Company: CRCE
Filing Date: 2025-08-14
Form Type: 10-Q
Source: 0001096906-25-001324
Chunk: 8

Company: Circle Energy, Inc./NV
Filing Date: 2025-08-14
Form: 10-Q
Item: Part I, Item 1
Chunk 8
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 land, buildings, equipment and leasehold improvements and placing them in service.
 
Depreciation of buildings equipment, software and leasehold improvements is calculated using the straight-line method based upon the following estimated useful lives:
 
Leasehold improvements
 
3-10 years

Office equipment and software
 
3-7 years

Equipment
 
5-10 years

Revenue Recognition – The Company accounts for revenues according to Accounting Standards Update (“ASU”) 2014-09 Revenues from Contracts with Customers (Topic 606) (“ASU 2014-09”).  The Company does not currently have any revenues. 
 
Income Taxes – Provisions for income taxes are based on taxes payable or refundable for the current year and deferred taxes. Deferred taxes are provided on differences between the tax bases of assets and liabilities and their reported amounts in the financial statements, and tax carry forwards. Deferred tax assets and liabilities are included in the 

10

CIRCLE ENERGY, INC.

NOTES TO CONDENSED FINANCIAL STATEMENTS

(UNAUDITED)

financial statements at currently enacted income tax rates applicable to the period in which the deferred tax assets and liabilities are expected to be realized or settled. As changes in tax laws or rates are enacted, deferred tax assets and liabilities are adjusted through the provision for income taxes.  No provision has been made for income taxes as the Company has not recorded or received any revenues.
 
For the three and six months ended June 30, 2024, the Company recorded a full valuation allowance against the deferred tax asset of $3,406 and $8,503, respectively.  For the three and six months ended June 30, 2024, the Company recorded a full valuation allowance against the deferred tax asset of $2,530 and $7,581, respectively. As the Company currently has no revenues there is reasonable doubt as to the realizability of this deferred tax asset. With the allowance taken as of June 30, 2025, the Company has a cumulative valuation allowance of $52,316.
 
Accounting for Uncertainty in Income Taxes – In accordance with generally accepted accounting principles, the Company has analyzed its filing positions in all jurisdictions where it is required to file income tax returns for the open tax years in such jurisdictions. The Company has identified its federal income tax return as a “major” tax jurisdiction. Therefore, the Company has no significant reserves for uncertain tax positions and no adjustments to such reserves were required by generally accepted accounting