Niagen Bioscience, Inc.NAGE
Niagen Bioscience, Inc. Income Taxes Disclosure
Income Taxes
Income before provision for income taxes was as follows:
| (In thousands) | Year Ended December 31, | ||||||||||
| 2025 | 2024 | ||||||||||
| Domestic | $ | 18,218 | $ | 8,822 | |||||||
| Foreign | (26) | 33 | |||||||||
| Total | $ | 18,192 | $ | 8,855 | |||||||
The provision for income taxes for the years ended December 31, 2025 and 2024 is summarized as follows:
| Year Ended December 31, | |||||||||||
| (In thousands) | 2025 | 2024 | |||||||||
| Current: | |||||||||||
| State | $ | 810 | $ | 305 | |||||||
| 810 | 305 | ||||||||||
| Deferred: | — | — | |||||||||
| Total | $ | 810 | $ | 305 | |||||||
A reconciliation of the federal statutory rate to the effective tax rate for income under ASU 2023-09 for the year ended December 31, 2025 is summarized as follows:
| Year Ended December 31, 2025 | ||||||||
| Amount (in thousands) | Percentage of pretax income | |||||||
| Income tax expense at statutory rate | $ | 3,820 | (21.0) | % | ||||
State and local income taxes, net of federal benefit (1) | 651 | (3.6) | % | |||||
| Foreign tax effects | 6 | — | % | |||||
| Tax credits | 23 | (0.1) | % | |||||
| Changes in valuation allowances | (3,262) | 17.9 | % | |||||
| Equity compensation | (428) | 2.3 | % | |||||
| Total income tax provision | $ | 810 | (4.5) | % | ||||
(1) State taxes in California made up the majority (greater than 50 percent) of the tax effect in this category.
A reconciliation of the federal statutory rate to the effective tax rate for income for the year ended December 31, 2024 is summarized as follows:
| Year Ended December 31, 2024 | ||||||||
| Amount (in thousands) | Percentage of pretax income | |||||||
| Income tax expense at statutory rate | $ | 1,852 | (21.0) | % | ||||
| State and local income taxes, net of federal benefit | 458 | (5.2) | ||||||
| Permanent differences | (202) | 2.3 | ||||||
| Change in state tax rate | 117 | (1.3) | ||||||
| Change in valuation allowance | (2,111) | 23.9 | ||||||
| Federal to state differences | 204 | (1.7) | ||||||
| Other | (13) | (0.5) | ||||||
| Total income tax provision | 305 | (3.5) | % | |||||
The Company's deferred tax assets and liabilities for the years indicated are summarized below:
| December 31, | |||||||||||
| (In thousands) | 2025 | 2024 | |||||||||
| Deferred tax assets: | |||||||||||
| Net operating loss carryforward | $ | 34,046 | $ | 35,224 | |||||||
| Stock options and restricted stock | 3,682 | 3,849 | |||||||||
| Inventory reserve | 335 | 185 | |||||||||
| Allowance for doubtful accounts | 37 | 25 | |||||||||
| Accrued expenses | 1,420 | 1,746 | |||||||||
| Research and development expense | 491 | 2,507 | |||||||||
| Deferred revenue | 680 | 676 | |||||||||
| Leasehold improvements and equipment | 161 | 124 | |||||||||
| Intangibles | 112 | 102 | |||||||||
| Unrealized gain and loss | 14 | — | |||||||||
| State bonus depreciation | 12 | — | |||||||||
| State section 174 | 322 | — | |||||||||
| Operating leases | 162 | 238 | |||||||||
| 41,474 | 44,676 | ||||||||||
| Less: Valuation allowance | (40,467) | (44,290) | |||||||||
| Total deferred tax assets | 1,007 | 386 | |||||||||
| Deferred tax liabilities: | |||||||||||
| 162(m) limitation | (835) | — | |||||||||
| Prepaid expenses | (172) | (386) | |||||||||
| Total deferred tax liabilities | (1,007) | (386) | |||||||||
| Net deferred tax assets (liabilities) | $ | — | $ | — | |||||||
For the year ended December 31, 2025, the Company’s effective tax rate was 4.5%. The Company reduced its valuation allowance by approximately $3.8 million, to $40.5 million as of December 31, 2025 from $44.3 million as of December 31, 2024. For the year ended December 31, 2024, the Company maintained a full valuation allowance against the entire deferred income tax balance which resulted in an effective tax rate of 3.5%. For the year ended December 31, 2024, the Company identified $36,750 in U.S. taxable income on global intangible low-taxed income (GILTI). For the year ended December 31, 2025, the Company identified no U.S. taxable income on GILTI.
As of December 31, 2025, the Company’s net operating loss (NOL) carryforwards for federal and state income tax purposes are approximately $128.5 million and $105.8 million, respectively, portions of which were reduced in the year ended December 31, 2025 for both federal and state. During the year ended December 31, 2025, $4.7 million of federal NOL carryforwards and $0.8 million of state NOL carryforwards were reduced against taxable income. The Company’s federal NOL carryforward of $103.6 million generated in tax years beginning after December 31, 2017 may be carried forward indefinitely but the deductibility of such NOL carryforwards in taxable years beginning after December 31, 2017, is limited to 80% of taxable income.
The Company did not pay any federal income taxes for the years ended December 31, 2025 and 2024, respectively. The Company paid state income taxes of $1,024,000 and $23,000 for the years ended December 31, 2025 and 2024, respectively.
Section 382 of the Internal Revenue Code of 1986, as amended (the “IRC”), generally imposes an annual limitation on the amount of NOL carryforwards and associated built-in losses that may be used to offset taxable income when a corporation has undergone certain changes in stock ownership. The Company’s ability to utilize NOL carryforwards and built-in losses may be limited, under this section or otherwise, by the Company’s issuance of common stock or by other changes in stock ownership. The Company has performed an analysis of IRC Section 382 and concluded that the Company did not undergo an ownership change. The Company will continue to analyze the potential impact of any additional transactions undertaken upon the utilization of the net operating losses on a go forward basis. To the extent the Company’s use of NOL carryforwards and associated built-in losses is significantly limited in the future due to additional changes in stock ownership, the Company’s income could be subject to U.S. corporate income tax earlier than it would if the Company were able to use NOL carryforwards and built-in losses without such annual limitation, which could result in lower profits and the loss of the majority of the benefits from these attributes.
During the first quarter of 2024, the Company was notified that it was selected for examination by the IRS for its federal income tax return for the fiscal year 2021 period. The examination was completed in the third quarter of 2024, with no changes recommended. The Company is currently not under examination by the Internal Revenue Service or any other major income tax jurisdiction. The Company has not identified any material uncertain tax positions requiring a reserve as of December 31, 2025 and December 31, 2024.
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Mar 4, 2026 | Showing above |
| 2024 | Mar 4, 2025 | |
| 2023 | Mar 6, 2024 | |
| 2022 | Mar 8, 2023 | |
| 2021 | Mar 14, 2022 | |
| 2020 | Mar 12, 2021 | |
| 2019 | Mar 10, 2020 | |
| 2018 | Mar 7, 2019 | |
| 2017 | Mar 15, 2018 | |
| 2016 | Mar 17, 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.