INCOME TAXES

12 Months Ended

Dec. 31, 2022

Income Tax Disclosure [Abstract]

INCOME TAXES

13. INCOME TAXES

US Income Taxes

The components of income tax expense and the effective tax rates for the years ended December 31, 2022 and 2021 are as follows:

	Year Ended December 31,
	2022			2021
Current:
Federal	$	-		$	45,736
State		-			46,179
Total Current		-			91,916
Deferred:
Federal		(3,905,452	)		(2,725,007	)
State		1,163,407			(1,266,545	)
Total Deferred		(2,742,045	)		(3,991,553	)
Valuation Allowance		2,742,045			3,991,553
Total Income Tax Expense	$	-		$	91,916
Pre-tax Loss	$	(46,212,505	)	$	(118,483,577	)
Effective Income Tax Rate		0.0	%		-0.1	%

A reconciliation of our income tax expense at federal statutory income tax rate of 21% to our income tax expense at the effective tax rate is as follows:

	Year Ended December 31,
	2022			2021
Federal Statutory Tax Rate		21.0	%		21.0	%
State Income Tax, Net of Federal Income Taxes		0.0	%		0.0	%
Intercompany Management & Oversight Fees		0.0	%		-0.1	%
Capitalized Construction Costs		0.0	%		0.2	%
Minority interest in Partnerships		0.0	%		0.1	%
Deferred Finance Costs		-0.4	%		-0.2	%
Amort of BCF Debt Discount		0.0	%		-9.0	%
Miscellaneous Permanent Items		0.2	%		0.0	%
Non includible foreign entities loss/(income)		-13.8	%		-9.6	%
Valuation Allowance		-7.1	%		-2.5	%
Effective Income Tax Rate		0.0	%		-0.1	%

Deferred tax assets consist of the following at December 31, 2022 and 2021:

	2022			2021
Interest Income		(6,304,175	)		(5,660,333	)
Interest Expense		5,802,873			5,100,076
Depreciation and Amortization		(140,886	)		(10,434	)
Impairment		2,253,228			2,253,228
Accrued Expense		1,102,779			60,662
Unrealized Loss on Investment		4,324,883			2,512,554
Partnership Loss		13,175			13,175
Other Amortization		1,160,710			-
Others		377,180			(224,637	)
Net Operating Loss		1,297,770			2,047,388
		9,887,537			6,091,679
Valuation Allowance		(9,887,537	)		(6,091,679	)
Net Deferred Tax Asset		-			-

As of December 31, 2022, the Company has Federal and State net operating loss carry-forwards of approximately $7,573,000, and $2,020,000, respectively. The full utilization of the deferred tax assets in the future is dependent upon the Company’s ability to generate taxable income. Accordingly, a valuation allowance of an equal amount has been established. During the year ended December 31, 2022, the valuation allowance increased by $3,795,858.

As of December 31, 2022, total tax receivable is $143,574, including federal income tax receivable $111,351, and Maryland state income tax receivable $32,223. As of December 31, 2021, total tax receivable is $151,211, including federal income tax receivable $77,390, and Maryland state income tax receivable $73,821.

We are subject to U.S. federal income tax as well as income tax of certain state jurisdictions. We have substantially concluded all U.S. federal income tax and state tax matters through 2018. However, our federal tax returns for the years 2019 through 2021 remain open to examination. State tax jurisdiction tax years remain open to examination as well, though we believe that any additional assessment would be immaterial to the Consolidated Financial Statements.

Income taxes – Other Countries

On December 31, 2022 and 2021, foreign subsidiaries have tax losses of approximately $4.27 million and $1.99 million, respectively, which are available for offset against future taxable profits, subject to the agreement of the tax authorities and compliance with the relevant provisions. The deferred tax assets arising from these tax losses have not been recognized because it is not probable that future taxable profits will be available to use these tax assets. The following charts show the details in different regions as of December 31, 2022 and 2021.

As of December 31, 2022:

	SG Companies			HK Companies			KR Companies			AU Companies			Total
Calculation:
Cumulative loss & other deferred tax assets before tax	$	(25,140,421	)	$	-		$	-		$	-		$	(25,140,421	)
Effective tax rates		17.00	%		16.50	%		25.00	%		30.00	%
Tax at the domestic tax rates applicable to profits in the countries where the Company operates	$	(4,273,872	)	$	-		$	-		$	-		$	(4,273,872	)
Adjustments:
Deferred tax assets not recognized	$	4,273,872		$	-		$	-		$	-		$	4,273,872
Income tax expenses recognized in profit or loss	$	-		$	-		$	-		$	-		$	-

As of December 31, 2021:

	SG Companies			HK Companies			KR Companies			AU Companies			Total
Calculation:
Cumulative loss & other deferred tax assets before tax	$	(11,692,089	)	$	-		$	-		$	-		$	(11,692,089	)
Effective tax rates		17.00	%		16.50	%		19.24	%		30.00	%
Tax at the domestic tax rates applicable to profits in the countries where the Company operates	$	(1,987,655	)	$	-		$	-		$	-		$	(1,987,655	)
Adjustments:
Deferred tax assets not recognized	$	1,987,655		$	-		$	-		$	-		$	1,987,655
Income tax expenses recognized in profit or loss	$	-		$	-		$	442,098		$	-		$	442,098