XML 39 R25.htm IDEA: XBRL DOCUMENT
v3.26.1

Note O - Income Taxes | 12 Months Ended
--- | ---
Dec. 31, 2025
Notes to Financial Statements |
Income Tax Disclosure [Text Block] | NOTE O—INCOME TAXES For financial reporting purposes, the net pre-tax book loss for the United States and foreign entities, in the aggregate, was:
|  | Year ended |  |  | Year ended |
|  | December 31, |  |  | December 31, |
|  | 2025 |  |  | 2024 |
United States |  | $ | (6,179,476 | ) |  | $ | (2,767,752 | )
Hong Kong |  |  | (74,045 | ) |  |  | (222,901 | )
Nigeria |  |  | (164,518 | ) |  |  | (223,426 | )
Spain |  |  | (723,407 | ) |  |  | (1,109,611 | )
Portugal |  |  | - |  |  |  | - |
Total |  | $ | (7,141,446 | ) |  | $ | (4,323,690 | )
There was no provision for current federal, foreign or state taxes for both of the years ended December 31, 2025 and 2024 as a result of taxable losses incurred in these jurisdictions. The provision for income taxes (tax benefits) benefits consists of the following:
|  | Year ended |  |  | Year ended |
|  | December 31, |  |  | December 31, |
|  | 2025 |  |  | 2024 |
Current |  |  |  |  |  |  |  |
Federal and States |  | $ | - |  |  | $ | - |
Foreign: |  |  |  |  |  |  |  |
Subtotal |  |  | - |  |  | $ | - |
Deferred: |  |  |  |  |  |  |  |
Federal and States |  |  |  |  |  |  |  |
Foreign |  |  | 16,500 |  |  |  | (22,998 | )
Subtotal |  |  | 16,500 |  |  |  | (22,998 | )
Provision for income tax expense (benefit) |  | $ | 16,500 |  |  | $ | (22,998 | )
There were no payments made in relation to income taxes for the year ending December 31, 2025. Significant components of deferred tax assets and liabilities are as follows at December 31, 2025 and 2024 :
|  | December 31, |  |  |  | December 31, |
|  | 2025 |  |  |  | 2024 |
Accrued compensation |  | $ | 140,490 |  |  |  | $ | 154,457 |
Allowance for credit losses |  |  | 20,626 |  |  |  |  | 20,513 |
Research and development expenses |  |  | 724,038 |  |  |  |  | 1,261,601 |
Capital loss carry forward |  |  | 114,885 |  |  |  |  | 114,251 |
Right-of-use operating lease assets |  |  | (5,979 | ) |  |  |  | (16,346 | )
Operating lease liabilities |  |  | - |  |  |  |  | 16,406 |
Stock-based compensation |  |  | 54,258 |  |  |  |  | 34,299 |
Equipment and leasehold improvements |  |  | (1,951 | ) |  |  |  | (6,268 | )
Impairment of investment |  |  | 712,500 |  |  |  |  | - |
Intangible assets - Foreign |  |  | (89,000 | ) |  |  |  | - |
Allowance for credit losses - Foreign |  |  | 72,500 |  |  |  |  | - |
Inventory reserve |  |  | 589,271 |  |  |  |  | 781,213 |
Other |  |  | 1,006 |  |  |  |  | 1,000 |
Tax credits |  |  | 1,116,119 |  |  |  |  | 1,554,541 |
Net operating loss and research and credit carryforwards |  |  | 11,686,140 |  |  |  |  | 11,824,622 |
Valuation allowance |  |  | (15,083,017 | ) |  |  |  | (15,740,289 | )
Net deferred tax liability |  | $ | - |  |  |  | $ | - |
The Company recorded a valuation allowance equal to its net deferred taxes due to the uncertainty of realization of the deferred tax assets due to operating loss history of the Company. The Company currently provides a valuation allowance against deferred taxes when it is more likely than not that some portion, or all of its deferred tax assets will not be realized. The valuation allowance could be reduced or eliminated based on future earnings and future estimates of taxable income. With a full valuation allowance, any change in the deferred tax asset or liability is fully offset by a corresponding change in the valuation allowance. At December 31, 2025 and 2024, the Company provided a valuation allowance on its net deferred tax assets of $15,083,017 and $15,740,289 respectively. As of December 31, 2025, the Company has U.S. federal net operating loss carryforwards of approximately $53.3 million. Approximately $19.6 million are subject to expiration between 2026 and 2037, and $33.7 million net operating loss carryforwards have no expiration date. These net operating loss carryforwards could be subject to the limitations under Section 382 of the Internal Revenue Code due to changes in the equity ownership of the Company. In addition, the Company has net operating loss carry forwards from various states of approximately $12.5 million which expire from 2026 through 2045. A reconciliation of the effective tax rate on loss from operations and the US federal statutory rate is presented below for the years ended December 31, 2025 and 2024.
