v3.26.1
Income Tax
 3 Months Ended
Mar. 31, 2026
Income Tax [Abstract]  
INCOME TAX

NOTE 10 – INCOME TAX

 

The Company accounts for income taxes in accordance with ASC 740, Income Taxes. Deferred tax assets and liabilities are recognized for the expected future tax consequences of temporary differences between the financial statement carrying amounts and the tax bases of assets and liabilities, as well as for net operating loss carryforwards.

 

For the three months ended March 31, 2026 and 2025, the Company recorded no income tax expense or benefit due to continuing operating losses and the establishment of a full valuation allowance against its deferred tax assets, as management determined that it is more likely than not that such deferred tax assets will not be realized.

 

As of March 31, 2026, the Company had federal net operating loss carryforwards of approximately $7.6 million available to offset future taxable income, subject to limitations under Section 382 of the Internal Revenue Code. Net operating losses generated in tax years beginning after December 31, 2017 may be carried forward indefinitely.

 

The effective tax rate for the three months ended March 31, 2026 and 2025 differed from the statutory federal income tax rate primarily due to the increase in the valuation allowance recorded against deferred tax assets.

 

The components of the Company’s effective tax rate reconciliation are as follows:

 

    March 31,
2026		     March 31,
2025		  
Federal statutory tax rate     21.0 %     21.0 %
State taxes, net of federal benefit     5.2 %     5.2 %
Change in valuation allowance     (26.2 )%     (26.2 )%
Effective tax rate     0.0 %     0.0 %

 

The Company recognizes interest and penalties related to uncertain tax positions in income tax expense. As of March 31, 2026, the Company had no uncertain tax positions requiring recognition or disclosure. The Company is generally subject to examination by federal and state taxing authorities for tax years beginning in 2022 and forward.