Income taxes

12 Months Ended

Dec. 31, 2024

Income Tax Disclosure [Abstract]

Income taxes

Income taxes

The source of pre-tax income and the components of income tax expense are as follows:

	For the Years Ended December 31,
	2024		2023
	USD		USD
Income components
United States	$	(5,300,760)	$	(681,951)
Outside United States	3,018,662		2,069,739
Total pre-tax (loss) income	$	(2,282,098)	$	1,387,788
Provision for (benefit of) income taxes
Current
Federal	$	2,809	$	27,451
State	46,915		13,555
Foreign	913,818		670,512
	963,542		711,518
Deferred
Federal	(941,331)		24,622
State	(435,241)		92,271
Foreign	(134,791)		(20,187)
	(1,511,363)		96,706
Total (benefit of) provision for income taxes	$	(547,821)	$	808,224

Reconciliations between taxes at the U.S. federal income tax rate and taxes at the Company’s effective income tax rate on earnings before income taxes are as follows:

	For the Years Ended December 31,
	2024	2023
	%	%
Federal statutory rate	21.0	21.0
Increase (decrease) in tax rate resulting from:
State and local income taxes, net of federal benefit	13.4	(0.5)
Foreign operations	(6.4)	15.1
Permanent items	(8.1)	3.1
Deferred adjustments	—	16.8
Others	4.1	2.7
Effective tax rate	24.0	58.2

The following is a summary of the components of the net deferred tax assets and liabilities recognized in the consolidated balance sheets:

	As of December 31, 2024		As of December 31, 2023
	USD		USD
Deferred tax assets
Allowance for credit losses	$	45,859	$	58,476
Other reserve	127,515		61,371
Accrued expenses	152,600		143,823
Lease liability	1,464,256		1,769,328
Charitable contributions	331		8,181
Business interest limitation	634,794		242,862
Net operating loss – federal	976,500		310,099
Net operating loss – state	328,861		27,337
Other	186,554		66,063
Total deferred tax assets	3,917,270		2,687,540
Less: valuation allowance	—		—
Net deferred tax assets	3,917,270		2,687,540
Deferred tax liabilities
Fixed assets	1,416,178		1,728,364
Intangibles	(164,493)		(209,657)
Total deferred tax liabilities	1,251,685		1,518,707
Deferred tax assets, net of deferred tax liabilities	$	2,665,585	$	1,168,833

The deferred tax assets related to the Company’s net operating losses of $10,056,026 (Federal $4,649,994 and States $5,406,032) and $1,836,077 (Federal $1,476,655 and States $359,422) as of December 31, 2024 and December 31, 2023, respectively. The Federal Net Operating losses have no expiration date. The States Net Operating losses have either 20 years or no expiration date. The Company had no material unrecognized tax benefits at December 31, 2024 or December 31, 2023. The Company has not taken any tax positions for which it is reasonably possible that unrecognized tax benefits will significantly increase within the next 12 months.

Inflation Reduction Act of 2022

On August 16, 2022, the Inflation Reduction Act of 2022 (the “IR Act”) was signed into federal law. The IR Act provides for, among other things, a new U.S. federal 1% excise tax on certain repurchases of stock by publicly traded U.S. domestic corporations and certain U.S. domestic subsidiaries of publicly traded foreign corporations occurring on or after January 1, 2023. The excise tax is imposed on the repurchasing corporation itself, not its shareholders from which shares are repurchased. The amount of the excise tax is generally 1% of the fair market value of the shares repurchased at the time of the repurchase. However, for purposes of calculating the excise tax, repurchasing corporations are permitted to net the fair market value of certain new stock issuances against the fair market value of stock repurchases during the same taxable year. In addition, certain exceptions apply to the excise tax. The U.S. Department of the Treasury (the “Treasury”) has been given authority to provide regulations and other guidance to carry out and prevent the abuse or avoidance of the excise tax. There was no material impact of the IR Act on the Company’s consolidated financial statements.