| Schedule of Net Deferred Tax Asset |
As of December 31, 2025 and 2024, the Company’s
net deferred tax assets were as follows:
| | |
December 31, 2025 | | |
December 31, 2024 | |
| Deferred tax assets | |
| | |
| |
| Federal net operating loss | |
$ | 1,402,259 | | |
$ | 1,913,959 | |
| Transaction costs | |
| 1,408,371 | | |
| 1,515,401 | |
| Accrued expenses | |
| 670,754 | | |
| 1,202,259 | |
| Deferred compensation | |
| 1,350,406 | | |
| 446,113 | |
| Derivative liability | |
| - | | |
| 228,732 | |
| Stock-based compensation | |
| 818,497 | | |
| 648,697 | |
| Other | |
| 73,972 | | |
| 45,322 | |
| Total deferred tax assets | |
| 5,724,259 | | |
| 6,000,483 | |
| Deferred tax liabilities | |
| | | |
| | |
| Oil and natural gas properties | |
| (8,385,100 | ) | |
| (8,665,914 | ) |
| Prepaid expenses | |
| (37,740 | ) | |
| - | |
| Equipment credit | |
| (1,244,559 | ) | |
| - | |
| Unrealized gain on derivatives | |
| (16,252 | ) | |
| (27,302 | ) |
| Total deferred tax liabilities | |
| (9,683,651 | ) | |
| (8,693,216 | ) |
| Net deferred tax liabilities | |
| (3,959,392 | ) | |
| (2,692,733 | ) |
| Valuation allowance for deferred tax assets | |
| - | | |
| - | |
| Net Deferred tax liability, net of allowance | |
$ | (3,959,392 | ) | |
$ | (2,692,733 | ) |
|
| Schedule of Income Tax Provision |
The income tax provision consists of the following:
| | |
For the Year Ended December 31, 2025 | | |
For the Year Ended December 31, 2024 | |
| Current income tax (benefit) expense | |
| | |
| |
| Federal | |
$ | 503,692 | | |
$ | - | |
| State | |
| 143,203 | | |
| - | |
| Total current income tax expense | |
| 646,895 | | |
| - | |
| Deferred tax (benefit) expense: | |
| | | |
| | |
| Federal | |
| 1,036,586 | | |
| (2,840,051 | ) |
| State | |
| 230,073 | | |
| (630,356 | ) |
| Valuation allowance | |
| - | | |
| - | |
| Total deferred income tax (benefit) expense | |
| 1,266,659 | | |
| (3,470,407 | ) |
| Total income tax (benefit) expense | |
$ | 1,913,554 | | |
$ | (3,470,407 | ) |
|
| Schedule of Reconciliation of the Federal Income Tax Rate |
A reconciliation of the federal income tax rate
to the Company’s effective tax rate is as follows:
| | |
For the Year Ended December 31, 2025 | | |
For the Year Ended December 31, 2024 | |
| Expected income tax expense (benefit) computed at the statutory rate | |
$ | (1,724,743 | ) | |
| 21.00 | % | |
$ | (2,792,305 | ) | |
| 21.00 | % |
| State Taxes (Net of Federal Benefit) | |
| 343,205 | | |
| (4.18 | )% | |
| (667,494 | ) | |
| 5.02 | % |
| Nontaxable or Nondeductible Items | |
| | | |
| | | |
| | | |
| | |
| Gain on forgiveness of debt – equity related party | |
| 1,133,061 | | |
| (13.80 | )% | |
| - | | |
| - | |
| Change in fair value of derivative liability, related party | |
| (71,610 | ) | |
| 0.87 | % | |
| - | | |
| - | |
| Change in fair value of derivative liability | |
| 434,758 | | |
| (5.29 | )% | |
| - | | |
| - | |
| Loss on extinguishment of debt | |
| 337,247 | | |
| (4.11 | )% | |
| - | | |
| - | |
| Other | |
| 60,344 | | |
| (0.73 | )% | |
| 420,205 | | |
| (3.16 | )% |
| Exchange of Class B units for Class A common stock | |
| 1,401,292 | | |
| (17.06 | )% | |
| (430,813 | ) | |
| 3.24 | % |
| Income tax provision (benefit) | |
| 1,913,554 | | |
| (23.30 | )% | |
| (3,470,407 | ) | |
| 26.10 | % |
|