|  | Year ended |
|  | December 31, |
|  | 2025 |
Federal statutory income tax rate |  | $ | (1,673,013 | ) |  |  | 21 | %
State taxes, net of federal benefit |  |  | - |  |  |  | - |
Permanent differences |  |  |  |  |  |  |  |
Amortization of intangible assets |  |  | 33,242 |  |  |  | (0.7 | )
Restricted Stock units |  |  | 26,334 |  |  |  | (0.6 | )
Others |  |  | 2,918 |  |  |  | (0.1 | )
Expiration of net operating loss and research credit carryforwards |  |  | 1,848,627 |  |  |  | (40.5 | )
Foreign rate differential - all |  |  | 187,823 |  |  |  | (4.1) |
True ups and other |  |  | 175,955 |  |  |  | (3.9 | )
Valuation allowance |  |  | (585,386 | ) |  |  | 28.5 |
|  |  | - |  |  |  |  |
Effective tax rate |  | $ | 16,500 |  |  |  | (0.4 | )%
The rate reconciliation above has been adjusted to be presented in compliance with the guidance under ASU 2023-09. The Company has adopted this guidance on a prospective basis. As previously disclosed for the year ended December 31, 2024, prior to the adoption of ASU 2023-09, the following is a reconciliation of our income tax rate computed using the federal statutory rate to our actual income tax rate.
|  | Year ended |
|  | December 31, |
|  | 2024 |
Federal statutory income tax rate |  |  | 21 | %
State taxes, net of federal benefit |  |  | 0.82 |
Permanent differences |  |  | (1.84 | )
Expiration of net operating loss and research credit carryforwards |  |  | (46.14 | )
Foreign rate differential |  |  | (7.23 | )
Rate change |  |  | (0.41 | )
Other |  |  | 0.14 |
Valuation allowance |  |  | 33.98 |
Effective tax rate |  |  | 0.32 | %
On July 4, 2025, the One Big Beautiful Bill was enacted ("OBBBA"), introducing significant and wide-ranging changes to the U.S. federal tax system. Significant components include restoration of 100% accelerated tax depreciation on qualifying property including expansion to cover qualified production property. Another major aspect includes the return to immediate expensing of domestic research and experimental expenditures ("R&E") which in some cases may include retroactive application back to 2021 for businesses with gross receipts of less than $31 million or accelerated tax deductions of R&E that was previously capitalized for larger businesses. The legislation also reinstates EBITDA-based interest deductions for tax purposes and makes several business tax incentives permanent. Less favorable business provisions include limitations on tax deductions for charitable contributions. In accordance with ASC 740, the Company recognized the effects of the OBBBA in the period that included the enactment date. The Company continues to evaluate the ongoing effects of the OBBBA, including the interaction of the enacted provisions with its existing tax attributes and elections. The Company has not been audited by the Internal Revenue Service (“IRS”) or any states in connection with income taxes. The Company files income tax returns in the U.S. federal jurisdiction and various state jurisdictions. The Company has not filed its required returns for fiscal 2024 as of the date of this report. Management believes that when the returns are filed, the taxes that will be owed will not be material due to the losses incurred during the year. The Company is currently working on the filings and expects to file these returns in April 2026. The Company estimates that the potential penalties for non-filing will be minimal due to the losses incurred. The periods from 2021 through 2025 remain open to examination by the IRS and state jurisdictions. The Company's subsidiary in Nigeria has not filed its required returns since inception. Management believes that when the returns are filed, no taxes will be owed due to the losses incurred during those periods. The Company is not subject to minimum tax during the first four years of operations. As a result, management could not calculate the amount of net operating loss carryforwards that are available to offset future taxable income. Potential penalties for non-filing are estimated to be minimal due to the losses. The Company expects to be current by December 31, 2026. The Company's subsidiary in Hong Kong has not filed its required returns in several years. Management believes that when the returns are filed, no taxes will be owed due to losses incurred during those periods. As a result, management could not calculate the amount of net operating loss carryforwards are available to offset future taxable income. Potential penalties for non-filing are expected to be minimal due to the losses. The Company expects to be current in 2026. The Company's subsidiary in Portugal has not filed its required returns since inceptions. Management believes that when the returns are filed, no taxes will be owed due to losses incurred during those periods. As a result, management could not calculate the amount of net operating loss carryforwards are available to offset future taxable income. We estimate that the potential penalties for non-filing will be minimal due to the losses. The Company will be working on the filings during 2026. The Company believes it is not subject to any tax audit risk beyond those periods. The Company’s policy is to recognize interest and penalties accrued on any unrecognized tax benefits as a component of income tax expense. The Company does not have any accrued interest or penalties associated with any unrecognized tax benefits, nor was any interest expense incurred during the years ended December 31, 2025 and 2024.

