v3.25.2
Income taxes
 6 Months Ended
Jun. 30, 2025
Income taxes  
Income taxes

9. Income taxes

 

The Company did not provide any current or deferred US federal income tax provision or benefit for the three and six months ending June 30, 2025 and or the year ended December 31, 2024 as they incurred tax losses during both of these periods.

 

When it is more likely than not, that a tax asset cannot be realized through future income, the Company must record an allowance against any future potential future tax benefit. The Company has provided a full valuation allowance against the net deferred tax asset, consisting of net operating loss carry forwards, because management has determined that it is more likely than not that the Company will not earn income sufficient to realize the deferred tax assets during the carry forward periods. The Company has not taken a tax position that, if challenged, would have a material effect on the unaudited consolidated financial statements for the three and six months ended June 30, 2025 and 2024 as defined under ASC 740, “Accounting for Income Taxes.”

 

The provision for income taxes differs from the amount computed by applying the statutory federal income tax rate to income before provision for income taxes.

 

The sources and tax effects of the differences for the periods presented are as follows:

 

 

 

Three and Six Months Ended

 

 

 

June 30,

2025

 

 

June 30,

2024

 

U.S. statutory federal income tax rate

 

 

21%

 

 

21%

State income taxes, net of federal income tax

 

 

4%

 

 

4%

Change in valuation allowance

 

 

(25)%

 

 

(25)%

Effective income tax rate

 

 

0%

 

 

0%

A reconciliation of the income taxes computed at the statutory rate is as follows:

 

 

 

Three Months Ended

 

 

 

June 30,

2025

 

 

June 30,

2024

 

 

 

 

 

 

 

 

Tax credit (expense) at statutory rate (25%)

 

$13,693

 

 

$30,951

 

Increase in valuation allowance

 

 

(13,693)

 

 

(30,951)

Net deferred income tax asset

 

$-

 

 

$-

 

 

 

 

Six Months Ended

 

 

 

June 30,

2025

 

 

June 30,

2024

 

 

 

 

 

 

 

 

Tax credit (expense) at statutory rate (25%)

 

$55,063

 

 

$66,074

 

Increase in valuation allowance

 

 

(55,063)

 

 

(66,074)

Net deferred income tax asset

 

$-

 

 

$-

 

 

At June 30, 2025 and December 31, 2024, the significant components of the deferred tax assets are summarized below:

 

 

 

 June 30,

 

 

December 31,

 

 

 

2025

 

 

2024

 

 

 

 

 

 

 

 

Net operating loss carry-forward

 

$506,903

 

 

$451,841

 

Valuation allowance

 

 

(506,903)

 

 

(451,841)

Net deferred tax asset (liability)

 

$-

 

 

$-

 

 

As of June 30, 2025 and December 31, 2024, the Company had a federal net operating loss carryforward of approximately $2,180,835 and $1,807,363, respectively. The federal net operating loss carryforwards do not expire but may only be used against taxable income to 80%. No tax benefit has been reported in the unaudited consolidated financial statements. The annual offset of this carryforward loss against any future taxable profits may be limited under the provisions of Internal Revenue Code Section 381 upon any future change(s) in control of the Company.