LISATA THERAPEUTICS, INC.LSTA
LISATA THERAPEUTICS, INC. Income Taxes Disclosure
Income Taxes
The provision (benefit) for income taxes is based on loss from operations before provision for income taxes and noncontrolling interests as follows ($ in thousands):
| Years Ended December 31, | |||||||||||
| Pre-tax book income | 2025 | 2024 | |||||||||
| United States | $ | (16,890) | $ | (19,474) | |||||||
| Australia | (658) | (1,309) | |||||||||
| Total | $ | (17,548) | $ | (20,783) | |||||||
The provision (benefit) from income taxes was as follows ($ in thousands):
| Years Ended December 31, | ||||||||||||||
| 2025 | 2024 | |||||||||||||
| Current | ||||||||||||||
| U.S. Federal | $ | — | $ | — | ||||||||||
| State and local | — | — | ||||||||||||
| $ | — | $ | — | |||||||||||
| Deferred | ||||||||||||||
| U.S. Federal | $ | — | $ | — | ||||||||||
| State and local | (962) | (798) | ||||||||||||
| $ | (962) | $ | (798) | |||||||||||
| Total | ||||||||||||||
| U.S. Federal | $ | — | $ | — | ||||||||||
| State and local | (962) | (798) | ||||||||||||
| $ | (962) | $ | (798) | |||||||||||
The provision (benefit) for income taxes is determined by applying the U.S. Federal statutory rate of 21% to income before income taxes, and the components are set forth below ($ in thousands):
| Years Ended December 31, | ||||||||||||||||||||||||||
| 2025 | % | 2024 | % | |||||||||||||||||||||||
| U.S. Federal tax (benefit) at statutory rate | $ | (3,685) | 21.00 | % | $ | (4,364) | 21.00 | % | ||||||||||||||||||
| Domestic | ||||||||||||||||||||||||||
| Other true ups | (2) | 0.01 | % | (21) | 0.10 | % | ||||||||||||||||||||
| Change in Valuation Allowance US | 2,756 | (15.71) | % | 3,695 | (17.78) | % | ||||||||||||||||||||
| Non-taxable or non-deductible items | ||||||||||||||||||||||||||
| Section 162(m) Limit on Compensation | 67 | (0.38) | % | 86 | (0.41) | % | ||||||||||||||||||||
| Share-based compensation | 525 | (2.99) | % | 172 | (0.83) | % | ||||||||||||||||||||
| Sale of NJ NOLs | 202 | (1.15) | % | 168 | (0.81) | % | ||||||||||||||||||||
| Other | (1) | 0.01 | % | (11) | 0.05 | % | ||||||||||||||||||||
| Domestic state and local income taxes, net of federal effect * | (962) | 5.48 | % | (798) | 3.84 | % | ||||||||||||||||||||
| Foreign Tax Effects | ||||||||||||||||||||||||||
| Australia | ||||||||||||||||||||||||||
| AUS Foreign Rate Differential | (26) | 0.15 | % | (52) | 0.25 | % | ||||||||||||||||||||
| Change in Valuation Allowance AUS | 177 | (1.01) | % | (35) | 0.17 | % | ||||||||||||||||||||
| Non-deductible R&D Expense | 10 | (0.06) | % | 188 | (0.90) | % | ||||||||||||||||||||
| AUS Others | (23) | 0.13 | % | 174 | (0.84) | % | ||||||||||||||||||||
| Total Tax Provision | $ | (962) | 5.48 | % | $ | (798) | 3.84 | % | ||||||||||||||||||
*State taxes in New Jersey made up the majority (greater than 50%) of the tax effect in this category.
