INCOME TAXES |
6 Months Ended |
|---|---|
Jun. 30, 2026 | |
| INCOME TAXES | |
| INCOME TAXES | NOTE 11. INCOME TAXES
The Company is taxed as a C corporation for U.S. federal income tax purposes. Boumarang Pty Ltd is dormant and has not generated any taxable income for Australian tax purposes. The Company’s consolidated effective tax rate differs from the U.S. federal statutory rate of 21% principally due to the establishment of a full valuation allowance against the Company’s deferred tax assets.
Pursuant to ASC 740-270, the Company applies an estimated annual effective tax rate to year-to-date pre-tax loss in determining the interim income tax provision. Because the Company expects to remain in a cumulative loss position for the year ending December 31, 2026, with no current taxable income and a full valuation allowance against deferred tax assets, the Company’s estimated annual effective tax rate is 0% and accordingly no current or deferred federal, state, or foreign provision for income taxes was recognized for the three and six months ended June 30, 2026.
The Company’s cumulative book losses before income taxes were approximately $4,058,542 at June 30, 2026 (December 31, 2025: $2,994,320), comprising the prior $2,994,320 of losses incurred from inception through December 31, 2025, and an additional $1,064,222 of losses incurred during the six months ended June 30, 2026. The Company expects to have net operating loss (“NOL”) carryforwards available for U.S. federal income tax purposes, subject to completion of its income tax returns and book-tax adjustments. NOLs generated in tax years beginning after December 31, 2017, may be carried forward indefinitely under the Tax Cuts and Jobs Act but, in any single tax year, are limited to offset 80% of taxable income generated in such year. The Company has not yet completed a formal Section 382 study; any limitation arising from a future ownership change would not affect the Company’s unaudited consolidated financial statements at June 30, 2026, because the Company has fully reserved against its deferred tax assets through the valuation allowance.
The Company has reviewed its income tax positions and has concluded that there are no material uncertain tax positions requiring recognition or disclosure as of June 30, 2026 or December 31, 2025.
The Company has not yet filed any U.S. federal or state income tax returns; accordingly, all tax periods from inception (July 26, 2024) forward remain open and subject to examination. |