Bone Biologics Corp Income Taxes Disclosure

5. Income Taxes

 

No federal or state tax provisions have been provided for the years ended December 31, 2025 and 2024 due to the losses incurred during such periods. The provision for income taxes consists of the following:

 

 Schedule of Provision for Income Taxes 

Year Ended			December 31, 2025				December 31, 2024
Current:
Federal		$	-			$	-
State			-				-
Total current			-				-
Deferred:
Federal			-				-
State			-				-
Total deferred			-				-
Provision for income taxes		$	-			$	-

 

 

The components of deferred tax assets and liabilities consist of the following:

 

 Schedule of Deferred Tax Assets and Liabilities 

		December 31, 2025				December 31, 2024
Deferred tax assets
Net operating loss carryforwards		$	14,145,000			$	10,771,000
Accrued expenses			1,809,000				2,125,000
Research and development credit carryforwards			938,000				938,000
Stock-based compensation			7,919,000				7,848,000
Deferred tax assets before valuation allowance			24,811,000				21,682,000
Less: Valuation allowance			(24,811,000	)			(21,682,000	)
Net deferred income tax assets			-				-
Deferred tax liabilities			-				-
Net deferred tax assets (liabilities)		$	-			$	-

 

The Company’s federal and state net operating loss carryforwards at December 31, 2025 and 2024 were approximately $46,140,000 and $34,585,000, respectively, and will begin to expire in 2037 if not utilized.

 

The Company reviews its deferred tax assets for realization based upon historical taxable income, prudent and feasible tax planning strategies, the expected timing of the reversals of existing temporary differences and expected future taxable income. The Company has concluded that it is more likely than not that the deferred tax assets will not be realized. Accordingly, the Company has recorded a valuation allowance against the net deferred tax assets in the amount of $24,811,000 at December 31, 2025. The net change in the valuation allowance for the year ended December 31, 2025 was $3,129,000.

 

The effective tax rate differs from the statutory tax rate principally due to the change in valuation allowance, nondeductible permanent differences, credits, and state income taxes.

 

A reconciliation of the federal income tax rate to the Company’s effective tax rate for the years ended December 31, 2025 and 2024 is as follows:

 

 Schedule of Income Tax Effective Tax Rate 

		December 31, 2025									December 31, 2024
Statutory federal income tax rate		$	(652,888	)			21.0	%		$	(863,608	)			21.0	%
State taxes, net of federal tax benefit			(885,062	)			28.5	%			(978,736	)			23.8	%
Nondeductible permanent items			-				-	%			-				-	%
Deferred tax rate change			-				-	%			-				-	%
Research and development credit			-				-	%			-				-	%
Change in valuation allowance			1,537,950				(49.5	)%			1,842,344				(44.8	)%
Income tax provision		$	-				0.0	%		$	-				0.0	%

 

The Company’s effective tax rate is 0% for income tax for the years ended December 31, 2025 and 2024. Based on the weight of available evidence, including cumulative losses since inception and expected future losses, the Company has determined that it is more likely than not that the deferred tax asset amount will not be realized and therefore a valuation allowance has been provided on net deferred tax assets.

 

The Company files tax returns for U.S. Federal, State of Massachusetts, and State of California. The Company is not currently subject to any income tax examinations. Since the Company’s inception, the Company had incurred losses from operations, which generally allows all tax years to remain open.