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INCOME TAXES (Tables)

12 Months Ended

Dec. 31, 2021

Income Tax Disclosure [Abstract]

The following is a geographical breakdown of income/loss before the provision for income tax, for the years ended December 31, 2021 and 2020

The following is a geographical breakdown of income/loss before the provision for income tax, for the years ended December 31, 2021 and 2020:

		2021				2020
Pre-tax income (loss)
U.S. Federal		$	(24,644,000	)		$	(32,382,000	)
Foreign			803,000				(1,030,000	)
Total		$	(23,841,000	)		$	(33,412,000	)

Schedule of deferred tax assets

Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and income tax purposes. Significant components of the Company’s deferred tax assets are as follows:

Schedule of deferred tax assets

		2021				2020
Deferred tax asset:
Allowance for doubtful accounts		$	361,000			$	359,000
Unrealized losses			5,413,000				10,000
Obsolete inventory			375,000				3,000
Stock compensation			1,915,000				881,000
Other carryforwards			132,000				484,000
Net operating loss carryforwards			8,716,000				5,913,000
Lease liability			888,000				798,000
Credit loss			560,000				559,000
Accrued expenses			2,157,000				934,000
Total deferred tax asset			20,517,000				9,941,000
Deferred tax liability:
Right-of-use assets			(857,000	)			(756,000	)
Fixed assets, net			(3,937,000	)			(160,000	)
Intangible assets, net			(256,000	)			(1,000	)
Total deferred income tax liabilities			(5,050,000	)			(917,000	)
Net deferred income tax assets			15,467,000				9,024,000
Valuation allowance			(15,467,000	)			(9,038,000	)
Deferred tax asset (liability), net		$	-			$	(14,000	)

Schedule of reconciliation of income tax attributable to operations

The net income tax provision (benefit) consisted of the following:

Schedule of net income tax benefit

		2021				2020
Current
U.S. Federal		$	69,000			$	-
U.S. State			35,000				-
Foreign			26,000				25,000
Total current provision			130,000				25,000
Deferred
U.S. Federal			-				-
U.S. State			-				-
Foreign			-				(49,000	)
Total deferred provision (benefit)			130,000				(24,000	)
Total provision (benefit) for income taxes		$	130,000			$	(24,000	)

The Company’s effective tax rates were 0.9% and (0.1%) for the years ended December 31, 2021 and 2020, respectively. During the year ended December 31, 2021, the effective tax rate differed from the U.S. federal statutory rate primarily due to the change in valuation allowance. The reconciliation of income tax attributable to operations computed at U.S. Federal statutory income tax rates of 21% to income tax expense is as follows:

Schedule of reconciliation of income tax attributable to operations

		2021				2020
Expected federal income tax benefit			21.0	%			21.0	%
State taxes net of federal benefit			6.1	%			8.1	%
Foreign rate differential			0.3	%			-0.3	%
Section 382 limitation			0.0	%			-34.7	%
PPP forgiveness			0.4	%			0.0	%
Effect of change in valuation allowance			-26.0	%			21.1	%
Beneficial conversion feature			0.0	%			-0.1	%
Deconsolidation of I.AM			0.0	%			1.5	%
Loss on extinguishment of debt			0.0	%			-9.8	%
Return to provision adjustment			0.0	%			-7.8	%
Permanent differences			-0.1	%			0.0	%
IRC Section 162(m) compensation limitation			-0.7	%			0.0	%
Excess tax benefit - windfall/(shortfall)			0.7	%			0.0	%
Other			-2.6	%			0.9	%
Income tax benefit			-0.9	%			-0.1	%

Schedule of reconciliation of income tax attributable to operations

The Company’s effective tax rates were 0.9% and (0.1%) for the years ended December 31, 2021 and 2020, respectively. During the year ended December 31, 2021, the effective tax rate differed from the U.S. federal statutory rate primarily due to the change in valuation allowance. The reconciliation of income tax attributable to operations computed at U.S. Federal statutory income tax rates of 21% to income tax expense is as follows:

Schedule of reconciliation of income tax attributable to operations

		2021				2020
Expected federal income tax benefit			21.0	%			21.0	%
State taxes net of federal benefit			6.1	%			8.1	%
Foreign rate differential			0.3	%			-0.3	%
Section 382 limitation			0.0	%			-34.7	%
PPP forgiveness			0.4	%			0.0	%
Effect of change in valuation allowance			-26.0	%			21.1	%
Beneficial conversion feature			0.0	%			-0.1	%
Deconsolidation of I.AM			0.0	%			1.5	%
Loss on extinguishment of debt			0.0	%			-9.8	%
Return to provision adjustment			0.0	%			-7.8	%
Permanent differences			-0.1	%			0.0	%
IRC Section 162(m) compensation limitation			-0.7	%			0.0	%
Excess tax benefit - windfall/(shortfall)			0.7	%			0.0	%
Other			-2.6	%			0.9	%
Income tax benefit			-0.9	%			-0.1	%

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Tabular disclosure of the components of income tax expense attributable to continuing operations for each year presented including, but not limited to: current tax expense (benefit), deferred tax expense (benefit), investment tax credits, government grants, the benefits of operating loss carryforwards, tax expense that results from allocating certain tax benefits either directly to contributed capital or to reduce goodwill or other noncurrent intangible assets of an acquired entity, adjustments of a deferred tax liability or asset for enacted changes in tax laws or rates or a change in the tax status of the entity, and adjustments of the beginning-of-the-year balances of a valuation allowance because of a change in circumstances that causes a change in judgment about the realizability of the related deferred tax asset in future years.

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Tabular disclosure of the components of net deferred tax asset or liability recognized in an entity's statement of financial position, including the following: the total of all deferred tax liabilities, the total of all deferred tax assets, the total valuation allowance recognized for deferred tax assets.

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Tabular disclosure of the reconciliation using percentage or dollar amounts of the reported amount of income tax expense attributable to continuing operations for the year to the amount of income tax expense that would result from applying domestic federal statutory tax rates to pretax income from continuing operations.

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