Income Tax

12 Months Ended

Dec. 31, 2023

Income Tax [Abstract]

INCOME TAX

NOTE 7 — INCOME TAX

The Company is incorporated in the State of Delaware and is subject to a U.S. federal and state corporate income taxation. The Company is not filing as a member of the U.S. consolidated group of Collective Audience, Inc. and will file the US tax returns on a separate return basis. The tax provision has been prepared using this filing profile and does not include any activity of any entities outside of the Company.

The Company incurred net operating losses for the years ended December 31, 2023 and 2022. The Company is subject to U.S. federal corporate income tax rate of 21% and estimated state tax rate of 9.80%.

As of December 31, 2023 and 2022, this company does not have any net deferred tax assets.

	2023			2022
Statutory tax rate		21.00	%		21.00	%
State income tax		8.70	%		9.80	%
Change in Valuation Allowance		—	%		(31.01	)%
True-Up		—	%		(0.21	)%
Change in State Rate		—	%		—	%
Total		29.70	%		0.00	%

Deferred income taxes reflect the net tax effects of temporary differences between the carrying amount of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. Details of the Company’s deferred tax assets and liabilities as of December 31 were as follows:

Deferred Tax Assets and Liabilities	2023			2022
Allowance for Bad Debt	$	366,226		$	185,647
Deferred Payroll		-			58,336
Stock-based compensation		-			8,876
Depreciation		(182,442	)		(26,312	)
Amortization		(1,510,875	)		(644,524	)
Net Operating Loss		4,575,314			4,022,649
Valuation Allowance		(3,248,224	)		(3,604,672	)
Net Deferred Tax Assets	$	—		$	—

Management has determined that it is more likely than not that the Company will not realize its net deferred tax asset, and accordingly, a valuation allowance has been deemed necessary. As of December 31, 2023 and 2022, respectively, the valuation allowance is $3,248,224 and $3,604,672.

The Company reports income tax related interest and penalties within our income tax line item on our carve-out consolidated statements of operations. We likewise report the reversal of income tax-related interest and penalties within such line item to the extent we resolve our liabilities for uncertain tax positions in a manner favorable to our accruals. As of December 31, 2023 and 2022, the Company has not recorded any uncertain tax positions.