AIM ImmunoTech Inc. Income Taxes Disclosure

 

(12)	Income Taxes

 

The Company applies the provisions of FASB ASC 740-10 Uncertainty in Income Taxes. As a result of the implementation, there has been no material change to the Company’s tax positions as they have not paid any corporate income taxes due to operating losses. With the exception of net operating losses and research and development credits generated in New Jersey, all tax benefits will likely not be recognized due to the substantial net operating loss carryforwards which will most likely not be realized prior to expiration.

 

As of December 31, 2025, and December 31, 2024, respectively, the Company has approximately $149,645,900 of Federal net operating loss carryforwards (expiring in the years 2025 through 2038), and $135,324,600 of Federal net operating loss carryforwards with no expiration date, both of which have been limited by Internal Revenue Code Section 382, available to offset future federal taxable income. The Company has approximately $60,135,200 of New Jersey state net operating loss carryforwards (expiring in 2045). The Company has approximately $114,500,700 of Florida state net operating loss carryforwards with no expiration date to offset future Florida taxable income. The Company has approximately $3,600,000 of Belgium net operating loss carryforwards with no expiration date to offset future taxable income. The utilization of certain state net operating loss carryforwards may be subject to annual limitations. With no tax due for the foreseeable future, the Company has determined that a policy to determine the accounting for interest or penalties related to the payment of tax is not necessary at this time.

 

Under the Tax Reform Act of 1986, the utilization of a corporation’s net operating loss carryforward is limited following a greater than 50% change in ownership. As noted above, due to the Company’s prior and current equity transactions, some of the Company’s net operating loss carryforwards are subject to an annual limitation generally determined by multiplying the value of the Company on the date of the ownership change by the federal long-term tax-exempt rate. Any unused annual limitation may be carried forward to future years for the balance of the net operating loss carryforward period. As of December 31, 2025, the tax years after 2021 remain subject to examination by major tax jurisdictions.

 

 

The Income tax provision consists of the following:

Schedule of Income Tax Provision 

		2025				2024
		Year Ended December 31, (in thousands)
		2025				2024
Federal			—				—
State			—				—
Foreign			—				—
Net Current Tax Provision			—				—
Deferred Tax Provision (Benefit)
Federal			(2,870	)			(3,658	)
State			(1,103	)			(801	)
Deferred Tax Provision / (Benefit)			(3,973	)			(4,459	)
Increase/(Decrease) in Valuation Allowance			3,973				4,459
Net Deferred Tax Provision / (Benefit)			—				—
Net Income Tax Expense / (Benefit)			—				—

 

Increase tax payments during the year, net of refunds, are comprised of the following:

 

Deferred income taxes reflect the net tax effects of temporary differences between carrying amounts of assets and liabilities for financial reporting purposes and the carrying amounts used for income tax purposes. In assessing the realizability of deferred tax assets, Management considers whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. The realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which temporary differences representing net future deductible amounts become deductible. With the exception of net operating losses generated in New Jersey which can be surrendered for 80% of their value, due to the uncertainty of the Company’s ability to realize the benefit of the deferred tax asset, the remainder of our deferred tax assets are fully offset by a valuation allowance at December 31, 2025, and 2024.

 

 

The components of the net deferred tax assets and liabilities as of December 31, 2025, and 2024, consist of the following:

Schedule of Components of Net Deferred Tax Assets and Liabilities 

		2025				2024
		(in thousands)
Deferred tax assets:		December 31,
		2025				2024
Net operating losses		$	34,197			$	29,001
Research and Development costs			3,463				3,914
Stock Compensation			1,359				1,515
R&D credits			2,763				2,829
Other			70				41
Amortization & Depreciation			4,988				5,575
Right of use asset			12				4
Total deferred tax assets			46,852				42,879
Less: Valuation allowance			(46,852	)			(42,879	)
Deferred tax assets, net		$	—			$	—

 

Deferred tax assets are included within other assets in the accompanying Consolidated Balance Sheets. The benefits of deferred tax assets are included within the gain from sale of income tax operating losses in the accompanying Consolidated Statements of Operations and Comprehensive Loss.

 

In December 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2023-09, “Income Taxes (Topic 740): Improvements to Income Tax Disclosures.” This standard expands disclosures related to income taxes specifically for the rate reconciliation and information on income taxes paid. We adopted this standard prospectively effective January 1, 2025. The adoption of ASU 2023-09 did not result in any material changes to the consolidated financial statements or income tax disclosures.

 

Reconciliation between the effective tax rate on income from continuing operations and the statutory tax rate is as follows (in thousands):

Schedule of Effective Tax Rate and Statutory Tax Rate 

Pre Tax Book Loss		$	(13,958	)
Federal Rate			(2,931	)			21.0	%
State Taxes net of federal tax benefit			(1,065	)			7.63	%
Tax Credits			(481	)			3.45	%
Change in Valuation Allowances			3,973				-28.46	%
Nontaxable or Nondeductible Items
Change in FV of Warrants			77				-0.55	%
Nondeductible executive compensation under 162(m)			126				-0.90	%
Meals and Entertainment			1				-0.01	%
Mark to Market adjustment			(21	)			0.15	%
Other Adjustments
Federal Provision to Return			187				-1.34	%
State Rate Change			(5	)			0.04	%
Stock Option Forfeitures			156				-1.12	%
Other			(17	)			0.12	%
Total		$	—				-0.00	%

 

 

The Company files tax returns in the U.S., Florida and New Jersey. As of December 31, 2025, tax years for 2024, 2023, and 2022 are still subject to examination by the tax authorities. The Company is no longer subject to U.S. federal or state examinations by tax authorities for years before 2022.