Corbus Pharmaceuticals Holdings, Inc. Income Taxes Disclosure

No provision or benefit for federal, state or foreign income taxes has been recorded, as the Company has incurred a net loss for all of the periods presented, and the Company has provided a full valuation allowance against its deferred tax assets.

Our foreign subsidiaries in the U.K. and Australia may qualify for refundable research and development tax credits in the form of cash that were earned on certain research and development expenses incurred primarily outside of the U.S. In the year ending December 31, 2024, the Company applied for refundable research and development credits from foreign tax authorities of approximately $4.0 million that were recorded in other income, net. No future conditions impact the recognition of these tax credits. The Company did not apply for any refundable research and development credits from foreign tax authorities in the year ended December 31, 2025. All amounts have been received, except for $1.5 million, which is subject to tax authority review and is included in prepaid expenses and other current assets within the consolidated balance sheets as of December 31, 2025 and 2024.

At December 31, 2025 and 2024, the Company had U.S. federal net operating loss carryforwards of $292.3 million and $233.9 million respectively, of which federal carryforwards will expire in varying amounts beginning in 2029. Of the federal net operating loss carryforwards of $292.3 million, approximately $236.0 million are from periods after 2017 and have no expiration date and are generally limited to 80% of taxable income. At December 31, 2025 and 2024, the Company had State net operating loss carryforwards of approximately $271.5 million and $220.8 million, respectively. Utilization of net operating losses, income tax credits and certain other tax attributes may be subject to substantial annual limitations due to the “change in ownership” provisions of the Internal Revenue Code, and similar state provisions. The annual limitations may result in the expiration of net operating losses before utilization. The Company has not yet conducted a study to determine if any such changes have occurred that could limit the Company’s ability to use the net operating losses and tax credit carryforwards. The Company also had research and development tax credit carryforwards at December 31, 2025 and 2024 of approximately $13.5 million and $11.2 million, respectively, of which will begin to expire in varying amounts beginning in 2033.

The Company does not provide for U.S. Federal, state, and applicable foreign income and withholding taxes on the financial reporting basis over the tax basis of its foreign subsidiary investment because the Company has the intention and ability to indefinitely reinvest the undistributed earnings of its foreign subsidiaries. As a result, deferred taxes have not been recorded for the outside basis differences in its foreign subsidiary as of December 31, 2025 to the extent such differences are expected to result in future taxable income upon repatriation. The Company reviews its ability and intentions to indefinitely reinvest its foreign earnings at each balance sheet.

For tax years beginning after December 31, 2024, the One Big Beautiful Bill Act ("OBBBA") enacted a new rule under Section 174A allowing companies to immediately expense any domestic research and developmental (“R&D”) expenditures. For domestic R&D, companies may either immediately expense or elect to capitalize and amortize over at least 60 months under Section 174A. However, foreign R&D continues to require capitalization subject to the mandatory 15-year amortization period under Section 174. Transition provisions allow taxpayers either to continue amortizing amounts capitalized under the TCJA rules or to deduct remaining unamortized domestic R&D expenditures in the first tax year beginning after December 31, 2024. The Company has elected to continue amortizing previously capitalized domestic R&D expenditures over the remaining amortization period permitted under OBBBA.

The Company has maintained a full valuation allowance against its deferred tax assets in all periods presented. A valuation allowance is required to be recorded when it is not more-likely-than-not that some portion or all the net deferred tax assets will be realized. Since the Company cannot determine that it is more-likely-than-not that it will generate taxable income, and thereby realize the net deferred tax assets, a full valuation allowance has been provided. The valuation allowance increased by approximately $22.0 million and $10.7 million in 2025 and 2024, respectively, due to increased net operating loss carryforwards and capitalization of R&D expenditures as required by changes to the tax laws from the TCJA as described above. The Company has no uncertain tax positions at December 31, 2025 and 2024 that would affect its effective tax rate. Since the Company is in a loss carryforward position, the Company is generally subject to U.S. federal and state income tax examinations by tax authorities for all years for which a loss carryforward is available.

The reconciliation of the Company's statutory tax rate and effective tax rate is as follows (in thousands):