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INCOME TAXES
 12 Months Ended
Dec. 31, 2021
Income Tax Disclosure [Abstract]  
INCOME TAXES

(11) INCOME TAXES

 

Income tax expense consists of:

 

  Current   Deferred   Total 
Year Ended December 31, 2020:               
U.S. Federal  $—   $—   $— 
State and local   11,752    —    11,752 
Foreign   14,964    —    14,964 
   $26,716   $—   $26,716 
Year Ended December 31, 2021:               
U.S. Federal  $—   $—   $— 
State and local   32,069    —    32,069 
Foreign   31,704    —    31,704 
   $63,773   $—   $63,773 

 

 

The principal components of deferred tax assets, net, were as follows at December 31:

 

   2021
(As Restated)		   2020 
Deferred income tax assets:           
Inventories  $

566,403

   $241,874 
Accounts receivable    484,728    445,392 
Accrued expenses   

45,522

   116,254 
Net operating loss and tax credit carry forwards    15,195,123    15,243,998 
Plant and equipment    60,059    39,521 
Stock compensation    65,014    448,375 
Lease accounting     —    248 
Other – interest expense   

74,931

    24,009 
Total deferred income tax assets    16,491,780    16,559,671 
Valuation allowance    (16,491,780)   (16,559,671)
Net deferred tax assets  $  —   $ — 

 

As of December 31, 2021, the Company had Federal net operating loss carry forwards of approximately $62.7 million which are available to offset future taxable income. They are due to expire in varying amounts from 2022 to 2040. Federal net operating losses occurring after December 31, 2018, of approximated $14.5 million may be carried forward indefinitely. As of December 31, 2021, the Company had state net operating loss carry forwards of approximately $19.9 million which are available to offset future taxable income. They are due to expire in varying amounts from 2033 through 2040. A valuation allowance has been established for the full amount of net 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 Federal and state NOLs may be subject to certain limitations under Section 382 of the Internal Revenue Code, which could significantly restrict the Company’s ability to use the NOLs to offset taxable income in subsequent years.

 

The following is a reconciliation of the statutory Federal income tax rate to the actual effective income tax rate for continuing operations:

 

   2021
(As Restated)		   2020 
Federal tax (benefit) rate   20%   21%
Increase (decrease) in taxes resulting from:          
State income taxes   (2)    4 
Change in valuation allowance   (5)   3 
Expiration of NOLs   

—

    (27)
Expiration of stock options   (14)   — 
Permanent differences   (4)   (5)
Changes in Federal and state rates   3    3 
Effective income tax rate   (2)%   (1)%

 

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, 2021 and 2020, the Company did not have any material uncertain tax positions. No interest and penalties related to uncertain tax positions were accrued at December 31, 2021 and 2020.

 

The Company files income tax returns in the U.S., India, and Mexico. Tax years subsequent to 2016 remain subject to examination for both U.S. Federal and state tax reporting purposes. Tax years subsequent to 2015 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 an India operation and has no other operations in a foreign location. The India operation had no tax obligations as of December 31, 2021.