Greenwich LifeSciences, Inc. Income Taxes Disclosure
6. Income Taxes
Significant components of the Company’s deferred tax assets and liabilities were as follows:
| December 31, | ||||||||
| 2025 | 2024 | |||||||
| Deferred tax assets: | ||||||||
| Net operating loss carryforwards | 9,275,559 | 6,639,032 | ||||||
| Valuation allowance | (9,275,559 | ) | (6,639,032 | ) | ||||
| Total deferred tax assets | ||||||||
The federal income tax rate used for 2025 and 2024 was 21%. At December 31, 2025, the Company had federal net operating loss (“NOL”) carryforwards of approximately $44.2 million that will expire in tax years up through 2037. The NOLs generated in tax years 2018 and forward will carry forward indefinitely, but the deductibility of such federal net operating losses is limited. The NOL and tax credit carryforwards may be further subject to the application of Section 382 of the Internal Revenue Code of 1986, as amended (the “Code”), as discussed further below. The Company has provided a valuation allowance to offset the deferred tax assets due to the uncertainty of realizing the benefits of the net deferred tax asset.
The Company’s issuances of common and preferred stock may have resulted in ownership changes as defined by Section 382 of the Code. The Company has not conducted a Section 382 study to date. It is possible that a future analysis may result in the conclusion that a portion of the Company’s NOL carryforwards and R&D tax credit carryforwards will be limited due to Sections 382 and 383 of the Code.
The Company is subject to U.S. federal tax examinations by tax authorities for the years 2010 to 2009 due to the fact that NOL carryforwards exist going back to 2010 that may be utilized on a current or future year tax return.
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Jun 1, 2026 | Showing above |
| 2024 | Apr 15, 2025 | |
| 2023 | Apr 15, 2024 | |
| 2022 | Mar 31, 2023 | |
| 2021 | Mar 21, 2022 | |
| 2020 | Mar 31, 2021 | |
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.