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Income Taxes | 12 Months Ended
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Dec. 31, 2021
Income Taxes [Abstract] |
Income Taxes | 19. Income Taxes The components of loss before income taxes for the years ended December 31, 2021 and 2020 were as follows:
|  | Year Ended December 31, |
|  | 2021 |  |  | 2020 |
Domestic |  | $ | (12,852,902 | ) |  | $ | (2,808,067 | )
Foreign |  |  | (8,592,950 | ) |  |  | (312,975 | )
|  | $ | (21,445,852 | ) |  |  | (3,121,042 | )
The components of income tax provision (benefit) for the years ended December 31, 2021 and 2020 were as follows:
|  | Year Ended December 31, |
|  | 2021 |  |  | 2020 |
Federal: |  |  |  |  |  |
Current |  | $ | - |  |  | $ | - |
Deferred |  |  | - |  |  |  | - |
Total federal income tax (benefit) provision |  |  | - |  |  |  | - |
State: |  |  |  |  |  |  |  |
Current |  |  | - |  |  |  | - |
Deferred |  |  | - |  |  |  | - |
Total state income tax (benefit) provision |  |  | - |  |  |  | - |
International (Non-US): |  |  |  |  |  |  |  |
Current |  |  | (71,731 | ) |  |  | - |
Deferred |  |  | (850,779 | ) |  |  | - |
Total international income tax (benefit) provision |  |  | (922,510 | ) |  |  | - |
Total income tax (benefit) provision |  | $ | (922,510 | ) |  | $ | - |
Income tax (benefit) provision differs from the amount that would be provided by applying the statutory U.S. corporate income tax rate of 21% for the years ended December 31, 2021 and 2020 due to the following items:
|  | Year Ended December 31, |
|  | 2021 |  |  | 2020 |
Current tax at U.S. statutory rate |  | $ | (4,503,629 | ) |  | $ | (655,419 | )
Effect of state tax |  |  | (2,322,410 | ) |  |  | (78,345 | )
Effect of valuation allowance |  |  | 9,309,430 |  |  |  | 213,463 |
Warranty Liability |  |  | (4,776,042 | ) |  |  | - |
Effect of non-US income tax rates |  |  | 939,695 |  |  |  | 2,391 |
Net Operating Loss True-Up |  |  | - |  |  |  | 154,533 |
Effect of non-deductible expenses |  |  | - |  |  |  | 184,425 |
Transaction expenses |  |  | 428,384 |  |  |  | - |
Stock compensation |  |  | 282,076 |  |  |  | 182,591 |
Other, net |  |  | (280,014 | ) |  |  | (3,639 | )
Total income tax (benefit) provision |  | $ | (922,510 | ) |  | $ | - |
Deferred tax assets and liabilities are recognized for the anticipated future tax effects of temporary differences between the financial statement basis and the tax basis of the Company’s assets and liabilities at the applicable tax rates in effect. The principal components of Company’s deferred tax assets (liabilities) as of December 31, 2021, and 2020 include the following:
|  | December 31, 2021 |  |  | December 31, 2020 |
Deferred Tax Assets: |  |  |  |  |  |
Net operating loss carryforwards |  | $ | 12,673,332 |  |  | $ | 1,000,520 |
Fixed assets |  |  | - |  |  |  | 32,627 |
Debt costs |  |  | - |  |  |  | 20,490 |
Reserves and accruals |  |  | 932,354 |  |  |  | 203,013 |
Accounts receivable |  |  | - |  |  |  | 36,838 |
Capitalized costs |  |  | - |  |  |  | 198,909 |
Stock compensation |  |  | 1,770,835 |  |  |  | 69,341 |
Other |  |  | 22,915 |  |  |  | 49,655 |
Total deferred tax assets before valuation allowance |  | $ | 15,399,436 |  |  | $ | 1,611,393 |
Less: Valuation Allowance |  |  | (11,773,412 | ) |  |  | (1,597,693 | )
Total deferred tax assets, net of valuation allowance |  | $ | 3,626,024 |  |  | $ | 13,700 |
Deferred Tax Liabilities: |  |  |  |  |  |  |  |
Fixed assets |  |  | (12,039 | ) |  |  | (13,700 | )
Other |  |  | (35,132 | ) |  |  | - |
Intangibles |  |  | (4,833,234 | ) |  |  | - |
Total deferred tax liabilities |  | $ | (4,880,405 | ) |  | $ | (13,700 | )
Net deferred tax assets/(liabilities) |  | $ | (1,254,381 | ) |  | $ | - |
A valuation allowance for deferred tax assets is recorded when it is more likely than not that some or all of the benefit from the deferred tax asset will not be realized. The Company provides a valuation allowance to offset deferred tax assets for net operating losses incurred during the year and for other deferred tax assets where, in the Company’s opinion, it is more likely than not that the financial statement benefit of these losses will not be realized. The Company’s valuation allowance increased by approximately $10.2 million during the year ended December 31, 2021 mainly due to net operating losses generated during the period. As of December 31, 2021, the Company had U.S. federal and state net operating loss carryforwards of $28.2 million and $27.2 million, respectively, which may be used to offset future taxable income, if any. As of December 31, 2020, the Company had U.S. federal and state net operating loss carryforwards of $4.0 million and $2.2 million, respectively, which may be used to offset future taxable income, if any. The Company’s U.S. federal and state net operating loss carryforwards begin to expire in 2033 and the U.S. federal net operating losses generated in 2018- 2021 can be carried forward indefinitely. The Company’s ability to utilize these net operating loss carry-forwards and tax credit carry-forwards may be limited in the future if the Company experiences an ownership change pursuant to Internal Revenue Code Section 382. An ownership change occurs when the ownership percentages of 5% or greater stockholders change by more than 50% over a three-year period. The Company also has net operating loss carryforwards in Greece of approximately $4.2 million that begin to expire in 2026, in Denmark of approximately $8.3 million that can be carried forward indefinitely and in Germany of approximately $14.6 million that can be carried forward indefinitely. As of December 31, 2021 and 2020, the Company had $134,595 of gross unrecognized tax benefits, which would impact the effective tax rate, if recognized. A reconciliation of unrecognized tax benefits is as follows:
|  | Year Ended December 31, |
|  | 2021 |  |  | 2020 |
Balance at beginning of year |  | $ | 134,595 |  |  | $ | 134,595 |
Increase in tax positions for current year |  |  | - |  |  |  | - |
Decrease in tax positions for prior year |  |  | - |  |  |  | - |
Lapse in statute of limitations |  |  | - |  |  |  | - |
Balance at end of year |  | $ | 134,595 |  |  | $ | 134,595 |
The Company’s policy is to classify interest and penalties, if any, as components of the income tax provision in the consolidated statement of operations. The Company has not recorded any interest or penalty in the years ended December 31, 2021 and 2020. The Company expects its unrecognized tax benefits to increase within the next twelve months, but the range cannot be estimated at this time. The Company files income tax returns in the U.S. federal and Massachusetts jurisdictions. The statute of limitations for assessment by the Internal Revenue Service and Massachusetts tax authorities is closed for tax years prior to 2017, although carryforward attributes that were generated prior to tax year 2017 may still be adjusted upon examination by the Internal Revenue Service or Massachusetts tax authorities if they either have been, or will be, utilized in a future period.

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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=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 http://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 http://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 http://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 http://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 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 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 http://asc.fasb.org/extlink&oid=120395691&loc=d3e23780-122690 + Details
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