Income Taxes (Tables)

12 Months Ended

Dec. 31, 2025

The components of income tax provision expense (benefit) for the years ended December 31, 2025 and 2024 were as follows:

	For the Years Ended December 31,
	2025			2024
Domestic	$	(37,841,287	)	$	(21,278,239	)
Foreign		1,123,216			(258,610	)
Income before taxes	$	(36,718,071	)	$	(21,536,849	)

	For the Years Ended December 31,
	2025			2024
Current provision
Federal	$	-		$	-
State		-			581
Foreign		-			-
Current provision for income taxes	$	-		$	581

Deferred provision
Federal	$	124,223		$	(4,045,818	)
State		(275,872	)		(105,464	)
Foreign		10,338			(10,338	)
Change in valuation allowance		141,311			4,161,621
Deferred provision for income taxes	$	-		$	-
Total provision for income taxes	$	-		$	581

Schedule of Reconciles the U.S. Federal Statutory Tax

The following table presents required disclosure pursuant to ASU No. 2023-09 and reconciles the U.S. federal statutory tax amount and rate to our actual global effective amount and rate for the year ended December 31, 2025:

	For the Year Ended December 31, 2025
	Amount			Percent
U.S. federal statutory tax rate	$	(7,710,795	)		(21.0	)%
State income taxes, net of federal income tax effect		(282,645	)		(0.8	)
Foreign tax effects
Puerto Rico
Statutory tax rate difference between Puerto Rico and United States		(247,107	)		(0.6	)
Changes in valuation allowance		(10,338	)		-
Effect of cross-border tax laws
Global intangible low-tax income		22,250			0.1
Changes in valuation allowance		151,649			0.4
Nontaxable or nondeductible items
Change in Fair Value of SAFE agreements		3,647,367			9.9
Transaction costs		548,015			1.5
Loss on extinguishment of debt		1,202,942			3.3
Deferred tax true-ups		2,551,581			6.9
Other adjustments
Other		127,081			0.3
Effective tax rate	$	-			0.0	%

Schedule of Company’s Deferred Tax Assets

Significant components of the Company’s deferred tax assets are as follows for the year ended December 31, 2025:

	December 31, 2025
Deferred tax assets:
Research and development tax credits	$	262,178
Lease liabilities		65,554
Net operating losses		3,310,890
Other		1,367,374
Total deferred tax assets	$	5,005,996

Deferred tax liabilities:
Right of use asset		(60,330	)
Total deferred tax liabilities		(60,330	)
Valuation allowance		(4,945,666	)
Net deferred tax assets	$	-

Significant components of the Company’s deferred tax assets are as follows for the year ended December 31, 2024:

	December 31, 2024
Deferred tax asset (liability):
Accrual to cash adjustment	$	729,287
Charitable contributions		1,618
Change in fair value of SAFE agreements		3,106,508
R&D expenditures		359,433
R&D tax credit carryovers		239,142
Right-of-use asset		(65,999	)
Lease liability		56,893
Stock options		55,481
Federal net operating loss carryforwards		304,628
Foreign net operating loss carryforwards		10,338
State net operating loss carryforwards		7,028
Valuation allowance		(4,804,357	)
Net deferred taxes	$	-

CID Holdco, Inc. 10-K