INTENSITY THERAPEUTICS, INC.INTS
INTENSITY THERAPEUTICS, INC. Income Taxes Disclosure
Income Taxes
On July 4, 2025, the U.S. government enacted the One Big Beautiful Bill Act (“OBBBA”) which includes, among other provisions, changes to the U.S. corporate income tax system, including the allowance of 100% expensing of qualified asset expenditures, immediate expensing of qualifying domestic research and development expenses and permanent extensions of certain other provisions within the Tax Cuts and Jobs Act. Certain provisions are effective for 2025, beginning January 19, 2025.
Under ASC 740, Income Taxes, the Company is required to recognize the effects of changes in tax laws in the period in which the legislation is enacted. The enactment did not impact our effective tax rate for the year ended December 31, 2025. The Company does not currently expect OBBBA to have a material impact on its long-term effective tax rate.
The components of the Company’s provision for income taxes and income taxes computed using the U.S. federal statutory corporate tax rate were as follows (in thousands):
| 2025 | 2024 | |||||||||||||||||||
| Percent | Amount | Percent | Amount | |||||||||||||||||
| Statutory federal income tax rate | 21.0% | $ | (2,437) | 21.0% | $ | (3,414) | ||||||||||||||
| State income taxes, net of federal income tax benefit* | —% | — | —% | — | ||||||||||||||||
| Change in valuation allowance | (20.5)% | 2,388 | (20.1)% | 3,267 | ||||||||||||||||
| Other adjustments | —% | 3 | (0.2)% | 38 | ||||||||||||||||
| Other permanent items | (0.5)% | 46 | (0.7)% | 109 | ||||||||||||||||
| Provision for income taxes | —% | $ | — | —% | $ | — | ||||||||||||||
| *The Company files state income taxes in Connecticut | ||||||||||||||||||||
The components of the net deferred tax assets are as follows (in thousands):
| 2025 | 2024 | ||||||||||
| Deferred tax assets: | |||||||||||
| Net operating loss carryforwards | $ | 14,218 | $ | 10,235 | |||||||
| Capitalized research expense | 2,219 | 3,774 | |||||||||
| Share based compensation | 2,139 | 1,713 | |||||||||
| Research and development credits | 488 | 495 | |||||||||
| Compensation accrual | 215 | — | |||||||||
| Lease liability | 30 | 37 | |||||||||
| Gross deferred tax assets | 19,309 | 16,254 | |||||||||
| Less valuation allowance | (19,283) | (16,221) | |||||||||
| Total deferred tax assets | 26 | 33 | |||||||||
| Deferred tax liabilities: | |||||||||||
| Right of use assets | (26) | (33) | |||||||||
| Total deferred tax liabilities | (26) | (33) | |||||||||
| Deferred income taxes, net | $ | — | $ | — | |||||||
As of December 31, 2025, the Company has U.S. federal and state net operating loss carryforwards of $52.8 million and $52.7 million, respectively, which may be used to offset future taxable income, if any. As of December 31, 2024, the Company had U.S. federal and state net operating loss carryforwards of $38.0 million and $38.0 million, respectively, which may be used to offset future taxable income, if any. The Company’s U.S. federal and state net operating loss carryforwards begin to expire in 2033 and the U.S. federal net operating losses generated between 2018 and 2024 can be carried forward indefinitely. Federal loss carryforwards of $7.0 million expire between the years 2033 and 2037, and the remainder have no expiration date.
As of December 31, 2025 and 2024, the Company has U.S. federal and state credit carryforwards of $0.3 million and $0.2 million, respectively, which may be used to offset future taxable income, if any. The Company’s U.S. federal and state credit carryforwards begin to expire in 2033. The Company’s ability to utilize these net operating loss carryforwards and tax credit carryforwards may be limited if the Company experiences an ownership change pursuant to Internal Revenue Code Section 382 and 383. An ownership change occurs when the ownership percentages of 5% or greater stockholders change by more than 50% over a three-year period. The Company has not completed an analysis under Section 382 of the Code.
A valuation allowance for deferred tax assets is recorded when it is more likely than not that some or all of the benefit from the deferred tax asset will not be realized. The Company provides a valuation allowance to offset deferred tax assets for net operating losses incurred during the year and for other deferred tax assets where, in the Company’s opinion, it is more likely than not that the financial statement benefit of these losses will not be realized. The increase in valuation allowance for the years ended December 31, 2025 and 2024 totaled $3.1 million and $4.2 million, respectively.
The Company’s policy is to classify interest and penalties, if any, as components of the income tax provision in the statement of operations. The Company has not recorded any unrecognized tax benefit, interest or penalty in the years ended December 31, 2025 and 2024.
The Company is subject to income tax in the U.S. Federal and Connecticut jurisdictions. The Company did not make any income tax payments during the years ended December 31, 2025 and 2024. As no income taxes were paid, disaggregation by federal or state jurisdiction was not applicable for the periods presented.
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Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Mar 27, 2026 | Showing above |
| 2024 | Mar 13, 2025 | |
| 2023 | Mar 14, 2024 | |
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.