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INCOME TAXES | 12 Months Ended
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Dec. 31, 2022
INCOME TAXES |
INCOME TAXES | NOTE 8 – INCOME TAXES ​ The components of net loss before income tax for continuing operations (comprised of the total of loss before income tax and equity in net loss of investee and equity in net loss of investee, net of tax) for the year ended December 31, 2022 and the period February 8, 2021 (date of inception) to December 31, 2021 are as follows (in thousands): ​
​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | ​ | ​ | ​ | Period February 8, 2021 (date of
​ | ​ | Year Ended | ​ | inception) to
​ | ​ | December 31, | ​ | December 31,
​ |  | 2022 |  | 2021
Domestic |  | $ | (86,190) |  | $ | (47,192)
Foreign |  | ​ | — |  | ​ | —
Total |  | $ | (86,190) |  | $ | (47,192)
​ The Company’s income tax benefit for continuing operations for the year ended December 31, 2022 and the period February 8, 2021 (date of inception) to December 31, 2021 are as follows (in thousands):
​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | ​ | ​ | ​ | Period February 8, 2021 (date of
​ | ​ | Year Ended | ​ | inception) to
​ | ​ | December 31, | ​ | December 31,
​ |  | 2022 |  | 2021
Current: |  | ​ |  |  | ​ |
Federal |  | $ | — |  | $ | —
State |  | ​ | — |  | ​ | —
Foreign | ​ | ​ | — | ​ | ​ | —
Total current income tax (benefit) expense |  | ​ | — |  | ​ | —
​ | ​ | ​ | ​ | ​ | ​ | ​
Deferred: |  | ​ |  |  | ​ |
Federal |  | ​ | (256) |  | ​ | (615)
State |  | ​ | — |  | ​ | —
Foreign | ​ | ​ | 0 | ​ | ​ | 0
Total deferred income tax benefit |  | ​ | (256) |  | ​ | (615)
Income tax benefit |  | $ | (256) |  | $ | (615)
​ A reconciliation between income tax benefit and the expected tax benefit at the statutory rate for the year ended December 31, 2022 and the period February 8, 2021 (date of inception) to December 31, 2021 are as follows:
​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | ​ | ​ | Period February 8, 2021 (date of
​ | ​ | Year Ended | ​ | inception) to
​ | ​ | December 31, | ​ | December 31,
​ | ​ | 2022 | ​ | 2021
Federal statutory rate | ​ | 21.0 | % | ​ | 21.0 | %
State rate, net of federal benefit | ​ | 3.0 | % | ​ | — | %
Non-deductible equity financing costs | ​ | — | % | ​ | (2.7) | %
Change in valuation allowance | ​ | (24.6) | % | ​ | (17.0) | %
Other items | ​ | 0.9 | % | ​ | — | %
Effective tax rate | ​ | 0.3 | % | ​ | 1.3 | %
​ ​ The significant components of the Company’s deferred tax liabilities, net consist of the following at December 31, 2022 and 2021 (in thousands): ​
​ | ​ | ​ | ​ | ​ | ​ | ​
​ |  | ​ | December 31, 2022 |  | ​ | December 31, 2021
Deferred tax assets: | ​ | ​ | ​ | ​ | ​ | ​
Net operating loss |  | $ | 21,599 |  | $ | 6,678
Share based liabilities |  | ​ | 3,811 |  | ​ | 2,630
Accruals and reserves |  | ​ | 1,632 |  | ​ | 470
Tax credit carryforwards |  | ​ | — |  | ​ | 278
Property, plant and equipment | ​ | ​ | 458 | ​ | ​ | —
Operating lease liability | ​ | ​ | 259 | ​ | ​ | 227
Investment in joint venture | ​ | ​ | 1,520 | ​ | ​ | —
Stock compensation |  | ​ | 410 |  | ​ | —
Gross deferred tax assets |  | ​ | 29,689 |  | ​ | 10,283
Valuation allowance |  | ​ | (29,464) |  | ​ | (8,295)
Deferred tax assets, net |  | ​ | 225 |  | ​ | 1,988
​ | ​ | ​ | ​ | ​ | ​ | ​
Deferred tax liabilities: |  | ​ |  |  | ​ |
Property, plant and equipment |  | ​ | — | ​ | ​ | (899)
Intangible assets |  | ​ | — | ​ | ​ | (723)
Inventory |  | ​ | — | ​ | ​ | (407)
Right-of-use asset |  | ​ | (225) | ​ | ​ | (215)
Gross deferred tax liabilities | ​ | ​ | (225) | ​ | ​ | (2,244)
Deferred tax liabilities, net |  | $ | — |  | $ | (256)
