v3.26.1
Income Taxes
 12 Months Ended
Dec. 31, 2025
Income Taxes [Abstract]  
INCOME TAXES

9. INCOME TAXES

 

The Company and its subsidiaries are subject to 21% federal corporate income tax in US.

 

At December 31, 2025 and 2024, the Company had net operating loss (“NOL”) for income tax purposes; for federal income tax purposes, the NOL arising in tax years beginning after 2017 may only offset 80% of a taxpayer’s taxable income, and may be carried forward indefinitely; for California income tax purposes, the entire NOL can be carried forward up to 20 years.

 

The Company has NOL carry-forwards for Federal and California income tax purposes of $3.71 million and $2.35 million at December 31, 2025 and 2024, respectively. No tax benefit was reported with respect to these NOL carry-forwards in the accompanying consolidated financial statements because the Company believes the realization of the Company’s net deferred tax assets for the NOL for both federal and California State of approximately $1.04 million as of December 31, 2025, was not considered more likely than not and accordingly, the potential tax benefits of the net loss carry-forwards are fully offset by a full valuation allowance.

 

Components of the Company’s deferred tax assets from the company’s continuing operations as of December 31, 2025 and 2024 are as follows:

 

   December 31,
2025		   December 31,
2024		 
         
Net deferred tax assets (liability):        
Depreciation and amortization expense  $111   $794 
Expected income tax benefit from NOL carry-forwards   1,037,704    658,441 
Less: valuation allowance   (1,037,815)   (659,235)
Deferred tax assets, net of valuation allowance  $-   $- 

 

Income Tax Provision in the Statements of Operations

 

A reconciliation of the consolidated federal statutory income tax rate and the effective income tax rate as a percentage of income before income taxes from the company’s continuing operations for years ended December 31, 2025 and 2024 is as follows:

 

   2025   2024 
         
Federal statutory income tax expense (benefit) rate   (21.00)%   (21.00)%
State statutory income tax (benefit) rate, net of effect of state income tax deductible to federal income tax   (6.98)%   (6.98)%
Permanent difference   -%   21.08%
Change in valuation allowance   27.89%   6.95%
Effective income tax rate   0.09%   0.05%

The provision for income tax expense for the continuing operations for the years ended December 31, 2025 and 2024 consisted of the following:

 

   2025   2024 
         
Income tax expense – current  $800   $800 
Income tax benefit – current   -    - 
Total income tax expense  $800   $800