XML 34 R22.htm IDEA: XBRL DOCUMENT
v3.22.1

Income Taxes | 12 Months Ended
--- | ---
Dec. 31, 2021
Income Taxes |
Income Taxes | 14. Income Taxes Income tax provision (benefit) is as follows for the years ended:
|  | DECEMBER 31, |
|  | 2021 |  |  | 2020 |
Current provision |  |  |  |  |  |
State |  | $ | 100,000 |  |  | $ | 68,541 |
Foreign |  |  | 50,165 |  |  |  | 6,577 |
Total |  |  | 150,165 |  |  |  | 75,118 |
Deferred provision (benefit) |  |  |  |  |  |  |  |
Federal |  |  | 567,316 |  |  |  | (6,651,247 | )
State |  |  | (83,032 | ) |  |  | (823,822 | )
Foreign |  |  | 5,998 |  |  |  | - |
Total |  |  | 490,282 |  |  |  | (7,475,069 | )
Income tax provision (benefit) |  | $ | 640,447 |  |  | $ | (7,399,951 | )
Income tax provision (benefit) effective rates, which differs from the federal and state statutory rate as follows for the years ended:
|  | DECEMBER 31, |
|  | 2021 |  |  | 2020 |
Statutory federal income tax rate |  |  | 21.0 | % |  |  | 21.0 | %
State, net of federal benefit |  |  | 7.5 | % |  |  | 7.0 | %
Non-deductible expenses |  |  | 19.7 | % |  |  | 0.8 | %
Change in valuation allowance |  |  | 15.1 | % |  |  | 281.2 | %
Foreign rate differential |  |  | 3.8 | % |  |  | 0.0 | %
Return to accrual difference true-ups |  |  | 15.1 | % |  |  | 1.4 | %
Other |  |  | (0.1 | )% |  |  | 1.1 | %
Deferred tax adjustment and true-up |  |  | 88.2 | % |  |  | 3.4 | %
Combined effective tax rate |  |  | 62.9 | % |  |  | 253.1 | %
The tax effects of temporary differences that give rise to significant portions of the Company’s deferred tax assets (liabilities) consisted of the following:
|  | DECEMBER 31, |
|  | 2021 |  |  | 2020 |
Deferred tax assets: |  |  |  |  |  |
Net operating loss carryforwards |  | $ | 9,501,008 |  |  | $ | 9,711,726 |
Alternative minimum tax credit |  |  | 45,650 |  |  |  | 45,650 |
Share-based compensation |  |  | 659,338 |  |  |  | 627,980 |
Intangible amortization |  |  | 208,036 |  |  |  | 473,882 |
Lease liability |  |  | 1,554,888 |  |  |  | 1,522,560 |
Other assets |  |  | 251,553 |  |  |  | 107,682 |
Total deferred tax assets |  |  | 12,220,473 |  |  |  | 12,489,480 |
Less: valuation allowance |  |  | (1,999,630 | ) |  |  | (2,152,768 | )
Total deferred tax assets, net |  |  | 10,220,843 |  |  |  | 10,336,712 |
Deferred tax liabilities: |  |  |  |  |  |  |  |
Goodwill amortization |  |  | 3,041,451 |  |  |  | 2,786,029 |
Depreciation |  |  | 210,755 |  |  |  | 177,170 |
Foreign intangible amortization |  |  | 409,269 |  |  |  | 336,759 |
Other liabilities |  |  | 12,830 |  |  |  | 12,819 |
Lease asset |  |  | 1,419,056 |  |  |  | 1,417,856 |
Total deferred tax liabilities |  |  | 5,093,361 |  |  |  | 4,730,633 |
Net deferred tax asset |  | $ | 5,127,482 |  |  | $ | 5,606,079 |
As of December 31, 2021, the Company had approximately $34.4 million in net operating loss (NOL) carry forwards available to offset future taxable income for federal income tax purposes. These federal NOL carry forwards expire between 2022 to 2038. Included in the recorded deferred tax asset, the Company had a benefit of approximately $38.4 million available to offset future taxable income for state income tax purposes. These state NOL carry forwards expire between 2024 and 2036. Under the provisions of the Internal Revenue Code, the net operating losses (“NOL”) and tax credit carryforwards are subject to review and possible adjustment by the Internal Revenue Service and state tax authorities. NOL 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 of 1986, respectively, as well as similar state tax provisions. This could limit the amount of tax attributes that the Company can utilize annually to offset future taxable income or tax liabilities. The amount of the annual limitation, if any, will be 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. This annual limitation may result in the expiration of the net operating losses and credits before utilization. Changes in the valuation allowance for the years ended were as follows:
|  | DECEMBER 31, |
|  | 2021 |  |  | 2020 |
Beginning balance |  | $ | (2,152,768 | ) |  | $ | (10,364,787 | )
Decreases (increases) |  |  | 153,138 |  |  |  | 8,212,019 |
Ending balance |  | $ | (1,999,630 | ) |  | $ | (2,152,768 | )
The Company’s valuation allowance predominantly consisted of domestic net operating loss carryforwards and certain state net operating loss carryforwards. As of each reporting date, management considers new evidence, both positive and negative, that could affect its view of the future realization of deferred tax assets. As of December 31, 2020, in part because in the prior year we achieved three years of cumulative pretax income in the U.S. federal tax jurisdiction, management determined that there is sufficient positive evidence to conclude that it is more likely than not that additional deferred taxes are realizable. It therefore reduced the valuation allowance accordingly. During 2020, the Company released $8.2 million of the deferred tax asset valuation allowance to offset the regular tax expense generated by current earnings. In the future, changes in the Company’s valuation allowance may result from, among other things, additional pretax operating losses resulting in increases in our valuation allowance or pretax operating income resulting in decreases in our valuation allowance. The Company files U.S. federal income tax returns with the Internal Revenue Service (“IRS”) as well as income tax returns in various states and certain foreign countries. The Company may be subject to examination by the IRS for tax years 2003 and forward. The Company may be subject to examinations by various state taxing jurisdictions for tax years 2003 and forward. The Company may be subject to examination by various foreign countries for tax years 2014 forward. As of December 31, 2021, the Company is currently not under examination by the IRS, any state or foreign tax jurisdiction. The Company did not have any unrecognized tax benefits at either December 31, 2021 or 2020. In the future, any interest and penalties related to uncertain tax positions will be recognized in income tax expense.

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 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
Name: | us-gaap_IncomeTaxDisclosureTextBlock
Namespace Prefix: | us-gaap_
Data Type: | dtr-types:textBlockItemType
Balance Type: | na
Period Type: | duration