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INCOME TAXES | 12 Months Ended
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Dec. 31, 2019
INCOME TAXES |
NOTE 7 - INCOME TAXES | The domestic and foreign components of loss before provision for income taxes were as follows:
|  | 12/31/2019 |  |  | 12/31/2018 |
Domestic |  | $ | (2,515,360 | ) |  | $ | (8,731,677 | )
Foreign |  |  | (600,790 | ) |  |  | (311,655 | )
|  | $ | (3,116,150 | ) |  | $ | (9,043,332 | )
The components of the provision for income taxes are as follows:
|  | 12/31/2019 |  |  | 12/31/2018 |
Current tax provision |  |  |  |  |  |
Federal |  | $ | - |  |  | $ | - |
State |  |  | - |  |  |  | - |
Foreign |  |  | 182,815 |  |  |  | 17,326 |
Total current tax provision |  | $ | 182,815 |  |  | $ | 17,326 |
Deferred tax provision |  |  |  |  |  |  |  |
Domestic |  | $ | - |  |  | $ | - |
State |  |  | - |  |  |  | - |
Foreign |  |  |  |  |  |  |  |
Total deferred tax provision |  | $ | - |  |  | $ | - |
Total current provision |  | $ | 182,815 |  |  | $ | 17,326 |
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, 2019 and 2018 is as follows:
|  | 12/31/2019 |  |  | 12/31/2018 |
US |  |  |  |  |  |
Loss before income taxes |  | $ | (3,116,150 | ) |  | $ | (8,731,677 | )
Taxes under statutory US tax rates |  | $ | (654,391 | ) |  | $ | (1,833,652 | )
Increase (decrease) in taxes resulting from: |  |  |  |  |  |  |  |
Increase in valuation allowance |  | $ | 1,521,175 |  |  | $ | 554,452 |
Foreign tax rate differential |  | $ | 9,028 |  |  | $ | 164,394 |
Permanent differences |  | $ | 94,520 |  |  | $ | 1,628,906 |
Purchase price adjustments |  | $ | - |  |  | $ | 25,202 |
Prior period adjustments |  | $ | (713,466 | ) |  | $ | (375,828 | )
State taxes |  | $ | (74,051 | ) |  | $ | (146,148 | )
Income tax expense |  | $ | 182,815 |  |  | $ | 17,326 |
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:
|  | 12/31/2019 |  |  | 12/31/2018 |
Net operating loss carryforward |  | $ | 1,270,650 |  |  | $ | 904,877 |
Capital loss carryforward |  |  | 801,744 |  |  |  | - |
Nonqualified stock options |  |  | 184,545 |  |  |  | 187,513 |
Accrued expenses |  |  | 7,389 |  |  |  | - |
Depreciation |  |  | 2,418 |  |  |  | 1,602 |
Mark to market adjustment in securities |  |  | 348,422 |  |  |  | - |
Total deferred tax assets |  |  | 2,615,168 |  |  |  | 1,093,992 |
Intangibles |  |  | (10,729 | ) |  |  | (10,729 | )
Goodwill |  |  | (14,473 | ) |  |  | (14,473 | )
Total deferred tax liabilities |  |  | (25,202 | ) |  |  | (25,202 | )
Valuation allowance |  |  | (2,589,966 | ) |  |  | (1,068,790 | )
Net deferred tax assets (liabilities) |  | $ | - |  |  | $ | - |
At December 31, 2019, the Company had U.S. net operating loss carry forwards of approximately $3,817,475 that may be offset against future taxable income, subject to limitation under IRC Section 382. Of the $3.8 million of Federal net operating loss carryforwards, $2.5 million begin to expire in 2031. The remaining balance of $1.3 million is limited in annual usage of 80% of current year’s taxable income, but do not have an expiration. At December 31, 2019, the Company had United Kingdom net operating loss carry forwards of approximately $1 million 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, 2019 or 2018 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 has not recorded a non-cash interest expense deferred tax asset and is currently assessing its realizability. Upon completion of the analysis, deferred tax assets will be adjusted accordingly. 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, 2019 and December 31, 2018, respectively.

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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://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -URI http://asc.fasb.org/topic&trid=2144680 + Details
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