v3.25.2
Income Taxes
 12 Months Ended
Dec. 31, 2024
Income Taxes  
Income Taxes

Note 13 - Income Taxes

 

Components of income tax expense (benefit) are as follows for the years ended December 31, 2024 and 2023:

 

 

 

2024

 

 

2023

 

Current

 

$-

 

 

$-

 

Deferred

 

 

-

 

 

 

-

 

Income tax benefit

 

$-

 

 

$-

 

 

The tax effects of temporary differences which give rise to the significant portions of deferred tax assets or liabilities are as follows at December 31, 2024 and 2023:

 

 

 

2024

 

 

2023

 

Deferred tax assets and liabilities

 

 

 

 

 

 

Net operating losses carried forward

 

$7,148,000

 

 

$5,780,000

 

Intangibles

 

 

(57,000)

 

 

(103,000)

Total deferred tax asset

 

 

7,091,000

 

 

 

5,677,000

 

Less: valuation allowance

 

 

(7,091,000)

 

 

(5,677,000)

Net deferred tax asset

 

$-

 

 

$-

 

 

The Company will have approximately $34.4 million and $27.5 million of gross net operating loss carry-forwards at December 31, 2024 and 2023, respectively. Federal NOLs do not expire, but are subject to 80% income limitation on use; state and local laws may vary by jurisdiction. Net deferred tax assets are mainly comprised of temporary differences between financial statement carrying amount and tax basis of assets and liabilities.

 

ASC 740 requires a valuation allowance to reduce the deferred tax assets reported if, based on the weight of the evidence, it is more likely than not that some portion or all of the deferred tax assets will not be realized. At December 31, 2024 and 2023, respectively, a full valuation allowance was recognized.

 

In addition, the Company performed a comprehensive review of its uncertain tax positions and determined that no adjustments were necessary relating to unrecognized tax benefits at December 31, 2024 and 2023. The Company’s federal and state income tax returns are subject to examination by taxing authorities for three years after the returns are filed, and as such the Company’s federal and state income tax returns remain open to examination.

 

The reconciliation of the income tax benefit is computed at the U.S. federal statutory rate as follows:

 

 

 

2024

 

 

2023

 

Statutory tax rate

 

 

21.0%

 

 

21.0%

State tax rate

 

 

8.8%

 

 

8.8%

Effect of change in income tax rate for deferred tax assets

 

 

 

 

 

 

 

 

Effect of expenses not deductible for tax purpose

 

 

(1.8)%

 

 

0.0%

Amortization

 

 

0.5%

 

 

0.5%

Change in valuation allowance

 

 

(28.5)%

 

 

(30.3)%

Effective income tax rate

 

 

0.0%

 

 

0.0%