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

16. INCOME TAXES

 

For all results of operations to date, there has been no provision for income taxes and deferred tax assets have been entirely offset by valuation allowances.

 

As of March 31, 2026 and December 31, 2025, the Company had net operating loss carry forwards of approximately $7,258,057 and $6,611,460, respectively. The carry forwards expire through the year 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 Tax Cuts and Jobs Act was enacted on December 22, 2017, which reduced the U.S. corporate statutory tax rate from 35% to 21% beginning on January 1, 2018. We used 21% as an effective federal rate, and 1.5% as an effective state rate. Tax computations are as follows:

 

   For the Three months Ended   For the Three months Ended 
  

March 31, 2026

   March 31, 2025 
Net income (loss) before taxes  $(2,437,157)  $(23,068)
Adjustments to arrive at taxable income/loss          
Permanent differences:   12,764    24,378 
Temporary differences:   1,566,067    - 
Taxable income (loss)   (858,326)   1,310 
           
Current Year Taxable income (loss)   (858,326)   1,310 
NOL carried forward prior year (tax return)   (6,611,460)   (5,534,653)
NOL carried forward at period end   (7,469,786)   (5,533,343 
           
Deferred Tax Asset - Federal Rate (21%)  180,248   275 
Deferred Tax Asset - State Rate (1.5%)   12,875    20 
Total Deferred Tax Asset   193,123    295 
           
Valuation Allowance   (193,123)   (295)
Deferred tax per books  $-   $- 

 

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 at March 31, 2026 and March 31, 2025, are as above.

 

In assessing the ability to realize the 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.

 

The returns filed from the year 2019 going forward are subject to examination by the IRS. The Company has not received any notification from the IRS. Reported tax benefits and valuation allowances are the Company’s best estimate of its tax positions and have not been reviewed by the taxing authority.