v3.25.2
Income Taxes
 12 Months Ended
May 31, 2025
Income Tax Disclosure [Abstract]  
Income Taxes

Note 14 – Income Taxes

 

The Company is subject to U.S. federal rate of 21.0% and California state tax rate of 8.84% and Utah State tax rate of 4.55%.

 

The income taxes expense (benefit) for years ended May 31, 2025 and 2024 consists of the following:

 

          
   For The Fiscal Years Ended May 31,
   2025  2024
       
Current          
Federal  $206,950   $92,406 
State   61,530    81,870 
           
Deferred          
Federal   268,985    (394,481)
State   (83,637)   - 
 Income tax expense (benefit)  $453,828   $(220,205)

 

The following table reconciles the Company’s income tax expense (benefit) at the U.S. federal statutory rate to the actual income tax expense (benefit) for the years ended May 31, 2025 and 2024:

 

          
   For The Fiscal Years Ended May 31,
   2025  2024
Tax expense (benefit) computed at statutory rate of 21%  $274,854   $374,415 
State tax expense (benefit) blended rate   (36,988)   81,870 
Permanent differences   55,585    87,614
Deferred tax true up   173,638    (366,891)
Other   (13,261)    (397,213)
Tax expense (benefit)  $453,828   $(220,205)

 

Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes.

 

The effects of temporary differences that gave rise to significant portions of deferred tax assets and liabilities at May 31, are as follows:

 

       
   As of May 31,
   2025  2024
       
Deferred tax assets          
Property, Plant and Equipment  $(101,415)  $- 
Intangibles   (59,238)   - 
Net operating loss   90,060    231,587 
Stock-based compensation   163,018    - 
Others   (46,186)   - 
Total gross deferred tax assets   46,239    231,587 
Less: Deferred tax asset valuation allowance   -    - 
           
Deferred tax liabilities   -    - 
Total net deferred tax assets  $46,239   $231,587 

 

There was no valuation allowance at May 31, 2025 and 2024.

 

As of May 31, 2025, the Company had California net operating loss (“NOL”) carryforwards of $1,289,587. These NOLs are available to offset future taxable income, subject to applicable limitations. California NOLs are generally subject to a 20-year carryforward period. As of May 31, 2025, the Company did not have any federal or Utah NOL carryforwards.

 

During the year ended May 31, 2025, the Company utilized approximately $465,613 of its federal NOLs and $123,216 of its California NOLs to offset taxable income. Based on recent operating results and projected future income, management believes it is more likely than not that the remaining NOL carryforwards will be fully realized. Accordingly, no valuation allowance has been recorded as of May 31, 2025.