |  |  |  | — |
Total deferred income benefit |  |  | (675,290 | ) |  |  | (2,274,295 | )
Total income tax benefit |  | $ | (716,155 | ) |  | $ | (2,263,725 | )
The following table sets forth reconciliations of the income tax expense at the statutory federal income tax rate to actual expense based on our loss before income taxes:
|  | Year Ended December 31, |
|  | 2022 |  |  | 2021 |
Income tax expense (benefit) attributable to: |  |  |  |  |  |
Federal |  | $ | (16,749,778 | ) |  | $ | (6,692,267 | )
State, net of federal benefit |  |  | (853,392 | ) |  |  | (672,148 | )
Foreign tax rate differential |  |  | (11,543 | ) |  |  | (138,292 | )
Permanent differences |  |  | 472,270 |  |  |  | (230,034 | )
Goodwill impairment |  |  | 9,172,756 |  |  |  | 2,658,665 |
Rate changes |  |  | (992 | ) |  |  | 54,295 |
Changes in valuation allowance |  |  | 7,501,917 |  |  |  | 3,361,603 |
Provision to return adjustment |  |  | 62,788 |  |  |  | 273,489 |
Deferred true-ups |  |  | (247,839 | ) |  |  | (928,743 | )
Other adjustments |  |  | (62,342 | ) |  |  | 49,707 |
Effective income tax expense (benefit) |  | $ | (716,155 | ) |  | $ | (2,263,725 | )
The following table sets forth our deferred income tax assets and liabilities: |  |  |
|  | As of December 31, |
|  | 2022 |  |  | 2021 |
Noncurrent deferred tax assets: |  |  |  |  |  |
Employee compensation |  | $ | 136,154 |  |  | $ | 820,410 |
Debt issuance costs |  |  | 39,381 |  |  |  | 138,778 |
Revenue recognition |  |  | 64,662 |  |  |  | 105,735 |
Settlement accrual |  |  | 178,549 |  |  |  | 146,604 |
Fixed assets |  |  | 774,936 |  |  |  | 242,006 |
Section 174 capitalization |  |  | 1,121,311 |  |  |  | — |
Federal and state net operating loss |  |  | 13,860,338 |  |  |  | 10,673,908 |
Foreign net operating loss |  |  | 4,641,293 |  |  |  | 4,904,857 |
Other |  |  | 280,430 |  |  |  | 225,340 |
Total deferred tax assets |  | $ | 21,097,054 |  |  | $ | 17,257,638 |
Noncurrent deferred tax liabilities: |  |  |  |  |  |  |  |
Intangible assets |  |  | (1,713,666 | ) |  |  | (6,051,459 | )
Total deferred tax liabilities |  | $ | (1,713,666 | ) |  | $ | (6,051,459 | )
Valuation allowance |  |  | (19,383,388 | ) |  |  | (11,881,470 | )
Deferred tax asset (liability), net after valuation allowance |  | $ | — |  |  | $ | (675,291 | )
During the year ended December 31, 2022, valuation allowances on deferred tax assets that are not anticipated to be realized increased by $7.5 million, substantially all of which was recorded to deferred expense while an insignificant portion was recorded in final purchase accounting. During the year ended December 31, 2021, valuation allowances on deferred tax assets that were not anticipated to be realized increased by $3.6 million of which $0.2 million was recorded in purchase accounting and the remainder of $3.4 million was recorded to deferred expense. Our deferred tax valuation allowances are primarily the result of uncertainties regarding the future realization of recorded tax benefits on tax losses. The measurement of deferred tax assets is reduced by a valuation allowance if, based upon available evidence, it is more likely than not that the deferred tax assets will not be realized. We have evaluated the realizability of our deferred tax assets in each jurisdiction by assessing the adequacy of expected taxable income, including the reversal of existing temporary differences, historical and projected operating results, and the availability of prudent and feasible tax planning strategies. Based on this analysis, we have determined that the valuation allowances recorded as of December 31, 2022 and December 31, 2021 are appropriate. We have deferred tax assets related to U.S. federal tax and state tax carryforwards for net operating losses (“NOL”) in the amount of $58.9 million. The majority of U.S. federal NOL carryforwards are carried forward indefinitely. Federal NOLs generated after 2017 have an indefinite carryforward and are only available to offset 80 percent of taxable income beginning in 2021. U.S. state NOL carryforwards expire at various dates of which the majority begin to expire in 2039. We have deferred tax assets related to foreign NOL carryforwards, which begin to expire in 2034, in the amount of $17.5 million. We are not currently under examination for any of the major jurisdictions where we conduct business as of December 31, 2022; however, all of our tax years remain subject to examination. Our management does not believe there are significant uncertain tax positions in 2022 and as a result we do not expect any cash payments in the next 12 months; however, uncertain tax positions related to potential penalties in the amount of $30,000 was recorded in connection with business combinations during the year ended December 31, 2020. A reserve for potential penalties for $0.1 million that was established in 2021 was reversed in 2022 as a result of the Internal Revenue Service’s dismissal of the matters. There was no interest related to uncertain tax positions in 2022 or 2021. We paid less than $0.1 million for income taxes, net of refunds received, in certain state and national jurisdictions during each of the years ended December 31, 2022 and 2021, respectively. T he Inflation Reduction Act (“IRA”) was enacted on August 16, 2022. The IRA introduced new provisions including a 15% corporate alternative minimum tax for certain large corporations that have at least an average of $1 billion adjusted financial statement income over a consecutive three-tax-year period and a 1% excise tax surcharge on stock repurchases. The IRA is applicable for tax years beginning after December 31, 2022 and had no benefit to our consolidated financial statements for any of the periods presented, and we do not expect it to have a direct material impact on our future results of operations, financial condition, or cash flows.

X
- References No definition available. + Details
Name: | us-gaap_IncomeTaxDisclosureAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration

X
- Definition The entire disclosure for income taxes. Disclosures may include net deferred tax liability or asset recognized in an enterprise's statement of financial position, net change during the year in the total valuation allowance, approximate tax effect of each type of temporary difference and carryforward that gives rise to a significant portion of deferred tax liabilities and deferred tax assets, utilization of a tax carryback, and tax uncertainties information. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 21 -URI https://asc.fasb.org/extlink&oid=121826272&loc=d3e32857-109319 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section S99 -Paragraph 2 -Subparagraph (SAB Topic 11.C) -URI https://asc.fasb.org/extlink&oid=122134291&loc=d3e330215-122817 Reference 3: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 17 -Subparagraph (b) -URI https://asc.fasb.org/extlink&oid=121826272&loc=d3e32809-109319 Reference 4: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SAB TOPIC 6.I.5.Q1) -URI https://asc.fasb.org/extlink&oid=122134291&loc=d3e330036-122817 Reference 5: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 14 -URI https://asc.fasb.org/extlink&oid=121826272&loc=d3e32705-109319 Reference 6: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 270 -Section 50 -Paragraph 1 -URI https://asc.fasb.org/extlink&oid=6424409&loc=d3e44925-109338 Reference 7: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -URI https://asc.fasb.org/topic&trid=2144680 Reference 8: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 30 -Section 50 -Paragraph 2 -Subparagraph (a) -URI https://asc.fasb.org/extlink&oid=6424122&loc=d3e41874-109331 Reference 9: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 235 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SX 210.4-08(h)(2)) -URI https://asc.fasb.org/extlink&oid=120395691&loc=d3e23780-122690 + Details
Name: | us-gaap_IncomeTaxDisclosureTextBlock
Namespace Prefix: | us-gaap_
Data Type: | dtr-types:textBlockItemType
Balance Type: | na
Period Type: | duration