GERON CORPGERN
GERON CORP Income Taxes Disclosure
INCOME TAXES
The components of income (loss) before income taxes were as follows:
Year Ended December 31, | ||||||
(In thousands) | 2025 | 2024 | 2023 | |||
Domestic | (82,358) | (174,737) | (181,884) | |||
Foreign | (1,067) | 215 | 150 | |||
Total | (83,425) | (174,522) | (181,734) | |||
Provision for (benefit from) income taxes was as follows:
Year Ended December 31, | ||||||
(In thousands) | 2025 | 2024 | 2023 | |||
State | — | 398 | — | |||
Foreign | 75 | 51 | 22 | |||
Total | 75 | 449 | 22 | |||
The following table reconciles the federal statutory tax rate to the effective income tax rate from continuing
operations:
Year Ended December 31, | ||||||||||||
2025 | 2024 | 2023 | ||||||||||
Amount | Amount | Amount | ||||||||||
(In thousands) | Percentage | (In thousands) | Percentage | (In thousands) | Percentage | |||||||
Tax at statutory rate | (17,535) | 21.0% | (36,660) | 21.0% | (38,667) | 21.0% | ||||||
State income tax, net of federal benefit | — | — | 398 | (0.2) | — | — | ||||||
Federal and state tax credits | (2,233) | 2.7 | (4,128) | 2.4 | (7,591) | 4.1 | ||||||
Stock-based compensation | 2,588 | (3.1) | (224) | 0.1 | 564 | (0.3) | ||||||
Stock Based compensation - 162(m) | 1,578 | (1.9) | 3,014 | (1.7) | 1,750 | (0.9) | ||||||
Net operating loss not benefitted | 7,717 | (9.2) | 862 | (0.5) | 10,451 | (5.7) | ||||||
Foreign rate difference | 315 | (0.4) | 16 | — | (9) | — | ||||||
Change in unrecognized tax benefit | (3) | — | (615) | 0.4 | 13 | — | ||||||
Other | 312 | (0.4) | 180 | (0.1) | 52 | — | ||||||
Change in valuation allowance | 7,336 | (8.8) | 37,606 | (21.7) | 33,459 | (18.2) | ||||||
Effective tax rate | 75 | (0.1)% | 449 | (0.3)% | 22 | 0.0% | ||||||
Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of
assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. Significant
components of our deferred tax assets are as follows:
December 31, | ||||
(In thousands) | 2025 | 2024 | ||
Net operating loss carryforwards | $278,382 | $272,970 | ||
Federal and state tax credits | 72,360 | 70,492 | ||
Capitalized research and development | 34,747 | 39,503 | ||
Stock-based compensation | 11,063 | 8,353 | ||
Revenue Participation | 32,758 | 29,547 | ||
Operating lease liabilities | 618 | 767 | ||
Other | 15,266 | 8,963 | ||
Total deferred tax assets | 445,194 | 430,595 | ||
Less: valuation allowance | (444,650) | (429,913) | ||
Net deferred tax assets | 544 | 682 | ||
Operating leases, right-of-use assets | (544) | (682) | ||
Total deferred tax liabilities | (544) | (682) | ||
Total net deferred tax assets | $— | $— | ||
We record net deferred tax assets to the extent we believe these assets will more likely than not be realized.
In making such determination, we consider all available positive and negative evidence, including scheduled reversals of
deferred tax liabilities, projected future taxable income, tax planning strategies and recent financial performance. Forming a
conclusion that a valuation allowance is not required is difficult when there is negative evidence such as cumulative losses
in recent years. Because of our history of losses, the net deferred tax assets have been fully offset by a valuation allowance.
The valuation allowance increased by $14.7 million and $35.0 million for the years ended December 31, 2025 and 2024,
respectively.
As of December 31, 2025, we had domestic federal net operating loss carryforwards of approximately $1.0
billion. Of this, $561.7 million will expire at various dates beginning in 2026 through 2037 and the remaining will
carryforward indefinitely under the new tax laws, but is subject to an 80% taxable income limitation for tax years
beginning after December 31, 2017. As of December 31, 2025, we had state net operating loss carryforwards of
approximately $871.8 million expiring at various dates beginning in 2028 through 2045. We also had federal tax credit
carryforwards of approximately $81.9 million expiring at various dates beginning in 2026 through 2045, if not utilized. Our
state tax credit carryforwards of approximately $22.6 million carry forward indefinitely.
Utilization of net operating loss and tax credit carryforwards may be subject to an annual limitation due to
ownership change limitations provided by the Internal Revenue Code and similar state provisions. Annual limitations may
result in expiration of net operating loss and tax credit carryforwards before some or all of such amounts have been
utilized.
We adopted the provision of the standard for accounting for uncertainties in income taxes on January 1,
2007. Upon adoption, we recognized no material adjustment in the liability for unrecognized tax benefits. At December 31,
2025, we had approximately $28.8 million of unrecognized tax benefits, none of which would currently affect our effective
tax rate if recognized due to our net deferred tax assets being fully offset by a valuation allowance.
A reconciliation of the beginning and ending amounts of unrecognized tax benefits is as follows (in
thousands):
Balance as of December 31, 2024 | $28,310 | |
Decrease related to prior year tax positions | (583) | |
Increase related to current year tax positions | 1,094 | |
Balance as of December 31, 2025 | $28,821 |
If applicable, we would classify interest and penalties related to uncertain tax positions in income tax
expense. Through December 31, 2025, there has been no interest expense or penalties related to unrecognized tax benefits.
We do not currently expect any significant changes to unrecognized tax benefits during the fiscal year
ended December 31, 2025. In certain cases, our uncertain tax positions are related to tax years that remain subject to
examination by the relevant tax authorities. Tax years for which we have carryforward net operating loss and credit
attributes remain subject to examination by federal and most state tax authorities.
On July 4, 2025, the One Big Beautiful Bill Act, or OBBBA, was signed into law in the United States. This
comprehensive tax legislation contains a broad range of tax reforms, including provisions that allow for the immediate
expensing of domestic research and development expenses, restore and make permanent 100% bonus depreciation for
qualifying assets, and ease limitations on the deductibility of interest expense. The legislation has multiple effective dates,
with certain provisions taking effect in 2025 and others being implemented through various future years. We have
accounted for the provisions of the OBBBA in our consolidated financial statements. The changes did not impact income
taxes due to its cumulative tax loss and tax effect of a full valuation allowance against those balances.
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Mar 2, 2026 | Showing above |
| 2024 | Feb 27, 2025 | |
| 2023 | Feb 28, 2024 | |
| 2022 | Mar 16, 2023 | |
| 2021 | Mar 10, 2022 | |
| 2020 | Mar 11, 2021 | |
| 2019 | Mar 12, 2020 | |
| 2018 | Mar 7, 2019 | |
| 2017 | Mar 16, 2018 | |
| 2016 | Mar 1, 2017 | |
| 2015 | Mar 10, 2016 | |
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.