Deferred income taxes at December 31, 2025 and 2024 consist of the following ($ in thousands):
| December 31, | ||||||||||||||
| 2025 | 2024 | |||||||||||||
| Deferred Tax Assets: | ||||||||||||||
| Accumulated net operating losses (tax effected) | $ | 27,016 | $ | 16,062 | ||||||||||
| Lease liability | — | 39 | ||||||||||||
| Share-based compensation | 1,846 | 2,373 | ||||||||||||
| Intangibles | 621 | 765 | ||||||||||||
| Capitalized research and development | 548 | 7,717 | ||||||||||||
| Accumulated depreciation | 18 | 21 | ||||||||||||
| Accrued payroll | 197 | 219 | ||||||||||||
| Other | 639 | 637 | ||||||||||||
| Deferred tax assets | 30,885 | 27,833 | ||||||||||||
| Deferred Tax Liabilities: | ||||||||||||||
| Right-of-use asset | $ | — | $ | (39) | ||||||||||
| Deferred tax liabilities | — | (39) | ||||||||||||
| Net deferred tax asset | 30,885 | 27,794 | ||||||||||||
| Valuation allowance | (30,885) | (27,794) | ||||||||||||
| Net deferred tax asset | $ | — | $ | — | ||||||||||
The following table presents income taxes paid, net of refunds received, disaggregated by jurisdiction for the years ended December 31, 2025 and 2024 ($ in thousands):
| Years Ended December 31, | |||||||||||
| Jurisdiction | 2025 | 2024 | |||||||||
| U.S. Federal | $ | — | $ | — | |||||||
| States | — | ||||||||||
| New Jersey | 4 | 4 | |||||||||
| California | 2 | 2 | |||||||||
| Foreign | — | — | |||||||||
| Total | $ | 6 | $ | 6 | |||||||
In assessing the realizability of deferred tax assets, including the net operating loss carryforwards (NOLs), the Company assesses the available positive and negative evidence to estimate if sufficient future taxable income will be generated to utilize its existing deferred tax assets. Based on its assessment, the Company has provided a full valuation allowance against its net deferred tax assets as their future utilization remains uncertain at this time.
As of December 31, 2025 and 2024, the Company had approximately $99.0 million and $57.9 million, respectively, of Federal NOLs available to offset future taxable income expiring from 2030 through 2036. The Company performed an analysis and determined that they had an ownership change of greater than 50% on September 15, 2022. As a result of the ownership change, losses incurred before the ownership change on September 15, 2022 will be subject to an annual limitation while losses incurred after September 15, 2022 will not be subject to limitations.
As of December 31, 2022, Cend Therapeutics, Inc. (“Cend”) had approximately $3.6 million of Federal NOLs available to offset future taxable income. The Company performed an analysis and determined that there was an ownership change of greater than 50% on September 15, 2022. As of September 15, 2022 Cend has approximately $3.1 million of Federal and $4.3 million of state NOLs. The state NOLs will expire from the 2036 through 2042 tax years. Using a fair market value of $36.1 million and applying an applicable federal rate of 2.54% Cend will have an annual limitation of approximately $917 thousand each year. The Federal NOL of $459 thousand incurred in the post-acquisition period September 15, 2022 to December 31, 2022 is not subject to limitation, and does not expire.
As of December 31, 2025 and 2024, the Company’s wholly owned Australian subsidiary had approximately $3.0 million and $2.3 million, respectively, of NOLs which will be carried forward and do not expire. There is a full valuation allowance against the NOLs.
As of December 31, 2025, the Company had federal research and development credit carryforwards of $0.5 million expiring from 2027 through 2034 if unutilized, and state research and development credit carryforwards of $0.1 million, which carryforward indefinitely. Utilization of these credits may be subject to an annual limitation based on changes in ownership.
As of December 31, 2025 and 2024, the Company had State NOLs available in New Jersey of $54.8 million and $24.6 million, respectively, California of $9.2 million and $9.2 million, respectively, and New York City of $1.9 million and $1.9 million, respectively, to offset future taxable income expiring from 2032 through 2045. The usage of the Company’s NOLs is limited given the change in ownership.
The Company applies the Financial Accounting Standards Board provisions for uncertain tax positions. The Company utilizes the two-step process to determine the amount of recognized tax benefit. For tax positions meeting the more-likely-than-not threshold, the amount recognized in the consolidated financial statements is the largest benefit that has a greater than 50% likelihood of being realized upon ultimate settlement with the relevant taxing authority. The Company recognizes interest and penalties associated with certain tax positions as a component of income tax expense.
As of December 31, 2025 and 2024, the Company’s uncertain tax positions were $344 thousand and $344 thousand, respectively. The uncertain tax positions are due to the acquisition of Cend related to Federal and state credits and certain state NOLs. The Company will continue to evaluate its uncertain tax positions in future periods. The Company does not believe there will be any material changes in its unrecognized tax positions over the next year.
A reconciliation of the beginning and ending amounts of unrecognized tax benefits is as follows:
| Years Ended December 31, | ||||||||||||||
| 2025 | 2024 | |||||||||||||
| Gross unrecognized tax benefit, beginning of period | $ | 344 | $ | 344 | ||||||||||
| Additions based on tax positions related to the current year | — | — | ||||||||||||
| Additions based on tax positions related to the prior years | — | — | ||||||||||||
| Reductions due to lapse in statute of limitations and settlements | — | — | ||||||||||||
| Gross unrecognized tax benefit, end of period | $ | 344 | $ | 344 | ||||||||||
For years prior to 2022 the federal statute of limitations is closed for assessing tax. The Company’s state tax returns remain open to examination for a period of three to four years from the date of the tax return filing.
On March 4, 2024, the Company received final approval from the New Jersey Economic Development Authority (“NJEDA”) under the Technology Business Tax Certificate Transfer Program (“Program”) to sell $8.9 million of its New Jersey net operating losses (“NJ NOLs”), which were subsequently sold to a qualifying and approved buyer pursuant to the Program for net proceeds of $0.7 million. The sale of NJ NOLs resulted in a $0.8 million deferred income tax benefit and a loss on sale of $0.1 million recorded in other income (expense) in the consolidated financial statements.
In January 2025, the Company sold a portion of their unused New Jersey net operating losses through the State of New Jersey Economic Development Authority's (“NJEDA”) Technology Business Tax Certificate Transfer Program (“Program”). Under the Program, the Company sold $10.7 million of its New Jersey net operating losses (“NJ NOLs”) for net proceeds of $0.9 million. The sale of NJ NOLs resulted in a $1.0 million deferred income tax benefit and a loss on sale of $0.1 million recorded in other income (expense) in the consolidated financial statements.
On July 4, 2025, President Trump signed into law the One Big Beautiful Bill Act (“OBBBA”). The OBBBA makes permanent key elements of the Tax Cuts and Jobs Act, including 100% bonus depreciation, domestic research cost expensing, and the business interest expense limitation. ASC 740, “Income Taxes”, requires the tax effects of changes in tax rates and tax law be recognized in the period in which the legislation is enacted. The Company completed its initial assessment of OBBBA for the year ended December 31, 2025. For the provisions effective in 2025, there was no material impact to the Company’s effective tax rate for the year ended December 31, 2025.
The One Big Beautiful Bill Act (“OBBBA”) enacted new Section 174A, which permanently allows taxpayers to fully expense domestic research or experimental (R&E) expenditures paid or incurred in taxable years beginning after Dec. 31, 2024, and also provides transition rules permitting taxpayers to deduct unamortized domestic R&E expenditures paid or incurred in 2022 through 2024. The company anticipates deducting the remaining unamortized domestic R&E expenditures of $26.2 million entirely in 2025.Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Mar 12, 2026 | Showing above |
| 2024 | Feb 27, 2025 | |
| 2023 | Feb 29, 2024 | |
| 2022 | Mar 30, 2023 | |
| 2021 | Mar 22, 2022 | |
| 2020 | Feb 25, 2021 | |
| 2019 | Mar 5, 2020 | |
| 2018 | Mar 14, 2019 | |
| 2017 | Mar 22, 2018 | |
| 2016 | Mar 17, 2017 | |
| 2015 | Mar 15, 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.