Income Taxes (Tables)

9 Months Ended

Sep. 30, 2022

Income Tax Disclosure [Abstract]

Components of Provision for Income Taxes

Significant components of the tax expense (benefit) recognized in the accompanying consolidated statements of operations for the Three and Nine Months ended September 30, 2022 and September 30, 2021 are as follows:

	Three Months Ended			Three Months Ended			Nine Months Ended			Nine Months Ended
	September 30, 2022			September 30, 2021			September 30, 2022			September 30, 2021
Current tax benefit
Federal	$	2,499,186		$	(1,159,524	)	$	1,135,644		$	2,078,774
State		458,158			(321,397	)		176,034			348,622
Total current tax expense (benefit)		2,957,344			(1,480,921	)		1,311,678			2,427,396
Deferred tax expense		(1,153,380	)		12,619			(231,454	)		34,614
Change in tax rates		423,630			-			211,815			-
Valuation allowance		(915,916	)		1,480,921			19,639			(2,432,127	)
Income tax expense	$	1,311,678		$	12,619		$	1,311,678		$	29,883

Schedule of Reconciliation of Tax Provision with Expected Provision

The reconciliation of the income tax computed at the combined federal and state statutory rate of (24.2%) and (27.0%) for the Three and Nine Months ended September 30, 2022 and (0.2%) and 0.3% for the Three and Nine Months ended September 30, 2021 to the income tax benefit is as follows:

	Three Months Ended				Three Months Ended				Nine Months Ended					Nine Months Ended
	September 30, 2022				September 30, 2021				September 30, 2022					September 30, 2021
Benefit on net loss	$	(488,094	)	9.0%	$	(1,469,827	)	26.7%	$	(1,219,660	)	25.1%		$	2,458,947		23.8%
Section 382 adjustment		2,299,884		(42.5)%		-		-		2,299,884		(47.3)%			-			-
Non deductible expenses		(7,826	)	0.1%		1,525		-		-			-		3,063			0.0	%
Valuation Allowance		(915,916	)	17.0%		1,480,921		(26.9)%		19,639		(0.4)%			(2,432,127	)	(23.5)%
Tax rate change		423,630		(7.8)%		-		-		211,815		(4.4)%			-			-
Tax benefit/effective rate	$	1,311,678		(24.2)%	$	12,619		(0.20)%	$	1,311,678		(27.0)%		$	29,883		0.3%

Components of Deferred Tax Assets and Liabilities

The significant components of the Company’s deferred tax liabilities and assets as of September 30, 2022 and December 31, 2021 are as follows:

	As of September 30, 2022			As of December 31, 2021
Deferred tax liabilities:
Right to Use asset	$	73,366		$	-
State income taxes		62,950			-
Subsidiary		203,213			-
Loss from partnership		14,985			-
Collection costs		65,098			-
Unrealized gain on securities		2,787,425			-
Deferred vendor stock compensation		-			261,323
Total deferred tax liabilities		3,207,037			261,323
Deferred tax assets:
Loss carryforwards		2,078,549			2,101,401
Step up in basis at contribution to C-Corp		437,712			461,078
Stock option expense		3,237,074			669,959
Step up in basis - purchase of non-controlling interest		41,819			42,529
Allowance for credit losses		1,770			16,539
Right to Use assets		74,315			-
Digital asset impairment loss		107,535			-
Unrealized loss on securities		455,091			216,284
Total deferred tax asset		6,433,865			3,507,790
Valuation allowance		(3,226,828	)		(3,246,467	)
Net deferred tax asset (liability)	$	-		$	-