Sports Entertainment Gaming Global Corp Income Taxes Disclosure

Note 13. Income Taxes

 

The Company accounts for income taxes in accordance with ASC 740, which requires recognition of deferred tax assets and liabilities for the expected future tax consequences of temporary differences and net operating loss (“NOL”) carryforwards.

 

Income Tax Provision

 

For the years ended December 31, 2025 and 2024, the Company recorded an income tax provision of $0.

 

The Company has generated net losses in the current and prior periods and does not expect to incur current income tax expense. Accordingly, no current income tax expense has been recorded.

 

Deferred tax assets generated during the period have been fully offset by a valuation allowance, resulting in no net deferred tax benefit recognized in the consolidated statements of operations.

 

Deferred Tax Assets and Valuation Allowance

 

The Company’s deferred tax assets primarily relate to net operating loss carryforwards and other temporary differences. Due to cumulative losses and uncertainty regarding the timing and extent of future taxable income, the Company has recorded a full valuation allowance against its deferred tax assets as of December 31, 2025 and 2024.

 

As a result, no net deferred tax assets are presented on the consolidated balance sheets.

 

 

Net Operating Loss Carryforwards

 

As of December 31, 2025, the Company has generated federal and state net operating loss carryforwards. Such carryforwards may be subject to limitations under Section 382 of the Internal Revenue Code due to ownership changes.

 

The Company has not completed a formal Section 382 analysis as of the date of these financial statements.

 

Uncertain Tax Positions

 

The Company recognizes the effect of income tax positions only if those positions are more likely than not to be sustained. As of December 31, 2025 and 2024, the Company has not identified any material uncertain tax positions.

 

Open Tax Years

 

The Company remains subject to examination by taxing authorities for all periods in which net operating losses are available for utilization.

 

Preliminary Assessment

 

The Company’s accounting for income taxes is based on currently available information and represents a preliminary assessment under ASC 740. The Company continues to evaluate its deferred tax assets, including net operating loss carryforwards, and related valuation allowance. Adjustments, if any, are not expected to be material to the consolidated financial statements.