v3.26.1
INCOME TAXES
 12 Months Ended
Jan. 31, 2026
INCOME TAXES  
INCOME TAXES

Note 8 – INCOME TAXES

 

The Company did not record a current income tax provision on its operating losses for the years ended January 31, 2026, and 2025, due to its net operating loss position and a full valuation allowance against deferred tax assets. In accordance with ASC 740-10-45-25, the Company has elected to classify interest and penalties on income tax obligations as income tax expense. The income tax payable balance of $344,234 and $313,722 as of January 31, 2026, and 2025, primarily relates to historical tax liabilities incurred in prior periods and franchise tax expenses. During the years ended January 31, 2026, and 2025, the Company recognized $29,957 and $95,008, respectively, in interest and penalties on historical income tax obligations relating to fiscal year 2022. In addition, during the year ended January 31, 2026, the Company recognized $555 of interest and penalties related to the late payment of franchise tax, which is included in general and administrative expenses.

 

Due to uncertainties surrounding the Company’s ability to generate future taxable income to realize deferred income tax assets arising as a result of net operating losses carried forward, the Company has not recorded any deferred income tax assets as of January 31, 2026. The Company has incurred a net operating loss (NOL) of $5,974,373.

 

Federal net operating loss carryforwards generated in tax years beginning after December 31, 2017, carry forward indefinitely; any net operating losses generated in earlier tax years expire 20 years after the year in which they were generated. The Company’s net operating loss carry forwards may be subject to annual limitations, which could eliminate, reduce or defer the utilization of the losses because of an ownership change as defined in Section 382 of the Internal Revenue Code.  The Company files U.S. federal and California state income tax returns, which remain subject to examination for the periods provided under the applicable statutes of limitations.

 

The provision for refundable federal income tax at 21% consists of the following for the periods ending:

 

 

 

January 31,

 

 

January 31,

 

 

 

2026

 

 

2025

 

Net Operating Loss

 

$(385,411)

 

$(679,914)

Statutory federal income tax rate

 

 

21%

 

 

21%

Income Tax expense

 

 

(80,936)

 

 

(142,782)

Less: valuation allowance

 

 

80,936

 

 

 

142,782

 

Income Tax expense

 

$-

 

 

$-

 

 

Net deferred tax assets consist of the following components as of January 31, 2026, and 2025:

 

 

 

January 31,

 

 

January 31,

 

 

 

2026

 

 

2025

 

Net operating carryforward

 

$5,974,373

 

 

$5,588,962

 

Statutory federal income tax rate

 

 

21%

 

 

21%

Tax benefit of net operating loss carryforward

 

 

(1,254,618)

 

 

(1,173,682)

Valuation allowance

 

 

1,254,618

 

 

 

1,173,682

 

Deferred income tax assets

 

$-

 

 

$-