XML 29 R16.htm IDEA: XBRL DOCUMENT
v3.23.1

Income Taxes | 12 Months Ended
--- | ---
Dec. 31, 2022
Income Taxes [Abstract] |
INCOME TAXES | 10. INCOME TAXES Reconciliation of the benefit/ (expense) for income taxes from continuing operations recorded in the consolidated statements of operations with the amounts computed at the statutory federal tax rates for each year:
|  | 2022 |  |  | 2021 |
Federal tax at statutory rate |  | $ | (630,700 | ) |  | $ | 852,198 |
State tax, net of federal tax |  |  | (736,962 | ) |  |  | (487,093 | )
Tax impact on gain on bargain purchase |  |  | (3,036,868 | ) |  |  | - |
Permanent differences |  |  | 123,933 |  |  |  | (259,967 | )
Change in statutory rate |  |  | 7,862 |  |  |  | 59,168 |
Change in valuation allowance |  |  | (12,525,690 | ) |  |  | 614,112 |
Other |  |  | 163,374 |  |  |  | 6,892 |
Benefit/ (expense) for income taxes |  | $ | (16,635,051 | ) |  | $ | 785,310 |
Tax affected components of deferred tax assets and deferred tax liabilities at December 31, 2022 and 2021 were as follows:
|  | 2022 |  |  | 2021 |
Deferred tax assets (liabilities): |  |  |  |  |  |
Equity based compensation |  | $ | 428,111 |  |  | $ | 479,956 |
Allowance for doubtful accounts |  |  | 3,240,968 |  |  |  | 6,847,189 |
Fixed assets |  |  | (9,153,508 | ) |  |  | (8,085,957 | )
Lease impairment |  |  | 989,120 |  |  |  | 423,022 |
Lease Liability |  |  | 439,758 |  |  |  | 481,312 |
Right of use asset |  |  | (348,478 | ) |  |  | (383,924 | )
Accrued expenses |  |  | (16,962 | ) |  |  | - |
Change in fair value of loans receivable |  |  | 2,264,813 |  |  |  | - |
Tax credit carryforward |  |  | 32,394 |  |  |  | 32,394 |
Sec 163(j) carryforward |  |  | 2,703,639 |  |  |  | - |
Federal loss carry-forwards |  |  | 12,304,134 |  |  |  | 11,838,840 |
State loss carry forward |  |  | 3,860,104 |  |  |  | 343,914 |
Intangible assets |  |  | (4,730,265 | ) |  |  | - |
Other |  |  | - |  |  |  | (53,414 | )
Gross deferred tax |  |  | 12,013,828 |  |  |  | 11,923,332 |
Valuation allowance |  |  | - |  |  |  | (12,418,498 | )
Net deferred tax assets/ liability |  | $ | 12,013,828 |  |  | $ | (495,166 | )
During the second quarter of 2022, the Company released the valuation allowance of the Company’s deferred tax asset recorded as of December 31, 2021. The Company had historical cumulative positive pre-tax income plus permanent differences. The realization of the deferred tax asset as of December 31, 2022 is more likely than not based on the Company’s projected taxable income. The release of the deferred tax asset valuation allowance resulted in a tax benefit of approximately $12.5 million in the year ended December 31, 2022. As of December 31, 2022, the Company had federal and state net operating loss carryforwards of $58,591,117 and $8,153,233, respectively available to offset future income. Our federal loss carryforwards do not expire. The Company’s net operating losses may be subject to annual Section 382 of the Internal Revenue Code limitations due to ownership changes that could impact future realization. The components of income tax expense (benefits) for the years ended December 31, 2021 and 2020 were as follows:
|  | 2022 |  |  | 2021 |
Current Income Tax: |  |  |  |  |  |
Federal |  | $ | - |  |  | $ | - |
State |  |  | 754,505 |  |  |  | 290,144 |
Deferred Income Tax: |  |  |  |  |  |  |  |
Federal |  |  | (13,439,360 | ) |  |  | 495,166 |
State |  |  | (3,950,196 | ) |  |  | - |
|  | $ | (16,635,051 | ) |  | $ | 785,310 |
The Company’s effective tax rate for the year ended December 31, 2022 and 2021 differs from the statutory rate of 21% primarily due to state income taxes, permanent differences and the release of the valuation allowance. The Company files tax returns in the U.S. federal jurisdiction and various states. At December 31, 2022, federal tax returns remained open for Internal Revenue Service review for tax years after 2018, while state tax returns remain open for review by state taxing authorities for tax years after 2018. The IRS can examine net operating loss carryforwards from earlier years the extent utilized in years after 2018. During 2019, the Company was notified that its 2017 federal income tax return was selected for examination. In the second quarter of 2021, the IRS completed their review with no changes to the reported tax. There were no other federal or state income tax audits being conducted as of December 31, 2022. The Company completed its analysis and review of all tax positions taken through December 31, 2022 and does not believe that there are any unrecognized tax benefits or liabilities related to tax positions taken on its income tax returns.

X
- References No definition available. + Details
Name: | us-gaap_IncomeTaxDisclosureAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration

X
- 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 https://asc.fasb.org/extlink&oid=121826272&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 https://asc.fasb.org/extlink&oid=122134291&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 https://asc.fasb.org/extlink&oid=121826272&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 https://asc.fasb.org/extlink&oid=122134291&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 https://asc.fasb.org/extlink&oid=121826272&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 https://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 https://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 https://asc.fasb.org/extlink&oid=6424122&loc=d3e41874-109331 Reference 9: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 235 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SX 210.4-08(h)(2)) -URI https://asc.fasb.org/extlink&oid=120395691&loc=d3e23780-122690 + Details
Name: | us-gaap_IncomeTaxDisclosureTextBlock
Namespace Prefix: | us-gaap_
Data Type: | dtr-types:textBlockItemType
Balance Type: | na
Period Type: | duration