INCOME TAXES

12 Months Ended

Dec. 31, 2023

Income Tax Disclosure [Abstract]

INCOME TAXES

14. INCOME TAXES

US Income Taxes

The components of income tax expense and the effective tax rates for the years ended December 31, 2023 and 2022 are as follows:

	Year Ended December 31,
	2023			2022
Current:
Federal	$	92,350		$	-
State		-			-
Total Current		92,350			-
Deferred:
Federal		6,176,130			(3,905,452	)
State		(454,675	)		1,163,407
Total Deferred		5,721,455			(2,742,045	)
Valuation Allowance		(5,721,455	)		2,742,045
Total Income Tax Expense	$	92,350		$	-
Pre-tax Loss	$	(61,186,383	)	$	(46,212,505	)
Effective Income Tax Rate		-0.2	%		0.0	%

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,
	2023			2022
Federal Statutory Tax Rate		21.0	%		21.0	%
Capitalized Construction Costs		1.5	%		0.0	%
Deferred Finance Costs		-4.0	%		-0.4	%
Miscellaneous Permanent Items		0.0	%		0.2	%
Non includible foreign entities loss/(income)		-7.9	%		-13.8	%
Valuation Allowance		-10.8	%		-7.1	%
Effective Income Tax Rate		-0.2	%		0.0	%

Deferred tax assets consist of the following at December 31, 2023 and 2022:

	2023			2022
Deferred tax assets:
Accrued Interest Expense		6,310,548			5,802,873
Accrued Expense		423,311			1,102,779
Partnership Gain		13,175			13,175
Real Estate Impairment		729,312			2,253,228
Other Amortization		1,160,710			1,160,710
Unrealized Loss on Investment		9,856,139			4,324,883
Others		353,693			377,180
Net Operating Loss		2,846,999			1,297,770
Total deferred tax assets:		21,693,887			16,332,597
Deferred tax liabilities:
Accrued Interest Income		(7,148,090	)		(6,304,175	)
Accumulated Depreciation and Amortization		(204,192	)		(140,886	)
Total deferred tax assets:		(7,352,282	)		(6,445,060	)
Deferred Tax Assets / (Liabilities), net		14,341,605			9,887,537
Less valuation allowance		(14,341,605	)		(9,887,537	)
Deferred Tax Asset c/f		-			-

As of December 31, 2023, the Company has Federal and State net operating loss carry-forwards of approximately $12.36 million, which will begin to expire in 2031. The Maryland net operating loss carry-forward of approximately $3.01 million will begin to expire in 2031. 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, 2023, the valuation allowance increased by $5,721,455.

As of December 31, 2023, total tax payable is $1,390, including federal income tax payable of $33,613, and Maryland state income tax receivable of $32,223. 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.

Net operating loss carryforwards may be limited upon the ownership change under IRS Section 382. IRS Section 382 places limitations (the “Section 382 Limitation”) on the amount of taxable income which can be offset by net operating loss carry-forwards after a change in control (generally greater than 50% change in ownership) of a loss corporation. Generally, after a change in control, a loss corporation cannot deduct operating loss carry-forwards in excess of the Section 382 Limitation. Due to these “change in ownership” provisions, utilization of the net operating loss may be subject to an annual limitation regarding their utilization against taxable income in future periods. The Company has not concluded its analysis of Section 382 through December 31, 2023 but believes the provisions will not limit the availability of losses to offset future income.

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 2019. However, our federal tax returns for the years 2020 through 2022 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, 2023 and 2022, foreign subsidiaries have tax losses of approximately $0.9 million and $4.27 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 2023.

As of December 31, 2023:

	SG Companies			HK Companies			KR Companies			AU Companies			Total
Calculation:
Cumulative loss & other deferred tax assets before tax	$	(5,016,561	)	$	-		$	-		$	-		$	(5,016,561	)
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	$	(852,815	)	$	-		$	-		$	-		$	(852,815	)
Adjustments:
Deferred tax assets not recognized	$	852,815		$	-		$	-		$	-		$	852,815
Income tax expenses recognized in profit or loss	$	-		$	-		$	-		$	-		$	-

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	$	-		$	-		$	-		$	-		$	-