X
- References No definition available. + Details
Name: | us-gaap_DisclosureTextBlockAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration

X
- Definition The entire disclosure for income tax. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Topic 942 -SubTopic 740 -Name Accounting Standards Codification -Section 50 -Paragraph 1 -Subparagraph (a) -Publisher FASB -URI https://asc.fasb.org/1943274/2147477617/942-740-50-1 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Topic 235 -SubTopic 10 -Name Accounting Standards Codification -Section S50 -Paragraph 1 -Publisher FASB -URI https://asc.fasb.org/1943274/2147480738/235-10-S50-1 Reference 3: http://www.xbrl.org/2003/role/disclosureRef -Topic 944 -SubTopic 740 -Name Accounting Standards Codification -Section 50 -Paragraph 1 -Subparagraph (a) -Publisher FASB -URI https://asc.fasb.org/1943274/2147478822/944-740-50-1 Reference 4: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 12 -Publisher FASB -URI https://asc.fasb.org/1943274/2147482685/740-10-50-12 Reference 5: http://www.xbrl.org/2003/role/exampleRef -Topic 740 -SubTopic 10 -Name Accounting Standards Codification -Section 55 -Paragraph 231 -Publisher FASB -URI https://asc.fasb.org/1943274/2147482663/740-10-55-231 Reference 6: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 12C -Publisher FASB -URI https://asc.fasb.org/1943274/2147482685/740-10-50-12C Reference 7: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 12B -Publisher FASB -URI https://asc.fasb.org/1943274/2147482685/740-10-50-12B Reference 8: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -SubTopic 270 -Name Accounting Standards Codification -Section 50 -Paragraph 1 -Publisher FASB -URI https://asc.fasb.org/1943274/2147477891/740-270-50-1 Reference 9: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -SubTopic 10 -Name Accounting Standards Codification -Section S99 -Paragraph 1 -Subparagraph (SAB Topic 6.I.5.Q1) -Publisher FASB -URI https://asc.fasb.org/1943274/2147479360/740-10-S99-1 Reference 10: http://www.xbrl.org/2003/role/disclosureRef -Topic 946 -SubTopic 20 -Name Accounting Standards Codification -Section 50 -Paragraph 13 -Publisher FASB -URI https://asc.fasb.org/1943274/2147480990/946-20-50-13 Reference 11: http://www.xbrl.org/2003/role/disclosureRef -Topic 235 -SubTopic 10 -Name Accounting Standards Codification -Section S99 -Paragraph 1 -Subparagraph (SX 210.4-08(h)(2)) -Publisher FASB -URI https://asc.fasb.org/1943274/2147480678/235-10-S99-1 Reference 12: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org/740/tableOfContent Reference 13: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 14 -Publisher FASB -URI https://asc.fasb.org/1943274/2147482685/740-10-50-14 Reference 14: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 21 -Publisher FASB -URI https://asc.fasb.org/1943274/2147482685/740-10-50-21 Reference 15: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 17 -Subparagraph (b) -Publisher FASB -URI https://asc.fasb.org/1943274/2147482685/740-10-50-17 Reference 16: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -SubTopic 10 -Name Accounting Standards Codification -Section S99 -Paragraph 2 -Subparagraph (SAB Topic 11.C) -Publisher FASB -URI https://asc.fasb.org/1943274/2147479360/740-10-S99-2 Reference 17: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -SubTopic 30 -Name Accounting Standards Codification -Section 50 -Paragraph 2 -Subparagraph (a) -Publisher FASB -URI https://asc.fasb.org/1943274/2147482603/740-30-50-2 + Details
Name: | us-gaap_IncomeTaxDisclosureTextBlock
Namespace Prefix: | us-gaap_
Data Type: | dtr-types:textBlockItemType
Balance Type: | na
Period Type: | duration