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

Note 6 – Income Taxes

 

The Company is subject to United States federal income taxes at an approximate rate of 21%. The reconciliation of the provision for income taxes at the United States federal statutory rate compared to the Company’s income tax expense as reported is as follows:

        
   Year Ended   Year Ended 
   December 31,   December 31, 
   2025   2024 
Income tax benefit computed at the statutory rate  $3,329,000   $3,120,000 
Tax effect of:          
True-ups and non-deductible expenses   193,000    (585,000)
Change in valuation allowance   (3,522,000)   (2,535,000)
Provision for income taxes  $–   $– 

 

The Company adopted ASC 2023-09 during the year ended December 31, 2025 prospectively. A reconciliation setting forth the differences between the effective tax rates and the U.S. federal statutory tax rate is as follows:

               
   Year Ended December 31, 2025 
   Amount   Rate 
US federal statutory tax rate  $3,329,000    21.0% 
Changes in valuation allowances   (3,522,000)   -22.2% 
Nontaxable or nondeductible items   193,000    1.2% 
Effective income tax rate  $–    0% 

 

 

Significant components of the Company’s deferred tax assets and liabilities after applying enacted corporate income tax rates are as follows:

        
   As of   As of 
   December 31,   December 31, 
   2025   2024 
Deferred income tax assets          
Net operating losses  $10,633,000   $7,923,000 
Stock-based compensation   1,026,000    999,000 
Capitalized 174 expenses   7,443,000    6,659,000 
Deferred income tax liability          
Prepaid expenses   (278,000)   (279,000)
Valuation allowance   (18,824,000)   (15,302,000)
Net deferred income tax assets  $–   $– 

 

As of December 31, 2025, the Company currently has net operating loss carryforwards of approximately $50,634,000. Approximately $200,000 of the net operating loss carryforward will begin to expire in 2037. The remaining net operating loss carryforward post-2017 may be carried forward indefinitely.

 

The Tax Reform Act of 1986 limits the use of net operating loss carryforwards in certain situations where changes occur in the stock ownership of a company. In the event that the Company has a change in ownership, utilization of carryforwards could be limited.