NOTE 7 - INCOME TAXES

The following table summarizes net loss before income taxes:

SCHEDULE OF NET LOSS BEFORE INCOME TAXES

The income tax provision (benefit) as of December 31, 2025 and 2024 consists of the following:

 SCHEDULE OF INCOME TAX PROVISION (BENEFIT) 

The Company did not pay any income taxes during the years ended December 31, 2025 and 2024.

A reconciliation of the statutory federal income tax benefit to actual tax benefit for the year ended December 31, 2025 is as follows:

 SCHEDULE OF STATUTORY FEDERAL INCOME TAX RATE

A reconciliation of the statutory federal income tax benefit to actual tax benefit for the year ended December 31, 2024 is as follows:

The Company’s net deferred tax assets, liabilities and valuation allowance as of December 31, 2025 and 2024 are summarized as follows:

 SCHEDULE OF NET DEFERRED TAX ASSETS AND LIABILITIES

The Company identified its federal and New York tax returns as its “major” tax jurisdictions. The Company is no longer subject to income tax income examinations by these tax authorities for taxable years ended December 31, 2021, and prior. The Company believes its income tax filing positions and deductions will be sustained on audit, and it does not anticipate any adjustments that would result in a material change to its financial position. Therefore, no liabilities for uncertain tax positions have been recorded.

At December 31, 2025, the Company had approximately $84,100,000 and $34,400,000 respectively, of federal and state net operating losses (“NOL”) that may be available to offset future taxable income. As a result of the Tax Cuts and Jobs Act of 2017 (the “Tax Act”), certain future carryforwards do not expire. Of the federal amount, $7,800,000 have a limited carryforward period and will begin to expire in 2029, the remaining $76,300,000 will have an indefinite carryforward period. Of the state post-apportioned amount, $7,400,000 have a limited carryforward period and will begin to expire in 2029; the remaining $27,000,000 will have an indefinite carryforward period.

For the year ended December 31, 2025, the Company had federal tax credit carryforwards of approximately $330,000. These credits have an indefinite carryforward period. The Company did not have any state or foreign tax credit carryforwards as of December 31, 2025.

In accordance with Section 382 and Section 383 of the Internal Revenue Code, utilization of the NOL and tax credit carryforwards may be subject to limitations based on prior or future ownership changes. The utilization of the Company’s net operating loss carryforwards and research tax credit carryovers could be subject to annual limitations under Section 382 and 383 of the Internal Revenue Code of 1986, as amended (the “Code”), due to ownership change limitations that may have occurred previously or that could occur in the future. These ownership changes limit the amount of net operating loss carryforwards and other deferred tax assets that can be utilized to offset future taxable income and tax, respectively. In general, an ownership change, as defined by Section 382 and 383 of the Code, results from transactions increasing ownership of certain stockholders or public groups in the stock of the corporation by more than 50 percentage points over a three-year period. The Company has not completed an analysis of an ownership change under Section 382 of the Code. To the extent that a study is completed and an ownership change is deemed to occur, the Company’s net operating losses and tax credits could be limited.

Additionally, after weighing up all available positive and negative evidence for the year ended December 31, 2025, the Company has recorded a full valuation allowance.

On July 4, 2025 the One Big Beautiful Bill Act (“OBBBA”) was enacted. The legislation includes several changes to the U.S. federal corporate income tax law, among other things, reinstating 100% bonus depreciation on qualified fixed assets, immediate expensing of domestic research and development expenditures, and favorable rules for determining the limitation on business interest expense. These changes were retroactively enacted for tax years beginning after December 31, 2024 with certain provisions effective after January 19, 2025 and were reflected in the income tax provision for the year ended December 31, 2025. The provisions of the OBBBA did not have a material impact on the effective income tax rate.

The Company has not realized a material impact on its consolidated financial statements due to the enactment of the OBBBA.

As of the date of this filing, the Company has not filed its 2025 federal and state corporate income tax returns. The Company expects to file these documents as soon as practicable.