Note 15 — Income taxes

Income (loss) before provision for or (benefit from) income taxes for the years ended December 31, 2025 and December 31, 2024 are as follows:

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The components of the provision (benefit) for income taxes for the years ended December 31, 2025 and 2024 were as follows:

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Significant deferred tax assets (liabilities) follow:

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The total provision (benefit) for income taxes for the years ended December 31, 2025 varies from the federal statutory rate as a result of the following:

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¹Texas is the state that contributes to the majority of the tax effect in this category.

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The total provision (benefit) for income taxes for the years ended December 31, 2024 varies from the federal statutory rate as a result of the following:

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Deferred income taxes reflect the impact of temporary differences between the amount of assets and liabilities recognized for financial reporting purposes and such amounts recognized for tax purposes. As a result of the Company’s evaluation of both the positive and negative evidence, the Company determined it does not believe it is more likely than not that its deferred tax assets will be utilized in the foreseeable future and has recorded a valuation allowance. For the year ended December 31, 2025, the Company recognized an income tax benefit primarily driven by the change in valuation allowance. For the year ended December 31, 2024, the Company recognized an income tax benefit primarily driven by federal tax refunds.

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On July 4, 2025, President Trump signed into law the One Big Beautiful Bill Act (“OBBBA”). The OBBBA makes permanent key elements of the Tax Cuts and Jobs Act, including 100% bonus depreciation, domestic research cost expensing, and business interest expense limitation. ASC 740, Income Taxes, requires the effects of changes in tax rates and laws on deferred tax balances to be recognized in the period in which the legislation is enacted. As a result, the Company evaluated the legislation and determined it did not have a material effect on the provision for income taxes for the year ended December 31, 2025.

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During 2025 and 2024, the Company determined that it experienced an ownership change as defined under Internal Revenue Code Section 382. The result of the ownership change is subjecting tax attributes to an annual limitation which includes the utilization of the Company's net operating losses. In addition, as a result of the merger with Legacy SMAP, the Company acquired a federal net operating loss tax attribute. These net operating losses are fully limited under section 382. The Company will continue to monitor ownership changes throughout future periods.

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Changes in the valuation allowance were as follows:

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The Company intends to continue maintaining a valuation allowance on its deferred tax assets until there is sufficient evidence to support reversal of all or some portion of these allowances.

The Company reported gross U.S net operating loss carryforwards of $44,875 and state net operating loss carryforward of $57,333. For federal income tax purposes the $44,875 of net operating losses will not expire.  For state income tax purposes, the Company has $51,294 of net operating losses which are subject to expiration.  The carryforward life for the state net operating losses is dependent on the rules for each jurisdiction and therefore the state losses are subject to expiration with the earliest year being 2032 and the latest year being 2045. The Company experienced an ownership change on July 1, 2024 and believes an ownership change occurred in 2025, however, the exact date of such ownership change has not yet been determined.  As a result both federal and state net operating losses before that date are subject to 382 limitations.

The following table summarizes cash for income taxes paid:

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The Company recognizes interest and penalties related to unrecognized tax benefits within Income tax expense (benefit) in the  Consolidated Statement of Operations. There were no unrecognized tax benefits or activity for the years ended December 31, 2025 and 2024.  The Company files income tax returns in the U.S. as well as in various states and notes that the earliest year open to examination is 2021. The Company is not currently under examination by any major tax jurisdiction.