INCOME TAXES (Tables)
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12 Months Ended |
Mar. 31, 2026 |
|---|
| Income Tax Disclosure [Abstract] |
|
| SCHEDULE OF INCOME TAX PROVISION |
The income tax provision for the periods shown consist of the following:
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|
|
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For the year ended March 31, |
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|
2026 |
|
|
2025 |
|
Current |
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|
|
|
|
|
US Federal |
|
$ |
- |
|
|
$ |
- |
|
US State |
|
|
49,537 |
|
|
|
- |
|
Total current provision |
|
|
49,537 |
|
|
|
- |
|
Deferred |
|
|
|
|
|
|
US Federal |
|
|
(304,882 |
) |
|
|
(5,601,975 |
) |
US State |
|
|
(80,378 |
) |
|
|
(1,556,266 |
) |
Total deferred benefit |
|
|
(385,260 |
) |
|
|
(7,158,241 |
) |
Change in valuation allowance |
|
|
385,260 |
|
|
|
13,444,546 |
|
Income tax provision |
|
$ |
49,537 |
|
|
$ |
6,286,305 |
|
|
| SCHEDULE OF RECONCILIATION OF INCOME TAX |
The table below provides the updated requirements of ASU 2023-09 for our effective tax rate for the year ended March 31, 2026. See Note 2, Summary of Significant Accounting Policies for additional details on the adoption of ASU 2023-09.
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For the year ended March 31, |
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|
2026 |
|
U.S. Federal |
|
$ |
(1,017,769 |
) |
|
|
|
21.0 |
|
% |
|
State taxes, net of Federal income tax benefit |
|
|
(268,321 |
) |
|
|
|
5.5 |
|
% |
|
Change in valuation allowance |
|
|
1,140,184 |
|
|
|
|
(23.4 |
) |
% |
|
Non-deductible meals & entertainment |
|
|
105,414 |
|
|
|
|
(2.2 |
) |
% |
|
Return-to-provision permanent non-deductible items |
|
|
90,029 |
|
|
|
|
(1.9 |
) |
% |
|
Total provision for income taxes |
|
$ |
49,537 |
|
|
|
|
(1.0 |
) |
% |
|
The reconciliation of income tax expense computed at the U.S. federal statutory rate of 21% to the effective tax rate, prior to the adoption of ASU 2023-09, is as follows:
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|
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For the year ended March 31, |
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|
2026 |
|
|
|
2025 |
|
|
U.S. Federal |
|
|
21.0 |
|
% |
|
|
21.0 |
|
% |
State taxes, net of Federal income tax benefit |
|
|
5.5 |
|
% |
|
|
5.5 |
|
% |
Change in valuation allowance |
|
|
(23.4 |
) |
% |
|
|
(37.4 |
) |
% |
Other adjustments |
|
|
0.0 |
|
% |
|
|
0.1 |
|
% |
Non-deductible meals & entertainment |
|
|
(2.2 |
) |
% |
|
|
0.0 |
|
% |
Return-to-provision permanent non-deductible items |
|
|
(1.9 |
) |
% |
|
|
0.0 |
|
% |
Effective tax rate |
|
|
(1.0 |
) |
% |
|
|
(10.8 |
) |
% |
|
| SCHEDULE OF CASH PAID INOME TAXES NET OF REFUNDS |
State taxes in Georgia, Arizona and Wisconsin represent the majority of the tax effect within this category. Following adoption of ASU 2023-09, our cash income taxes paid, net of refunds for the year ended March 31, 2026 were as follows:
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|
|
|
|
U.S. Federal |
|
$ |
- |
|
State1 |
|
|
|
Georgia |
|
|
49,287 |
|
Other states |
|
|
250 |
|
Total cash paid for income taxes, net of refunds |
|
$ |
49,537 |
|
1Georgia was the only jurisdiction to meet the 5% disaggregation threshold.
|
| SCHEDULE OF DEFERRED TAX ASSETS AND LIABILITIES |
Significant components of our deferred tax liabilities and assets are as follows:
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|
|
|
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|
|
|
|
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As of March 31, |
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|
2026 |
|
|
2025 |
|
Deferred tax assets |
|
|
|
|
|
|
Net operating loss carryforward |
|
$ |
35,465,705 |
|
|
$ |
16,557,351 |
|
Loss on purchase |
|
|
— |
|
|
|
2,213,969 |
|
Impairment - Ammunition segment |
|
|
— |
|
|
|
12,398,990 |
|
Inventory capitalization - Section 263A |
|
|
— |
|
|
|
472,665 |
|
Bad debt allowance |
|
|
627,013 |
|
|
|
1,045,220 |
|
Legal reserve settlement |
|
|
417,948 |
|
|
|
7,978,747 |
|
Compensation |
|
|
1,480,036 |
|
|
|
1,154,090 |
|
Other timing differences |
|
|
568,591 |
|
|
|
481,036 |
|
Total deferred tax assets |
|
$ |
38,559,293 |
|
|
$ |
42,302,068 |
|
|
|
|
|
|
|
|
Deferred tax liabilities |
|
|
|
|
|
|
Depreciation expense |
|
$ |
(134,837 |
) |
|
$ |
(3,523,690 |
) |
Change in estimate and accounting method |
|
|
- |
|
|
|
(699,392 |
) |
Accounting method change - Section 481A |
|
|
(587,500 |
) |
|
|
- |
|
Amortization - intangible assets |
|
|
(1,328,882 |
) |
|
|
(2,114,232 |
) |
Total deferred tax liabilities |
|
|
(2,051,219 |
) |
|
|
(6,337,314 |
) |
Net deferred tax asset |
|
$ |
36,508,074 |
|
|
$ |
35,964,754 |
|
Valuation allowance |
|
|
(36,508,074 |
) |
|
|
(35,964,754 |
) |
Net deferred tax asset |
|
$ |
- |
|
|
$ |
- |
|
|
| SUMMMARY OF ACTIVITY RELATED TO UNRECOFNIZED TAX BENEFITS |
The following table summarizes the activity related to unrecognized tax benefits as follows:
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As of March 31, |
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|
|
2026 |
|
|
2025 |
|
Opening balance |
|
$ |
2,003,585 |
|
|
$ |
— |
|
Charged to net income |
|
|
(2,003,585 |
) |
|
|
2,003,585 |
|
Write-offs, net of recoveries |
|
|
- |
|
|
|
- |
|
Closing balance |
|
$ |
- |
|
|
$ |
2,003,585 |
|
|