| Components of Provision for Income Taxes |
Significant components of the tax expense (benefit) recognized in the accompanying consolidated statements of operations for the years ended December 31, 2025 and December 31, 2024 are as follows:
|
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|
|
|
|
|
|
|
|
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|
|
|
Years Ended December 31, |
|
|
|
|
|
|
|
2025 |
|
|
2024 |
|
|
|
|
|
Current tax benefit |
|
|
|
|
|
|
|
|
|
|
Federal |
|
$ |
- |
|
|
$ |
- |
|
|
|
|
|
State |
|
|
- |
|
|
|
- |
|
|
|
|
|
Total current tax expense |
|
|
- |
|
|
|
- |
|
|
|
|
|
Deferred tax expense - Federal |
|
|
(5,242,366 |
) |
|
|
(1,751,407 |
) |
|
|
|
|
Deferred tax expense - State |
|
|
(207,536 |
) |
|
|
(359,266 |
) |
|
|
|
|
Valuation allowance |
|
|
5,449,902 |
|
|
|
2,110,673 |
|
|
|
|
|
Income tax expense |
|
$ |
- |
|
|
$ |
- |
|
|
|
|
|
|
| Schedule of Reconciliation of Tax Provision with Expected Provision |
The reconciliation of the income tax computed at the combined federal and state statutory rate of 0.0% for the years ended December 31, 2025 and 2024, respectively, to the income tax benefit is as follows:
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|
|
|
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|
Years Ended December 31, |
|
|
Years Ended December 31, |
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2025 |
|
|
|
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|
2024 |
|
|
|
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|
Income tax provision at the US federal statutory rate |
|
$ |
(5,664,790 |
) |
|
|
21.0 |
% |
|
$ |
(1,607,641 |
) |
|
|
21.0 |
% |
|
Nondeductible expenses |
|
|
105,219 |
|
|
|
-0.4 |
% |
|
|
81,692 |
|
|
|
-1.1 |
% |
|
State income taxes, net of federal benefit (a) |
|
|
(922,019 |
) |
|
|
3.4 |
% |
|
|
(328,787 |
) |
|
|
4.3 |
% |
|
True-up |
|
|
369,810 |
|
|
|
-1.4 |
% |
|
|
(274,033 |
) |
|
|
3.6 |
% |
|
Change in valuation allowance |
|
|
5,449,902 |
|
|
|
-20.2 |
% |
|
|
2,110,672 |
|
|
|
-27.6 |
% |
|
Change in Rate |
|
|
661,878 |
|
|
|
-2.5 |
% |
|
|
18,097 |
|
|
|
-0.2 |
% |
|
Tax expense/effective rate |
|
$ |
- |
|
|
|
0.0 |
% |
|
$ |
- |
|
|
|
0.0 |
% |
|
(a) State taxes in Florida and Oklahoma make up the majority (greater than 50%) of the tax effect in this category
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| Components of Deferred Tax Assets and Liabilities |
The significant components of the Company’s deferred tax liabilities and assets as of December 31, 2025 and December 31, 2024 are as follows:
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As of December 31, |
|
|
As of December 31, |
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|
|
|
2025 |
|
|
2024 |
|
|
Deferred tax liabilities: |
|
|
|
|
|
|
|
Depreciation |
|
$ |
- |
|
|
$ |
712,144 |
|
|
Amortization |
|
|
149,513 |
|
|
|
77,150 |
|
|
Unrealized gains/losses on fair value of Bitcoin |
|
|
- |
|
|
|
1,718,297 |
|
|
Right to use assets |
|
|
178,478 |
|
|
|
239,586 |
|
|
|
|
|
|
|
|
|
|
Total deferred tax liabilities |
|
|
327,991 |
|
|
|
2,747,177 |
|
|
|
|
|
|
|
|
|
|
Deferred tax assets: |
|
|
|
|
|
|
|
Loss carryforwards - Federal |
|
|
12,809,102 |
|
|
|
9,833,932 |
|
|
Loss carryforwards - State |
|
|
2,124,307 |
|
|
|
2,118,857 |
|
|
Stock option expense |
|
|
2,079,792 |
|
|
|
2,004,956 |
|
|
Depreciation |
|
|
940,974 |
|
|
|
- |
|
|
Allowance for credit losses |
|
|
12,820 |
|
|
|
13,865 |
|
|
Right to use liability |
|
|
192,186 |
|
|
|
241,847 |
|
|
Unrealized loss on securities |
|
|
4,244,147 |
|
|
|
4,655,574 |
|
|
Unrealized gains/losses on fair value of Bitcoin |
|
|
(376,746 |
) |
|
|
|
|
Unrealized gains/losses on derivatives |
|
|
(69,815 |
) |
|
|
|
|
Charitable contributions |
|
|
6,658 |
|
|
|
6,303 |
|
|
Other |
|
|
27,355 |
|
|
|
84,730 |
|
|
Total deferred tax asset |
|
|
21,990,780 |
|
|
|
18,960,064 |
|
|
|
|
|
|
|
|
|
|
Valuation allowance |
|
|
(21,662,789 |
) |
|
|
(16,212,887 |
) |
|
Net deferred tax asset |
|
$ |
- |
|
|
$ |
- |
|
|
|