v3.25.2
Income taxes
 12 Months Ended
Dec. 31, 2024
Income Tax Disclosure [Abstract]  
Income taxes

Note 11. Income taxes

 

Federal income tax expense differs from the statutory federal rates of 21% for the years ended December 31, 2024 and December 31, 2023 due to the following:

 

Rate Reconciliation  December 31, 2024       December 31, 2023     
                 
Provision/(Benefit) at statutory rate  $

(2,620,482

)    

(21.00

)%   $(851,925)   (21.00)%
State tax Provision/(Benefit) net of federal benefit   

(429,933

)   3.45%    (206,832)   5.10%
Permanent book/tax differences   252,817     (2.03)%   (237,419)   5.85%
Change in valuation allowance   2,934,868     (23.52)%   74,848    (1.85)%
Other   (137,271)    1.10%   1,221,327    (30.11)%
Income Tax Provision/(Benefit)   -    -    -    - 

 

The components of the net deferred tax asset at December 31, 2024 and 2023, are as follows:

 

   December 31,
2024		   December 31,
2023		 
Deferred Tax Assets          
Allowance for bad debt   $9,774    $5,797 
Fixed assets   171,728    136,208 
Inventory reserve   356,290    - 
Net operating loss carryovers   5,932,995    3,626,165 
Non-capital Losses   727,316    511,340 
Other   99,962    83,687 
Net Deferred Tax Asset/(Liability)   7,298,065    4,363,197 
Valuation Allowance   (7,298,065)    (4,363,197)
Net Deferred Tax Asset/(Liability)  $-      $- 

 

Tax periods for all fiscal years after 2020 remain open to examination by the federal and state taxing jurisdictions to which the Company is subject. As of December 31, 2024, the Company has cumulative net federal and state operating losses of $24,189,098 and $18,368,316, respectively.

 

ASC 740, “Income Taxes” requires that a valuation allowance be established when it is “more likely than not” that all, or a portion of, deferred tax assets will not be recognized. A review of all available positive and negative evidence needs to be considered, including the scheduled reversal of deferred tax liabilities, projected future taxable income, and tax planning strategies. After consideration of all the information available, management believes that uncertainty exists with respect to future realization of its deferred tax assets and has, therefore, established a full valuation allowance as of December 31, 2024.

 

As of December 31, 2024, and 2023, the Company has evaluated and concluded that there were no material uncertain tax positions requiring recognition in the Company’s financial statements. The Company’s policy is to classify assessments, if any, for tax related interest as income tax expenses. No interest or penalties were recorded during the years ended December 31, 2024, and 2023.