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Income Taxes | 8 Months Ended
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Dec. 31, 2024
Income Tax Disclosure [Abstract] |
Income Taxes | Note 15 – Income Taxes Red Cat Holdings, Inc. is domiciled in Puerto Rico, which is a commonwealth of the United States, with a majority of its operations in the United States. We are subject to taxation by the Puerto Rico taxing authority and by the United States federal and state taxing authorities. Since inception, we have incurred net losses in each year of operations. Our current provision for the reporting periods presented in these financial statements consisted of a tax benefit against which we applied a full valuation allowance, resulting in no current provision for income taxes. In addition, there was no deferred provision for any of these reporting periods. At December 31, 2024, April 30, 2024 and April 30, 2023, we had accumulated deficits of approximately $124,700,000, $81,100,000 and $57,100,000, respectively. Deferred tax assets related to the future benefit of these net operating losses for tax purposes totaled approximately $32,400,000, $21,100,000 and $14,800,000, respectively, calculated using the base Puerto Rico corporate tax rate of 18.5% and United States federal rate of 21% and state tax rates of 5%, which result in a blended tax rate of 26%. Currently, we focus on projected future taxable income in evaluating whether it is more likely than not that these deferred assets will be realized. Based on the fact that we have not generated an operating profit since inception, we have applied a full valuation allowance against our deferred tax assets at December 31, 2024, April 30, 2024 and April 30, 2023, resulting in a 0% effective tax rate and increasing the valuation allowance by $11,300,000, $6,300,000 and $7,300,000 for each period then ended, respectively. The Company is in process of filing taxes for open periods 2019 through 2024. There are no open tax examinations as of December 31, 2024.

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