XML 31 R20.htm IDEA: XBRL DOCUMENT v3.24.1
INCOME TAXES
 12 Months Ended
Dec. 31, 2023
Income Tax Disclosure [Abstract]  
INCOME TAXES

NOTE 11 — INCOME TAXES

 

The Company identified their federal, Nevada and Texas state tax returns as their “major” tax jurisdictions. The periods for income tax returns that are subject to examination for these jurisdictions is 2019 through 2023. The Company believes their income tax filing positions and deductions would be sustained on audit, and they do not anticipate any adjustments that would result in a material change to their financial position. Therefore, no liabilities for uncertain tax positions have been recorded.

 

As of December 31, 2023, the Company had approximately $16.7 million in net operating loss carry-forwards for federal and state income tax reporting (not tax effected) purposes. As a result of the Tax Cuts Job Act 2017 (the “Act”), certain future carryforwards do not expire. The Company has not performed a formal analysis but believes its ability to use such net operating losses and tax credit carryforwards in the future is subject to annual limitations due to change of control provisions under Sections 382 and 383 of the Internal Revenue Code, which will significantly impact its ability to realize these deferred tax assets.

 

The Company’s net deferred tax assets, liabilities and valuation allowance as of December 31, 2023 and 2022 are summarized as follows:

 

               
    Year Ended
December 31,		  
    2023     2022  
Deferred tax assets:                
Net operating loss carryforwards   $ 3,504,000     $ 3,256,000  
R&D costs     200,000       97,000  
Stock-based compensation     215,000       23,000  
Total deferred tax assets     3,919,000       3,376,000  
Valuation allowance     (3,919,000 )     (3,376,000 )
Net deferred tax assets   $ -     $ -  

 

We recorded a valuation allowance in the full amount of our net deferred tax assets since realization of such tax benefits has been determined by our management to be less likely than not. The valuation allowance increased $543,000 and $416,000 during the years ended December 31, 2023 and 2022, respectively.

 

A reconciliation of the statutory federal income tax benefit to actual tax benefit for the years ended December 31, 2023 and 2022 is as follows:

 

               
    2023     2022  
Federal statutory blended income tax rates     (21 )%     (21 )%
State statutory income tax rate, net of federal benefit     (- )     (- )
Non-deductible R&D costs     6       -  
Permanent differences     2       -  
Change in valuation allowance     12       25  
Other     1       (4 )
Effective tax rate     - %     - %

 

As of the date of this filing, the Company has not filed its 2023 federal and state corporate income tax returns. The Company expects to file these documents as soon as practicable.