| SCHEDULE OF COMPONENTS OF INCOME TAX BENEFIT |
The
components of income tax benefit for the years ended December 31, 2025, and 2024 are as follows:
SCHEDULE OF COMPONENTS OF INCOME TAX BENEFIT
| Income Tax Expense (Benefit) | |
Year Ended December 31,
2025 | | |
Year Ended December 31,
2024 | |
| Current tax payable | |
| | | |
| | |
| Federal | |
$ | - | | |
$ | - | |
| State | |
| - | | |
| - | |
| Total current tax payable | |
| - | | |
| - | |
| Deferred tax | |
| | | |
| | |
| Federal | |
| (1,998,000 | ) | |
| 30,000 | |
| State | |
| (264,000 | ) | |
| 3,000 | |
| Total deferred tax | |
| (2,262,000 | ) | |
| 33,000 | |
| Less increase in valuation allowance | |
| (318,000 | ) | |
| - | |
| Total income tax (benefit) expense | |
$ | (2,580,000 | ) | |
$ | 33,000 | |
|
| SCHEDULE OF DEFERRED TAX ASSETS AND LIABILITIES |
Individual
components of deferred tax assets and liabilities are approximately as follows:
SCHEDULE OF DEFERRED TAX ASSETS AND LIABILITIES
| Deferred Tax Assets & Liabilities: | |
| | |
| |
| Deferred Tax assets: | |
| | | |
| | |
| Impairment of investment | |
$ | 1,050,000 | | |
$ | 929,000 | |
| Research & development cost | |
| - | | |
| 519,000 | |
| Compensation | |
| 36,000 | | |
| 18,000 | |
| Net Operating loss | |
| 4,344,000 | | |
| 2,950,000 | |
| Gross deferred tax assets | |
| 5,430,000 | | |
| 4,416,000 | |
| | |
| | | |
| | |
| Deferred tax liability: | |
| | | |
| | |
| Note payable, related party FMV adjustment | |
| - | | |
| (1,148,000 | ) |
| Intangible assets | |
| (3,744,000 | ) | |
| (3,912,000 | ) |
| Gross deferred tax liability | |
| (3,744,000 | ) | |
| (5,060,000 | ) |
| | |
| | | |
| | |
| Less valuation allowance | |
| (2,374,000 | ) | |
| (2,625,000 | ) |
| Net deferred tax liability | |
$ | (688,000 | ) | |
$ | (3,269,000 | ) |
|
| SCHEDULE OF EFFECTIVE INCOME TAX RATE RECONCILIATION |
SCHEDULE OF EFFECTIVE INCOME TAX RATE RECONCILIATION
| |
$ |
- |
|
|
| | | |
$ |
- |
|
|
| | |
| | |
2025 | | |
2024 | |
| Statutory United States federal rate | |
$ |
(3,028,000 |
) |
|
| 21.0 | % | |
$ |
(5,240,000 |
) |
|
| 21.0 | % |
| State income taxes effective rate change | |
$ |
66,000 |
|
|
| -0.5 | % | |
$ |
- |
|
|
| 0.0 | % |
| State income taxes net of federal benefit | |
$ |
(208,000 |
) |
|
| 1.4 | % | |
$ |
3,000 |
|
|
| 0.0 | % |
| Permanent differences | |
$ |
908,000 |
|
|
| -6.3 | % | |
$ |
5,270,000 |
|
|
| -21.1 | % |
| Change in valuation allowance | |
$ |
(318,000 |
) |
|
| 2.2 | % | |
$ |
- |
|
|
| 0.0 | % |
| | |
|
|
|
|
| | | |
|
|
|
|
| | |
| Effective rate | |
$ |
(2,580,000 |
) |
|
| 17.9 | % | |
$ |
33,000 |
|
|
| -0.1 | % |
|