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INCOME TAXES
 9 Months Ended
Sep. 30, 2025
Income Tax Disclosure [Abstract]  
INCOME TAXES

NOTE 16. INCOME TAXES

 

OTHYS (a Limited liability company (“LLC”) since inception), Boat Center (an LLC since inception) and Azure (an LLC since inception) had elected to be taxed as a partnership under the provisions of the Internal Revenue Code (the “Code”). Under this Code, OTHYS, Boat Center and Azure does not pay federal corporate income taxes on its taxable income. Instead, the member is liable for individual federal income taxes on the Operating Entity’s taxable income. Therefore, no provision or liability for federal income taxes has been included in the accompanying financial statements.

 

OTH incorporated on January 3, 2025 and taxed as C corporation under the Code. AYG was incorporated in the State of Florida on August 8, 2025 and taxed as C corporation under the Code. There was no income tax liability as of September 30, 2025 and December 31, 2024. OTH and AYG are subject to both U.S. federal and state income tax in certain jurisdictions.

 

The income tax provision for the nine months ended September 30, 2025 and 2024 consisted of the following:

SCHEDULE OF INCOME TAX PROVISION

 

           
   For the nine months ended September 30, 2025   For the nine months ended September 30, 2024 
Computed “Expected” Income Taxes   21,682    203,094 
Non C-Corporation (Income)   (21,682)   (203,094)
Entity Level State Income Tax on LLC Income   -    - 
Computed “Expected” Income Taxes   -    - 

 

Deferred tax assets have been fully reserved by a valuation allowance since it is more likely than not that such tax benefits will not be realized.

SCHEDULE OF DEFERRED TAX ASSETS

 

   As of 
   September 30, 2025 
Deferred tax assets:     
Net Operation loss  $11,557 
Less: valuation allowance   (11,557)
Total deferred tax assets   - 
Deferred tax assets, net  $- 

 

The following table summarizes the Company’s effective tax rate:

SCHEDULE OF COMPANY’S EFFECTIVE TAX RATE

 

           
   For the nine months ended September 30, 2025   For the nine months ended September 30, 2024 
Statutory tax rate          
Federal   21.00%   - 
State and local taxes (net of federal tax benefit)   5.50%   - 
Deferred taxes   (26.50)%   - 
Others   -    - 
Effective tax rate   0.00%   0.00%

 

 

Uncertain tax positions

 

The Company evaluates each uncertain tax position (including the potential application of interest and penalties) based on the technical merits, and measures the unrecognized benefits associated with the tax positions. As of September 30, 2025 and December 31, 2024, the Company did not have any significant unrecognized uncertain tax positions. The Company did not incur any interest and penalties related to potential underpaid income taxes for the nine months ended September 30, 2025 and 2024. The Company also does not anticipate any significant increases or decreases in unrecognized tax benefits in the next 12 months from September 30, 2025.