v3.26.1
INCOME TAXES
 3 Months Ended
Mar. 31, 2026
INCOME TAXES  
INCOME TAXES

NOTE 12 - INCOME TAXES

 

As of March 31, 2026 and December 31, 2025, the Company has net operating loss carry forwards of $15,162,259 and $15,070,424, respectively, which may be available to reduce future years’ taxable income through 2045. The Company’s net operating loss carry forwards may be subject to annual limitations, which could reduce or defer the utilization of the losses as a result of an ownership change as defined in Section 382 of the Internal Revenue Code.

 

The Company’s tax expense differs from the “expected” tax expense for Federal income tax purposes (computed by applying the United States Federal tax rate of 21% and state tax rate of 0% to loss before taxes for fiscal years 2026 and 2025), as follows:

 

SCHEDULE OF TAX EXPENSE FOR FEDERAL INCOME TAX PURPOSES

 

 

 

March 31, 2026

 

 

December 31, 2025

 

Federal tax benefit at the statutory rate

 

$(394,371)

 

 

21.00%

 

$(997,649)

 

 

21.00%

State tax benefit at the statutory rate

 

 

-

 

 

 

0.00%

 

 

-

 

 

 

0.00%

Unallowed deductions

 

 

688

 

 

 

(0.04)%

 

 

587

 

 

 

(0.01)%

Stock based forbearance fee expense

 

 

-

 

 

 

0.00%

 

 

87,792

 

 

 

(1.85)%

Stock based compensation expense

 

 

198,130

 

 

 

(10.55)%

 

 

387,503

 

 

 

(8.16)%

Gain (loss) on settlement of debt

 

 

103,717

 

 

 

(5.53)%

 

 

-

 

 

 

0.00%

Change in valuation allowance

 

 

91,836

 

 

 

(4.89)%

 

 

521,767

 

 

 

(10.98)%

Total

 

$-

 

 

 

 

 

 

$-

 

 

 

 

 

 

The tax effects of the temporary differences between reportable financial statement income and taxable income are recognized as deferred tax assets and liabilities.

 

The tax effect of significant components of the Company’s deferred tax assets and liabilities at March 31, 2026 and December 31, 2025, are as follows:

 

SCHEDULE OF DEFERRED TAX ASSETS AND LIABILITIES

 

 

 

March 31, 2026

 

 

December 31, 2025

 

Deferred tax assets:

 

 

 

 

 

 

Net operating loss carryforward

 

$15,162,259

 

 

$15,070,424

 

Timing differences

 

 

-

 

 

 

-

 

Total gross deferred tax assets

 

 

15,162,259

 

 

 

15,070,424

 

Less: Deferred tax asset valuation allowance

 

 

(15,162,259)

 

 

(15,070,424)

Total net deferred taxes

 

$-

 

 

$-

 

 

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 tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible. Management considers the scheduled reversal of deferred tax liabilities, projected future taxable income and tax planning strategies in making this assessment.

 

Because of the historical earnings history of the Company, the net deferred tax assets for 2026 and 2025 were fully offset by a 100% valuation allowance. The valuation allowance for the remaining net deferred tax assets was $15,162,259 and $15,070,424 as of March 31, 2026 and December 31, 2025, respectively.

 

The tax years 2021 – 2025 remain open to examination by federal agencies and other jurisdictions in which it operates.