Quarterly report pursuant to Section 13 or 15(d)

Income Taxes

v3.20.2
Income Taxes
3 Months Ended
Mar. 31, 2020
Income Tax Disclosure [Abstract]  
Income Taxes

Note 6 — Income Taxes

 

A reconciliation of the statutory federal income tax rate to the Company’s effective tax rate is as follows:

 

   

For the Three Months

Ended March 31,

 
    2020     2019  
Tax at federal statutory rate     21.0 %     21.0 %
U.S. income subject to valuation allowance     -21.0 %     -21.0 %
State and local income taxes     0.0 %     0.0 %
Foreign income not subject to U.S. federal tax     0.0 %     0.0 %
Foreign tax     0.0 %     -1.7 %
Nondeductible expenses     0.0 %     0.0 %
Other     0.0 %     -0.0 %
Effective income tax rate     0.0 %     -1.7 %

 

The Company has determined that the gain on divestiture of $4,911,760 is a taxable transaction to the Company. The tax provision of approximately $1,030,000 would be offset by the utilization of the Company’s net operating loss carryforwards. The Company has sufficient net operating losses carryforwards to cover any tax liabilities generated due to the divestment of Cloud B, Inc. The Company does not have any deferred income tax expense from the gain due to the Company recording a full valuation allowance against all net operating losses in prior periods.