Income taxes

12 Months Ended

Dec. 31, 2022

Income Tax Disclosure [Abstract]

Income taxes

23. Income taxes

The Company is current in its US and Canadian tax filings as of December 31, 2022. 

The income tax provision/ (benefit) is different from that which would be obtained by applying the statutory Federal income tax rate of 21% and applicable state tax rates of 5% to income before income tax expense. The items causing this difference for the years ended December 31, 2022 and 2021 are as follows: 

	Year ended December 31, 2022			Year ended December 31, 2021
Taxation (charge) credit at the federal and state statutory rate		(85,555)			478,522
State taxation		(29,345	)
Prior year over provision		—			250,000
Foreign taxation		—			(5,309	)
Permanent differences		235,762			(271,310	)
Foreign tax rate differential		—			(100	)
Net operating loss utilized		(233,082)			5,594
Valuation allowance		—			(176,494	)
Net future tax asset		(112,220	)		280,903

Deferred income taxes reflect the net tax effect of temporary differences between the carrying amount of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. Significant components of deferred tax assets and liabilities at December 31, 2021 and 2020 are as follows:

	December 31, 2022			December 31, 2021
Net operating losses
Net operating loss carry forward		34,945,459			34,278,915
Prior year adjustment to opening balances		—			—
Foreign exchange differential		(105,379	)		8,466
Net operating loss utilized		(3,514,804)			(20,719	)
Net taxable loss		4,624,718			678,797
Disposal of subsidiary		(4,872,047	)
Valuation allowance		(31,077,947)			(34,945,459	)
Net future tax asset		—			—

The company has established a valuation allowance against its gross deferred tax assets sufficient to bring its net deferred tax assets to zero due to the uncertainty surrounding the realization of such assets. Management has determined it is more likely than not that the net deferred tax assets are not realizable due to the Company’s historical loss position. The valuation allowance for the year ended December 31, 2022 decreased by $3,867,512. This was due to the utilization of $(3,514,804) of net operating losses, the generation of additional losses of $4,624,718 and the disposal of a foreign subsidiary with a net operating loss of $(4,872,047).

As of December 31, 2022, the prior three tax years remain open for examination by the federal or state regulatory agencies for purposes of an audit for tax purposes.

Pursuant to the Internal Revenue Code of 1986, as amended (“IRC”), §382, the Company’s ability to use its net operating loss carry forwards to offset future taxable income is limited if the Company experiences a cumulative change in ownership of more than 50% within a three-year period.

The Company operates in foreign jurisdictions and is subject to audit by taxing authorities. These audits may result in the assessment of amounts different than the amounts recorded in the consolidated financial statements. The Company liaises with the relevant authorities in these jurisdictions in regard to its income tax and other returns. Management believes the Company has adequately provided for any taxes, penalties and interest that may fall due.