v3.26.1
Income Taxes
 12 Months Ended
Dec. 31, 2025
Income Tax Disclosure [Abstract]  
Income Taxes

Note 12. Income Taxes

 

Components of Income (Loss) before Income Taxes

 

As required by ASU 2023-09, the components of loss before income taxes are as follows:

 

 Schedule of Components of Loss Before Income Taxes

   2025   2024 
   For the year ended December 31, 
   2025   2024 
Domestic (U.S.)  $(219)  $5,521 
Foreign   -    - 
Total income (loss) before income taxes  $(219)  $5,521 

 

Effective Tax Rate Reconciliation

 

The following table reconciles the income tax benefit computed at the U.S. federal statutory rate to the Company’s reported income tax expense. Percentages are based on the loss before income taxes.

 

 Schedule of Effective Income Tax Rate Reconciliation

For the year ended December 31,  2025($)   2025(%)   2024($)   2024(%) 
Federal statutory tax (at 21%)  $(46)   21.0%  $1,159    21.0%
State and local income taxes, net 1   (9)   4.1%   235    4.3%
Non-taxable or non-deductible items                    
 Change in fair value of derivatives 2   -    0.0%   (1,496)   -27.1%
 Other permanent items   1    -0.5%   -    0.0%
Changes in valuation allowances   54    -24.6%   102    1.8%
Income tax expense (benefit)  $-    0.0%  $-    0.0%

 

1The state and local income tax category is primarily comprised of taxes related to the state of Georgia, which represents 100% of the Company’s state tax effect for the periods presented, net of federal tax benefits.

 

2In accordance with ASU 2023-09, the Company has disaggregated reconciling items that exceed 5% of the statutory tax amount. This includes the non-taxable change in fair value of derivatives in 2024.

 

Deferred Tax Assets and Liabilities

 

Significant components of the Company’s deferred tax assets are as follows:

 

 

       
   As of December 31, 
   2025   2024 
U.S. federal tax loss carry–forward  $19,039   $18,994 
U.S. State tax loss carry–forward   464    455 
Equity based compensation   8,567    8,567 
Fixed assets, intangibles, and goodwill   (51)   (51)
Long-term investments   (7)   (7)
Total deferred tax assets   28,012    27,958 
Less: valuation allowance   (28,012)   (27,958)
Net deferred tax asset  $-   $- 

 

 

Income Taxes Paid (Disaggregated by Jurisdiction)

 

The Company paid no material income taxes during the years ended December 31, 2025, and 2024.

 

 Schedule of Material Income Taxes Paid

   2025   2024 
   For the year ended December 31, 
   2025   2024 
Federal (U.S.)  $-   $- 
State and local (Georgia)   -    - 
Foreign   -    - 
Total Income Taxes Paid, net of refunds.  $-   $- 

 

Operating Loss Carryforwards

 

As of December 31, 2025, the Company has gross federal net operating loss (“NOL”) carryforwards of approximately $90,661 and gross state net operations loss carryforwards of $10,261. As it is not more likely than not that the resulting deferred tax benefits will be realized, a full valuation allowance has been recognized for such deferred tax assets. Federal and state laws impose substantial restrictions on the utilization of tax attributes in the event of an “ownership change,” as defined in Section 382 of the Internal Revenue Code. As of December 31, 2025, the Company performed a high-level review of its changes in ownership and determined that a change of control event likely occurred under Section 382 of the Internal Revenue Code and the Company’s net operating loss carryforwards are likely to be limited.

 

The Company has adopted the provisions of ASC 740-10-25, which provides recognition criteria and a related measurement model for uncertain tax positions taken or expected to be taken in income tax returns. ASC 740-10-25 requires that a position taken or expected to be taken in a tax return be recognized in the financial statements when it is more likely than not that the position would be sustained upon examination by tax authorities.

 

Tax positions that meet the more likely than not threshold are then measured using a probability weighted approach recognizing the largest amount of tax benefit that is greater than 50% likely of being realized upon ultimate settlement. The Company had no tax positions relating to open income tax returns that were considered to be uncertain.

 

The Company files income tax returns in the U.S. federal jurisdiction and Georgia jurisdiction. With few exceptions, the Company is no longer subject to U.S. federal, state and local, or non-U.S. income tax examination by tax authorities for years before 2022. The Internal Revenue Service has not recently informed the Company of any pending examinations.