v3.26.1
INCOME TAXES
 3 Months Ended
Mar. 31, 2026
Income Tax Disclosure [Abstract]  
INCOME TAXES

 

NOTE 15 - INCOME TAXES

 

The Company adopted ASU 2023-09 to enhance the income taxes disclosures. A reconciliation of the federal statutory income tax rate and the effective income tax rate as a percentage of income before income taxes is as follows:

 

   $   %   $   % 
   Three Months Ended March 31, 
   2026   2025 
   $   %   $   % 
                 
Loss before income taxes  $(364,779)       $(538,282)     
U.S. Federal Statutory Tax Rate   (76,604)   21.0%   (113,039)   21.0%
Current State Income Taxes, Net of Federal Income Tax Effect   (9,439)   2.6%   (27,079)   5.0%
                     
Nontaxable or nondeductible Items                    
Derivative debt discount   12,336    -3.4%   17,674    -3.3%
Other   -    0.0%   -    0.0%
                     
Other Adjustments                    
Share-based compensation   38,511    -10.6%   41,170    -7.6%
Interest accrued to cash basis taxpayers   6,046    -1.6%   (11,716)   2.2%
Amortization and depreciation   (4,857)   1.3%   (4,962)   0.9%
Change in reserves   (210)   0.1%   (210)   0.0%
                     
Change in Valuation Allowance   34,217    -9.4%   98,162    -18.2%
                     
Total Income Tax Provision   -    0.0%   -    0.0%

 

 

The Company’s deferred tax assets as of March 31, 2026 and December 31, 2025 are as follows:

 

   March 31,   December 31, 
   2026   2025 
         
Net operating loss carryforwards (Federal)  $8,234,000   $8,200,000 
           
Less valuation allowance   (8,234,000)   (8,200,000)
           
Deferred tax assets  $-   $- 

 

Deferred taxes are caused primarily by net operating loss carryforwards. U.S. Tax Legislation enacted in 2017 (the “TCJA”) has significantly changed certain aspects of U.S. federal income taxation. Net Operating Losses (“NOLs”) generated in 2017 and prior years can be carried forward for 20 years. NOLs generated in 2018 – 2020, as enacted by the CARES Act, can be carried forward indefinitely. However, NOLs generated in 2021 is also carried forward indefinitely but limited to 80% of taxable income.

 

For federal income tax purposes, the Company has a net operating loss carryforward of approximately $39,200,000 as of March 31, 2026, of which approximately $16,900,000 expires beginning in 2026 and $22,300,000 which can be carried forward indefinitely. For state income tax purposes, the Company has a net operating loss carryforward of approximately $17,000,000 and $22,000,000 as of March 31, 2026 in Georgia and Massachusetts, respectively, which expires beginning in 2038.

 

Pursuant to Internal Revenue Code Section 382, the future realization of our net operating loss carryforwards to offset future taxable income may be subject to an annual limitation as a result of ownership changes that may have occurred previously or that could occur in the future.

 

The change in valuation allowance is as follows:

 

   March 31,   December 31, 
   2026   2025 
         
Valuation allowance - beginning of period  $8,200,000   $8,100,000 
           
Additions charged to income tax benefit   34,000    100,000 
           
Valuation allowance - end of period  $8,234,000   $8,200,000