Company: CSDX
Filing Date: 2025-11-13
Form Type: 10-Q
Source: 0001214659-25-016410
Chunk: 2

Company: CS DIAGNOSTICS CORP.
Filing Date: 2025-11-13
Form: 10-Q
Item: Part I, Item 1
Chunk 2
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, quoted prices in markets that are not considered to be active, and observable inputs other than quoted prices
such as interest rates.

Level 3: Level 3 inputs
are unobservable inputs.

The following required disclosure of the estimated
fair value of financial instruments has been determined by the Company using available market information and appropriate valuation methodologies.
However, considerable judgment is required to interpret market data to develop the estimates of fair value. Accordingly, the use of different
market assumptions and/or estimation methodologies may have a material effect on the estimated fair value amounts.

The methods and assumptions used to estimate the
fair values of each class of financial instruments are as follows: Accounts Receivable, and Accounts Payable. The items are generally
short-term in nature, and accordingly, the carrying amounts reported on the consolidated balance sheets are reasonable approximations
of their fair values.

The carrying amounts of Notes Payable approximate
the fair value as the notes bear interest rates that are consistent with current market rates.

Income Taxes

We follow ASC 740-10-30, which requires recognition
of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements
or tax returns. Under this method, deferred tax assets and liabilities are based on the differences between the financial statement and
tax bases of assets and liabilities using enacted tax rates in effect for the fiscal year in which the differences are expected to reverse.
Deferred tax assets are reduced by a valuation allowance to the extent management concludes it is more likely than not that the assets
will not be realized. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in
the fiscal years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities
of a change in tax rates is recognized in the Statements of Income in the period that includes the enactment date.

We adopted ASC 740-10-25 (“ ASC 740-10-25”)
with regard to uncertainty income taxes. ASC 740-10-25 addresses the determination of whether tax benefits claimed or expected to
be claimed on a tax return should be recorded in the financial statements. Under ASC 740-10-25, we may recognize the tax benefit
from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by the taxing
authorities, based on the technical merits of the position. The tax benefits recognized in the financial statements from such a
position should be measured