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12. INCOME TAXES | 12 Months Ended
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Dec. 31, 2020
Income Tax Disclosure [Abstract] |
INCOME TAXES | Income tax expense consists of:
|  | Current |  |  | Deferred |  |  | Total |
Year Ended December 31, 2019: |  |  |  |  |  |  |  |  |
U.S. federal |  | $ | –– |  |  | $ | –– |  |  | $ | –– |
State and local |  |  | 10,792 |  |  |  | –– |  |  |  | 10,792 |
Foreign |  |  | 14,073 |  |  |  | –– |  |  |  | 14,073 |
|  | $ | 24,865 |  |  | $ | –– |  |  | $ | 24,865 |
Year Ended December 31, 2020: |  |  |  |  |  |  |  |  |  |  |  |
U.S. federal |  | $ | –– |  |  | $ | –– |  |  | $ | –– |
State and local |  |  | 11,752 |  |  |  | –– |  |  |  | 11,752 |
Foreign |  |  | 14,964 |  |  |  | –– |  |  |  | 14,964 |
|  | $ | 26,716 |  |  | $ | –– |  |  | $ | 26,716 |
A reconciliation of the expected income tax expense or benefit to actual follows:
|  | 2019 |  |  | 2020 |
Computed "expected" US benefit at Federal statutory rate |  | $ | (685,652 | ) |  | $ | (807,799 | )
Change resulting from: |  |  |  |  |  |  |  |
State and local income taxes, net of federal income tax benefit |  |  | (102,770 | ) |  |  | (145,891 | )
Valuation allowance |  |  | 411,810 |  |  |  | (121,000 | )
Non––deductible items |  |  | 87,998 |  |  |  | 394,236 |
Expired Federal net operating loss |  |  | 218,376 |  |  |  | 1,043,171 |
Federal and state rate changes |  |  | 95,103 |  |  |  | (113,340 | )
Non-taxable PPP loan forgiveness |  |  | –– |  |  |  | (222,661 | )
Income tax expense |  | $ | 24,865 |  |  | $ | 26,716 |
Temporary differences at December 31 follow:
|  | 2019 |  |  | 2020 |
Deferred income tax assets: |  |  |  |  |  |
Inventories |  | $ | 145,884 |  |  | $ | 241,874 |
Accounts receivable |  |  | 253,559 |  |  |  | 445,392 |
Accrued expenses |  |  | 80,068 |  |  |  | 116,254 |
Net operating loss and tax credit carry forwards |  |  | 13,276,081 |  |  |  | 15,243,998 |
Plant and equipment |  |  | 6,014 |  |  |  | 39,521 |
Stock compensation |  |  | 123,841 |  |  |  | 448,375 |
Lease accounting |  |  | 26,515 |  |  |  | 248 |
Other – interest expense |  |  | 12,385 |  |  |  | 24,009 |
Total deferred income tax assets |  |  | 13,924,347 |  |  |  | 16,559,671 |
Valuation allowance |  |  | (13,924,347 | ) |  |  | (16,559,671 | )
Net deferred tax assets |  | $ | –– |  |  | $ | –– |
On December 22, 2017, the U.S. government enacted comprehensive tax legislation commonly referred to as the Tax Cuts and Jobs Act (the “Tax Act”) that significantly revised the U.S. tax code effective January 1, 2018 by, among other things, lowering the corporate income tax rate from a top marginal rate of 35% to a flat 21%. Other than the reduction in statutory rate, the Company does not anticipate the regulations will have a material impact on income taxes in future years. As of December 31, 2020, the Company had federal net operating loss carry forwards of approximately $61,779,000 which are available to offset future taxable income. They are due to expire in varying amounts from 2021 to 2039. Federal net operating losses occurring after December 31, 2017, of approximated $13,617,000 may be carried forward indefinitely. As of December 31, 2020, the Company had state net operating loss carry forwards of approximately $19,151,000 which are available to offset future taxable income. They are due to expire in varying amounts from 2032 through 2039. The Company’s merger with Minim in 2020 triggered a change of ownership that may limit the use of our net operating losses. The Company is in the process of determining the impact of any such limitation. A valuation allowance has been established for the full amount of deferred income tax assets as management has concluded that it is more-likely than-not that the benefits from such assets will not be realized. The Company reviews annually the guidance for the financial statement recognition, measurement and disclosure of uncertain tax positions recognized in the financial statements. Tax positions must meet a "more-likely-than-not" recognition threshold. At December 31, 2020 and 2019, the Company did not have any uncertain tax positions. No interest and penalties related to uncertain tax positions were accrued at December 31, 2020 and 2019. The Company files income tax returns in the United States and Mexico. Tax years subsequent to 2016 remain subject to examination for both US federal and state tax reporting purposes. Tax years subsequent to 2014 remain subject to examination for Mexico tax reporting purposes. The foreign income tax reported represents tax on operations for the Company that is located in a special economic zone in Mexico. Other than the Mexico facility, the Company has no operations in a foreign location.

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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://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=84230637&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=116825942&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=84230637&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=116825942&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=84230637&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 + Details
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