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

Note 9 - Income Taxes

 

Loss from operations before provision (benefit) for income taxes and associated tax provision (benefit) are summarized in the following table:

 

-      
   Years ended December 31, 
Net Income (Loss)  2024   2023 
Domestic  $(4,306,918)  $(2,384,802)
Net Income (Loss)  $(4,306,918)  $(2,384,802)
           
Current          
Federal  $-   $- 
State   -    - 
Total Current  $-   $- 
           
Deferred          
Federal  $(998,912)  $(590,371)
State   (190,269)   (112,452)
Total Deferred   (1,189,181)   (702,823)
Less Increase in Allowance   1,189,181    702,823 
Net Deferred  $-   $- 
           
Total Income Tax Provision (Benefit)  $-   $- 

 

 

The significant components of the deferred tax assets and liabilities are summarized below:

 

       
   Years ended December 31, 
   2024   2023 
Deferred Tax Assets (Liabilities):          
Net Operating Loss Carry-Forwards  $5,350,576   $4,273,846 
Depreciable and Amortizable Assets   (20,520)   (20,520)
Stock Based Compensation   134,725    118,228 
Loss Reserve   457    457 
Accrued Compensation   133,163    37,326 
Other   32,481    32,364 
Total   5,630,882    4,441,701 
Less Valuation Allowance   (5,630,882)   (4,441,701)
Net Deferred Tax Assets (Liabilities)  $-   $- 

 

At December 31, 2024 and 2023, the Company has available net operating loss carry-forwards for federal and state income tax purposes of approximately $19.5 million and $15.2 million, respectively. Of the federal net operating loss carryforward, $16.2 million, if not utilized earlier, expires through 2040 and $3.3 million will carry-forward indefinitely. The state net operating loss carryforwards expire through 2043, if not utilized earlier. Due to the uncertainty as to the Company’s ability to generate sufficient taxable income in the future and utilize the net operating loss carry-forwards before they expire, the Company has recorded a valuation allowance to fully offset the net operating loss carry-forwards, as well as the total net deferred tax assets.

 

Internal Revenue Code Section 382 (“Section 382”) imposes limitations on the availability of a company’s net operating losses and other corporate tax attributes as certain significant ownership changes occur. As a result of the historical equity instrument issuances by the Company, a Section 382 ownership change may have occurred and a study will be required to determine the date of the ownership change, if any. The amount of the Company’s net operating losses and other tax attributes incurred prior to any ownership change may be limited based on the Company’s value. A full valuation allowance has been established for the Company’s deferred tax assets, including net operating losses and any other corporate tax attributes.

 

During the years ended December 31, 2024 and 2023, the Company had no unrecognized uncertain tax positions. The Company’s policy is to recognize interest accrued and penalties related to unrecognized uncertain tax positions in tax expense.

 

The Company files income tax returns in the U.S. federal jurisdiction, as well as the states of California, Florida, Illinois and New York. The tax years 2020-2024 generally remain open to examination by the U.S. federal and state taxing authorities.

 

A reconciliation of the income tax provision using the statutory U.S. income tax rate compared with the actual income tax provision reported on the consolidated statements of operations is summarized in the following table:

 

   Years ended December 31, 
   2024   2023 
Statutory United States federal rate   21.00%   21.00%
State income tax, net of federal benefit   4.00    4.00 
Change in valuation allowance   (27.61)   (29.47)
Stock based compensation   0.38    2.13 
Permanent differences   0.00    0.04 
Other   2.23    2.30 
Effective tax rate benefit (provision)   (2.23)%   (2.30)%