| Summary of Provision for Income Taxes |
A summary of the provision for income taxes is as follows:
| |
|
December 31, 2025
|
|
|
June 30, 2026
|
|
|
Corporate Income tax
|
|
$
|
1,272,361
|
|
|
$
|
1,124,205
|
|
|
Trade tax
|
|
|
2,059,361
|
|
|
|
2,656,912
|
|
|
Other
|
|
|
146,615
|
|
|
|
139,868
|
|
|
Total provision for income taxes
|
|
$
|
3,478,337
|
|
|
$
|
3,920,985
|
|
|
| Components of Income Tax Expense |
The significant components of income tax expenses are as follows:
| |
|
Six months ended
June 30, 2025
|
|
|
Six months ended
June 30, 2026
|
|
|
Current tax expense (or benefit)
|
|
$ |
972,878 |
|
|
$
|
480,772
|
|
|
Deferred tax expense (or benefit)
|
|
|
(373,568 |
) |
|
|
1,677,938
|
|
|
Total income tax expense
|
|
$ |
599,310 |
|
|
$
|
2,158,710
|
|
The income tax expense (or benefit) is disaggregated as follows:
| |
|
June 30, 2025
|
|
|
June 30, 2026
|
|
|
Federal (CIT)
|
|
$ |
(274,297 |
) |
|
$
|
130,458 |
|
|
State and Local (TT)
|
|
|
633,122 |
|
|
|
1,748,535 |
|
|
Foreign
|
|
|
262,295 |
|
|
|
270,350 |
|
| Other |
|
|
(21,810 |
) |
|
|
9,367 |
|
|
Total income tax expense
|
|
$ |
599,310 |
|
|
$
|
2,158,710 |
|
|
| Reconciliation of German Statutory Income Tax Rate to Actual Effective Income Tax Rate |
A reconciliation of the German statutory income tax rate to the actual effective income tax rate is provided below:
| |
|
Six months ended June 30, 2026
|
|
| |
|
%
|
|
|
|
$ |
|
|
German statutory Corporate Income tax rate
|
|
|
15.83
|
|
|
$
|
11,287,657
|
|
|
State and local income tax
|
|
|
2.45
|
|
|
|
1,748,535
|
|
Foreign tax effects
|
|
|
(0.27 |
) |
|
|
(194,839 |
) |
Changes in valuation allowances
|
|
|
(0.42 |
) |
|
|
(298,190 |
) |
|
Nontaxable or nondeductible items
|
|
|
(13.47
|
)
|
|
|
(9,607,335
|
)
|
Adjustments to prior year tax estimates
|
|
|
(0.88 |
) |
|
|
(624,173 |
) |
|
Other
|
|
|
(0.21
|
)
|
|
|
(152,945
|
)
|
|
Effective income tax rate
|
|
|
3.03
|
|
|
$
|
2,158,710
|
|
|
| Components of Deferred Tax Account Balances |
The significant components of the Company’s deferred tax account balances relate to temporary differences and are as follows:
|
|
December 31, 2025
|
|
|
June 30, 2026
|
|
|
Deferred tax assets
|
|
|
|
|
|
|
|
Receivables due from related parties
|
|
$
|
2,004,466
|
|
|
$
|
679,439
|
|
|
Intangible assets
|
|
|
2,813,526
|
|
|
|
2,489,993
|
|
|
Right of use assets
|
|
|
2,237,527
|
|
|
|
2,013,859
|
|
|
Provisions
|
|
|
1,126,281
|
|
|
|
1,098,644
|
|
|
Loss carrying forwards
|
|
|
2,329,454 |
|
|
|
6,538,586
|
|
|
Prepaid expenses and other assets
|
|
|
785,355
|
|
|
|
789,036
|
|
|
Other
|
|
|
120,166
|
|
|
|
282,149
|
|
|
Total deferred tax assets
|
|
|
11,416,775
|
|
|
|
13,891,706
|
|
|
Valuation allowances
|
|
|
(3,541,310
|
)
|
|
|
(6,890,887
|
)
|
|
Deferred tax assets, net of valuation allowances
|
|
|
7,875,465
|
|
|
|
7,000,819
|
|
|
Offsetting
|
|
|
(5,276,138
|
)
|
|
|
(5,088,432
|
)
|
|
Deferred tax assets, net of valuation allowances per balance sheet
|
|
$
|
2,599,327
|
|
|
$
|
1,912,387
|
|
|
|
|
|
|
|
|
|
|
|
Deferred tax liabilities
|
|
|
|
|
|
|
|
|
Property, plant and equipment
|
|
$
|
243,713 |
|
|
$
|
133,747 |
|
|
Equity instrument investments
|
|
|
6,583,988
|
|
|
|
5,402,222
|
|
|
|
|
|
5,867,921
|
|
|
|
7,741,426
|
|
|
Lease liabilities
|
|
|
2,237,527
|
|
|
|
2,013,859
|
|
Long-term debt
|
|
|
515,900 |
|
|
|
577,924 |
|
|
Other
|
|
|
423,319
|
|
|
|
347,905
|
|
|
Total deferred tax liabilities
|
|
|
15,872,368
|
|
|
|
16,217,083
|
|
|
Offsetting
|
|
|
(5,276,138
|
)
|
|
|
(5,088,432
|
)
|
|
Deferred tax liabilities per balance sheet
|
|
$
|
10,596,230
|
|
|
$
|
11,128,651
|
|
|
|
|
|
|
|
|
|
|
|
Net deferred tax liabilities
|
|
$
|
7,996,903
|
|
|
$
|
9,216,264
|
|
|