BIOLIFE SOLUTIONS INCBLFS
BIOLIFE SOLUTIONS INC Income Taxes Disclosure
Income taxes
The Company prospectively adopted ASU 2023-09 as of January 1, 2025.
The Company's loss from continuing operations before income tax expense (benefit) included a loss of $0.1 million from foreign sources as of December 31, 2025. The Company's loss from continuing operations before income tax expense (benefit) did not contain any foreign components as of December 31, 2024 and 2023.
The following table presents U.S. and foreign components of loss from continuing operations before income tax expense (benefit):
| Year Ended December 31, | |||||||||||||||||
| (In thousands) | 2025 | 2024 | 2023 | ||||||||||||||
| Domestic | $ | (11,954) | $ | (8,823) | $ | (12,221) | |||||||||||
| Foreign | (127) | — | — | ||||||||||||||
| Loss from continuing operations before income tax expense (benefit) | $ | (12,081) | $ | (8,823) | $ | (12,221) | |||||||||||
Income tax expense (benefit) from continuing operations consists of the following:
| Year Ended December 31, | |||||||||||||||||
| (In thousands) | 2025 | 2024 | 2023 | ||||||||||||||
| Current: | |||||||||||||||||
| State | $ | 100 | $ | 26 | $ | 6 | |||||||||||
| Foreign | (126) | — | — | ||||||||||||||
| Total current tax provision | (26) | 26 | 6 | ||||||||||||||
| Deferred: | |||||||||||||||||
| Federal | 38 | (64) | (70) | ||||||||||||||
| State | 37 | — | — | ||||||||||||||
| Total deferred tax provision | 75 | (64) | (70) | ||||||||||||||
| Income tax expense (benefit) | $ | 49 | $ | (38) | $ | (64) | |||||||||||
The Company's loss from continuing operations before income tax expense (benefit) did not contain any foreign components as of December 31, 2024, and 2023.
The tax benefit for the years ended December 31, 2024 contained excess tax benefits from stock-based compensation of $0.4 million. The tax benefit for the year ended December 31, 2023 did not contain excess tax benefits from stock-based compensation.
The Company has paid the following in income taxes, net of refunds received:
| Year Ended December 31, | |||||
| (In thousands) | 2025 | ||||
| Current: | |||||
| State | $ | 64 | |||
| Total income taxes paid | $ | 64 | |||
The following table presents a reconciliation of the federal statutory rate and the Company's effective tax rate for the year ended December 31, 2025, in accordance with ASU 2023-09:
| Year Ended December 31, | |||||||||||
| 2025 | |||||||||||
| (In thousands, except percentages) | Amount | Percentage | |||||||||
| At statutory rate | $ | (2,537) | 21.0 | % | |||||||
| State income taxes, net of federal effect | 85 | (0.7 | %) | ||||||||
| Change in valuation allowance | (2,174) | 18.0 | % | ||||||||
| Nontaxable or nondeductible items | |||||||||||
| IPR&D expense | 3,259 | (26.9 | %) | ||||||||
| Sec. 162(m) limitation on executive compensation | 3,378 | (27.9 | %) | ||||||||
| Stock compensation | (1,789) | 14.8 | % | ||||||||
| Other nondeductible items | 98 | (0.8 | %) | ||||||||
| Tax credits | |||||||||||
| R&D credit | (210) | 1.6 | % | ||||||||
| Worldwide changes in unrecognized tax benefit | 22 | (0.2 | %) | ||||||||
| Other | (130) | 1.0 | % | ||||||||
| Foreign tax effects | |||||||||||
| Canada | 47 | (0.3 | %) | ||||||||
| Income tax expense | $ | 49 | (0.4 | %) | |||||||
A reconciliation of income taxes computed using the federal statutory rate to that reflected in operations follows:
| Year Ended December 31, | |||||||||||
| 2024 | 2023 | ||||||||||
| Federal statutory tax | 21.0 | % | 21.0 | % | |||||||
| State tax, net of federal benefit | 7.3 | % | 6.4 | % | |||||||
| Stock compensation | 4.8 | % | (8.3 | %) | |||||||
| Sec. 162(m) limitation on executive compensation | (5.2 | %) | (10.7 | %) | |||||||
| Fair value change in contingent consideration | — | % | 3.8 | % | |||||||
| Tax credits | 5.3 | % | 6.6 | % | |||||||
| Change in valuation allowance | (28.3 | %) | (24.2 | %) | |||||||
| Gain on escrow settlement | — | % | 8.8 | % | |||||||
| Other | (4.5 | %) | (2.4 | %) | |||||||
| Total | 0.4 | % | 1.0 | % | |||||||
In 2025, state and local income taxes in Pennsylvania and Texas comprise the majority of the state and local income taxes, net of federal tax.
