Nano Nuclear Energy Inc. Income Taxes Disclosure

10. INCOME TAXES

 

The Company’s provision for income taxes for the years ended September 30, 2025 and 2024 was $0 and $0, respectively.

 

Reconciliation of the Company’s effective tax rate to statutory rates for the years ended September 30, 2025 and 2024 is as follows:

 

SCHEDULE OF RECONCILIATION OF EFFECTIVE TAX RATE TO STATUTORY RATES

Federal			21.00	%			21.00	%
State			13.06	%			11.79	%
Nondeductible expenses			10.92	%			(0.27	)%
Tax rate change			0.55	%			3.14	%
Provision to return adjustments and other			8.77	%			0.83	%
Change in valuation allowance			(54.31	)%			(36.49	)%
Effective tax rate		$	-			$	-

 

The Company’s deferred tax assets (liabilities) consist of the following as of September 30, 2025 and 2024:

 

SCHEDULE OF DEFERRED TAX ASSETS (LIABILITIES)

Deferred tax assets:
Net operating loss carryforwards		$	18,296,092				3,987,674
Research and development expenses			3,712,574				885,849
Stock-based compensation			4,531,093				242,891
Depreciation and amortization			309,253				272,835
Operating lease liabilities			952,156				633,354
Contribution Carryovers			140,699				-
Contingent consideration			673,703				252,622
Total deferred tax assets			28,615,570				6,275,225
Valuation allowance			(27,434,239	)			(5,675,186	)
Net deferred tax assets			1,181,331				600,039
Deferred tax liabilities:
Right-of-use assets			(872,237	)			(600,039	)
IPR&D			(309,094	)			-
Net deferred tax liabilities			(1,181,331	)			(600,039	)
Deferred tax assets (liabilities)		$	-			$	-

 

As of September 30, 2025 and 2024, the Company had total net deferred tax assets of $27,434,239 and $5,675,186, respectively. A valuation allowance is required to reduce deferred tax assets reported if, based on the weight of the evidence, it is more likely than not that some portion or all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets depends on the generation of future taxable income during those periods in which those temporary differences are deductible.

 

After consideration of all the evidence, both positive and negative, management determined that a 100% valuation allowance was necessary as of September 30, 2025 and 2024 in the amount of $27,434,239 an $5,675,186 , respectively, to reduce the deferred tax assets to the amount that will more likely than not be realized. The increase in the valuation allowance during the years ended September 30, 2025 and 2024 was $21,759,053 and $3,704,016, respectively.

 

As of September 30, 2025, the Company subject to limitations, had approximately $48.6 million of federal net operating loss carryforwards for U.S. federal income tax purposes, $61.4 million in net operating loss carryforwards for state income tax purposes and  $48.6 million of net operating loss carryforwards for city income tax purposes, to offset future taxable income which never expires but has annual limitations of 80% of the Company’s taxable income. The utilization of the Company’s net operating losses are subject to a U.S. federal limitation due to the “change in ownership provisions” under Section 382 of the Internal Revenue Code and other similar limitations in various state jurisdictions. Such limitations may result in a reduction of the amount of net operating loss carryforwards in future years and possibly the expiration of certain net operating loss carryforwards before their utilization.

 

 

NANO NUCLEAR ENERGY INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2025