Annual report pursuant to Section 13 and 15(d)

FEDERAL AND STATE INCOME TAXES

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FEDERAL AND STATE INCOME TAXES
 12 Months Ended
Dec. 31, 2023
Income Tax Disclosure [Abstract]  
FEDERAL AND STATE INCOME TAXES

NOTE 6 — FEDERAL AND STATE INCOME TAXES

 

Income tax expense consisted of the following:

           
    Year Ended
December 31,
2023		   Year Ended
December 31,
2022		  
State income tax:          
Current, net of refund   $ 0   $ 0  
Federal income tax:              
Deferred     2,035,297     2,014,018  
Current     —     —  
Write-off of deferred tax asset     (6,002,777 )   —  
Income tax benefit/(expense)   $ (3,967,480 ) $ 2,014,018  

 

The reconciliation of income taxes shown in the financial statements and amounts computed by applying the Federal expected tax rate of 21% for year 2023 and 2022 is as follows:

           
    Year Ended
December 31,
2023		   Year Ended
December 31,
2022		  
           
Loss before taxes   $ (9,773,582 ) $ (10,675,160 )
Income taxes computed at the federal statutory rate   $ 2,052,452   $ 2,241,784  
State income and franchise tax     —     —  
Permanent differences and other     (17,155 )   (227,766 )
Write-off of deferred tax asset     (6,002,777 )   —  
Income tax benefit/(expense)   $ (3,967,480 ) $ 2,014,018  

 

The significant components of deferred income tax assets, net are as follows:

 

    December 31,
2023		   December 31,
2022		  
           
Deferred compensation cost   $ 1,047,608   $ 557,931  
Depreciation and amortization     (913,671 )   (624,184 )
R&D credit     142,030     142,030  
NOL     3,566,630     2,956,685  
Allowance for bad debts and other     2,160,180     935,018  
Allowance for non-realization of deferred tax asset     (6,002,777 )   —  
Deferred income tax assets, net   $ —   $ 3,967,480  

 

Our U.S. federal and state income tax returns remain open to examination for the tax years 2020 through 2022.