Income Tax |
9 Months Ended | ||||||||||||||||||||||||||||||||||||
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Sep. 30, 2026 | |||||||||||||||||||||||||||||||||||||
| Income Tax Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||
| Income Tax | Note 11 – Income Tax
The Company accounts for income taxes in accordance with ASC 740, Income Taxes. Deferred income taxes are recognized for temporary differences between the financial statement carrying amounts and the tax bases of assets and liabilities. A valuation allowance is established when it is more likely than not that some portion or all of the deferred tax assets will not be realized.
During the year ended December 31, 2025, the Company underwent a change of control (see Note 6 - Investment in digital assets and Note 12 – Capital Structure). As a result of the change in control, the Company falls under the Internal Revenue Code (“IRC”) section 382, which limits the ability to utilize certain NOLs.
At September 30, 2026, the Company had net income before income tax of $45,643,812. Pre-tax income subject to U.S. federal taxation was $45,652,206, due to $8,394 of operating expenses attributable to offshore operations for which no U.S. tax benefit was recognized. The taxable pre-tax income totaled $45,652,206 consisting of $47,156,907 unrealized gains and income and a loss from operations and net interest income of $1,504,701 along with approximately $16,164,681 of net operating losses (“NOLs”) consisting of unrealized losses from its Digital Assets and operating loss carryforwards, resulting in a deferred tax liability of $6,226,015.
The following table sets forth the provision for income tax and related tax rate reconciliation for the nine months ended September 30, 2026:
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