v3.26.1
Income Taxes
 6 Months Ended
Jun. 30, 2026
Income Taxes [Abstract]  
INCOME TAXES

NOTE 13: INCOME TAXES

 

The Company’s provision for income taxes consists of the following for the six months ended June 30, 2026 and 2025:

 

    2026     2025  
Current:            
Federal   $ -     $ 171,949  
State and local     -       -  
Total current     -       171,949  
                 
Deferred:                
Federal   $ -     $ (141,815 )
State and local     -       (45,293 )
Total deferred     -       (187,108 )
                 
Income tax provision (benefit)   $ -     $ (15,159 )

 

A reconciliation of the federal statutory rate of 21% for the six months ended June 30, 2026 and 2025 to the effective rate for (loss) income from operations before income taxes is as follows:

 

    2026     2025  
Benefit for income taxes at federal statutory rate     21.00 %     21.00 %
State and local income taxes, net of federal benefit     6.71       6.71  
Meals and entertainment     (0.42 )     (0.41 )
Other and prior-year true up     (27.29 )     (27.30 )
Effective income tax rate     - %     - %

 

The tax effects of these temporary differences along with the net operating losses, net of an allowance for credits, have been recognized as deferred tax assets (liabilities) at June 30, 2026 and December 31, 2025 as follows:

 

    June 30,
2026
(unaudited)		     December 31,
2025		  
Net operating loss   $ 987,856     $ 695,067  
Accounts and contracts receivable     (500,214 )     (472,180 )
Prepaid expenses     (12,801 )     (20,780 )
Accounts payable and accrued expenses     215,289       245,192  
Depreciation     (150,929 )     (180,167 )
Stock-based compensation     1,486,084       1,486,084  
Lease liability     (30,679 )     (40,124 )
Net deferred tax asset (liability)     1,994,607       1,713,092  
Less: valuation allowance     (1,994,607 )     (1,713,092 )
    $ -     $ -  

 

As of June 30, 2026, the Company had a net operating loss carryforward of approximately $3,600,000 for Federal and State tax purposes. The net operating loss will carryforward indefinitely and be available to offset up to 80% of future taxable income each year.

 

The Company establishes a valuation allowance, if based on the weight of available evidence, it is more likely than not that some portion or all of the deferred assets will not be realized. The Company recorded a valuation allowance against its net deferred tax asset of $1,994,607 as of June 30, 2026.

 

The Company’s current portion of its provision for income taxes during the six months ended June 30, 2025 resulted from a payment for income taxes due with its prior year return.