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

NOTE 10 – INCOME TAXES

 

The Company accounts for income taxes in accordance with ASC 740, Income Taxes. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases, as well as net operating loss carryforwards. Deferred tax assets are reduced by a valuation allowance when management determines that it is more likely than not that the assets will not be realized.

 

For the three months ended March 31, 2026 and 2025, the Company recorded no provision for income taxes. Although the Company reported pretax income during the three months ended March 31, 2026, no income tax expense was recognized because the expected tax expense was offset by the utilization of net operating loss carryforwards for which a full valuation allowance had previously been established. Accordingly, the Company continues to maintain a full valuation allowance against its deferred tax assets. Management has concluded that it remains more likely than not that the Company's deferred tax assets will not be realized based upon its history of operating losses, limited operating history, and uncertainty regarding the generation of sufficient future taxable income.

 

The Company's effective income tax rate differed from the U.S. federal statutory rate for the three months ended March 31, 2026 and 2025 as follows:

 

Income Tax Rate Reconciliation

                    
   Three Months Ended March 31, 2026   Rate   Three Months Ended March 31, 2025   Rate 
Expected federal income tax (expense) benefit  $(7,622)   (21.0)%  $35,801    21.0% 
Expected state income tax (expense) benefit, net of federal effect*   (1,053)   (2.9)%   4,946    2.9% 
Change in valuation allowance   8,675    23.9%    (40,747)   (23.9)%
Income tax provision  $–    0.0%   $–    0.0% 

 

As of March 31, 2026, the Company continues to maintain a full valuation allowance against its deferred tax assets because management believes it is more likely than not that the deferred tax assets will not be realized. Management evaluates the need for a valuation allowance each reporting period based on all available positive and negative evidence.

 

The Company recognizes interest and penalties related to uncertain tax positions as a component of income tax expense. As of March 31, 2026, the Company had no unrecognized tax benefits and had not accrued any interest or penalties related to uncertain tax positions.