NOTE 19 - INCOME TAXES

The components of the income tax provisions for 2024 and 2023 are as follows:

The difference between the income tax provision and income taxes computed using the U. S. federal income tax rate of 21% consisted of the following:

Deferred income taxes reflect the net tax effect of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and amounts used for income tax purposes. Significant components of the Company’s deferred taxes as of December 31, 2024 and 2023 are as follows:

During the year ended December 31, 2024 and 2023, the Company recorded a valuation allowance equal to its net deferred tax assets. The Company determined that due to a recent history of net losses, that at this time, sufficient uncertainty exists regarding the future realization of these deferred tax assets through future taxable income. If, in the future, the Company believes that it is more likely than not that these deferred tax benefits will be realized, the valuation allowances will be reduced or eliminated. 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, 2024 and 2023, the Company provided a valuation allowance on its net deferred tax assets of $12,347,394 and $11,227,921, respectively.

As of December 31, 2024, the Company had federal net operating loss carryforwards of approximately $23.0 million, of which $9.3 million, if not utilized, expire beginning by 2030. Federal net operating loss carryforwards totaling approximately $13.7 million can be carried forward indefinitely. In addition, the Company has state net operating loss carryforwards of approximately $41.3 million with varying expiration dates as determined by each state. Pursuant to Section 382 of the Internal Revenue Code, use of the Company’s NOLs and credit carry forwards may be limited if the Company experiences a cumulative change in ownership of greater than 50% in a moving three-year period.

Due to change in the Company’s ownership, the Company’s utilization of its net operating losses may be limited pursuant to Sec. 382 of the Internal Revenue Code of 1986, as amended. The Company has not undergone a study to determine what, if any, of its net operating losses are limited in their use as any limitation pursuant to Sec. 382 would not have a material impact on the Company’s financial statements due to the full valuation allowance maintained against the related deferred tax assets.

At December 31, 2024 and 2023, the Company had no material unrecognized tax benefits and no adjustments to liabilities or operations were required. The Company does not expect that its unrecognized tax benefits will materially change within the next twelve months. The Company recognizes interest and penalties related to uncertain tax positions in interest expense. As of December 31, 2024, and 2023, the Company has not recorded any provisions for accrued interest and penalties related to uncertain tax positions.

In certain cases, the Company’s tax returns remain subject to examination by the relevant tax authorities. The Company files federal and state income tax returns in jurisdictions with varying statutes of limitations. The 2018 through 2023 tax years generally remain subject to examination by federal and state tax authorities.