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INCOME TAXES
 6 Months Ended 12 Months Ended
Mar. 31, 2025
Sep. 30, 2024
Income Tax Disclosure [Abstract]    
INCOME TAXES

NOTE 12 — INCOME TAXES

 

The Company is subjected to a combined effective tax rate for federal and state income taxes of 30.8% and state minimum fee.

 

The deferred tax assets and liabilities were estimated for further tax consequences attributable to difference between the financial statement carrying amounts of the Company’s existing assets and liabilities and their respective tax bases. The deferred tax assets and liabilities were measured using tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled.

 

For the three and six months ended March 31, 2025 and 2024, the Company incurred $5,298 in tax expenses for the franchise tax. No amounts were incurred for income tax uncertainties or interest and penalties during these periods. As of March 31, 2025, the Company had a liability of $5,298 payable to the Minnesota state government. As of September 30, 2024, the Company did not have an accrued liability for uncertain tax positions and does not anticipate recognition of any significant liabilities for uncertain tax positions during the next 12 months. The Company is currently not aware of any issues under review that could result in significant payments, accruals, or material deviation from its position. The Company’s tax years since its formation remain subject to possible income tax examination by its major taxing authorities for all periods.

 

No provision for income tax was made for the three and six months ended March 31, 2025 and 2024 as the Company had no assessable profits for both years

 

The following table reconciles income taxes based on the U.S. statutory tax rate to the Company’s income tax expense:

 

   March 31, 2025   March 31, 2024 
   For the three months ended 
   March 31, 2025   March 31, 2024 
Loss before income tax  $(384,883)  $(182,275)
Statutory tax rate   30.8%   30.8%
Tax at the domestic income tax rate   (118,543)   (56,139)
           
Tax effect of tax losses not recognized   114,578    52,254 
State franchise tax   (5,298)   - 
Non-deductible expenses   161    661 
Difference in state tax rate   3,804    3,224 
Total income tax expense  $(5,298)  $- 

 

 

AETHER HOLDINGS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

 

NOTE 12 — INCOME TAXES (continued)

 

The following table reconciles income taxes based on the U.S. statutory tax rate to the Company’s income tax expense (continued):

 

   March 31, 2025   March 31, 2024 
   For the six months ended 
   March 31, 2025   March 31, 2024 
Income (Loss) before income tax  $(707,082)  $(276,214)
Statutory tax rate   30.8%   30.8%
Tax at the domestic income tax rate   (217,782)   (85,074)
           
Tax effect of tax losses not recognized   210,103    79,247 
State franchise tax   (5,298)   - 
Non-deductible expenses   376    823 
Difference in state tax rate   7,303    5,004 
Total income tax expense  $(5,298)  $- 

 

Significant components of deferred income tax assets and liabilities were as follows:

 

  

March 31,

2025

   September 30, 2024 
Tax Loss Carryforward  $577,631   $367,528 
Valuation allowance for deferred tax assets   (577,631)   (367,528)
Total deferred income tax assets (liabilities)  $-   $- 

 

As of March 31, 2025 and September 30, 2024, there was net operating loss (“NOL”) carry forward of $1,950,840 and $1,244,454 respectively and they can be carried forward indefinitely. In assessing the recovery of the 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 in the periods in which those temporary differences become deductible. Management considers the scheduled reversals of future deferred tax assets, projected future taxable income, and tax planning strategies in making this assessment. As a result, management determined it was more likely than not the deferred tax assets would not be realized as of March 31, 2025 and September 30, 2024.

 

NOTE 11 — INCOME TAXES

 

The Company is subjected to a combined effective tax rate for federal and state income taxes of 30.8% and state minimum fee.

 

The deferred tax assets and liabilities were estimated for further tax consequences attributable to difference between the financial statement carrying amounts of the Company’s existing assets and liabilities and their respective tax bases. The deferred tax assets and liabilities were measured using tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled.

 

As of September 30, 2024 and 2023, the Company did not have an accrued liability for uncertain tax positions and does not anticipate recognition of any significant liabilities for uncertain tax positions during the next 12 months. For the years ended September 30, 2024 and 2023, no amounts were incurred for income tax uncertainties or interest and penalties. The Company is currently not aware of any issues under review that could result in significant payments, accruals, or material deviation from its position. The Company’s tax years since its formation remain subject to possible income tax examination by its major taxing authorities for all periods.

 

No provision for income tax was made for the years ended September 30, 2024 and 2023 as the Company had no assessable profits for both years

 

The following table reconciles income taxes based on the U.S. statutory tax rate to the Company’s income tax expense:

 

   September 30, 2024   September 30, 2023 
Loss before income tax  $(939,436)  $(295,747)
Statutory tax rate   30.8%   30.8%
Tax at the domestic income tax rate   (289,346)   (91,089)
           
State minimum fee   240    690 
Tax effect of tax losses not recognized   275,735    87,262 
Non-deductible expenses   1,387    2,028 
Difference in state tax rate   11,984    1,109 
Total income tax benefit  $-   $- 

 

Significant components of deferred income tax assets and liabilities were as follows:

 

   September 30, 2024   September 30, 2023 
Tax Loss Carryforward  $367,528   $91,793 
Valuation allowance for deferred tax assets   (367,528)   (91,793)
Total deferred income tax assets (liabilities)  $-   $- 

 

As of September 30, 2024 and 2023, there was net operating loss (“NOL”) carryforward of $1,244,454 and $309,521 respectively and they can be carried forward indefinitely. In assessing the recovery of the 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 in the periods in which those temporary differences become deductible. Management considers the scheduled reversals of future deferred tax assets, projected future taxable income, and tax planning strategies in making this assessment. As a result, management determined it was more likely than not the deferred tax assets would not be realized as of September 30, 2024 and 2023.

 

 

AETHER HOLDINGS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS