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INCOME TAXES
 12 Months Ended
Dec. 31, 2025
Income Tax Disclosure [Abstract]  
INCOME TAXES

NOTE 9 – INCOME TAXES

 

The U.S. and non-U.S. components of loss before income taxes were as follows:

          
  

Years ended

December 31,

 
   2025   2024 
United States  $3,285   $(5,000)
Canada   1,056,003    (485,756)
Income (Loss) before income taxes  $1,059,288   $(490,756)

 

The Company recorded income tax expense of $nil and $4,525 for the years ended December 31, 2025 and 2024, respectively.

 

United States

 

The Company is subject to US federal corporate income tax rate of 21%.

 

At December 31, 2025, the Company had approximately $10,000 of U.S. federal net operating losses available to offset future taxable income. These net operating losses may be carried forward indefinitely and are subject to an annual limitation of 80% of taxable income.

 

In connection with the reverse acquisition completed on October 16, 2024, the Company (formerly AGGI Inc.) was determined to be the legal acquirer but the accounting acquiree under ASC 805-40, Reverse Acquisitions. For accounting purposes, the transaction is treated as a recapitalization of the accounting acquirer, whereby the net assets of the legal acquirer (AGGI Inc.) are stated at their historical carrying amounts, and no goodwill or intangible assets are recognized. The historical accumulated deficit of $12,360,713 of the legal acquirer was eliminated against Additional Paid-in Capital as part of this recapitalization, consistent with ASC 805-40-45-1, since the financial statements subsequent to the transaction represent a continuation of the accounting acquirer’s operations with a recapitalized capital structure.

 

The Company evaluated the potential tax benefits associated with the legal acquirer’s historical NOLs under ASC 740. Because the transaction resulted in a change of ownership under Internal Revenue Code 382 and the legal acquirer had no continuing operations, no deferred tax asset has been recognized for those NOLs. Utilization of such pre-acquisition losses, if any, would be limited and will be recognized in the period utilization becomes more likely than not.

 

Canada

 

The Company’s Canadian subsidiaries are subject to a combined federal and provincial statutory income tax rate of 26.5% for the year ended December 31, 2025. For the year ended December 31, 2024, these subsidiaries were eligible for a small business income tax rate of 12.2%, inclusive of federal and provincial assessments.

 

At December 31, 2025, the Canadian subsidiaries had approximately $nil of net operating losses (“NOLs”) available to offset future taxable income. These NOLs may be carried forward for up to 20 years.

 

The components of deferred tax assets are summarized as follows:

          
   December 31,
2025		   December 31,
2024		 
Deferred tax assets – U.S. NOLs  $2,100   $1,050 
Deferred tax assets – Canadian NOLs   –    163,088 
Gross deferred tax assets   2,100    164,138 
Less: Valuation allowance   (2,100)   (164,138)
Deferred tax assets – U.S. NOLs  $–   $– 

 

The reconciliation of the U.S. federal statutory income tax rate to the Company’s effective tax rate is as follows:

Reconciliation of income tax rate          
  

Years ended

December 31,

 
   2025   2024 
U.S. federal statutory income tax rate   21.0 %   21.0 %
Foreign rate differential   5.5 %   (8.9)%
Tax on disallowed income   – %   – %
Valuation allowance   – %   (13.0)%
Net operating loss applied   (26.5)%   – %
Effective income tax rate   – %   (0.9)%

 

A reconciliation of the income tax expense, net determined at U.S. federal statutory income tax rate to the Company’s actual income tax expense is as follows:

           
   Years Ended
December 31,		 
   2025   2024 
Income (loss) before income tax expense  $1,059,288   $(490,756)
Statutory income tax rate   21.0 %   21.0 %
Income tax expense (benefit) at statutory rate   222,450    (103,059)
Foreign tax differential   58,081    43,681 
Change in valuation allowance   –    63,903 
Net operating loss applied   (280,531)   – 
Income tax expenses  $–   $4,525