​ ASC 740 requires a valuation allowance to reduce the deferred tax assets reported if, based on the weight of available evidence, it is more likely than not that some or a portion or all the deferred tax assets will not be realized. Based upon the level of historical U.S. losses and future projections over the period in which the net deferred tax assets are deductible, at this time, management believes it is more likely than not that the Company will not realize the benefits of the remaining deductible temporary differences, and as a result the Company has recorded a valuation allowance for the total, net deferred tax assets. The increase in the December 31, 2022 valuation allowance of $21.2 million is primarily attributable to the current year net loss. As of December 31, 2022 and, 2021, for federal income tax purposes the Company had total net operating loss carryforwards of approximately $96.3 million and $31.5 million, respectively. As of December 31, 2022, the net operating losses will have an indefinite carryforward as a result of the Tax Cuts and Jobs Act, but may be limited in utilization to 80% of taxable income. For state income tax purposes, as of December 31, 2022 and 2021 the Company had state net operating loss carryforwards of approximately $22.1 million and $0.7 million, respectively, which begin to expire in 2039. As of December 31, 2022 and 2021, the Company has available federal research development tax credit carryforwards of approximately $0 and approximately $100,000, respectively. As of December 31, 2022 and 2021, the Company has available state research development tax credit carryforwards of approximately $0 and approximately $100,000, respectively. Under the provisions of the Internal Revenue Code, the net operating loss and tax credit carryforwards are subject to review and possible adjustment by the Internal Revenue Service and state tax authorities. The Company has not completed a formal study to conclude whether an annual limitation may exist. Net operating loss and tax credit carryforwards may become subject to an annual limitation in the event of certain cumulative changes in the ownership interest of significant shareholders over a three-year period in excess of 50%, as defined under Sections 382 and 383 of the Internal Revenue Code, respectively, as well as similar state provisions. This could limit the amount of tax attributes that can be utilized annually to offset future taxable income or tax liabilities. The amount of the annual limitation is determined based on the value of the Company immediately prior to the ownership change. Subsequent ownership changes may further affect the limitation in future years. The Company follows the provisions of ASC 740-10, Accounting for Uncertainty in Income Taxes, which specifies how tax benefits for uncertain tax positions are to be recognized, measured, and recorded in consolidated financial statements; requires certain disclosures of uncertain tax matters; specifies how reserves for uncertain tax positions should be classified on the consolidated balance sheet; and provides transition and interim period guidance, among other provisions. At December 31, 2022 and 2021, the Company has not recorded any long-term liabilities for uncertain tax positions. The Company’s policy is to recognize interest and penalties accrued on any uncertain tax positions as a component of income tax expense, if any, in its consolidated statements of operations. For the year ended December 31, 2022 and the period February 8, 2021 (date of inception) to December 31, 2021, no estimated interest or penalties were recognized on uncertain tax positions. The Company files income tax returns in the U.S. federal tax jurisdiction and various state jurisdictions. Since the Company is in a loss carryforward position, the Company is generally subject to examination by the U.S. federal, state and local income tax authorities for all years in which a loss carryforward is available. The statute of limitations for assessment by federal and state tax jurisdictions in which the Company has business operations is open for the tax year ended December 31, 2022. The tax years subject to examination vary by jurisdiction.

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- 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 http://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 http://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 http://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 http://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 http://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 http://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 http://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 http://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 http://asc.fasb.org/extlink&oid=120395691&loc=d3e23780-122690 + Details
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