INCOME TAXES

12 Months Ended

Dec. 31, 2023

INCOME TAXES

INCOME TAXES

NOTE 8 – INCOME TAXES

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

Current income tax expense (benefit)	-
Deferred income tax expense (benefit)	-
Total income tax expense (benefit)	-

Effective Rate Reconciliation:

Pre-Tax income (loss) (16,308,366)

The U.S. Federal Statutory Tax Rate for 2023 is 21%. The reconciliation of the expected income tax expense (benefit)

and the actual income tax expense (benefit) is as follows:

Expected Federal income tax expense (benefit)	(3,424,757)	21.00%
State income tax expense (benefit)	(1,141,586)	7.00%
Stock option compensation	926,072	-5.68%
Section 162(m) Limitation	364,000	-2.23%
Other permanent differences	(3,577)	0.02%
Prior Year True-Up Adjustments	(3,117,890)	19.12%
Change in Valuation Allowance	6,397,738	-39.23%
Total income tax expense (benefit)	-

The Company has U.S. Federal net operating loss (NOL) carryovers of $17,516,800.

Under the Tax Cuts and Jobs Act (TCJA), Federal NOL's incurred in taxable years beginning in 2018 and later have an indefinite carryforward period, but the use of the NOL carryover is limited to 80% of taxable income in the subsequent year. Federal NOL Carryovers incurred prior to 2018 expire after 20 years. The Company has $2,217,168 of Federal NOL carryovers incurred prior to 2018 which begin to expire in 2036. The Company has NOL carryovers in California of $25,412,005 which begin to expire in 2034. NOL carryovers and capital loss carryovers are a benefit to the Company in the form of future tax savings and such carryovers are recorded as deferred tax assets, subject to a valuation allowance.

Net deferred income tax assets (liabilities) are comprised of the following:

	2023	2022
Deferred tax assets (liabilities)
Net Operating Loss Carryovers	5,457,368	2,987,090
Credit Carryovers	2,127,544	-
Capitalized Reserch and Development	1,752,064	-
Reserves and Allowances	50,229	22,195
Capital Loss Carryover	21,557	-
Depreciation	1,922	3,662
Deferred Tax Assets	9,410,684	3,012,947
Less: Valuation Allowance	(9,410,684)	(3,012,947)
Net Deferred Tax Assets	-	-