MAIA Biotechnology, Inc. Income Taxes Disclosure

8. INCOME TAXES

 

The Company’s net deferred tax assets consist of the following components:

 SCHEDULE OF DEFERRED TAX ASSETS

		December 31,
		2025				2024
Deferred tax assets:
Net operating loss carryforwards		$	13,883,039			$	8,238,806
Stock-based compensation			2,290,106				1,753,825
Research and development			6,314,771				4,622,097
Accrued compensation			395,645				524,012
Other			—				49,420
Total net deferred tax assets before valuation allowance			22,883,561				15,188,160
Valuation allowance			(22,883,561	)			(15,188,160	)
Net deferred tax asset		$	—			$	—

 

At December 31, 2025, the Company has unused U.S. federal and state net operating loss (“NOL”) carryforwards of $54.7 million that may be applied against future taxable income. The state NOL carryforwards begin to expire in 2030. The U.S. federal NOL carryforwards may be carried forward indefinitely, however are limited to 80 percent of taxable income. The Company has unused Australian NOL carryforwards of $0.3 million that may be carried forward indefinitely. The Company has unused U.S. federal research and development (“R & D”) tax credits of $.07 million that begin to expire in 2041.

 

The use of the Company’s NOL and R & D credit carryforwards may, however, be subject to limitations as a result of an ownership change. A corporation undergoes an “ownership change,” in general, if a greater than 50% change (by value) in its equity ownership by one or more five-percent stockholders (or certain groups of non-five-percent stockholders) over a three year period occurs. After such an ownership change, the corporation’s use of its pre-change NOL carryforwards and other pre-change tax attributes to offset its post-change income is subject to an annual limitation determined by the equity value of the corporation on the date the ownership change occurs multiplied by a rate determined monthly by the Internal Revenue Service.

 

If an ownership change occurs and if the Company earns net taxable income, the Company’s ability to use its pre-change NOLs to offset U.S. federal and taxable income would be subject to these limitations, which could potentially result in increased future tax liability compared to the tax liability the Company would incur if its use of NOL carryforwards were not so limited. In addition, for state income, franchise and similar tax purposes, there may be periods during which the use of NOL carryforwards is suspended or otherwise limited, which could accelerate or permanently increase the Company’s state income, franchise, or similar taxes.

 

In accordance with ASC 740, “Income Taxes,” the Company recorded a valuation allowance to fully offset its deferred tax assets, because it is not more likely than not that the Company will realize future benefits associated with these deferred tax assets at December 31, 2025 and 2024.The valuation allowance increased by approximately $7.7 million during the year ended December 31, 2025, related to U.S. federal, state, and foreign jurisdictions in the amounts of $4.8 million, $2.8 million, and $0.1 million, respectively. The valuation allowance increased by approximately $4.8 million during the year ended December 31, 2024, related to the U.S. federal, state and foreign jurisdictions in the amount of $3.3 million, $1.5 million and zero, respectively Increases to the valuation allowance were mainly due to increases in the NOL carryforward and other deferred tax assets. The Company will continue to assess the realizability of the deferred tax assets at each interim and annual balance sheet date based upon actual and forecasted operating results.

 

The following table presents (loss) before income taxes disaggregated between U.S. domestic and foreign jurisdictions (in thousands):

 SCHEDULE OF (LOSS) BEFORE INCOME TAXES DISAGGREGATED BETWEEN U.S. DOMESTIC AND FOREIGN JURISDICTIONS

		2025				2024
U.S. domestic		$	(22,181	)		$	(23,120	)
Foreign			(211	)			(133	)
Total		$	(22,392	)		$	(23,253	)

 

The following table presents income tax expense (benefit) disaggregated by jurisdiction and by type (current or deferred) (in thousands):

 SCHEDULE OF INCOME TAX EXPENSE (BENEFIT) DISAGGREGATED BY JURISDICTION AND BY TYPE (CURRENT OR DEFERRED)

		2025 Current				2025 Deferred				2025 Total				2024 Current				2024 Deferred				2024 Total
U.S. federal		$	—			$	—			$	—			$	—			$	—			$	—
U.S. state			—				—				—				—				—				—
Foreign			2				—				2				2				—				2
Total		$	2			$	—			$	2			$	2			$	—			$	2

 

The foreign current income tax expense relates to Romania and is immaterial in relation to the Company’s consolidated results of operations.

 

Income taxes paid (net of refunds received) were immaterial for the years ended December 31, 2025 and 2024. For disclosure purposes, amounts were zero or rounded to zero (in thousands):

 SCHEDULE OF INCOME TAXES PAID (NET OF REFUNDS RECEIVED)

		2025				2024
U.S. federal		$	—			$	—
U.S. state			—				—
Foreign			3				3
Total		$	3			$	3

 

The income tax benefit differs from the benefit that would result from applying federal statutory rates to loss before income taxes as follows (in thousands):

SCHEDULE OF FEDERAL STATUTORY RATES TO LOSS BEFORE INCOME TAXES

		December 31,
		2025								2024
U.S. statutory federal income tax		$	(4,702	)			21.0	%		$	(4,883	)			21.0	%
State taxes, net of federal tax benefit			—				—	%			—				—	%
Foreign tax effects:
Australia:
Non-deductible research expenses			44				(0.2	)%			19				(0.1	)%
Other			3				0.0	%			11				0.0	%
Romania:
Other			1				0.0	%			2				0.0	%
Effect of changes in tax laws or rates			—				—	%			—				—	%
Research tax credit			(240	)			1.1	%			(15	)			0.1	%
Change in U.S. federal valuation allowance			4,848				(21.7	)%			3,328				(14.3	)%
Nontaxable or nondeductible items:
Stock-based compensation			313				(1.4	)%			151				(0.7	)%
Warrant amendments			(252	)			1.1	%			1,403				(6.0	)%
Change in uncertain tax positions			—				—	%			—				—	%
Other adjustments:
Global Intangible Low Taxed Income			—				0.0	%			16				(0.1	)%
Deferred tax asset adjustments			(13	)			0.1	%			(30	)			0.1	%
Income tax expense		$	2				—	%		$	2				—	%

 

 

The Company accounts for uncertain tax positions in accordance with the provisions of ASC 740. When uncertain tax positions exist, the Company recognizes the tax benefit of tax positions to the extent that the benefit would more likely than not be realized assuming examination by the taxing authority. The determination as to whether the tax benefit will more likely than not be realized is based upon the technical merits of the tax position as well as consideration of the available facts and circumstances. The Company recognizes any interest and penalties accrued related to unrecognized tax benefits as income tax expense. The Company did not have any significant unrecognized tax benefits during the years ended December 31, 2025 and 2024. The Company files income tax returns in the U.S. federal jurisdiction, several U.S. States, Australia, and Romania. The Company’s tax returns since inception remain open to examination by the taxing authorities.