Income Taxes

12 Months Ended

Dec. 31, 2025

Income Taxes [Abstract]

INCOME TAXES

12 INCOME TAXES

The Company’s operations are based in the US and currently enacted tax laws in the US are used in the calculation of income taxes.

Federal Income Tax - United States

On December 22, 2017, the Tax Cuts and Jobs Act (the TCJA), which significantly modified U.S. corporate income tax law, was signed into law by President Trump. The TCJA contains significant changes to corporate income taxation, including but not limited to the reduction of the corporate income tax rate from a top marginal rate of 35% to a flat rate of 21%, limitation of the tax deduction for interest expense to 30% of earnings (except for certain small businesses), limitation of the deduction for net operating losses to 80% of current year taxable income and generally eliminating net operating loss carrybacks, allowing net operating losses to carryforward without expiration, one-time taxation of offshore earnings at reduced rates regardless of whether they are repatriated, elimination of U.S. tax on foreign earnings (subject to certain important exceptions), immediate deductions for certain new investments instead of deductions for depreciation expense over time, and modifying or repealing many business deductions and credits (including changes to the orphan drug tax credit and changes to the deductibility of research and experimental expenditures that will be effective in the future). Notwithstanding the reduction in the corporate income tax rate, the overall impact of the new federal tax law is uncertain, including to what extent various states will conform to the newly enacted federal tax law.

Income taxes are computed using the asset and liability method. Under the asset and liability method, deferred income tax assets and liabilities are determined based on the differences between the financial reporting and tax bases of assets and liabilities and are measured using the currently enacted tax rates and laws. A full valuation allowance is provided for the amount of deferred tax assets that, based on available evidence, are not expected to be realized. It is the Company’s policy to classify interest and penalties on income taxes as interest expense or penalties expense. As of December 31, 2025 and 2024, there have been no interest or penalties incurred on income taxes.

The provision for income taxes consists of the following:

		Year ended December 31, 2025		Year ended December 31, 2024
Current
Federal	$	-	$	-
State		-		-
Foreign		-		-
	$	-	$	-
Deferred
Federal	$	-	$	-
State		-		-
Foreign		-		-
	$	-	$	-

A reconciliation of the U.S. Federal statutory income tax to the effective income tax is as follows:

	Year ended December 31, 2025			Year ended December 31, 2024
Continuing operations
Tax expense at the federal statutory rate	$	(922,821	)	$	(866,532	)
State tax expense, net of federal tax effect		(125,721	)		(226,139	)
Permanent differences		566,917			387,714
Prior year net operating loss true up		-			(1,020,869	)
		(481,625	)		(1,725,826	)
Deferred income tax asset valuation allowance		481,625			1,725,826
	$	-		$	-

Significant components of the Company’s deferred income tax assets are as follows:

	December 31, 2025			December 31, 2024
Other	$	241,491		$	241,491
Capital loss		491,275			491,275
Net operating losses		9,107,529			8,625,904
Stock based compensation		511,142			511,142
Valuation allowance		(10,351,437	)		(9,869,812	)
Net deferred income tax assets	$	-		$	-

The valuation allowance for deferred income tax assets as of December 31, 2025 and December 31, 2024 was $10,351,437 and $9,869,812, respectively. The net change in the deferred income tax assets valuation allowance was an increase of $481,625 and is primarily attributable to tax operating losses and capital losses realized during the current year.

As of December 31, 2025, the prior three years remain open for examination by the federal or state regulatory agencies for purposes of an audit for tax purposes.

As of December 31, 2025, the Company had available for income tax purposes approximately $33.8 million in federal and $2.9 million in state net operating loss carry forwards, which may be available to offset future taxable income. $3.5 million of the net operating losses will begin to expire in 2034 and $30.3 million has an indefinite life. Due to the uncertainty of the utilization and recoverability of the loss carryforwards and other deferred tax assets, Management has determined a full valuation allowance for the deferred tax assets since it is more likely than not that the deferred tax assets will not be realizable.

The Company’s ability to utilize the previous Federal operating loss carryforwards may be adjusted if, pursuant to IRC Section 382/383 of the Internal Revenue Code of 1986, as amended, a change of ownership occurs. Management does not believe an ownership change has occurred under IRC Section 382/383. A future change in ownership may result in an adjustment to the loss carryforward.

The Company is subject to taxation in the U.S. and CA state. U.S. federal income tax returns for 2019 and after, remain open to examination. No income tax returns are currently under examination. As of December 31, 2025 and 2024, the Company does not have any unrecognized tax benefits, and continues to monitor its current and prior tax positions for any changes. The Company recognizes penalties and interest related to unrecognized tax benefits as income tax expense. For the years ended December 31, 2025 and 2024, there were no penalties or interest recorded in income tax expense.