Income Taxes |
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Mar. 31, 2026 | ||||||||||||||||||||||||||||||||||||||||||||||
| Income Tax Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||
| Income Taxes | Note 12. Income Taxes
The Company accounts for income taxes in accordance with ASC 740, Income Taxes, which requires recognition of estimated income taxes payable or refundable on income tax returns for the current year and for the estimated future tax effect attributable to temporary differences and carry-forwards. Measurement of deferred income tax is based on enacted tax laws including tax rates, with the measurement of deferred income tax assets being reduced by available tax benefits not expected to be realized. Given its history of net operating losses, the Company has determined that it is more likely than not that it will not be able to realize the tax benefit of its net operating loss carryforwards. Accordingly, the Company has not recognized a deferred tax asset for this benefit.
The valuation allowance at March 31, 2026 and December 31, 2025 was $815,993 and $794,639, respectively. The net change in valuation allowance for the quarter ended March 31, 2026 was an increase of $21,354 and for the year ended December 31, 2025 was a decrease of $96,285. In assessing the realizability of deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred income tax assets will not be realized. That realization is dependent upon the future generation of taxable income during the period in which those temporary differences become deductible. The Company considers the scheduled reversal of deferred income tax liabilities, projected future taxable income and tax planning strategies in making this assessment. Based on these considerations, the Company has determined that enough uncertainty exists regarding the realization of the deferred tax asset balance to apply a full valuation allowance against these assets as of March 31, 2026 and December 31, 2025. All tax years remain open for examination by taxing authorities.
Reconciliation between the provision for income taxes and the expected tax benefit using the federal statutory rate of 21% for 2026 and 2025 are as follows:
The Company has net operating losses of $4,007,457 which begin to expire in 2027. Future utilization of currently generated federal and state NOL and tax credit carry forwards may be subject to a substantial annual limitation due to the ownership change limitations. The annual limitation may result in the expiration of NOL and tax credit carry-forwards before full utilization.
For the three-month period ended March 31, 2026, the Company did not record a tax provision. The Company continues to maintain a valuation allowance against its net deferred tax assets, which will be reassessed as additional information becomes available.
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