Income Taxes

12 Months Ended

Dec. 31, 2023

Note 12. Income Taxes

The components of the income tax provision for the years ended December 31, 2023 and 2022 are as follows:

	Year ended December 31,
	2023			2022
Current tax expense:
Federal	$	—		$	—
State		4,569			1,500
	$	4,569		$	1,500

Deferred tax benefit:
Federal	$	129,000		$	50,000
State		67,000			27,000
Valuation allowance		(196,000	)		(77,000	)
	$	—		$	—

Net deferred tax assets consist of the following components as of December 31, 2023 and 2022:

	Year ended December 31,
	2023			2022
Deferred tax asset:
Net operating loss carryforward	$	4,319,000		$	4,271,000
Accounts receivable allowance		2,000			2,000
Property and equipment		(248,000	)		(389,000	)
Accrued expenses		274,000			265,000
Impairment charge		211,000			211,000
Start-up costs		3,000			3,000
Stock based compensation		133,000			133,000
Inventory allowance		1,000			1,000
Other		(36,000	)		(34,000	)
		4,659,000			4,463,000
Less valuation allowance		(4,659,000	)		(4,463,000	)
Net deferred taxes	$	—		$	—

A reconciliation of income tax expense at statutory rates to the income tax expense reported in the Statements of Operations is as follows for the years ended December 31, 2023 and 2022.

	Year ended December 31,
	2023			2022
Federal tax benefit at statutory rate	$	(104,000	)	$	(31,000	)
State tax benefit net of federal taxes		(33,431	)		(10,500	)
Warrant valuation		(62,000	)		(41,000	)
Other		8,000			7,000
Increase in valuation allowance		196,000			77,000
Income tax expense	$	4,569		$	1,500

As of December 31, 2023, the Company has available, for federal and state income tax purposes, net operating loss (“NOL”) carryforwards of approximately $14,997,000. $12,773,000 of the NOL carryforwards expire at various times through 2038 and $2,224,000 of the NOLs can be carried forward indefinitely. The utilization of the NOL carryforwards is dependent upon the ability of the Company to generate sufficient taxable income during the carryforward periods. The NOL carryforwards are also subject to certain limitations on their utilization should changes in Company ownership occur. The Company has not recognized any NOL carryforward benefits or other net deferred tax assets in the current financial statements.

The current tax expense represents the amount of estimated minimum state taxes payable.

- 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.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 740
-SubTopic 10
-Section 50
-Paragraph 21
-URI https://asc.fasb.org/extlink&oid=121826272&loc=d3e32857-109319

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 740
-SubTopic 10
-Section S99
-Paragraph 2
-Subparagraph (SAB Topic 11.C)
-URI https://asc.fasb.org/extlink&oid=122134291&loc=d3e330215-122817

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 740
-SubTopic 10
-Section 50
-Paragraph 17
-Subparagraph (b)
-URI https://asc.fasb.org/extlink&oid=121826272&loc=d3e32809-109319

Reference 4: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 740
-SubTopic 10
-Section S99
-Paragraph 1
-Subparagraph (SAB TOPIC 6.I.5.Q1)
-URI https://asc.fasb.org/extlink&oid=122134291&loc=d3e330036-122817

Reference 5: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 740
-SubTopic 10
-Section 50
-Paragraph 14
-URI https://asc.fasb.org/extlink&oid=121826272&loc=d3e32705-109319

Reference 6: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 740
-SubTopic 270
-Section 50
-Paragraph 1
-URI https://asc.fasb.org/extlink&oid=6424409&loc=d3e44925-109338

Reference 7: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 740
-URI https://asc.fasb.org/topic&trid=2144680

Reference 8: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 740
-SubTopic 30
-Section 50
-Paragraph 2
-Subparagraph (a)
-URI https://asc.fasb.org/extlink&oid=6424122&loc=d3e41874-109331

Reference 9: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 235
-SubTopic 10
-Section S99
-Paragraph 1
-Subparagraph (SX 210.4-08(h)(2))
-URI https://asc.fasb.org/extlink&oid=120395691&loc=d3e23780-122690

+ Details

Lightning Gaming, Inc. 10-K/A