| INCOME TAXES |
NOTE 14 – INCOME TAXES Provisions for income taxes are based on taxes payable or refundable for the current year and deferred income taxes. Deferred income taxes are provided on differences between the tax bases of assets and liabilities and their reported amounts in the financial statements and on tax carry forwards. Deferred tax assets and liabilities are included in the financial statements at currently enacted income tax rates applicable to the period in which the deferred tax assets and liabilities are expected to be realized or settled. As changes in tax laws or rates are enacted, deferred tax assets and liabilities are adjusted through the provision for income taxes. A valuation allowance is provided against deferred income tax assets when it is not more likely than not that the deferred income tax assets will be realized. Significant components of the Company’s income tax provision (benefit) for continuing operations are as follows: | | For the Three Months Ended | | | For the Six Months Ended | | | | June 30, | | | June 30, | | | | 2026 | | | 2025 | | | 2026 | | | 2025 | | | Current | | | | | | | | | | | | | Domestic-Federal | | $ | (124,650 | ) | | $ | (4,710 | ) | | $ | 52,131 | | | $ | (9,048 | ) | Domestic-State | | | 119 | | | | 25 | | | | 53,727 | | | | (1,717 | ) | Franchise taxes | | | 2,176 | | | | 7,240 | | | | 7,831 | | | | 11,155 | | Foreign | | | - | | | | - | | | | - | | | | - | | | | | (122,354 | ) | | | 2,555 | | | | 113,689 | | | | 390 | | | Deferred | | | | | | | | | | | | | | | | | Domestic-Federal | | | (39,593 | ) | | | (51,493 | ) | | | (662,298 | ) | | | (117,861 | ) | Domestic-State | | | (44,715 | ) | | | (5,890 | ) | | | (213,201 | ) | | | (17,065 | ) | Foreign | | | - | | | | - | | | | - | | | | - | | | | | (84,308 | ) | | | (57,383 | ) | | | (875,499 | ) | | | (134,926 | ) | | Total Provision/(Benefit) for Income Taxes | | $ | (206,662 | ) | | $ | (54,828 | ) | | $ | (761,810 | ) | | $ | (134,536 | ) |
The Company currently believes that all significant filing positions are highly certain and that all of its significant income tax filing positions and deductions would be sustained upon audit. Therefore, the Company has no significant reserves for uncertain tax positions and no adjustments to such reserves were required by US GAAP. The Company’s policy is to recognize accrued interest and penalties related to unrecognized tax benefits in the provision for income taxes. A reconciliation of the amount of tax provision (benefit) computed using the U.S. federal statutory income tax rate to the provision for income taxes on continuing operations is as follows: | | For the Three Months Ended | | | For the Six Months Ended | | | | June 30, | | | June 30, | | | | 2026 | | | 2025 | | | 2026 | | | 2025 | | | | | | | | | | | | | | | | Domestic-Federal | | $ | (345,897 | ) | | $ | (69,514 | ) | | $ | (1,337,255 | ) | | $ | (150,713 | ) | | State taxes, net of federal benefit | | | (95,691 | ) | | | (15,176 | ) | | | (364,278 | ) | | | (35,171 | ) | | Non-deductible expenses | | | 11,366 | | | | 10,931 | | | | 24,275 | | | | 29,416 | | | Franchise taxes | | | 2,176 | | | | 7,240 | | | | 7,831 | | | | 11,155 | | | Revision of prior years' deferred taxes | | | (49,129 | ) | | | 6,649 | | | | (49,129 | ) | | | 570 | | | Change in estimated future income tax rates | | | 32,398 | | | | 32,224 | | | | (87,026 | ) | | | 64,024 | | | Change in valuation allowance | | | 272,864 | | | | (27,182 | ) | | | 1,045,921 | | | | (53,815 | ) | | Other | | | (34,749 | ) | | | (1 | ) | | | (2,148 | ) | | | (1 | ) | | Total Provision/(Benefit) for Income Taxes | | $ | (206,662 | ) | | $ | (54,828 | ) | | $ | (761,810 | ) | | $ | (134,536 | ) |
Deferred tax assets and liabilities as of June 30, 2026 and December 31, 2025 were as follows: | | June 30, | | | December 31, | | | | 2026 | | | 2025 | | Deferred Tax Assets: | | | | | | | Operating Loss Carry forwards | | $ | 1,560 | | | $ | 8,169 | | Stock-Based Compensation | | | 2,810,058 | | | | 2,742,007 | | Sales Allowances | | | 93,522 | | | | 91,257 | | Provision for Credit Losses Extrax NM Loans | | | 112,717 | | | | 109,987 | | Inventory Reserve (Allowance) | | | 1,762,513 | | | | - | | Accrued Related Party Expenses | | | 2,651 | | | | 1,383 | | Interest Carryforward | | | - | | | | 65,675 | | Allowance for Doubtful Accounts | | | 322,616 | | | | 331,026 | | Lease Liabilities | | | 16,898 | | | | 16,205 | | Investment Impairments | | | 506,675 | | | | 468,384 | | Fixed Asset Impairments | | | 55,592 | | | | - | | Less: Valuation allowance | | | (4,366,299 | ) | | | (3,320,378 | ) | Total Deferred Tax Assets | | | 1,318,504 | | | | 513,715 | | | | | | | | | | | Deferred Tax Liabilities: | | | | | | | | | Depreciation & Amortization | | | (173,202 | ) | | | (243,913 | ) | Total Deferred Tax Liabilities | | | (173,202 | ) | | | (243,913 | ) | | | | | | | | | | Net Deferred Tax Assets/(Liabilities) | | $ | 1,145,302 | | | $ | 269,802 | |
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