v3.26.1
INCOME TAXES
 12 Months Ended
Dec. 31, 2025
Income Tax Disclosure [Abstract]  
INCOME TAXES

NOTE 16: INCOME TAXES

 

The following table summarizes the significant differences between the U.S. Federal statutory tax rate and the Company’s effective tax rate for financial statement purposes for the years ended December 31, 2025 and 2024:

 

 

 

   2025   2024 
Federal income taxes at statutory rate   21.00%   21.00%
State income taxes at statutory rate   9.00%   9.00%
Permanent differences   119.45%   0.00%
Other expenses   12.73%   0.00%
Stock compensation   24.20%   26.85%
Debt discounts   4.44%   2.30%
Change in valuation allowance   (190.82)%   (59.15)%
Totals   0.00%   0.00%

 

The following is a summary of the net deferred tax asset as of December 31, 2025 and 2024:

 

   As of
December 31, 2025		   As of
December 31, 2024		 
Deferred tax assets (liabilities):          
Net operating losses  $5,898,068   $8,955,320 
Stock compensation   9,158,792    7,943,348 
Debt discounts   561,289    338,042 
Other expense   639,351    - 
Total deferred tax assets   16,257,500    17,236,710 
Less: Valuation allowance   (16,257,500)   (17,236,710)
Net deferred tax assets (liabilities)  $-   $- 

 

Section 382 of the Internal Revenue Code provides an annual limitation on the amount of federal NOLs and tax credits that may be used in the event of an ownership change. The Company had a net operating loss carryforward totaling approximately $35,978,125 at December 31, 2025. All NOLs are subject to the Section 382 limitation due to the change in control of the Company.

 

The Company classifies accrued interest and penalties, if any, for unrecognized tax benefits as part of income tax expense. The Company did not accrue any penalties or interest as of December 31, 2025 and 2024.

 

The provision (benefit) for income taxes for continuing operations for the year ended December 31, 2025 and 2024 is as follows and represents minimum state taxes:

 

           
Current  $-   $- 
Deferred   -    - 
Total  $-   $-