Income Taxes

12 Months Ended

Dec. 31, 2021

Income Tax Disclosure [Abstract]

Income Taxes

Note 12: Income Taxes

Significant components of deferred tax assets were as follows:

	As of December 31,
	2021			2020
U.S. federal tax loss carry–forward	$	12,785,012		$	4,143,828
U.S. local tax loss carry–forward		1,204,422			389,717
Equity based compensation-RSUs		1,122,020			416,157
Property and equipment		(1,251,926	)		(1,741,690	)
Prepaid rent		(998,606	)		(1,040,888	)
Total deferred tax assets		12,860,922			2,167,124
Less: valuation allowance		(12,860,922	)		(2,167,124	)
Net deferred tax asset	$	—		$	—

As of December 31, 2021, the Company had the following tax attributes:

	Amount		Begins to expire
U.S. federal net operating loss carry–forwards	$	60,881,008		Indefinite
U.S. local net operating loss carry–forwards		60,983,412		2026

As of December 31, 2020, the Company had the following tax attributes:

	Amount		Begins to expire
U.S. federal net operating loss carry–forwards	$	19,732,513		Indefinite
U.S. local net operating loss carry–forwards		19,732,513		2025

As it is not more likely than not that the resulting deferred tax benefits will be realized, a full valuation allowance has been recognized for such deferred tax assets. As of December 31, 2021, the Company has note performed a review of its changes in ownership under Section 382 of the Internal Revenue Code. However, as the Company’s net operating losses have a full valuation allowance, any limitations are expected to be immaterial. For the years ended December 31, 2021 and 2020, the valuation allowance increased by $10,693,798 and $2,167,124, respectively.

The provision for/(benefit from) income tax differs from the amount computed by applying the statutory federal income tax rate to income before the provision for/(benefit from) income taxes. The sources and tax effects of the differences are as follows:

	For the Years Ended December 31,
	2021			2020
Expected Federal Tax		(21.0	)%		(21.0	)%
Local Tax (Net of Federal Benefit)		(2.0	)		(2.0	)
Business Combination Expenses		(0.3	)		22.0
Non-controlling interest		(0.1	)		-
Paycheck Protection Program Loan Forgiveness		(0.1	)		-
Note Extinguishment		-			4.3
Deferred Tax Liabilities Resulting from Business Combination		-			13.2
Change in fair value of warrant liabilities		11.9			(27.1	)
Other permanent differences		-			1.0
Change in valuation allowance		11.6			9.6
Effective rate of income tax		-	%		-	%

The Company files income tax returns in the U.S. federal jurisdiction and local (City of Canton) jurisdictions. As a result of the July 1, 2020 business combination and resulting conversion from a limited liability company to a corporate taxable entity, deferred tax liabilities of $2,995,870 were recognized from accrual and tax timing differences of property and equipment and prepaid rent existing at the time of the merger. Prior to the July 1, 2020 business combination the Company was a pass through entity and was not subject to income tax. The deferred tax liabilities were subsequently offset by the deferred tax assets created primarily from net operating losses incurred during the period from the merger date through the end of the year.