Solana Co Income Taxes Disclosure

12.INCOME TAXES

The Company's loss before provision for income taxes was generated from operations in the United States and outside of the United States as follows (in thousands):

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The benefit from or provision for income taxes differs from the amount computed by applying the federal statutory income tax rate to the Company's loss before income taxes as follows for the periods indicated (in thousands):

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The (benefit from) provision for income taxes consisted of the following for the periods indicated:

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Deferred income taxes reflect the net tax effects of the temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. Significant components of the Company's deferred tax assets and liabilities were as follows for the periods indicated (in thousands):

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As of December 31, 2025, the Company has accumulated non-capital losses totaling $5.1 million in Canada, Federal net operating losses (“NOLs”) of $97.5 million in the U.S., and State NOLs of $95.9 million in the U.S. which may be available to carry forward and offset future years’ taxable income. The Company has $39.5 million of pre-Tax Cuts and Jobs Act NOLs that would begin to expire in 2032, but these have been written off in accordance with the 382 limitation detailed below. The $97.5 million of Federal NOLs do not expire. State NOLs of $74.6 million begin to expire starting in 2032 through 2045. The remaining $21.4 million of State NOLs are available to be carried forward indefinitely.

The Company is in the process of completing an analysis through December 31, 2025 of its ownership changes since formation in accordance with Section 382 of the Internal Revenue Code of 1986, as amended. The analysis determined that the Company experienced a Section 382 ownership change on September 18, 2025. As a result of the ownership change, the Company’s NOLs are subject to an annual limitation of approximately $0.1 million per year. Additionally, as a result of the ownership change, approximately $39.6 million of are not expected to be realizable. These unrealizable NOLs have been written off and are included in the accumulated numbers above.

Uncertain Tax Positions

The Company has adopted certain provisions of ASC 740, “Income Taxes”, which prescribes a recognition threshold and measurement attribute for the recognition and measurement of tax positions taken or expected to be taken in income tax returns. The provisions also provide guidance on the de-recognition of income tax assets and liabilities, classification of current and deferred income tax assets and liabilities, and accounting for interest and penalties associated with tax positions.

The Company files income tax returns in the U.S. federal jurisdiction, and in various state and foreign jurisdictions. The Company’s tax returns are subject to tax examinations by U.S. federal and state tax authorities, or examinations by foreign tax authorities until the expiration of the respective statutes of limitation. The Company currently has no tax years under examination.

As of December 31, 2025, the Company does not have an accrual relating to uncertain tax positions. It is not anticipated that unrecognized tax benefits would significantly increase or decrease within 12 months of the reporting date.

The amounts of cash taxes paid by the Company are as follows:

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