v3.26.1
INCOME TAXES
 6 Months Ended
May 31, 2026
INCOME TAXES  
INCOME TAXES

NOTE 10 — INCOME TAXES

The Company and JAR are subject to the tax law of the United States. The Company elected to file income taxes as a corporation for the tax year ended November 30, 2024.

(i)The components of the income tax provision were as follows:

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

For the Three Months

​

For the Six Months

​

​

Ended May 31,

​

Ended May 31,

​

  ​ ​ ​

2026

  ​ ​ ​

​

2025

  ​ ​ ​

2026

  ​ ​ ​

2025

​

​

(Unaudited)

​

​

(Unaudited)

(Unaudited)

​

(Unaudited)

Current tax provision

 

​

  ​

​

​

​

 

​

  ​

 

​

  ​

Federal

​

$

—

​

$

—

​

$

—

​

$

—

State

​

 

—

​

​

400

​

 

1,600

​

 

800

​

​

 

—

​

​

400

​

 

1,600

​

 

800

Deferred tax provision (benefit)

​

 

​

​

​

​

​

 

​

​

 

​

Federal

​

 

—

​

​

—

​

 

—

​

 

(72,992)

State

​

 

—

​

​

—

​

 

—

​

 

(33,706)

​

​

 

—

​

​

—

​

 

—

​

 

(106,698)

Income tax provision (benefit)

​

$

—

​

$

400

​

$

1,600

​

$

(105,898)

​

(ii)Reconciliations of the statutory income tax rate to the effective income tax rate were as follows:

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

For the Three Months

​

For the Six Months

 

​

​

Ended May 31,

​

Ended May 31,

 

​

  ​ ​ ​

2026

  ​ ​ ​

2025

​

2026

​

2025

 

​

​

(Unaudited)

​

(Unaudited)

​

​

(Unaudited)

​

​

(Unaudited)

 

Federal statutory tax rate

 

​

21.00

%  

​

21.0

%  

​

21.00

%  

​

21.0

%

Permanent Items

​

$

—

%  

$

—

%  

$

—

%  

$

—

%

State statutory tax rate

 

​

6.98

%  

​

(7.3)

%  

​

6.96

%  

​

8.9

%

Non-deductible expenses

 

​

—

%  

​

(14.0)

%  

​

—

%  

​

(4.6)

%

Return to Provision

​

​

—

%  

​

—

%  

​

—

%  

​

—

%

DTA True Up

​

​

0.02

%  

​

—

%  

​

0.01

%  

​

—

%

Other

​

​

—

%  

​

—

%  

​

—

%  

​

—

%

Change in valuation allowance

​

​

(28.00)

%  

​

—

%  

​

(28.00)

%  

​

—

%

Effective tax rate

 

$

—

%  

$

(0.3)

%  

$

(0.03)

%  

$

25.3

%

​

(iii)Deferred tax liabilities were composed of the following:

​

​

​

​

​

​

​

​

​

​

As of May 31,

​

As of November 30,

​

  ​ ​ ​

2026

  ​ ​ ​

2025

​

​

(Unaudited)

​

(Audited)

Deferred tax assets:

 

​

  ​

 

​

  ​

Net operating loss carry-forwards

 

​

2,023,110

 

​

551,538

Depreciation expense

 

​

—

 

​

—

Less: Valuation allowance

 

​

(1,890,820)

 

​

(410,994)

Total deferred tax assets

 

​

132,290

 

​

140,544

​

​

​

​

​

​

​

Deferred tax liabilities:

 

​

​

 

​

​

Customer relationship recognized upon JAR Acquisition

 

​

(128,720)

 

​

(136,449)

Depreciation expense

 

​

(3,570)

 

​

(4,095)

Total deferred tax liabilities

 

​

(132,290)

 

​

(140,544)

Total deferred tax assets (liabilities)

​

$

—

​

$

—

​

Valuation Allowance

The Company recognizes income taxes using the asset and liability method. Management establishes deferred tax assets and liabilities for temporary differences between the financial reporting basis and the tax basis of assets and liabilities, using the tax rates expected to be in effect when the temporary differences reverse. Deferred tax assets are also recognized for tax attributes such as net operating loss carryforwards. Realization of the Company’s gross deferred tax asset depends on its ability to generate sufficient taxable income of the appropriate character within the carryforward periods of the jurisdictions in which the net operating and capital losses, deductible temporary differences and credits are generated. In assessing its ability to realize deferred tax assets, the Company considers all available evidence and records valuation allowances to reduce deferred tax assets to the amounts that management concludes are more-likely-than-not to be realized. As of May 31, 2026 and November 30, 2025, the Company believes that a valuation allowance is required.

Uncertain Tax Position

The Company recognizes income tax benefits associated with uncertain tax positions, when, in management’s judgment, it is more likely than not that the position will be sustained upon examination by a taxing authority. For a tax position that meets the more likely than not recognition threshold, management initially and subsequently measures the tax benefit as the largest amount judged to have a greater than 50% likelihood of being realized upon ultimate settlement with the taxing authority. The Company has concluded that there are no uncertain tax positions requiring recognition in its financial statements as of May 31, 2026.

State Income Tax

To the extent there is state nexus based on sales, location of employees, inventory, and/or other property, a tax provision is prepared and recorded. In 2026, the Company identified nexus in California.

For the three months ended May 31, 2026, the Company recorded a tax provision of $nil. For the three months ended May 31, 2025, the Company recorded a tax provision of $400. For the six months ended May 31, 2026, the Company recorded a tax provision of $1,600. For the six months ended May 31, 2025, the Company recorded a tax benefit of $105,898.