Annual report pursuant to Section 13 and 15(d)

Income Taxes

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Income Taxes
 12 Months Ended
Dec. 31, 2023
Income Tax Disclosure [Abstract]  
Income Taxes

5. Income Taxes

 

Significant components of the Company’s deferred tax assets and liabilities were as follows:

 

    2023     2022  
    December 31,  
    2023     2022  
Deferred tax assets:                
Net operating loss carryforwards     4,505,244       3,137,364  
Valuation allowance     (4,505,244 )     (3,137,364 )
Total deferred tax assets     —       —  

 

The federal income tax rate used for 2023 and 2022 was 21%. At December 31, 2023, the Company had federal net operating loss (“NOL”) carryforwards of approximately $21.5 million that will expire in tax years up through 2037. The NOLs generated in tax years 2018 and forward will carry forward indefinitely, but the deductibility of such federal net operating losses is limited. The NOL and tax credit carryforwards may be further subject to the application of Section 382 of the Internal Revenue Code of 1986, as amended (the “Code”), as discussed further below. The Company has provided a valuation allowance to offset the deferred tax assets due to the uncertainty of realizing the benefits of the net deferred tax asset.

 

The Company’s issuances of common and preferred stock may have resulted in ownership changes as defined by Section 382 of the Code. The Company has not conducted a Section 382 study to date. It is possible that a future analysis may result in the conclusion that a portion of the Company’s NOL carryforwards and R&D tax credit carryforwards will be limited due to Sections 382 and 383 of the Code.

 

The Company is subject to U.S. federal tax examinations by tax authorities for the years 2010 to 2009 due to the fact that NOL carryforwards exist going back to 2010 that may be utilized on a current or future year tax return.