v3.26.1
INCOME TAX
 12 Months Ended
Dec. 31, 2025
INCOME TAX  
INCOME TAX

NOTE 11 – INCOME TAX

 

The Company provides for income taxes under ASC 740, “Income Taxes.” Under the asset and liability method of ASC 740, deferred tax assets and liabilities are recorded based on the differences between the financial statement and tax basis of assets and liabilities and the tax rates in effect when these differences are expected to reverse. A valuation allowance is provided for certain deferred tax assets if it is more likely than not that the Company will not realize tax assets through future operations.

 

A reconciliation between expected income taxes, computed at the federal income tax rate of 21% applied to the pretax accounting income (loss), and the income tax net expense included in the statements of operations for the years ended December 31, 2025 and 2024 is as follows:

 

 

 

For Year Ended

 

 

For Year Ended

 

 

 

 December 31, 2025

 

 

 December 31, 2024

 

Net (loss) income before income tax

 

$(567,160)

 

$(1,868,186)

Statutory tax Rate

 

 

21%

 

 

21%

Tax (benefit) expense at the statutory tax rate

 

 

(119,104)

 

 

(392,319)

Tax effect of

 

 

 

 

 

 

 

 

     Stock-based compensation

 

 

9,870

 

 

 

18,900

 

     (Loss) gain on change in fair value of derivative liabilities

 

 

(103,065)

 

 

237,891

 

     Unrealized loss on change in fair value of digital assets

 

 

15,855

 

 

 

-

 

Changes in valuation allowance

 

 

196,444

 

 

 

135,528

 

Income tax expense (benefit) per book

 

$-

 

 

$-

 

 

The components of the Company’s deferred tax asset and reconciliation of income taxes computed at the statutory rate to the income tax amount recorded as of December 31, 2025 and 2024 are as follows:

 

 

 

 December 31, 2025

 

 

 December 31, 2024

 

Net operating loss carryforward

$ 

 6,437,450

 

 

$5,502,006

 

Statutory tax Rate

 

 

21%

 

 

21%

Deferred tax asset

 

 

1,351,865

 

 

 

1,155,421

 

Less: Valuation allowance

 

 

(1,351,865)

 

 

(1,155,421)

Net deferred assets

 

$-

 

 

$-

 

 

The valuation allowance increased by $196,444 and $135,528 during the years ended December 31, 2025 and 2024, respectively. As of December 31, 2025, the Company had approximately $6.4 million in net operating losses (“NOLs”) that may be available to offset future taxable income, which begin to expire between 2034 and 2039. NOLs generated in tax years prior to December 31, 2017, can be carried forward for twenty years, whereas NOLs generated after December 31, 2017 can be carried forward indefinitely. In accordance with Section 382 of the U.S. Internal Revenue Code, the usage of the Company’s net operating loss carry forwards is subject to annual limitations following greater than 50% ownership changes.