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

NOTE 8: INCOME TAXES

 

Income tax expense is comprised of the following:

                
  

Years Ended December 31,

 
   2025   2024 
   US   Brazil   Total   US 
Income (loss) from Continuing operations  $389   $(354)  $35   $2,636 
                     
Federal:                    
Current  $–   $–   $–   $– 
Deferred   –    –    –    – 
Total Federal   –    –    –    – 
State:                    
Current   68    6    73    16 
Deferred   –    –    –    – 
Total State   –    –    73    16 
Total income tax expense  $68   $6   $73   $16 

 

Income tax expense differs from the amount computed by applying the U.S. statutory income tax rate to loss before income taxes for the reasons set forth below.

                
   2025   2024 
   $   %   $   % 
Income tax expense (benefit) at federal statutory rate   (7)   21.00%   (554)   21.00%
Domestic federal reconciling items                    
Meals and Entertainment   (12)   (35)%   (6)   0.00%
Other permanent differences   1    1%   –    (0.24)%
Change in valuation allowance   79    227%   569    21.58%
Domestic state tax benefit (expense), net of federal benefit   (54)   (154)%   (25)   (0.96)%
Foreign reconciling items - Brazil                    
Rate differential   (22)   (62)%   –    0.00%
Change in valuation allowance   (54)   (155)%   –    0.00%
Foreign withholding taxes                    
Foreign state tax benefit (expense), net of federal effect -Brazil   (4)   (13)%   –    0.00%
Income tax expense at effective rate   (73)   (211)%   (16)   (0.62)%

 

Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes, as well as operating loss and tax credit carryforwards. The tax effects of the temporary differences and carryforwards are as follows:

        
   December 31, 
   2025   2024 
Deferred tax assets:          
Net operating loss carryforwards  $5,346   $5,432 
Research and development and other credit carryforwards   618    618 
Share-based compensation   877    859 
Allowance for credit losses   124    – 
Right-of-use operating lease liabilities   1,377    1,289 
Other   16    62 
Total deferred tax assets   8,358    8,260 
Less: valuation allowance   (6,954)   (6,978)
Net deferred tax assets  $1,404   $1,282 
           
Deferred tax liabilities:          
Intangible amortization  $(42)  $(10)
Depreciation and amortization on property, plant and equipment   (150)   (141)
Right-of-use operating lease assets   (1,212)   (1,131)
Total deferred tax liabilities  $(1,404)  $(1,282)
           
Net deferred tax position  $–   $– 

 

We have $24,721 of US federal, $360 of Brazil, and $1,313 of state net operating loss (“NOL”) carryforwards and $618 in research and development and other credits available to offset future taxable income. These federal and state NOLs will expire at various dates through 2034, except for federal NOLs generated in 2018 and subsequent years, which have no expiration dates. Management analyzed the Company’s current operating results and future projections and determined that a full valuation allowance was needed due to our cumulative losses in recent years. We have no uncertain tax positions at December 31, 2025. Accordingly, we do not have any accruals for penalties or interest related to our tax returns. Should an examination or audit arise, we would evaluate the need for an accrual and record one, if necessary. Our federal tax returns from the tax years ended December 31, 2021 through December 31, 2024 are open to examination by the Internal Revenue Service.