Note 14 — Income Taxes

Our income before provision for (benefit from) income taxes for the years ended December 31, 2025 and 2024 was as follows:

The benefit from income taxes was as follows: 

Upon adoption of ASU 2023-09, Improvements to Income Tax Disclosures, as described in Note 2, Summary of Significant Accounting Policies, the reconciliation of taxes at the federal statutory rate to our provision for (benefit from) income taxes for the year ended December 31, 2025 was as follows:

A reconciliation of the provision for income taxes with the amounts computed by applying the Federal income tax rate to income from operations before the provision for income taxes is as follows for the years ended December 31, 2024:

There was no cash paid for income taxes, net of refunds, during the years ended December 31, 2025 and 2024, respectively.

The components of deferred tax assets (liabilities) were as follows:

As of December 31, 2025, the Company has federal net operating loss carryforwards of approximately $11.9 million and state net operating loss carryforwards of approximately $13.4 million which can be carried forward indefinitely. As of December 31, 2024, the Company had federal net operating loss carryforwards of approximately $12.0 million and state net operating loss carryforwards of approximately $12.9 million. The valuation allowance on our net deferred tax assets increased by $1.4 million and $3.1 million during the years ended December 31, 2025 and 2024, respectively. The changes in valuation allowances during the years ended December 31, 2025 and 2024 were primarily due to the net operating losses generated by the Company and stock compensation awarded. Deferred tax assets for net operating loss carryforwards are fully offset by a valuation allowance.

We have taken current and potential future expirations into consideration when evaluating the need for valuation allowances against these deferred tax assets. A valuation allowance for deferred tax assets is provided when it is more likely than not that some portion or all of the deferred tax assets will not be realized. Realization is dependent upon the generation of future taxable income or the reversal of federal tax liabilities during the periods in which those temporary differences become deductible. We consider the scheduled reversal of deferred tax liabilities, projected future taxable income and tax planning strategies in making this assessment. Based upon the level of historical taxable income and projections for future taxable income over the periods in which our deferred tax assets are deductible, we believe it is more likely than not that we will not realize the benefits of these deductible differences. We have recorded a valuation allowance for deferred tax assets of $5,937,086 and $4,582,120 as of December 31, 2025 and 2024.

The Company applies the FASB’s provisions for uncertain tax positions. The Company utilizes the two-step process to determine the amount of recognized tax benefit. For tax positions meeting the more-likely-than-not threshold, the amount recognized in the consolidated financial statements is the largest benefit that has a greater than 50% likelihood of being realized upon ultimate settlement with the relevant tax authority.

The Company recognizes interest and penalties associated with uncertain tax positions as a component of income tax expense. As of December 31, 2025 and 2024 we have not accrued for any interest and penalties on our unrecognized tax benefits.

We file income tax returns in the U.S., Florida and foreign jurisdictions. We are currently not under examination by the Internal Revenue Service (“IRS”). All net operating losses and tax credits generated to date are subject to adjustment for U.S. federal and state income tax purposes. Our returns for 2021 and subsequent tax years remain subject to examination in U.S. and Florida jurisdictions. Our returns for 2023 and subsequent tax years remain subject to examination in foreign jurisdictions.

As of December 31, 2025, management does not believe the Company has any material uncertain tax positions that would require it to measure and reflect the potential lack of sustainability of a position on audit in its financial statements. The Company will continue to evaluate its uncertain tax positions in future periods to determine if measurement and recognition in its financial statements is necessary. The Company does not believe there will be any material changes in its unrecognized tax positions over the next year.