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INCOME TAXES
 12 Months Ended
Mar. 31, 2026
Income Tax Disclosure [Abstract]  
INCOME TAXES

NOTE 14 – INCOME TAXES

 

No income tax benefit has been recorded for the years ended March 31, 2026, and 2025, as the Company has incurred operating losses and maintains a full valuation allowance against its net deferred tax assets.

 

The following table presents the tax effects of temporary differences that give rise to significant portions of the deferred tax assets and liabilities as of March 31, 2026, and 2025:

  

   March 31, 2026   March 31, 2025 
Deferred income tax asset:          
Net operating loss carryforwards  $14,816,000   $12,723,000 
Stock compensation   2,398,000    1,857,000 
Other   637,000    98,000 
Total deferred tax assets   17,851,000    14,678,000 
Valuation allowance   (17,851,000)   (14,678,000)
Net deferred tax assets  $-   $- 

 

As of March 31, 2026, the Company had net operating loss carryforwards of approximately $51,550,000 of which $7,000,000 has been accumulated in our pre-merger operating subsidiary, Gel-Del Technologies, Inc. Internal Revenue Code (“IRC”) 382 potentially limits the utilization of net operating losses when there is a greater than 50% change in ownership. The Company has not performed an analysis under IRC 382 related to the changes in ownership, which could place certain limits on the company’s ability to utilize the NOLs.

 

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, the projected future taxable income and tax planning strategies in making this assessment. Management concluded that it is more likely than not that the deferred tax assets will not be realized and, accordingly, has recorded a full valuation allowance against the net deferred The change in the valuation allowance during the years ended March 31, 2026, and 2025 was $3,173,000 and $2,279,000, respectively. The net operating loss carryforwards prior to 2019, if not utilized, generally expire twenty years from the date the loss was incurred, and losses incurred in 2019 and after are carried forward indefinitely and subject to annual limitations for federal purposes. Minnesota loss carryforwards expire fifteen years from the date the loss was incurred and are subject to annual limitations.

 

A reconciliation of the benefit for income taxes to the amount computed by applying the 21% statutory U.S. federal income tax rate to income before income taxes after the adoption of ASU 2023-09 is as follows for years ended March 31, 2026, and 2025:

 

   2026   2026   2025   2025 
U.S. Federal Statutory Tax Rate  $(2,199,471)   21.00%  $(1,763,825)   21.00%
State and Local Income Taxes(1)   -    0.00%   -    0.00%
Domestic Federal:                    
Nontaxable or Nondeductible items   40,889    -0.39%   32,489    -0.39%
Other   (159,733)   1.52%   66,212    -0.79%
Changes in Valuation Allowance  $2,318,315    -22.13%  $1,665,124    -19.82%
Totals   -    0.00%   -    0.00%

 

  (1) The state that contributes to the majority (greater than 50%) of the tax effect in this category is Minnesota.

 

No income taxes were paid during the years ended March 31, 2026 and 2025.

 

As of March 31, 2026 and 2025, the Company had no unrecognized tax benefits and did not incur any interest or penalties related to uncertain tax positions. Accordingly, no accrual for uncertain tax positions was recorded as of those dates.

 

The Company is subject to taxation in the U.S. and Minnesota. Tax years for 2022 and forward are subject to examination by tax authorities. The Company is not currently under examination by any tax authority.

 

As of March 31, 2026, and 2025, the Company had no uncertain tax positions.