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

Note 13 – Income Taxes

 

Income taxes are accounted for under the liability method of accounting for income taxes. Under the liability method, future tax liabilities and assets are recognized for the estimated future tax consequences attributable to differences between the amounts reported in the financial statement carrying amounts of assets and liabilities and their respective tax bases. Future tax assets and liabilities are measured using enacted or substantially enacted income tax rates expected to apply when the asset is realized or the liability settled. The effect of a change in income tax rates on future income tax liabilities and assets is recognized in income in the period that the change occurs. Future income tax assets are recognized to the extent that they are considered more likely than not to be realized.

 

The FASB has issued ASC 740 clarifies the accounting for uncertainty in income taxes recognized in an enterprise’s financial statements. This standard requires a company to determine whether it is more likely than not that a tax position will be sustained upon examination based upon the technical merits of the position.

 

If the more-likely-than-not threshold is met, a company must measure the tax position to determine the amount to recognize in the financial statements.

 

As a result of the implementation of this standard, the Company performed a review of its material tax positions in accordance with recognition and measurement standards established by ASC 740 and concluded that the tax position of the Company has not met the more-likely-than-not threshold as of December 31, 2025.

 

The domestic and foreign components of loss before provision for income taxes were as follows:

          
   Year Ended   Year Ended 
   December 31, 2025   December 31, 2024 
Domestic  $(2,844,471)  $(3,386,541)
Foreign   (1,205,369)   (386,160)
Loss before provision for income taxes  $(4,049,840)  $(3,772,701)

 

The reconciliation of income tax expense computed at the U.S. federal statutory rate to the income tax provision for the years ended December 31, 2025 and 2024 is as follows:

          
   Year Ended   Year Ended 
   December 31, 2025   December 31, 2024 
Loss before income taxes  $(4,049,840)  $(3,772,701)
Taxes benefits under statutory US tax rates   (850,466)   (792,267)
Increase (decrease) in taxes resulting from:          
Increase in valuation allowance   (1,121,049)   (1,179,247)
Foreign tax rate differential   68,863    68,863 
Permanent differences   1,961,659    1,961,659 
State taxes   (59,007)   (59,007)
Provision for income taxes  $0   $0 

 

Deferred income taxes reflect the net tax effects of temporary differences between the carrying amount of assets and liabilities for financial reporting purposes and amounts used for income tax purposes. Significant components of the Company's deferred tax assets and liabilities consist of the following:

          
   December 31, 2025   December 31, 2024 
Deferred tax assets          
Net operating loss carryforwards  $7,163,281   $6,389,127 
Stock based compensation   1,718,035    1,718,035 
Intangibles   (680,012)   (680,012)
Depreciation   (3,973)   (3,973)
Other   (27,130)   (27,130)
Total deferred tax assets   8,170,201    7,396,047 
           
Valuation allowance   (8,170,201)   (7,396,047)
Net deferred tax assets (liabilities)  $–   $– 

 

At December 31, 2025, the Company had net operating loss (“NOL”) carryforwards of approximately $34.9 million that may be offset against future taxable income. Of the $34.9 million in NOLs, approximately $25.6 million relates to U.S. federal and state net operating losses, which are subject to limitations under Internal Revenue Code Section 382. These U.S. NOLs are limited to 80% of taxable income in any given year but do not expire under current tax law. The remaining $9.3 million relates to non-U.S. jurisdictions and may begin to expire in varying years depending on local regulations.

 

Income Taxes Paid (ASU 2023-09): For the years ended December 31, 2025 and 2024, the Company paid $nil in income taxes to any jurisdiction. There were no cash income tax payments made to U.S. federal, U.S. state or local, or foreign tax authorities in either period presented, consistent with the Company’s full valuation allowance position and $nil income tax provision.