Proficient Auto Logistics, Inc Income Taxes Disclosure

Note 9 — Income taxes

 

Deferred income tax assets and liabilities consist of the following as of December 31:

 

		December 31,				December 31,
		2025				2024
Deferred tax assets:
Accrued liabilities		$	1,126,552			$	450,984
Accounts receivable and other reserves			172,271				653,752
Operating lease liabilities			146,489				2,743,518
NOL and other tax attributes			8,168,061				7,160,150
Deductible goodwill			9,438,992				9,256,955
Stock compensation			769,347				912,337
Deferred revenue			2,129,947				—
Other deferred assets			171,838				1,086,422
Total deferred tax asset		$	22,123,497			$	22,264,118
Deferred tax liabilities:
Prepaid expenses		$	(1,415,903	)		$	(2,381,137	)
Property and equipment, net			(26,777,893	)			(28,734,778	)
Intangibles, net			(28,830,141	)			(33,720,352	)
Other deferred liabilities			—				(65,930	)
Total deferred tax liability		$	(57,023,937	)		$	(64,902,197	)
Net deferred tax liability		$	(34,900,440	)		$	(42,638,079	)

 

The Company expects to increase the Federal Net Operating Loss (“NOL”) by $3.0 resulting in a NOL carryforward of $35.2 million at December 31, 2025, including acquired Federal NOL of $13.6 million from the Predecessor. The net operating losses relate to years after 2017 and are not subject to expiration.  The acquired NOL is subject to limitation on use under IRC 382.  However, based on our calculations, the cumulative limitation applicable for 2024, 2025, and forward would allow for unrestricted use as needed in future periods.

 

There are accompanying State jurisdiction NOLs that vary in amount and carryforward period from the Federal NOL discussion above.  Typical adjustments from Federal NOL to State NOL are represented by decoupling from bonus depreciation and application of the 163j interest limitation at the state levels. There are also State level applications of IRC 382 in certain jurisdictions.  There are expected net usage of State NOLS for the period ending December 31, 2025, leaving $15.2 million of gross State NOL carryforward from December 31, 2024, including $8.7 million of acquired NOLs from Predecessor; all of which are subject to expiration between 15- and 20-year periods depending upon the State jurisdiction.  Additionally, many states have legislated an annual limitation on use in addition to any IRC 382 considerations. 

 

The geographical breakdown of our income (loss) before income taxes is as follows: 

 

		Successor								Predecessor
		Twelve months ended December 31, 2025				Twelve months ended December 31, 2024				Period from January 1, 2024 to May 12, 2024				Twelve months ended December 31, 2023
United States			(43,241,214	)			(9,720,652	)			(21,735,318	)			9,399,787
Foreign			—				—				—				—
(Loss) Income Before Income Taxes			(43,241,214	)			(9,720,652	)			(21,735,318	)			9,399,787

Income tax expense consists of the following:

 

		Successor								Predecessor
		Twelve months ended December 31, 2025				Twelve months ended December 31, 2024				Period from January 1, 2024 to May 12, 2024				Twelve months ended December 31, 2023
Current income taxes:
Federal		$	—			$	—			$	(2,741,786	)		$	1,136,505
State			515,991				137,178				88,653				249,571
Foreign			—				—				—				—
Total current income taxes			515,991				137,178				(2,653,133	)			1,386,076
Deferred income taxes:
Federal			(5,513,609	)			(785,648	)			(2,891,551	)			769,530
State			(2,224,030	)			(596,914	)			(805,958	)			88,011
Foreign			—				—				—				—
Total deferred income taxes (benefit)			(7,737,639	)			(1,382,562	)			(3,697,509	)			857,541
Total income tax expense		$	(7,221,648	)		$	(1,245,384	)		$	(6,350,642	)		$	2,243,617

 

For the year ended December 31, 2025, following the adoption of ASU 2023-09, our tax payments by jurisdiction are as follows:

 

		December 31, 2025
Federal		$	—
State
Delaware			349,421
California			183,963
Texas			136,624
New York			76,700
Massachusetts			62,900
Other			297,868
Foreign			—
Total income taxes paid		$	1,107,476

 

The income tax provision differs from the amount determined by applying the U.S. federal tax rate as follows:

 

Income Tax Disclosures as adopted by ASU 2023-09 

 

		December 31, 2025
		Amount				Percent
Tax at U.S. statutory rate		$	(9,080,655	)			21.0	%
State and local income taxes (1)			(1,599,150	)			3.7	%
Non-taxable or non-deductible items:
Stock based compensation			825,809				(1.9	)%
Goodwill impairment			2,578,399				(6.0	)%
Return to provision and def. rate adjustment			53,949				(0.1	)%
Total tax provision and effective rate		$	(7,221,648	)			16.7	%

 

(1)	State Taxes of Delaware, California, Texas, New York and Massachusetts made up the majority (greater than 50%) of the tax effect in this category.

Income Tax Disclosures prior to the adoption of ASU 2023-09

 

		Successor				Predecessor
		Twelve months ended December 31, 2024				Period from January 1, 2024 to May 12, 2024				Twelve months ended December 31, 2023
Federal (benefit) tax at statutory rate (21%)		$	(2,041,337	)		$	(4,564,417	)		$	1,973,955
State taxes, net of federal benefit			(476,051	)			(574,715	)			284,762
Permanent differences to return1			1,272,004				149,456				18,432
Other discrete items			—				(1,360,966	)			(33,532	)
Total income tax (benefit) expense		$	(1,245,384	)		$	(6,350,642	)		$	2,243,617

 

(1)	For the period twelve months ending December 31, 2024, stock-based compensation deduction limitation accounts for $1.2 million of the permanent item above.

 

The Founding Companies’ tax years 2020 and forward remain subject to examination by federal and/or state jurisdictions dependent upon their respective statutory periods. The Founding Companies are not currently under an IRS examination as of the date these financials were issued.

 

The Company has no uncertain tax positions.