General form of registration statement for all companies including face-amount certificate companies

INCOME TAXES

v3.23.3
INCOME TAXES
 12 Months Ended
Dec. 31, 2022
Income Tax Disclosure [Abstract]  
INCOME TAXES

Note 13. INCOME TAXES

 

Deferred tax assets and valuation allowance

 

The Company had, subject to limitation, approximately $18.4 million of net operating loss carryforwards at December 31, 2022, of which approximately $6.0 million will begin expiring in 2034. The remaining balance of approximately $12.4 million will carry forward indefinitely. A 100% valuation allowance has been provided for the deferred tax benefits resulting from the net operating loss carryover due to a lack of earnings history. In addressing the realizability of deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences are deductible. The valuation allowance increased by approximately $0.8 million and $0.5 million for the years ended December 31, 2022, and 2021, respectively. Significant components of deferred tax assets are as follows:

 

             
    December 31,  
    2022     2021  
Deferred tax assets:                
Net operating loss carryover   $ 3,871,192     $ 3,302,836  
Stock compensation     477,055       434,645  
Capitalized R&E costs    

260,560

      

—

  
Depreciation and amortization     (7,337 )     1,099  
Other     5,708       3,974  
Tax credits     443,867       484,778  
Total deferred tax assets     5,051,045       4,227,332  
Less: valuation allowance     (5,051,045 )     (4,227,332 )
Net deferred tax assets   $ —     $ —  

 

 

bioAffinity Technologies, Inc.

Notes to Consolidated Financial Statements

For the Years Ended December 31, 2022 and 2021

 

The reconciliation of the statutory federal income tax rate to the Company’s effective tax rate for the years ended

December 31, 2022 and 2021, was as follows:

 

             
    Year Ended December 31,  
    2022     2021  
Tax at federal statutory rate     (21.0 )%     (21.0 )%
Permanent differences     10.4       14.8  
Research and development credits     2.2       (1.9 )
Change in valuation allowance     10.1       8.1  
Effective income tax rate     — %     — %

 

Unrecognized tax benefits

 

As of December 31, 2022 and 2021, the Company has unrecognized tax benefits related to tax credits of $190,229 and $49,646, respectively. None of the unrecognized tax benefits as of December 31, 2022, if recognized, would impact the effective tax rate due to the valuation allowance, and no interest or penalties have been recognized. A reconciliation of the beginning and ending balance of unrecognized tax benefits is as follows:

 

             
    December 31,  
    2022     2021  
             
Beginning balance   $ 49,646     $ 70,893  
Deductions based on tax positions related to the prior year     110,681       (21,247 )
Additions based on tax positions related to the current year     29,902       —  
Ending balance   $ 190,229     $ 49,646  

 

The Company is not under audit with any taxing jurisdiction at this time. The Company’s tax returns for the previous three years remain open for audit by the respective tax jurisdictions.