The principal components of the Company’s net deferred tax liabilities are as follows as of December 31, 2025 and 2024:
| (In thousands) | 2025 | 2024 | |||||||||
| Deferred tax assets related to: | |||||||||||
| Net operating loss carryforwards | $ | 37,443 | $ | 39,079 | |||||||
| Capital loss carryforward | 3,164 | 7,011 | |||||||||
| Tax credit carryforward | 2,801 | 2,695 | |||||||||
| Stock-based compensation | 1,498 | 2,141 | |||||||||
| Accruals and reserves | 1,566 | 1,883 | |||||||||
| Inventory | 1,111 | 1,410 | |||||||||
| Fixed assets | (143) | 568 | |||||||||
| Lease liabilities | 3,219 | 3,540 | |||||||||
| Capitalized research and development | 2,540 | 3,222 | |||||||||
| Fair value change in investments | 314 | 556 | |||||||||
| Other | 28 | 1,084 | |||||||||
| Total deferred tax assets | 53,541 | 63,189 | |||||||||
| Deferred tax liabilities related to: | |||||||||||
| Intangibles | (1,108) | (2,326) | |||||||||
| Right-of-use assets | (1,863) | (2,654) | |||||||||
| Total deferred tax liabilities | (2,971) | (4,980) | |||||||||
| Net deferred tax assets before valuation allowance | 50,570 | 58,209 | |||||||||
| Less: valuation allowance | 50,759 | 58,333 | |||||||||
| Net deferred tax liabilities | $ | (189) | $ | (124) | |||||||
Realization of deferred tax assets is dependent upon the generation of future taxable income, if any, the timing and amount of which are uncertain. The assessment regarding whether a valuation allowance is required on deferred tax assets considers the evaluation of both positive and negative evidence when concluding whether it is more likely than not that deferred tax assets are realizable. The valuation allowance recorded as of December 31, 2025 and 2024 primarily relates to deferred tax assets for net operating loss carryforwards.
The changes in the valuation allowance for deferred tax assets were as follows:
| (In thousands) | 2025 | 2024 | |||||||||
| Balance at beginning of period | $ | 58,333 | $ | 49,517 | |||||||
| Net deferred tax assets divested | (2,990) | (7,723) | |||||||||
| Charged to income tax expense | (4,584) | 16,539 | |||||||||
| Balance at end of period | $ | 50,759 | $ | 58,333 | |||||||
During the year ended December 31, 2025, the One Big Beautiful Bill Act ("OBBBA") was enacted, introducing significant changes to U.S. tax law. Among other items, the OBBBA allows the deduction of U.S. research and development expenses from taxable income. As previously required under the Tax Cuts and Jobs Act, the Company capitalized research and development expenditures in the years ended December 31, 2024 and 2023. With the enactment of OBBBA, the Company began deducting domestic Section 174 costs during the year ended December 31, 2025.
As of December 31, 2025, the Company had U.S. federal net operating loss (“NOL”) carryforwards of approximately $168.4 million. Approximately $38.6 million of NOL will expire from 2025 through 2037, and approximately $129.8 million of NOL will be carried forward indefinitely. The NOL carryforwards may become subject to an annual limitation in the event of certain cumulative changes in the ownership interest. This limited the amount of tax attributes that can be
utilized annually to offset future taxable income or tax liabilities. Subsequent ownership changes may further affect the limitation in future years.
The Company determines its uncertain tax positions based on a determination of whether and how much of a tax benefit taken by the Company in its tax filings or positions is more likely than not to be sustained upon examination by the relevant income tax authorities.
A reconciliation of the beginning and ending balances of uncertain tax positions in the years ended December 31, 2025 and 2024 is as follows:
| (In thousands) | 2025 | 2024 | |||||||||
| Balance at beginning of period | $ | 1,155 | $ | 954 | |||||||
| Increase related to prior year tax positions | (98) | — | |||||||||
| Increase related to current year tax positions | 120 | 201 | |||||||||
| Balance at end of period | $ | 1,177 | $ | 1,155 | |||||||
The Company is generally subject to examination by U.S. federal and local income tax authorities for all tax years in which loss carryforward is available, which includes 2005 through 2025.
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Feb 26, 2026 | Showing above |
| 2024 | Mar 3, 2025 | |
| 2023 | Feb 29, 2024 | |
| 2021 | Mar 31, 2022 | |
| 2019 | May 15, 2020 | |
| 2018 | Mar 15, 2019 | |
| 2017 | Mar 9, 2018 | |
About Income Taxes Disclosures
The income tax disclosure reveals how much a company actually pays in taxes versus what the statutory rate would predict. Analysts focus on the effective tax rate (ETR) reconciliation, which breaks down every item driving the gap between the 21% federal rate and the company's reported ETR — including R&D credits, foreign rate differentials, and state taxes. Deferred tax assets (DTAs) and their valuation allowances signal management's confidence in future profitability: a rising allowance suggests the company doubts it can use accumulated tax benefits. Uncertain tax benefit (UTB) reserves quantify exposure to IRS challenges on aggressive positions.
Key signals to watch: sudden ETR drops without clear operational reasons, large increases in valuation allowances, growing UTB balances, and significant unremitted foreign earnings. Post-TCJA, pay attention to GILTI and BEAT provisions that affect multinational tax structures. Compare the cash taxes paid (from the cash flow statement) against the income tax provision to gauge earnings quality.