Income Taxes (Tables)

3 Months Ended

Mar. 31, 2022

Components of Provision for Income Taxes

Significant components of the tax expense (benefit) recognized in the accompanying consolidated statements of operations for the Three Months ended March 31, 2022 and March 31, 2021 are as follows:

	Three Months Ended			Three Months Ended
	March 31, 2022			March 31, 2021
Current tax benefit
Federal	$	(361,715	)	$	911,648
State		(48,102	)		188,624
Total current tax expense (benefit)		(409,817	)		1,100,272
Deferred tax expense		(1,021,132	)		8,214
Valuation allowance (expense)		1,430,949			(1,105,002	)
Income tax (reduction) benefit	$	-		$	3,484

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 23.8% for the Three Months ended March 31, 2022 and 24.3% for the Three Months ended March 31, 2021 to the income tax benefit is as follows:

	Three Months Ended				Three Months Ended
	March 31, 2022				March 31, 2021
Benefit on net loss	$	(1,432,139	)	23.8%	$	1,107,447		24.3%
Nondeductible expenses		1,190		0.0%		1,039		0.0%
Valuation allowance (expense)		1,430,949		(23.8)%		(1,105,002	)	(24.3)%
Tax benefit/effective rate	$	-		(—)%	$	3,484		(—)%

Components of Deferred Tax Assets and Liabilities

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

	As of March 31, 2022			As of December 31, 2021
Deferred tax liabilities:
Deferred vendor stock compensation	$	(182,926	)	$	(261,323	)
Total deferred tax liabilities		(182,926	)		(261,323	)
Deferred tax assets:
Loss carryforwards		2,511,217			2,101,401
Step up in basis at contribution to C-Corp		449,165			461,078
Stock option expense		1,459,575			669,959
Step up in basis - purchase of non-controlling interest		41,439			42,529
Allowance for credit losses		16,539			16,539
Unrealized loss on securities		382,407			216,284
Total deferred tax asset		4,860,342			3,507,790
Valuation allowance		(4,677,416	)		(3,246,467	)
Net deferred tax asset (liability)	$	-		$	-