Annual report pursuant to Section 13 and 15(d)

Income Taxes

Income Taxes

12 Months Ended

Dec. 31, 2020

NOTE 20 - INCOME TAXES

As of December 31, 2020, we estimate we will have net operating loss carryforwards available to offset future federal income tax of approximately $21.1 million. These carryforwards will expire between the years 2028 through 2037. Under the Tax Reform Act of 1986, the amount of and the benefit from net operating losses that can be carried forward may be limited in certain circumstances. Events that may cause changes in our tax carryovers include, but are not limited to, a cumulative ownership change of more than 50% over a three-year period. Therefore, the amount available to offset future taxable income may be limited. We carry a deferred tax valuation allowance equal to 100% of total deferred assets. In recording this allowance, we have considered a number of factors, but chiefly, our operating losses from inception. We have concluded that a valuation allowance is required for 100% of the total deferred tax assets as it is more likely than not that the deferred tax assets will not be realized.

Deferred tax assets were comprised of the following as of December 31, 2020 and 2019:

	2020			2019

Allowance for doubtful accounts	$	-		$	3,000
Accrued expenses		105,000			97,000
Current deferred tax asset		105,000			100,000

Intangible and fixed assets		110,000			79,000
NOL carryforward		5,408,000			4,660,000
Long-term deferred tax asset		5,518,000			4,739,000

Total deferred tax asset		5,623,000			4,839,000
Less valuation allowance		(5,623,000	)		(4,839,000	)
Net deferred tax asset	$	-		$	-

The benefit for income taxes differed from the amount computed using the U.S. federal income tax rate of 21% for December 31, 2020 and 2019, as follows:

	2020			2019

Income tax benefit	$	573,000		$	655,000
Non-deducible items		28,000			48,000
State and other benefits included in valuation		196,000			319,000

Exclusion of losses of pass-through entity		(13,000	)		(75,000	)
Change in valuation allowance		(784,000	)		(947,000	)
Income tax benefit	$	-		$	-

- Definition

The entire disclosure for income taxes. Disclosures may include net deferred tax liability or asset recognized in an enterprise's statement of financial position, net change during the year in the total valuation allowance, approximate tax effect of each type of temporary difference and carryforward that gives rise to a significant portion of deferred tax liabilities and deferred tax assets, utilization of a tax carryback, and tax uncertainties information.

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