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| Taxes | Note 7 – Taxes Income tax Cayman Islands Under the current laws of the Cayman Islands, the Group is not subject to tax on income or capital gain. Additionally, upon payments of dividends to the shareholders, no Cayman Islands withholding tax will be imposed. Canada SonicHash Canada is incorporated in Canada and is subject to both federal and provincial income taxes for its business operation in Canada. The applicable tax rate is 15% for federal and 15% for Alberta. SonicHash Canada had no taxable income during the six months ended December 31, 2025 and 2024. United States SonicHash US and Sonic Auspice are incorporated in the U.S. and are only subject to federal income taxes but no state income taxes as they did not conduct any business operation in Delaware. The applicable tax rate is 21% for federal. Both SonicHash US and Sonic Auspice had no taxable income during the six months ended December 31, 2025 and 2024. Singapore SonicHash Singapore and Bit Origin Singapore are incorporated in Singapore and are subject to Singapore Profits Tax on the taxable income as reported in its statutory financial statements adjusted in accordance with relevant Singapore tax laws. SonicHash Singapore was struck off on September 4, 2024 and had no taxable income for the six months ended December 31, 2024. Bit Origin Singapore had no taxable income during the six months ended December 31, 2025. The applicable tax rate is 17% in Singapore, with 75% of the first SGD 10,000 (approximately $7,700) taxable income and 50% of the next SGD 190,000 (approximately $147,000) taxable income are exempted from income tax. Gain (loss) before provision for income taxes consisted of:
Significant components of deferred tax assets were as follows:
As of December 31, 2025, the Group’s net operating loss carry forward was approximately $31.2 million. The net operating loss carry forwards are available to reduce future years’ taxable income for unlimited years but limited to 80% use per year in the U.S., for 20 years in Canada, and for unlimited years in Singapore. Management believes that the realization of the benefits from these losses appears uncertain due to the Group’s operating history and continued losses. If the Group is unable to generate taxable income in its operations, it is more likely than not that it will not have sufficient income to utilize its deferred tax assets. Accordingly, the Group has provided a 100% valuation allowance on its net deferred tax assets of approximately $6.5 million related to its operations as of December 31, 2025. Uncertain tax positions The Group evaluates each uncertain tax position (including the potential application of interest and penalties) based on the technical merits, and measure the unrecognized benefits associated with the tax positions. As of December 31, 2025 and June 30, 2025, the Group did not have any significant unrecognized uncertain tax positions. |
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