Annual report pursuant to Section 13 and 15(d)

INCOME TAXES (Tables)

v3.22.1
INCOME TAXES (Tables)
12 Months Ended
Dec. 31, 2021
INCOME TAXES  
Schedule of components of the income tax provision

Years Ended December 31, 

($’s in thousands)

    

2021

    

2020

Current:

  

  

Federal

$

$

1,669

State

 

67

 

536

Total current

 

67

 

2,205

Deferred:

 

  

 

  

Federal

 

(7,829)

 

(234)

State

 

(1,474)

 

(101)

Total deferred

 

(9,303)

 

(335)

Valuation allowance

10,870

Total income tax expense

$

1,634

$

1,870

Schedule of components of the Company's deferred tax assets

December 31, 

($’s in thousands)

    

2021

    

2020

Deferred tax assets:

  

  

Net operating loss carryforwards

$

3,113

$

5

Amortization of license fees

 

4,760

 

1,086

Stock compensation

 

667

 

113

Lease liability

 

25

 

48

Reserve on sales return, discount and bad debt

 

3,573

 

765

Accruals and reserves

 

505

 

248

Tax credits

 

193

 

Business interest expense deduction limit

 

41

 

State taxes

 

12

 

Total deferred tax assets

 

12,889

 

2,265

Less: valuation allowance

(10,870)

Deferred tax assets, net

$

2,019

$

2,265

Deferred tax liability:

Section 481(a) adjustment on reserve on sales return, discount and bad debt

(1,996)

(765)

Right-of-use asset

(23)

(46)

Deferred tax assets, net

$

$

1,454

Schedule of reconciliation of the statutory tax rates and the effective tax rates

Years Ended December 31, 

 

    

2021

    

2020

 

Percentage of pre-tax income:

  

  

U.S. federal statutory income tax rate

 

21

%  

21

%

State taxes, net of federal benefit

 

4

%  

6

%

Non-deductible items

 

(5)

%  

0

%

Provision to return

 

0

%  

0

%

Change in state rate

 

0

%  

(1)

%

Change in valuation allowance

(26)

%  

0

%

Other

 

2

%  

0

%

Effective income tax rate

 

(4)

%  

26

%