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Income Taxes | 12 Months Ended
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Dec. 31, 2020
Income Tax Disclosure [Abstract] |
Income Taxes | NOTE 14 – INCOME TAXES As of December 31, 2020, the Company had net operating loss carry-forwards for federal income tax purposes of approximately $19.3 million, consisting of pre-2018 losses in the amount of approximately $13.3 million that expire from 2020 through 2037, and post-2017 losses in the amount of approximately $6 million that never expire. These net operating losses are available to offset future taxable income. The Company was formed in 2006 as a limited liability company and changed to a corporation in 2007. Activity prior to incorporation is not reflected in the Company’s corporate tax returns. In the future, the cumulative net operating loss carry-forward for income tax purposes may differ from the cumulative financial statement loss due to timing differences between book and tax reporting. The provision for Federal income tax consists of the following for the years ended December 31, 2020 and 2019:
|  | 2020 |  |  | 2019 |
Federal income tax benefit (expense) attributable to: |  |  |  |  |  |
Current operations |  | $ | 463,000 |  |  | $ | 848,000 |
Acquisition costs |  |  | - |  |  |  | (143,000 | )
Change in fair value of contingent consideration |  |  | (29,000 | ) |  |  | (133,000 | )
Other permanent items |  |  | 200,000 |  |  |  | 29,000 |
Deferred adjustment |  |  | (913,000 | ) |  |  | (913,000 | )
Other adjustments |  |  | 104,000 |  |  |  | - |
NOLs expiring |  |  | (209,000 | ) |  |  | - |
Valuation allowance |  |  | (529,000 | ) |  |  | 1,209,960 |
Net provision for federal income tax |  | $ | - |  |  | $ | 897,960 |
|  | 2020 |  |  | 2019 |
Current tax benefit (expense) - Federal |  | $ | - |  |  | $ | - |
Deferred tax benefit (expense) - Federal |  |  | - |  |  |  | - |
Adjustment of valuation allowance from business combination |  |  | - |  |  |  | 897,960 |
Total tax benefit (expense) on income |  | $ | - |  |  | $ | 897,960 |
The cumulative tax effect of significant items comprising our net deferred tax amount at the expected rate of 21% is as follows as of December 31, 2020 and 2019:
|  | 2020 |  |  | 2019 |
Deferred tax asset attributable to: |  |  |  |  |  |
Net operating loss carryover |  | $ | 4,057,000 |  |  | $ | 3,839,000 |
Stock compensation |  |  | 353,000 |  |  |  | 320,000 |
Operating lease liability |  |  | 94,000 |  |  |  | - |
Other |  |  | 44,000 |  |  |  | 36,000 |
Deferred tax asset |  | $ | 4,548,000 |  |  | $ | 4,195,000 |
Deferred tax liabilities attributable to: |  |  |  |  |  |  |  |
Fixed assets |  | $ | - |  |  | $ | (13,000 | )
Intangibles |  |  | (2,181,000 | ) |  |  | (2,438,000 | )
Operating lease right of use assets |  |  | (94,000 | ) |  |  | - |
Other |  |  | (16,000 | ) |  |  | (16,000 | )
Deferred tax liability |  | $ | (2,291,000 | ) |  | $ | (2,467,000 | )
Valuation allowance |  | $ | (2,257,000 | ) |  | $ | (1,728,000 | )
Net deferred tax asset |  | $ | - |  |  | $ | - |
The ultimate realization of deferred tax assets is dependent upon the Company’s ability to generate sufficient taxable income during the periods in which the net operating losses expire and the temporary differences become deductible. The Company has determined that there is significant uncertainty that the results of future operations and the reversals of existing taxable temporary differences will generate sufficient taxable income to realize the deferred tax assets; therefore, a valuation allowance has been recorded. In making this determination, the Company considered historical levels of income, projections for future periods, and the significant amount of tax deductions to be generated from the future exercise of stock options. The tax years 2017 to 2020 remain open for potential audit by the Internal Revenue Service. There are no uncertain tax positions as of December 31, 2019 or December 31, 2020, and none are expected in the next 12 months. The Company’s foreign subsidiaries are cost centers that are primarily reimbursed for expenses, as a result they generate an immaterial amount of income or loss. Pretax book income (loss) is all from domestic operations. Up to four years of returns remain open for potential audit in foreign jurisdictions, however any audits for periods prior to ownership by the Company are the responsibility of the previous owners. Under certain circumstances issuance of common shares can result in an ownership change under Internal Revenue Code Section 382, which limits the Company’s ability to utilize carry-forwards from prior to the ownership change. Any such ownership change resulting from stock issuances and redemptions could limit the Company’s ability to utilize any net operating loss carry-forwards or credits generated before this change in ownership. These limitations can limit both the timing of usage of these laws, as well as the loss of the ability to use these net operating losses. It is likely that fundraising activities have resulted in such an ownership change.

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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=84230637&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=116825942&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=84230637&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=116825942&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=84230637&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 + Details
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