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

NOTE 10 – INCOME TAXES

 

Income (loss) from continuing operations before income taxes for the years ended December 31, 2025 and 2024 consisted entirely of domestic (U.S.) amounts.

 

The components of income tax expense (benefit) from continuing operations are as follows (in thousands):

          
   2025   2024 
Federal  $–   $– 
State   –    – 
Foreign   –    – 
Total  $–   $– 

 

Income taxes paid (net of refunds received) were $0 in federal, state, and foreign jurisdictions for both years. No individual jurisdiction exceeded 5% of total income taxes paid (net of refunds).

 

The Company’s net deferred tax assets at December 31, 2025 and 2024 was $9,998 thousand and $8,562 thousand, respectively, which primarily consists of net operating loss carry forwards and accrued expenses. The Company has recorded a full valuation allowance against its deferred tax assets as of both periods because management has determined that it is more likely than not that these assets will not be realized.

 

For the years ended December 31, 2025 and 2024, the valuation allowance increased by approximately $1,436 thousand and $1,462 thousand, respectively. The total net operating loss carryforwards at December 31, 2025 was $47,572 thousand. These net operating loss carryforwards begin to expire in 2027. Net operating losses incurred after 2020 can be carried forward indefinitely.

 

The Company’s effective tax rate was 0% for both years.

 

The following table presents a reconciliation between the U.S. federal statutory income tax rate and the Company’s effective tax rate (in thousands):

Schedule of income tax reconciliation            
Description  2025 Amount  2025%  2024 Amount  2024%
U.S. federal statutory tax rate (benefit)  $(1,663)   21.0%  $(1,876)   21.0%
State income taxes, net of federal income tax effect (1)   –    – %   –    – %
Nondeductible permanent differences   227    (2.9%)   414    (4.6%)
Changes in valuation allowance (2)   1,436    (18.1)%   1,462    (16.4)%
Effective tax rate  $–    – %  $–    – %

 

(1) In 2025 and 2024, the majority of state and local income taxes, net of federal effect, are attributable to taxes in California.
(2) The change in valuation allowance related to state and local tax is included in the “State and local tax” line above.

 

The Company operates primarily in the United States and files income tax returns in the U.S. federal jurisdiction and various state jurisdictions, including California. The Company is subject to examination by U.S. federal and state taxing authorities for tax years beginning in 2020 and is not currently under examination by any taxing authority.