Income Taxes

12 Months Ended

Dec. 31, 2024

Income Tax Disclosure [Abstract]

Income Taxes

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:

	2024		2023		2022
Federal income taxes at statutory rate	21.00	%	21.00	%	21.00	%
State income taxes at statutory rate	(0.40)	%	2.20	%	3.50	%
Change in tax rate	(0.50)	%	(0.80)	%	(2.90)	%
Permanent differences	(8.40)	%	(3.60)	%	(7.70)	%
Other	(2.10)	%	0.50	%	(1.70)	%
Goodwill impairment	—	%	(6.30)	%	—	%
Change in valuation allowance	(10.30)	%	(6.40)	%	(17.90)	%
Totals	(0.70)	%	6.60	%	(5.70)	%

The following is a summary of the net deferred tax asset (liability) as of December 31:

	2024		2023		2022
Deferred tax assets:
Deferred interest	$	864,967	$	698,231	$	—
Lease liabilities	297,596		160,042		8,973
Accrued expenses	317,407		352,346		148,776
Stock compensation	3,896,517		3,530,993		3,008,318
Transaction costs	40,488		44,665		41,817
Other	(68,193)		160		149,153
Total deferred tax assets	5,348,782		4,786,437		3,357,037
Deferred tax liabilities:
Intangible assets	(761,765)		(1,348,275)		(939,607)
ROU Assets	(292,115)		(156,788)		(9,052)
Property and equipment	(17,890)		(55,164)		(8,569)
Debt discount	(113,542)		(256,788)		(741,579)
Cash to accrual method change	—		(136,667)		(43,443)
Total deferred tax liabilities	(1,185,312)		(1,953,682)		(1,742,250)
Valuation allowance	$	(4,163,470)	$	(2,839,047)	$	(1,614,787)
Net deferred tax assets (liabilities)	$	—	$	(6,292)	$	—

The Company recognized a valuation allowance against deferred tax assets of $4,163,470 and $2,839,047 as of December 31, 2024 and 2023, respectively. The valuation allowance increased by $1,324,423 for the year ended December 31, 2024, compared to the increase of $1,224,260 for the year ended December 31, 2023. The increase in the valuation allowance is a result of the current year losses partially offset by nondeductible expenses that are not tax benefited. The Company believes that, based on a number of factors, the available objective evidence creates sufficient uncertainty regarding the realizability of the deferred tax assets such that a valuation allowance has been recorded. These factors include the Company’s history of net losses since its inception.

The Company’s policy is to recognize interest and penalties associated with uncertain tax benefits as part of the income tax provision and include accrued interest and penalties with the related income tax liability on the Company’s consolidated balance sheets. To date, the Company has not recognized any interest and penalties in its consolidated statements of

operations, nor has it accrued for or made payments for interest and penalties. The Company has no material unrecognized tax benefits as of December 31, 2024 and 2023.

The provision (benefit) for income taxes for the years ended December 31 are as follows:

	2024		2023		2022
Current	$	68,032	$	223,049	$	209,563
Deferred	—		(1,480,166)		610,033
Total	$	68,032	$	(1,257,117)	$	819,596