| INCOME TAXES |
NOTE
9 INCOME TAXES
The
Company has not paid or incurred any income taxes liabilities during 2025 and 2024 due to its net operating losses. State taxes are apportioned
through 47 states. The states in which the apportionment are greatest are California and Florida, which comprise 22% of the effective
state and local effective tax rate.
The
effects of temporary differences that gave rise to significant portions of deferred tax assets at December 31, 2025, and December 31,
2024 were approximately as follows:
SCHEDULE
OF DEFERRED TAX ASSETS
| | |
2025 | | |
2024 | |
| | |
For the year ended December 31, | |
| | |
2025 | | |
2024 | |
| Net operating loss carryforward | |
| 34,436,504 | | |
$ | 28,458,816 | |
| Stock-based compensation | |
| 3,930,195 | | |
| 2,707,630 | |
| Rights of use assets | |
| (4,429,142 | ) | |
| (5,023,531 | ) |
| Operating lease liabilities | |
| 5,157,627 | | |
| 5,634,917 | |
| Other | |
| 933,102 | | |
| 487,722 | |
| Less Valuation Allowance | |
| (40,028,287 | ) | |
| (32,265,553 | ) |
| Total Deferred Tax Assets - Net | |
$ | - | | |
$ | - | |
The
change in valuation allowance is as follows:
SCHEDULE
OF CHANGE IN VALUATION ALLOWANCE
| | |
2025 | | |
2024 | |
| | |
For the year ended December 31, | |
| | |
2025 | | |
2024 | |
| Net operating loss | |
$ | 5,977,689 | | |
$ | 7,141,156 | ) |
| Fair value of options | |
| 1,222,565 | | |
| 1,603,333 | |
| Other, mostly amortization of intangible assets | |
| 696,875 | ) | |
| 915,218 | |
| Change in valuation allowance | |
| 7,897,129 | | |
| 9,659,709 | |
| | |
$ | - | | |
$ | - | |
The
Company’s tax expense differs from the statutory tax expense for the years ended December 31, 2025, and December 31, 2024 and the
reconciliation is as follows.
SCHEDULE
OF INCOME TAX RATE RECONCILIATION
| | |
2025 Amount | | |
2025 Percent | | |
2024 Amount | | |
2024 Percent | |
| U.S. Federal Statutory tax rate | |
$ | 7,017,227 | | |
| 21 | % | |
$ | 7,498,169 | | |
| 21 | % |
| | |
| | | |
| | | |
| | | |
| | |
| States and local income taxes, net of federal income tax effect | |
| 1,438,709 | | |
| 4.3 | | |
| 1,535,339 | | |
| 4.3 | % |
| Changes in valuation allowance | |
| (7,897,129 | ) | |
| (23.6 | )% | |
| (9,659,709 | ) | |
| (27.1 | )% |
| Other | |
| (558,807 | ) | |
| (1.7 | )% | |
| 626,201 | | |
| 1.8 | % |
| Effective tax rate | |
$ | - | | |
| - | % | |
$ | - | | |
| - | % |
|