Income Taxes

3 Months Ended

Mar. 31, 2023

Income Tax Disclosure [Abstract]

Income Taxes

Note 13 – Income Taxes

During the year ended December 31, 2021, the Company under new management since 2019 filed returns for 2018, 2019 and 2020. During the year ended December 31, 2022, the Company filed returns for 2021 as well. The Company has filed an extension for its federal and state tax returns for the year ended December 31, 2022.

Based on available information, management believes it is more likely than not that any potential net deferred tax assets as of March 31, 2023 and December 31, 2022 may not be fully realizable. Due to recurring losses, the Company’s tax provisions for the three months ended March 31, 2023 and 2022 were $0.

The difference between the effective income tax rate and the applicable statutory federal income tax rate is summarized as follows:

	2023			2022
Statutory federal rate		-21.0	%		-21.0	%
State income tax rate, net of federal benefit		-3.6	%		-3.6	%
Permanent differences, including stock-based compensation and impairment of acquired assets		8.6	%		8.6	%
Change in valuation allowance		16.0	%		16.0	%
Effective tax rate		0.0	%		0.0	%

FOMO WORLDWIDE, INC AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

MARCH 31, 2023

UNAUDITED

At March 31, 2023 and December 31, 2022, the Company’s deferred tax assets were as follows:

	March 31, 2023			December 31, 2022
Tax benefit of net operating loss carry forward	$	5,170,801		$	4,248,077
less valuation allowance		(5,170,801	)		(4,248,077	)
Net deferred tax assets	$	-		$	-

As of March 31, 2023 the Company had unused net operating loss carry forwards of approximately $21.0 million available to reduce future federal taxable income. Net operating loss carryforwards expire through fiscal years beginning in 2023 and extending to indefinite. Internal Revenue Code Section 382 places a limitation on the amount of taxable income that can be offset by carryforwards after a change in control (generally a greater than 50% change in ownership).

The Company’s ability to offset future taxable income, if any, with tax net operating loss carryforwards may be limited due to the non-filing of tax returns and the impact of the statute of limitations on the Company’s ability to claim such benefits. Furthermore, changes in ownership may result in limitations under Internal Revenue Code Section 382. Due to these limitations, and other considerations, management has established full valuation allowances on deferred tax assets relating to net operating loss carryforward, as the realization of any future benefits from these assets is uncertain.

The Company’s valuation allowance at March 31, 2023 and December 31, 2022 was $5,170,801 and $4,248,077, respectively. The change in the valuation allowance during the three months ended March 31, 2023 was an increase of approximately $922,000.

2013	$	84,206	2023
2014		494,301	2024
2015		680,549	2025
2016		651,537	2026
2017		1,239,493	2027
2018		1,843,498	Indefinite
2019		48,201	Indefinite
2020		140,808	Indefinite
2021		9,262,185	Indefinite
2022		2,823,829	Indefinite
2023		3,750,911	Indefinite
	$	21,019,518