Income Taxes

3 Months Ended

Jun. 30, 2025

NOTE 9 — INCOME TAXES

The Company’s taxable income primarily consists of interest earned on investment held in Trust Account.

The income tax provision (benefit) consists of the following:

	For the Three Months Ended			For the Three Months Ended
	June 30, 2025			June 30, 2024

Current
Federal	$	38,677		$	149,752
State		—			—
Deferred
Federal		(399	)		(6,750	)
State		—			—
Income tax provision	$	38,277		$	143,002

The Company’s effective tax rate was (19.4) % and 86.4% for the three months ended June 30, 2025 and 2024, respectively. The effective tax rate differs from the statutory tax rate of 21.0% primarily due to the valuation allowance on the deferred tax assets.

The Company’s net deferred tax assets (liabilities) were as follows as of:

	June 30, 2025			March 31, 2025
Deferred tax assets:
Start-up/organization costs	$	655,503		$	575,740
Deferred tax liability:
Accrued dividend income		(13,493	)		(13,892	)
Total deferred tax assets		642,010			561,848
Valuation allowance		(655,503	)		(575,740	)
Deferred tax liability, net	$	(13,493	)	$	(13,892	)

As of June 30, 2025 and March 31, 2025, the Company had $3,121,444 and $2,741,621 of U.S. federal and state gross deferred tax assets on start-up/organization costs carryovers available to offset future taxable income over the period of 180 months upon the consummation of the Business Combination. In assessing the realization of deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which temporary differences representing net future deductible amounts become deductible. Management considers the scheduled reversal of deferred tax assets, projected future taxable income and tax planning strategies in making this assessment. After consideration of all of the information available, management believes that significant uncertainty exists with respect to future realization of the deferred tax assets and has therefore established a full valuation allowance of $655,503 and $575,740 as of June 30, 2025 and March 31, 2025, respectively. The valuation allowance increased by $79,763 from March 31, 2025 to June 30, 2025.

As of June 30, 2025 and March 31, 2025, the Company prepaid income taxes of $249,234, net of current provision for the three months ended June 30, 2025, and $287,911, respectively. The Company withdrew the prepaid income taxes balance from the Trust Account as the Company was required to pay estimated federal income taxes payments for the year ending March 31, 2025 based on the actual year ending March 31, 2024 federal income taxes payments during the year ended March 31, 2025. The Company is expected to receive the refunds of the prepaid income taxes balance of $287,911 once the Internal Revenue Service completes its review of the Company’s fiscal year ended March 31, 2025 federal income tax return filed in June 2025. The Company will deposit this balance back to the Trust Account as soon as the Company will receive the tax refunds from the Internal Revenue Service and to distribute the $207,991 to the redeeming shareholders tendered for redemption in June 2025.

- Definition

The entire disclosure for income tax.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
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Reference 2: http://www.xbrl.org/2003/role/disclosureRef
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+ Details

Goldenstone Acquisition Ltd. 10-Q