Nuvve Holding Corp.NVVE
Nuvve Holding Corp. Income Taxes Disclosure
Income Taxes
| Income (loss) before taxes includes the following components: | ||||||||||||||
| Years Ended December 31, | ||||||||||||||
| 2025 | 2024 | |||||||||||||
| United States | $ | (29,931,476) | $ | (16,425,567) | ||||||||||
| Foreign | (1,618,512) | (999,245) | ||||||||||||
| Total income (loss) before income taxes | (31,549,988) | (17,424,812) | ||||||||||||
Income tax expense is summarized as follows:
| Years Ended December 31, | ||||||||||||||
| 2025 | 2024 | |||||||||||||
| Federal | $ | — | $ | — | ||||||||||
| State | (1,000) | 1,600 | ||||||||||||
| Current income tax (benefit) expense | (1,000) | 1,600 | ||||||||||||
| Federal | — | — | ||||||||||||
| State | — | — | ||||||||||||
| Deferred income tax expense | $ | — | $ | — | ||||||||||
| Income tax (benefit) expense | $ | (1,000) | $ | 1,600 | ||||||||||
Below is a tabular rate reconciliation pursuant to the disclosure requirements of ASU 2023-09, adopted prospectively for tax year ended December 31, 2025:
Year Ended December 31, 2025 | ||||||||||||||
| Amount | Percent | |||||||||||||
| Provision for income taxes at U.S. federal statutory rate | $ | (6,472,946) | 21.0 | % | ||||||||||
| State and local income taxes, net of federal benefit (1) | (790) | — | % | |||||||||||
| Foreign tax effects: | — | |||||||||||||
| Other | 339,887 | (1.1) | % | |||||||||||
| Changes in valuation allowances | 4,554,105 | (14.8) | % | |||||||||||
| Nontaxable or nondeductible items: | — | |||||||||||||
| Change in fair value of warrants | 1,552,756 | (5.0) | % | |||||||||||
| Other | 25,988 | (0.1) | % | |||||||||||
| Total tax provision and effective tax rate | $ | (1,000) | — | % | ||||||||||
The reconciliation between the income tax expense and the amount computed by applying the statutory federal tax rate of 21% to loss before taxes is as follows:
| Year Ended December 31, | |||||||||||
| 2024 | |||||||||||
| Federal income tax benefit at statutory federal tax rate | $ | (3,659,211) | |||||||||
| State income tax, net of federal benefit | (792,182) | ||||||||||
| Noncontrolling interest | — | ||||||||||
| Stock compensation | 516,159 | ||||||||||
| Change in fair value of warrants | (714,690) | ||||||||||
| Change in valuation allowance | 4,335,676 | ||||||||||
| Finance costs | — | ||||||||||
| Other | 315,848 | ||||||||||
| Income tax expense | $ | 1,600 | |||||||||
Significant components of the Company’s deferred tax assets (liabilities) are as follows:
| Years Ended December 31, | ||||||||||||||
| 2025 | 2024 | |||||||||||||
| Equity investment | $ | (7,439) | $ | (386,544) | ||||||||||
| Accrued liabilities and other | 3,518,070 | 3,043,132 | ||||||||||||
| Right-of-use assets | (975,555) | (1,158,556) | ||||||||||||
| Lease liabilities | 1,140,488 | 1,332,754 | ||||||||||||
| Research and experimental expenditures | 1,875,254 | 2,678,310 | ||||||||||||
| Net operating losses | 31,750,528 | 26,176,691 | ||||||||||||
| Net deferred tax assets (liabilities) before valuation allowance | 37,301,346 | 31,685,787 | ||||||||||||
| Valuation allowance | (37,301,346) | (31,685,787) | ||||||||||||
| Net deferred tax assets (liabilities) | $ | — | $ | — | ||||||||||
As of December 31, 2025, the Company had federal net operating loss carryforwards of approximately $116,648,000 and state net operating loss carryforwards of approximately $62,110,000. Of the federal net operating loss carryforwards, $3,070,000 will begin to expire in 2034, and the remainder do not expire. The state net operating loss carryforwards will begin to expire in 2034. Pursuant to Internal Revenue Code Sections 382 and 383, use of the Company’s net operating loss and credit carryforwards may be limited if a cumulative change in ownership of more than 50% occurs within any three-year period since the last ownership change. The Company believes that there has not been a change in control under these Sections. However, the Company does not anticipate performing a complete analysis of the limitation on the annual use of the net operating loss and tax credit carryforwards until the time that it projects that it will be able to utilize these tax attributes.
A valuation allowance of $37,301,346 as of December 31, 2025, has been established against the Company’s deferred tax assets as it is more likely than not such assets will not be realized. The valuation allowance increased by $5,615,559 during the year ended December 31, 2025. In assessing if the deferred tax assets will be realized, the Company considers whether it is more likely than not that some or all of the deferred tax assets will not be realized. In determining whether the deferred taxes are realizable, the Company considers the period of expiration of the tax asset, historical and projected taxable income, and tax liabilities for the tax jurisdiction in which the tax asset is located. Valuation allowances are provided to reduce the amounts of deferred tax assets to an amount that is more likely than not to be realized based on an assessment of positive and negative evidence, including estimates of future taxable income necessary to realize future deductible amounts.
On July 4, 2025, the One Big Beautiful Bill Act (“OBBBA”) was enacted in the U.S. The OBBBA includes significant provisions, such as the permanent extension of certain expiring provisions of the Tax Cuts and Jobs Act, modifications to the international tax framework, and the restoration of favorable tax treatment for certain business provisions. The legislation has multiple effective dates, with certain provisions effective in 2025 and others implemented through 2027. The OBBBA did not have a significant impact the Company's consolidated financial statements.
As of December 31, 2025, the Company does not have any unrecognized tax benefits related to various federal and state income tax matters. The Company will recognize accrued interest and penalties related to unrecognized tax benefits in income tax expense. The Company does not anticipate material unrecognized tax benefits within the next 12 months.
The Company is subject to U.S. federal and state income tax as well as income tax in various foreign countries. Due to net operating loss carryforwards from earlier years, the Company’s U.S. income tax returns are open to audit for the years ended December 31, 2014 through 2025. The Company’s foreign income tax returns are open to audit for the years ended December 31, 2018 through 2025.
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Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Mar 31, 2026 | Showing above |
| 2024 | Mar 31, 2025 | |
| 2023 | Mar 29, 2024 | |
| 2022 | Mar 31, 2023 | |
| 2021 | Mar 31, 2022 | |
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.