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Note 14 - Income Taxes | 12 Months Ended
--- | ---
Dec. 31, 2024
Notes to Financial Statements |
Income Tax Disclosure [Text Block] | 14. Income Taxes The Company has the following net deferred tax assets and liabilities:
|  | December 31, |
|  | 2024 |  |  | 2023 |
Goodwill and intangible assets |  | $ | 425,865 |  |  | $ | 83,613 |
Developed technology |  |  | 2,866 |  |  |  | 3,953 |
Property and equipment |  |  | (12,565 | ) |  |  | (9,970 | )
Other deferred tax assets |  |  | 320,815 |  |  |  | 264,571 |
Settlements |  |  | 121,950 |  |  |  | 121,950 |
Stock based compensation |  |  | 103,551 |  |  |  | 76,977 |
Net operating loss |  |  | 10,365,248 |  |  |  | 10,216,313 |
Valuation allowance |  |  | (11,327,730 | ) |  |  | (10,757,407 | )
Net deferred tax liability |  | $ | - |  |  | $ | - |
The benefit for income taxes for the years ended December 31, 2024, and 2023, consists of the following:
|  | Year Ended December 31, |
|  | 2024 |  |  | 2023 |
Federal: |  |  |  |  |  |  |  |
Current provision |  | $ | - |  |  | $ | - |
Deferred tax benefit |  |  | - |  |  |  | (110,961 | )
|  | $ | - |  |  | $ | (110,961 | )
State: |  |  |  |  |  |  |  |
Current provision |  | $ | 6,321 |  |  | $ | - |
Deferred tax benefit |  |  | - |  |  |  | (28,419 | )
|  | $ | 6,321 |  |  | $ | (28,419 | )
Foreign: |  |  |  |  |  |  |  |
Current provision |  | $ | - |  |  | $ | - |
Deferred provision (benefit) |  |  | - |  |  |  | - |
|  | $ | - |  |  | $ | - |
Income tax expense benefit |  | $ | 6,321 |  |  | $ | (139,380 | )
A reconciliation of the statutory federal income tax rate to the Company’s effective tax rate is as follows:
|  | Year Ended December 31, |
|  | 2024 |  |  | 2023 |
Expected federal statutory rate |  |  | 21.0 | % |  |  | 21.0 | %
State income taxes, net of federal benefit |  |  | 6.1 | % |  |  | 6.1 | %
Valuation allowance |  |  | (21.9 | )% |  |  | (17.1 | )%
Permanent items |  |  | (1.0 | )% |  |  | 0.0 | %
Other |  |  | (4.2 | )% |  |  | (6.9 | )%
|  |  | (0.0 | )% |  |  | 3.1 | %
The valuation allowance at December 31, 2024 was $11,327,730. The net change in the valuation allowance during the year ended December 31, 2024 was an increase of $570,323. In assessing the realizability of deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred income tax assets will not be realized. The ultimate realization of deferred income tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible. Management considers the scheduled reversal of deferred income tax liabilities, projected future taxable income, and tax planning strategies in making this assessment. Based on consideration of these items, management has determined that enough uncertainty exists relative to the realization of the deferred income tax asset balances to warrant the application of a valuation allowance as of December 31, 2024. At December 31, 2024, the Company had U.S. federal, Illinois, and New York net operating loss carryforwards of approximately $39,550,000, $21,089,000, and $11,995,000 respectively. Of the federal amount, $19,304,000 expires between 2034 and 2038, and $20,246,000 has an indefinite carryforward period. The Illinois losses may be carried forward 12 years and begin to expire in 2026. The New York losses may be carried forward 20 year and begin to expire in 2035. Certain tax attributes are subject to an annual limitation as a result of changes in ownership as defined under Internal Revenue Code Section 382. The Company files tax returns in multiple jurisdictions and is subject to examination in these jurisdictions. Significant jurisdictions in the U.S. include New York and Illinois. The U.S. Tax Cuts and Jobs Act of 2017 provided for a one-time deemed mandatory repatriation of post-1986 undistributed foreign earnings and profit (“E&P”) through the year ended December 31, 2017. Due to the seizure of cash, by Chinese local authorities, the Company’s undistributed foreign E&P has been reduced to $0.

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