Lucid Diagnostics Inc. Income Taxes Disclosure

Note 16 — Income Taxes

 

Income tax (benefit) expense for respective periods noted is as follows:

 

		Years Ended December 31,
		2025				2024
Current				​				​
Federal, State and Local		$	—			$	—
Deferred				​				​
Federal			(9,466	)			(8,033	)
State and Local			(4,021	)			(2,173	)
Current and Deferred tax (benefit) expense			(13,487	)			(10,206	)
Less: Valuation allowance reserve			13,487				10,206
Income tax (benefit) expense		$	—			$	—

 

The reconciliation of the federal statutory income tax rate to the effective income tax rate for the year ended December 31, 2025 is as follows:

 

		Year Ended December 31,
		2025				Amount
U.S. federal statutory rate			21.0	%			(12,182	)
				​				​
Current state tax expense			0.0	%			—
Deferred California tax (benefit)			5.0	%			(2,928	)
Deferred state tax (benefit) - all other states			0.1	%			(74	)
State revaluation of DTA			0.9	%			(546	)
State deferred true-up			(0.6	)%			371
State valuation allowance - California			(5.0	)%			2,928
State valuation allowance - all other states			(0.1	)%			74
Total state taxes (net of federal benefit)			0.3	%			(175	)
				​				​
Permanent differences - Other			(3.2	)%			1,879
Tax credits			0.4	%			(219	)
Foreign tax effects			0.0	%			—
New tax law changes			0.0	%			—
Effect of Cross - Border Tax laws			0.0	%			—
Changes in Unrecognized Benefits			0.0	%			—
Federal deferred true-up			(0.4	)%			213
Change in valuation allowance			(18.1	)%			10,484
Effective tax rate			—	%		$	—

 

The reconciliation of the federal statutory income tax rate to the effective income tax rate for the year ended December 31, 2024 is as follows:

 

​	​	Year Ended December 31,		​
​	​	2024		​
U.S. federal statutory rate	​	​	21.0	%
U.S. state and local income taxes, net of federal benefit	​	​	6.1	%
Permanent differences	​	​	(1.9	)%
Tax credits	​	​	0.4	%
Revaluation of state deferred taxes	​	​	0.8	%
Federal deferred true-up	​	​	(0.8	)%
State deferred true-up	​	​	(3.2	)%
Valuation allowance	​	​	(22.4	)%
Effective tax rate	​	​	—	%

 

For the year ended December 31, 2025, the components of the Company’s income tax paid are state and local taxes primarily from California, Connecticut, Massachusetts, New Jersey and New York. For the year ended December 31, 2024, there were no income taxes paid.

 

Substantially all sources of losses before provision for income tax were derived from sources within the United States. No income was derived from foreign sources for the years ended December 31, 2025 and 2024.

 

The tax effects of temporary differences which give rise to the net deferred tax assets for the respective period noted is as follows:

 

​	​	Years Ended December 31,						​
​	​	2025		​	​	2024		​
Deferred Tax Assets	​	​	​	​	​	​	​	​
Net operating loss	​	$	52,853	​	​	$	39,472	​
Stock-based compensation expense	​	​	8,643	​	​	​	7,659	​
Accrued expenses	​	​	145	​	​	​	154	​
Depreciation & amortization	​	​	810	​	​	​	755	​
Lease liabilities	​	​	499	​	​	​	736	​
Research and development expenditures	​	​	1,964	​	​	​	3,107	​
Research and development tax credit carryforwards	​	​	1,443	​	​	​	1,225	​
Deferred tax assets	​	$	66,357	​	​	$	53,108	​
​	​	​	​	​	​	​	​	​
Deferred Tax Liabilities	​	​	​	​	​	​	​	​
Operating leases right-of-use assets	​	​	(495	)	​	​	(732	)
Deferred Tax Liabilities	​	$	(495	)	​	$	(732	)
​	​	​	​	​	​	​	​	​
Deferred tax assets, net of deferred tax liabilities	​	​	65,863	​	​	​	52,376	​
Less: valuation allowance	​	​	(65,863	)	​	​	(52,376	)
Deferred tax assets, net after valuation allowance	​	$	—	​	​	$	—	​

 

 

Deferred tax assets and deferred tax liabilities resulting from temporary differences are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect of the change in the tax rate is recognized as income or expense in the period the change in tax rate is enacted.

 

As required by FASB ASC Topic 740, Income Taxes, (“ASC 740”), a “more-likely-than-not” criterion is applied when assessing the estimated realization of deferred tax assets through their utilization to reduce future taxable income, or with respect to a deferred tax asset for tax credit carryforward, to reduce future tax expense. A valuation allowance is established, when necessary, to reduce deferred tax assets, net of deferred tax liabilities, when the assessment indicates it is more-likely-than-not, the full or partial amount of the net deferred tax asset will not be realized. Accordingly, the Company evaluated the positive and negative evidence bearing upon the estimated realizability of the net deferred tax assets, and based on the Company’s history of operating losses, concluded it is more-likely-than-not the deferred tax assets will not be realized, and therefore recognized a valuation allowance reserve equal to the full amount of the deferred tax assets, net of deferred tax liabilities, as of  December 31, 2025 and 2024.

 

Lucid Diagnostics has federal and state net operating loss (“NOL”) carryforwards, available to reduce future taxable income, if any, as of  December 31, 2025 and 2024, as follows: federal NOL carryforward of approximately $192.8 million and $144.8 million, respectively, with such federal NOL carryforward not having a statutory expiration date; and state NOL carryforward of approximately $192.6 million and $134.6 million, respectively, with such state NOL carryforward having statutory expiration dates commencing in 2037. The Company has not yet conducted a formal analysis and the NOL carryforward may be subject-to limitation under U.S. Internal Revenue Code (“IRC”) Section 382 (provided there was a greater than 50% ownership change, as computed under such IRC Section 382).

 

As of October 14, 2021, Lucid Diagnostics filed its Federal income tax returns on a stand-alone legal entity basis but filed combined unitary state tax returns with PAVmed. As of September 10, 2024, Lucid Diagnostics no longer qualifies to be included in PAVmed’s combined unitary state tax returns and will file on a stand-alone legal entity basis. For all periods presented, the deferred tax asset net of valuation allowance, income tax expense and /or an uncertain tax position, if any; is determined based on Lucid Diagnostics stand-alone legal entity assumed filing of separate income tax returns in all jurisdictions.

 

The Company files income tax returns in the United States in federal and applicable state and local jurisdictions. The Company’s tax filings for the years 2022 and thereafter each remain subject to examination by taxing authorities. The Company’s policy is to record interest and penalties related to income taxes as part of its income tax provision. The Company has not recognized any penalties or interest related to its income tax provision.

 

Tax Legislation

 

On July 4, 2025, the One Big Beautiful Bill Act (“OBBBA”) was enacted in the U.S. Key provisions of the OBBBA include making permanent certain aspects of the 2017 Tax Cuts and Jobs Act, modifying certain international tax rules, and restoring provisions that accelerate deductions for certain business investments and expenditures. The legislation has multiple effective dates, with certain provisions effective in 2025 and other implemented in subsequent years. The OBBBA did not have a material impact on the Company’s consolidated financial statements for the year ended December 31, 2025, and the Company does not expect the changes to have a material impact on the provision for income taxes or net income in future periods.