INCOME TAXES

12 Months Ended

Dec. 31, 2025

Income Tax Disclosure [Abstract]

INCOME TAXES

12. INCOME TAXES

The provision for income tax expense (benefit) is comprised of the following:

	2025		2024
Current tax, federal	$	673,742	$	405,475
Current tax, state		50,564		183,429
Current tax, foreign		19,878		115,540
Current tax, total expense		744,184		704,444
Deferred income tax, federal		114,484		101,053
Deferred income tax, state		40,915		45,714
Deferred income tax, foreign		-		-
Deferred income tax, total expense (benefit)		155,399		146,767
Total	$	899,583	$	851,211

Income taxes paid in cash, net refunds received, during the years ended December 31, 2025 and 2024 were as follows:

United States	$	(107,188	)	$	52,367
State of Illinois		-			-
Canada		927,345			-
Total	$	820,157		$	52,367

The following table reconciles the income tax expense at the U.S. Federal statutory rate to income tax expense at the Company’s effective tax rates.

	2025					2024
	$			%		$			%
Income before income tax - United States	$	4,561,178				$	4,472,950
Income before income tax - Canada		(627,055	)				479,850
Income before income tax - Panama		(666,745	)				-
Income before income tax		3,267,378					4,952,800
US federal statutory tax rate		686,149		21.0	%		1,040,088		21	%
Illinois state income tax, net of federal tax benefit		344,367		10.5	%		371,708		7.5	%
Foreign tax effects - Canada		151,906		4.7	%		(35,952	)	(0.7	)%
Foreign tax effects – Panama		140,016		4.3	%
Valuation allowance		(49,801	)	(1.5	)%		(395,348	)	(8.0	)%
Nontaxable or nondeductible items:
Income attributable to non-controlling interests in pass-through entities		(410,808	)	(12.6	)%		(283,414	)	(5.7	)
Other		1,314		-	%		64,857		1.3	%
Other adjustments		36,440		1.1	%		89,272		1.8	%
Total	$	899,583		27.5	%	$	851,211		17.2	%

Deferred taxes reflect the tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes. Deferred tax assets (liabilities) at December 31, 2025 and 2024 are comprised of the following:

	2025			2024
Canada
Non-capital loss carryforwards	$	1,225,583		$	1,059,468
Share issuance costs		2,324			1,024
Property, equipment and leaseholds		33,978			27,995
		1,261,885			1,088,487
Valuation allowance		(1,261,885	)		(1,088,487	)
Net deferred tax asset	$	-		$	-

United States
Net operating loss carryforwards	$	2,917		$	190,024
Property, equipment and leaseholds		308,583			502,646
Deferred tax asset		311,500			692,670
Intangible assets		(487,567	)		(516,414	)
Investments		(98,433	)		(105,322	)
Valuation allowance		(2,917	)		(192,953	)
Net deferred tax liability	$	(277,417	)	$	(122,019	)
Panama
Net operating loss carryforwards	$	166,686		$	-
Valuation allowance		(166,686	)		-
		-			-
Net deferred tax liability	$	(277,417	)	$	(122,019	)

The Company has non-capital loss carryforwards of $5,328,621 which may be carried forward to apply against future year income tax for Canadian income tax purposes, subject to the final determination by taxation authorities, expiring in the following years:

	Loss
2030	$	31,050
2031		908,846
2032		594,293
2037		1,633,234
2039		144,912
2040		415,910
2041		316,051
2042		330,847
2043		233,120
2044		195,057
2045		525,301
Total	$	5,328,621

As at December 31, 2025, the Company has federal and state income tax net operating loss carryforwards of $10,234 available for US tax purposes. The NOLs carry forward indefinitely, with utilization limited to offsetting up to 80% of taxable income in any given year.

As at December 31, 2025, the Company has income tax net operating loss carryforwards of $666,745 available for Panama tax purposes. The NOLs carry forward five years.

The Company’s federal income tax returns for fiscal years 2022 through 2025 remain open and subject to examination.

The Company recognizes income tax liabilities from uncertain tax positions where there is uncertainty as to whether a tax position is sustainable using the more-likely-than-not threshold. During the years ended December 31, 2025 and 2024, the total liability for uncertain tax positions changed by $(161,320) and $419,214, respectively, primarily due to increased liabilities based on existing tax positions. As of December 31, 2025 and 2024, the Company has recognized liabilities for uncertain tax positions of $1,964,485 and $2,125,805, respectively, which is included in income taxes payable on the consolidated balance sheets. All recorded uncertain tax positions impact the Company’s effective tax rate.

Subsequent to December 31, 2025, based on discussions with its tax consultants, management determined that the Company is responsible for paying income taxes with respect to tax positions taken since 2019. This determination confirms the existence of the liability previously accrued by the Company. The liability recorded as of December 31, 2025 represents management’s best estimate of the obligation based on information available at the balance sheet date. Management is currently working with its tax consultants to assess the full extent of the obligation, and any adjustment to the estimated recorded liability resulting from this process will be reflected in the period in which the change in estimate is identified.

Additionally, the Company has accrued interest and penalties related to these tax liabilities, which are recorded as a component of income tax expense (benefit). As of December 31, 2025 and 2024, the Company recorded a change of $277,262 and $333,086 in accrued interest and penalties. At December 31, 2025 and 2024, the Company had accrued cumulative interest and penalties of $1,064,926 and $787,664, respectively, which is included in income taxes payable on the consolidated balance sheets. Given the confirmation of the underlying tax liability, the Company expects that interest and penalties will continue to accrue until the matter is resolved with the taxing authorities.