Quarterly report pursuant to Section 13 or 15(d)

INCOME TAXES

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INCOME TAXES
 3 Months Ended
Mar. 31, 2022
INCOME TAXES  
INCOME TAXES

NOTE 15 – INCOME TAXES

The effective tax rate was 0% for the three months ended March 31, 2022 and 2021. The effective tax rate differs from the federal tax rate of 21% for the three months ended March 31, 2022 and 2021 due primarily to the full valuation allowance, and other discrete items.

At December 31, 2021, the Company had federal and state net operating losses (“NOLs”) in the amount of $10,687,462 and $11,173,080 respectively. These NOLs expire from 2031 to 2041 or have indefinite lives. However, the Tax Cuts & Jobs Act of 2017 limits the amount of net operating loss utilized each year after December 31, 2020 to 80% of taxable income.

Income tax expense is recorded using the asset and liability method. Deferred tax assets and liabilities are recognized for the expected future tax consequences attributable to temporary differences between amounts reported for income tax purposes and financial statement purposes, using current tax rates. A valuation allowance is recognized if it is anticipated that some or all of a deferred tax asset will not be realized. The Company must assess the likelihood that its deferred tax assets will be recovered from future taxable income and, to the extent that the Company believes that recovery is not likely, it must establish a valuation allowance. Significant management judgment is required in determining the provision for income taxes, deferred tax assets and liabilities and any valuation allowance recorded against net deferred tax assets.

The Company and its subsidiaries income tax returns for 2019 and 2020 are open to review by the tax authorities.