| Schedule of Net Pre-Tax Book Loss for the United States and Foreign |
For financial reporting purposes, the net pre-tax book loss for the United States and foreign entities, in the aggregate, was: | | | Year Ended
December 31,
2025 | | Year Ended
December 31,
2024 | | Federal | | $ | (1,436,000 | ) | | $ | (1,366,000 | ) | | Foreign | | | — | | | | — | | | Total | | $ | (1,436,000 | ) | | $ | (1,366,000 | ) |
|
| Schedule of Provision for Income Taxes |
The provision for (benefit from) income taxes for the years ended December 31, 2025 and 2024, is set forth below: | Current | | Year Ended
December 31,
2025 | | Year Ended
December 31,
2024 | | Federal | | $ | (131,000 | ) | | $ | — | | State | | | — | | | | — | | Foreign | | | — | | | | — | | Total Provision for Income Taxes | | $ | (131,000 | ) | | $ | — |
|
| Schedule of Reconciliation of Effective Tax Rate |
The following is a reconciliation of our effective tax rate on income and the statutory rate for the year ended December 31, 2025: | | | Year Ended
December 31,
2025 | | | | Current tax at U.S statutory rate | | $ | (301,000 | ) | | 21.0 | % | | State and local taxes, net of federal taxes(a) | | | — | | | 0.0 | % | | | | | | | | | | | Changes in Valuation Allowance | | | 154,000 | | | -10.7 | % | | | | | | | | | | | Nondeductible/non taxable items | | | | | | | | | Nondeductible/nontaxable items | | | 31,000 | | | -2.2 | % | | Other Adjustments | | | | | | | | | Deferred Adjustment – Asset Write-Down Related to Transferable Credit | | | 115,000 | | | -8.0 | % | | True-up and Other | | | 1,000 | | | -0.1 | % | | Sale of Transferable Credit | | | (131,000 | ) | | 9.1 | % | | Income tax expense | | $ | (131,000 | ) | | 9.1 | % | ____________ (a) For the year ended December 31, 2025, state taxes in California and New York made up the majority (greater than 50% of the tax effect). As previously disclosed for the year ended December 31, 2024, prior to the adoption of ASU No. 2023-09, the following is a reconciliation of our income tax rate computed using the federal statutory rate to our actual income tax rate. | | | Year Ended
December 31,
2024 | | U.S. statutory income tax rate | | 21.00 | % | | State taxes, net of federal benefit | | 0.22 | % | | Permanent difference, overaccruals,and non-deductible items | | -0.82 | % | | Change in state rate | | -7.53 | % | | Deferred tax valuation allowance | | -13.77 | % | | True-up and Other | | 0.90 | % | | Total | | 0.00 | % |
|
| Schedule of Components of Net Deferred Tax Assets |
The components of net deferred tax assets at December 31, are set forth below: | | | December 31,
2025 | | December 31,
2024 | | Deferred tax assets: | | | | | | | | | | Current: | | | | | | | | | | Net operation loss | | $ | 4,990,000 | | | $ | 4,871,000 | | | Allowance for doubtful accounts | | | 158,000 | | | | 140,000 | | | Inventory – IRC 263A adjustment | | | 356,000 | | | | 296,000 | | | Stock based compensation – options and restricted stock | | | 425,000 | | | | 218,000 | | | Capitalized engineering costs | | | 75,000 | | | | 134,000 | | | Amortization – NTW Transaction | | | 107,000 | | | | 178,000 | | | Inventory reserve | | | 470,000 | | | | 644,000 | | | Deferred gain on sale of real estate | | | 5,000 | | | | 14,000 | | | Accrued Expenses | | | 54,000 | | | | 113,000 | | | Disallowed interest | | | 2,480,000 | | | | 2,269,000 | | | Operating lease liabilities | | | 153,000 | | | | 339,000 | | | Charitable Contributions | | | 2,000 | | | | — | | | Total deferred tax asset before valuation allowance | | | 9,275,000 | | | | 9,216,000 | | | Valuation allowance | | | (8,306,000 | ) | | | (8,091,000 | ) | | Total deferred tax asset after valuation allowance | | | 969,000 | | | | 1,125,000 | | | Right of Use Asset | | | (112,000 | ) | | | (255,000 | ) | | Property and equipment | | | (857,000 | ) | | | (870,000 | ) | | Total deferred tax liabilities | | | (969,000 | ) | | | (1,125,000 | ) | | | | | | | | | | | | Net deferred tax asset | | $ | — | | | $ | — | |
|