v3.26.1
Income Taxes
 12 Months Ended
Dec. 31, 2025
Income Taxes [Abstract]  
Income Taxes

Note 10  – Income Taxes

 

The Company’s tax expense differs from the “expected” tax expense for the period (computed by applying the blended corporate and state tax rates of 25.35% to loss before taxes), are approximately as follows:

 

   December 31,   December 31, 
   2025   2024 
Federal income tax benefit–-21%  $(418,000)  $(232,000)
State income tax–-4.35%   (85,600)   (48,000)
Non-deductible items   336,400    
-
 
Subtotal   (167,200)   (280,000)
Change in valuation allowance   167,200    280,000 
Income tax benefit  $
-
   $
-
 

  

The tax effects of temporary differences that give rise to significant portions of deferred tax assets and liabilities at December 31, 2025 and 2024 are approximately as follows:

 

Schedule of Deferred Tax Assets and Liabilities

 

    December 31,     December 31,  
    2025     2024  
Amortization of debt discount   $ -     $ (3,800 )
Unpaid Liabilities     (244,800 )    
 
  
Share based payments    
 
       (532,300 )
Net operating lass carryforwards     (1,576,900 )     (973,000 )
Total deferred Tax assets     (1,821,700 )     (1,509,100 )
Less valuation allowance     1,821,700       1,509,100  
Net deferred tax asset recorded   $ -     $ -  

 

Deferred tax assets and liabilities are computed by applying the federal and state income tax rates in effect to the gross amounts of temporary differences and other tax attributes, such as net operating loss carryforwards. In assessing if the deferred tax assets will be realized, the Company considers whether it is more likely than not that some or all of these deferred tax assets will be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the period in which these deductible temporary differences reverse.

  

During the year ended December 31, 2025, the valuation allowance increased by approximately $167,200. The total valuation allowance results from the Company’s estimate of its uncertainty in being unable to recover its net deferred tax assets.

 

At December 31, 2025, the Company has federal net operating loss carryforwards, which are available to offset future taxable income, of approximately $6,222,000. The Company is in the process of analyzing their NOL and has not determined if the Company has had any change of control issues that could limit the future use of these NOL’s.

 

NOL carryforwards that were generated after 2017 of approximately $6,222,084 may only be used to offset 80% of taxable income and are carried forward indefinitely.

 

These carryforwards may be subject to an annual limitation under Section 382 and 383 of the Internal Revenue Code of 1986, and similar state provisions if the Company experienced one or more ownership changes which would limit the amount of NOL and tax credit carryforwards that can be utilized to offset future taxable income and tax, respectively. In general, an ownership change, as defined by Section 382 and 383, results from transactions increasing ownership of certain stockholders or public groups in the stock of the corporation by more than 50 percentage points over a three- year period. The Company has not completed an IRC Section 382/383 analysis. If a change in ownership were to have occurred, NOL and tax credit carryforwards could be eliminated or restricted.

If eliminated, the related asset would be removed from the deferred tax asset schedule with a corresponding reduction in the valuation allowance. Due to the existence of the valuation allowance, limitations created by future ownership changes, if any, will not impact the Company’s effective tax rate.

 

The Company files corporate income tax returns in the United States and Florida jurisdictions. Due to the Company’s net operating loss posture, all tax years are open and subject to income tax examination by tax authorities. The Company’s policy is to recognize interest expense and penalties related to income tax matters as tax expense. At December 31, 2025 and 2024, respectively, there were no unrecognized tax benefits, and there are no significant accruals for interest related to unrecognized tax benefits or tax penalties.