Income Taxes

12 Months Ended

Dec. 31, 2021

Income Taxes [Abstract]

Income Taxes

 Note 17 - Income Taxes

The Company is subject to taxation at the federal level in both the United States and France and at the state level in the United States. At December 31, 2021 and 2020, the Company had no tax provision for either jurisdictions.

At December 31, 2021 and 2020, the Company had gross deferred tax assets of approximately $31.6 million and $26.1 million, respectively. As the Company cannot determine that it is more likely than not that the Company will realize the benefit of the deferred tax asset, a valuation allowance of approximately $31.6 million and $26.1 million has been established at December 31, 2021 and 2020, respectively. The change in the valuation allowance was approximately $5.6 million and $9.7 million in 2021 and 2020, respectively.

The significant components of the Company’s net deferred tax assets consisted of: 

	December 31,
		2021			2020
Gross deferred tax assets:
Net operating loss carry-forwards	$	30,576,000		$	24,269,000
Temporary differences:
Stock compensation		112,000			1,408,000
Accruals		30,000			76,000
Change in accounts payable		138,000			-
Other		791,000			639,000
Amortization		-			(319,000	)
Deferred tax asset valuation allowance		(31,647,000	)		(26,073,000	)
Net deferred tax asset	$	-		$	-

Income taxes computed using the federal statutory income tax rate differs from the Company’s effective tax rate primarily due to the following:

	December 31,
	2021			2020
Income taxes benefit (expense) at statutory rate		21.0	%		21.0	%
State income tax		4.2	%		14.0	%
Non-deductible expense		(10.3	%)		(12.0	%)
Change in valuation allowance		(9.5	%)		(23.0	%)
Prior year adjustments		(4.7	%)		-	%
Other		(0.7	%)		-	%
		0	%		0	%

The Company has gross net operating loss (“NOL”) carryforwards for U.S. federal and state income tax purposes of approximately $79.1 million and $51.4 million, at December 31, 2021 and 2020, respectively. The NOL’s expire between the years 2034 and 2039. The Company’s ability to use its NOL carryforwards may be limited if it experiences an “ownership change” as defined in Section 382 of the Internal Revenue Code of 1986, as amended. An ownership change generally occurs if certain stockholders increase their aggregate percentage ownership of a corporation’s stock by more than 50 percentage points over their lowest percentage ownership at any time during the testing period, which is generally the three-year period preceding any potential ownership change. The Company has not completed a study to determine whether transactions that have occurred over the past three years may have triggered an ownership change limitation.

The Company had approximately $27.1 million and $23.0 million in net operating losses, at December 31, 2021 and 2020, respectively, which it can carryforward indefinitely to offset against future French income. 

The Company had taken no uncertain tax positions that would require disclosure under ASC 740, Accounting for Income Taxes, at December 31, 2021 and 2020, respectively.