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Income Taxes

12 Months Ended

Dec. 31, 2022

Income Taxes

Income Taxes

Note 11 — Income Taxes

The Company files U.S. federal and various state and foreign tax returns.

Pre-tax earnings consisted of the following for the years ended:

​

​	​	​	​	​	​	​	​	​	​
​	​	December 31,		​	December 31,		​	December 31,
​		2022			2021			2020
Pre-Tax Income (Loss)		​			​			​
U.S.	​	$	(41,356,619)	​	$	(39,906,101)	​	$	(18,238,773)
Outside the U.S.	​		593,046	​		(471,059)	​		286,601
Total Pre-Tax Income (Loss)	​	$	(40,763,573)	​	$	(40,377,160)	​	$	(17,952,172)

​

The provision expense/(benefit) for income taxes for the years ended December 31, 2022, 2021 and 2020 was as follows:

​

​	​	​	​	​	​	​	​	​	​
​		2022			2021			2020
U.S. Income Taxes:		​			​			​
Current Provision	​	$	—	​	$	—	​	$	—
Deferred Provision	​		(2,957,991)	​		(8,924,947)	​		(3,897,293)
Valuation Allowance	​		2,957,991	​		8,924,947	​		3,897,293
Income Taxes Outside the U.S.:	​		​	​		​	​		​
Current Provision	​		—	​		—	​		—
Deferred Provision	​		109,107	​		(341,181)	​		7,916
Valuation Allowance	​		(109,107)	​		341,181	​		(7,916)
State Income Taxes:	​		​	​		​	​
Current Provision	​		—	​		—	​		—
Deferred Provision	​		271,248	​		(636,401)	​		(94,324)
Valuation Allowance	​		(271,248)	​		636,401	​		94,324
Total Provision	​	$	—	​	$	—	​	$	—

​

A reconciliation of the statutory U.S. federal income tax rate to the effective rates for the years ended December 31, 2022, 2021 and 2020 is as follows:

​

​	​	​	​	​	​	​
​		2022		2021		2020
​	​	%	​	%	​	%
Federal Income Tax at Statutory Rate		21.0		21.0		21.0
State Tax Provision, Net of Federal Benefit		(0.5)		1.6		0.3
Permanent Differences		(0.4)		—		(0.4)
Forgiveness of PPP Loan	​	—	​	—	​	1.8
Federal Tax Credits		(0.1)		0.2		1.1
Stock Compensation	​	(13.2)	​	1.5	​	(2.1)
Foreign Tax Provision	​	0.1	​	0.6	​	0.3
Expiration of NOL, Credits, Charitable Contribution	​	(0.8)	​	(0.7)	​	0.1
Other		0.2		0.3		0.1
Effective Tax Rate		6.3		24.5		22.2
Change in Valuation Allowance		(6.3)		(24.5)		(22.2)
Net Effective Tax Rate		—		—		—

​

Significant components of the Company’s deferred tax assets and liabilities at year end are as follows:

​

​	​	​	​	​	​	​	​	​	​
​	​	December 31,		​	December 31,		​	December 31,
​		2022			2021			2020
Deferred Tax Assets:		​			​			​
Net Operating Loss Carry-forwards	​	$	38,655,757	​	$	36,705,377	​	$	29,264,829
Tax Credit Carry-forwards	​		4,048,872	​		3,924,660	​		3,778,001
Inventory Valuation Adjustment	​		350,165	​		290,713	​		847,441
Stock-Based Compensation	​		890,169	​		2,989,427	​		208,803
Lease Obligation Liability	​	​	204,141	​	​	240,741	​	​	323,186
Capitalized R&D	​	​	2,265,857	​	​	—	​	​	—
Other	​		702,540	​		425,737	​		368,243
Total Deferred Tax Assets	​		47,117,501	​		44,576,655	​		34,790,503
​	​	​	​	​	​	​	​	​	​
Deferred Tax Liabilities:	​			​			​
​	​	​	​	​	​	​	​	​	​
Income from Foreign Operations	​	​	—	​	​	—	​	​	10,727
Lease Right of Use Asset	​	​	204,141	​	​	240,741	​	​	323,186
Moviynt Intangibles	​	​	3,867	​	​	​	​	​	​
Other	​		—	​		4,057	​		27,262
Total Deferred Tax Liabilities	​		208,008	​		244,798	​		361,175
​	​	​	​	​	​	​	​	​	​
Net Deferred Tax Assets Before Valuation Allowance	​	$	46,909,493	​	$	44,331,857	​	$	34,429,328
Valuation Allowance	​		(46,909,493)	​		(44,331,857)	​		(34,429,328)
​	​	​	​	​	​	​	​	​	​
Net Deferred Tax Assets	​	$	—	​	$	—	​	$	—

​

As of December 31, 2022, the Company has approximately $178 million in US federal net operating loss (NOL) carry-forwards and $2.2 million of Japanese NOL carry-forwards. The federal NOL carry-forwards generated in tax years prior to 2018 began to expire in 2020. The federal NOL carry-forwards created in 2018 - 2022 have no expiration. The Company has state NOL carry-forwards of approximately $8.4 million available in various jurisdictions in which it files that will begin to expire in 2034. The Company also has approximately $4.0 million of federal and state credit carry-forwards. The federal and state credit carry-forwards began to expire during 2018. Utilization of the NOL carry-forwards may be subject to an annual limitation in the case of sufficient equity ownership changes under Section 382 of the tax law or the carry-forwards may expire unutilized.

As a result of the assessment of the FASB ASC 740-10 (Prior Authoritative Literature: FASB Interpretation No. 48 (“FIN 48”), Accounting for Uncertainty in Income Taxes — An Interpretation of FASB Statement No. 109), the Company has no unrecognized tax benefits.

The Company’s U.S. federal and state tax returns for the years 2018 through 2021 remain subject to examination by the respective tax authorities.

FASB ASC 740 (Prior Authoritative Literature: SFAS No. 109, Accounting for Income Taxes), requires recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements or tax returns. Under this method, deferred tax assets and liabilities are determined based on differing treatment of items for financial reporting and income tax reporting purposes. The deferred tax balances are adjusted to reflect tax rates by tax jurisdiction, based on currently enacted tax laws, which will be in effect in the years in which the temporary differences are expected to reverse. In light of the historic losses of the Company, a 100% valuation allowance has been recorded to fully offset any benefit associated with the net deferred tax assets, for which realization is not considered more likely than not to occur.

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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.

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-Name Accounting Standards Codification
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