v3.26.3
Income Taxes
 3 Months Ended
Jul. 31, 2026
Income Taxes [Abstract]  
INCOME TAXES

NOTE 12 — INCOME TAXES

 

Marwynn is a Nevada holding company subject to 21% corporate federal income tax rate. There is no state income tax rate because no state income tax is levied in Nevada. Marwynn is a holding company and does not have active operations as of July 31, 2026.

 

FuAn and EcoLoopX were incorporated in the State of California, and are subject to 21% corporate federal income tax rate and 8.84% California state income tax rate. NexaCore was incorporated in the State of Delaware and did not have any operation yet. Marwynn, FuAn, EcoLoopX and NexaCore file separate corporate income tax returns.

 

For the three months ended July 31, 2026, and 2025, the provision for income taxes consisted of the following:

 

    Three
Months
ended
July 31,
2026		     Three
Months
ended
July 31,
2025		  
Current:            
Federal income tax expense   $ 9,915     $ 817  
State income tax expense     32,715       691  
Deferred:                
Federal income tax expense     —       —  
State income tax expense     —       —  
Total income tax expense   $ 42,630     $ 1,508  

  

The following table reconciles the Company’s effective income tax rate for the three months ended July 31, 2026 and 2025:

 

    Three Months
ended
July 31,
2026		     Three Months
ended
July 31,
2025		  
Federal statutory rate     21.0 %     21.0 %
State statutory rate, net of effect of state income tax deductible to federal income tax     6.98 %     6.98 %
Permanent difference – penalties, interest, and others     (43.97 )%     (0.06 )%
Valuation allowance     (48.31 )%     (27.98 )%
Effective tax rate     (64.30 )%     (0.06 )%

 

Deferred tax assets and liabilities are recognized for the expected future tax consequences of differences between the carrying amounts of assets and liabilities and their respective tax bases using enacted tax rates in effect for the year in which the differences are expected to reverse. Deferred taxes are comprised of the following:

 

    July 31,
2026
(unaudited)		     April 30,
2026		  
Deferred tax assets:            
Operating lease liabilities, net of ROU   $ -     $ -  
Depreciation     3,348       3,348  
Bad debt expense     10,066       10,066  
NOL     2,173,312       2,141,283  
Valuation allowance     (2,186,726 )     (2,154,697 )
Deferred tax assets, net   $ —     $ —  

 

Uncertain tax positions

 

The Company evaluates each uncertain tax position (including the potential application of interest and penalties) based on the technical merits, and measures the unrecognized benefits associated with the tax positions. As of July 31, 2026 and April 30, 2026, the Company had $47,736 and $18,581 accrued interest and penalties related to understated income tax payments, respectively. For the three months ended July 31, 2026 and 2025, the Company recorded $29,155 and $1,508 of interest and penalties related to understated income tax payments, respectively.