XML 25 R15.htm IDEA: XBRL DOCUMENT

INCOME TAXES

12 Months Ended

Dec. 31, 2018

Notes to Financial Statements

NOTE 9 - INCOME TAXES

The reconciliation of income tax expense computed at the U.S. federal statutory rate to the income tax provision for the years ended December 31, 2018 and 2017 is as follows:

		12/31/2018				12/31/2017
US
Income before income taxes		$	(8,731,677	)		$	(6,209,768	)
Taxes under statutory US tax rates		$	(1,833,652	)		$	(2,111,321	)
Increase (decrease) in taxes resulting from:
Increase (decrease) in valuation allowance		$	554,452			$	156,724
Foreign tax rate differential		$	164,394			$	424,810
Tax Cuts and Jobs Act		$	-			$	181,881
Permanent differences		$	1,628,906			$	1,384,635
Purchase price adjustments		$	25,202			$	-
Discrete items		$	(318,892	)		$	-
State taxes		$	(146,148	)		$	(31,629	)
Income tax (expense) benefit		$	74,263			$	5,100

On December 22, 2017, the Tax Cuts and Jobs Act (“The Act”), was signed into law by President Trump. The Act includes a number of provisions, including the lowering of the U.S. corporate tax rate from 35 percent to 21 percent, effective January 1, 2018 and the establishment of a territorial-style system for taxing foreign-source income of domestic multinational corporations. In December 2017, the SEC issued Staff Accounting Bulletin No. 118, Income Tax Accounting Implications of the Act (“SAB118”), which allows us to record provisional amounts during a measurement period not to extend beyond one year of the enactment. The Company remeasured its deferred tax assets and liabilities as of December 31, 2017, applying the reduced corporate income tax rate and recorded a provisional decrease to the deferred tax assets of $181,881, with a corresponding adjustment to the valuation allowance. In the fourth quarter of 2018, we completed our analysis to determine the effect of the Tax Act and there were no material adjustments as of December 31, 2018.

Deferred income taxes reflect the net tax effects of temporary differences between the carrying amount of assets and liabilities for financial reporting purposes and amounts used for income tax purposes. Significant components of the Company's deferred tax assets and liabilities consist of the following:

		12/31/2018				12/31/2017
Net Operating Loss Carryforward		$	904,877			$	514,338
Nonqualified Stock Options			187,513				-
Depreciation			1,602				-
Total Deferred tax assets			1,093,992				514,338

Intangibles			(10,729	)			-
Goodwill			(14,473	)			-
Total Deferred tax liabilities			(25,202	)			-
Valuation allowance			(1,068,790	)			(514,338	)
Net deferred tax assets (liabilities)		$	-			$	-

At December 31, 2018, the Company had U.S. net operating loss carry forwards of approximately $2,422,876 that may be offset against future taxable income, subject to limitation under IRC Section 382. Of the $2.4 million, of Federal net operating loss carryforwards, $2.2 million begin to expire in 2031. The remaining balance of $.2 million is limited in annual usage of 80% of current year’s taxable income, but do not have an expiration. At December 31, 2018, the Company had Greece net operating loss carry forwards of approximately $847,896 that may be offset against future taxable income which begin to expire in 2019. At December 31, 2018, the Company had United Kingdom net operating loss carry forwards of approximately $847,896 that may be offset against future taxable income part or all of which may not be available to offset our future taxable income in the United Kingdom should there be a change in the nature or conduct of our business in the United Kingdom within the three years subsequent to the date of our acquisition of Decahedron. No tax benefit has been reported in the December 31, 2018 or 2017 consolidated financial statements due to the uncertainty surrounding the realizability of the benefit, based on a more likely than not criteria and in consideration of available positive and negative evidence.

The Company applied the "more-likely-than-not" recognition threshold to all tax positions taken or expected to be taken in a tax return, which resulted in no unrecognized tax benefits as of December 31, 2018 and December 31, 2017, respectively.