Annual report pursuant to Section 13 and 15(d)

INCOME TAXES (Tables)

v3.23.1
INCOME TAXES (Tables)
12 Months Ended
Dec. 31, 2022
INCOME TAXES  
Summary of provision benefit of income tax and effective tax rate

Years Ended December 31, 

($’s in thousands)

    

2022

    

2021

Current:

  

  

Federal

$

$

State

 

63

 

67

Total current

 

63

 

67

Deferred:

 

  

 

  

Federal

 

(6,701)

 

(7,829)

State

 

(1,737)

 

(1,474)

Total deferred

 

(8,438)

 

(9,303)

Valuation allowance

8,438

10,870

Total income tax expense

$

63

$

1,634

Schedule of components of the Company's deferred tax assets

December 31, 

($’s in thousands)

    

2022

    

2021

Deferred tax assets:

  

  

Net operating loss carryforwards

$

6,553

$

3,113

Amortization of license fees

 

4,951

 

4,760

R&D capitalization

 

2,462

 

Stock compensation

 

1,293

 

667

Lease liability

48

25

Reserve on sales return, discount and bad debt

 

2,988

 

3,573

Accruals and reserves

 

574

 

505

Tax credits

 

1,152

 

193

Business interest expense deduction limit

 

322

 

41

State taxes

 

13

 

12

Total deferred tax assets

 

20,356

 

12,889

Less: valuation allowance

(19,307)

(10,870)

Deferred tax assets, net

$

1,049

$

2,019

Deferred tax liability:

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

(1,001)

(1,996)

Right-of-use asset

(48)

(23)

Deferred tax assets, net

$

$

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

Years Ended December 31, 

 

    

2022

    

2021

 

Percentage of pre-tax income:

  

  

U.S. federal statutory income tax rate

 

21

%  

21

%

State taxes, net of federal benefit

 

4

%  

4

%

Non-deductible items

 

(0)

%  

(5)

%

Provision to return

 

0

%  

0

%

Change in state rate

 

0

%  

0

%

Change in valuation allowance

(28)

%  

(26)

%

Other

 

3

%  

2

%

Effective income tax rate

 

(0)

%  

(4)

%