NOTE 9 — INCOME TAXES

The Company’s combined pre-tax loss for the years ended March 31, 2026 and 2025 was ($226,708) and $(330,985), respectively.

The Company recognizes deferred tax assets and liabilities for the tax effects of differences between the financial statements and the tax bases of assets and liabilities. The Company’s current year loss results in the generation of a deferred tax asset for the federal net operating loss (“NOL”). However, due to uncertainty regarding the Company's ability to generate sufficient taxable income in the foreseeable future, management has concluded that it is more likely than not that this deferred tax asset will not be realized. Accordingly, a full valuation allowance has been recorded against the deferred tax asset.

Effective April 1, 2024, the Company adopted Accounting Standards Update 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures. The adoption of ASU 2023-09 did not affect the recognition or measurement of income taxes but resulted in expanded disclosures, including additional disaggregation of the effective tax rate reconciliation and income taxes paid by jurisdiction. The Company elected to apply the provisions of ASU 2023-09 retrospectively to the periods presented, and, accordingly, the income tax disclosures for the years ended March 31, 2026 and 2025 have been prepared in accordance with ASU 2023-09.

For the year ended March 31, 2026, the Company increased its valuation allowance by $66,516. Of this increase, $55,112 relates to federal deferred tax assets and $11,404 relates to state deferred tax assets. Further, of the $55,112 federal increase, $47,531 relates to operations and is reflected in the rate reconciliation below, while $7,581 relates to the initial recognition of a deferred tax asset arising from a book-tax basis difference on equipment contributed by a shareholder in exchange for stock. Similarly, of the $11,404 state increase, $9,835 relates to operations and is included net within the “State taxes (Florida), net of federal effect” category in the rate reconciliation, while $1,569 relates to the same shareholder contributed equipment basis difference. The total equity related portion of $9,150, ($7,581 federal and $1,569 state) was recorded directly in additional paid-in capital, with an offsetting increase in the valuation allowance, in accordance with ASC 740-20-45-11.

For the year ended March 31, 2025, the Company increased its valuation allowance by $83,668. Of this increase, $69,325 relates to federal deferred tax assets and $14,343 relates to state deferred tax assets. The total increase in the valuation allowance for 2025 is reflected in the effective tax rate reconciliation within both the “Increase (Decrease) in valuation allowance” category (which includes the federal portion) and the “State taxes (Florida), net of federal effect” category (which includes the state portion).

The Company’s provision (benefit) for income taxes consists of the following:

The Company’s deferred tax assets and liabilities consist of the effects of temporary differences attributable to the following:

As of March 31, 2026 and 2025, the Company had U.S. federal net operating loss carryforwards of $685,797 and $480,602, respectively, all of which do not expire and are limited to 80% of taxable income in the year utilized. These net operating loss carryforwards may be used to offset future taxable income and thereby reduce the Company’s U.S. federal income taxes. Section 382 of the Internal Revenue Code of 1986 (the “Code”) imposes an annual limit on the ability of a corporation that undergoes a greater than 50% ownership change to use its net operating loss carry forwards to reduce its tax liability. If in the future the Company issues common stock or additional equity instruments convertible into common shares which result in an ownership change exceeding the 50% limitation threshold imposed by section 382 of the Code, the Company’s net operating loss carryforwards may be significantly limited as to the amount of use in a particular year. As of March 31, 2026 and 2025, the Company had net operating loss carryforwards for state income tax purposes of $612,640 and $480,602 respectively, which do not expire and are limited to 80% of taxable income in the year utilized.

The Company has provided a full valuation allowance against its net deferred tax assets, since in the opinion of management based upon the earnings history of the Company; it is more likely than not that the benefits of these assets will not be realized.

The Company complies with the provisions of FASB ASC 740-10 in accounting for its uncertain tax positions. ASC 740-10 addresses the determination of whether tax benefits claimed or expected to be claimed on a tax return should be recorded in the financial statements. Under ASC 740-10, the Company may recognize the tax benefit from an uncertain tax position only if it is more likely that not that the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position. Management has determined that the Company has no significant uncertain tax positions requiring recognition under ASC 740-10.

The Company is subject to income tax in the U.S., and certain state jurisdictions. The Company has not been audited by the U.S. Internal Revenue Service, or any states in connection with income taxes. The Company’s tax years generally remain open to examination for all federal and state tax matters until its net operating loss carryforwards are utilized and the applicable statutes of limitation have expired. The federal and state tax authorities can generally reduce a net operating loss (but not create taxable income) for a period outside the statute of limitations in order to determine the correct amount of net operating loss which may be allowed as a deduction against income for a period within the statute of limitations.

The Company recognizes interest and penalties related to unrecognized tax benefits, if incurred, as a component of income tax expense.

The significant elements contributing to the difference between income taxes at the effective United States federal statutory tax rate of 21% and the Company’s effective tax rate are as follows: