ORAGENICS INC Income Taxes Disclosure

10. Income Taxes

 

Our income before provision for (benefit from) income taxes for the years ended December 31, 2025, and 2024 was as follows:

Schedule of Provision for Income Taxes

		2025				2024
Domestic		$	(9,999,086	)		$	(10,594,939	)
Australia			19,689				27,021
Loss before taxes		$	(9,979,397	)		$	(10,567,918	)

 

Income taxes are provided for the tax effects of transactions reported in the financial statements and consist of taxes currently due. Deferred taxes relate to differences between the basis of assets and liabilities for financial and income tax reporting which will be either taxable or deductible when the assets or liabilities are recovered or settled.

 

The components of the provision for income taxes for the years ended December 31, 2025, and 2024 are as follows:

 

Schedule of Components of Provision for Income Taxes

		2025				2024
Current - Australia		$	(136,910	)		$	—
Deferred - Federal			2,010,443				(1,408,287	)
Valuation Allowance			(2,010,443	)			1,408,287
Total provision (deferred benefit) for income taxes		$	(136,910	)		$	—

 

The Company is subject to taxation in the United States at both the federal level and within Florida. The company is not currently under any audit examination. The federal and state statute of limitations is still open to the extent of the net operating losses generated within each particular year. Generally, U.S. and Florida tax years beginning in 2022 and forward remain open to examination, while Australian Taxation Office review periods remain open for 2024 and subsequent tax years.

 

The Company had an effective tax rate of 1.37% and 0.00% for the years ended December 31, 2025, and 2024, respectively.

 

Beginning in 2025 annual reporting, we adopted ASU 2023-09 prospectively. See Note 1 - Summary of Significant Accounting Policies - Recently Adopted Accounting Pronouncements for additional details on the adoption of ASU 2023-09. A reconciliation of the U.S. federal statutory income tax rate to our effective tax rate pursuant to the disclosure requirements of ASU 2023-09 for the year ended December 31, 2025, is as follows (in thousands, except for percentages):

 

Schedule of Effective Income Tax Rate Reconciliation

		For the year ended
		December 31, 2025
U.S. federal statutory income tax rate			(2,096	)			21.00	%
State taxes1, net of federal			0				0.00	%
Australia
Statutory tax rate difference between Australia and United States			1				-0.05	%
R&D tax incentive expenditure addback			112				-1.13	%
FY24 tax provision true up			(78	)			0.78	%
Australian R&D incentive offset			(176	)			1.76	%
Change in valuation allowance			1,042				-10.42	%
Expiring NOLS			742				-7.42	%
Deferred only stock-based compensation adjustment			300				-3.00	%
Other deferred only adjustments			14				-0.14	%
Nontaxable or nondeductible items			2				-0.02	%
Effective Tax Rate			(137	)			1.36	%

 

						December 31, 2024
U.S. statutory rate							21.00	%
Australia Tax							0.59	%
State taxes, net of federal							3.80	%
Change in valuation allowance							-19.29	%
Nontaxable or nondeductible items							0.00	%
Stock-based compensation							-0.47	%
Issuance Costs							0.00	%
Other permanent items, net							-0.01	%
Change in tax rate							-5.62	%
Effective Tax Rate							0.00	%

 

1	Florida accounts for 100% of the tax effect in this category.

 

The Company did not make any income tax payments or receive any income tax refunds requiring disclosure under ASU 2023-09 for the year ended December 31, 2025.

 

The table below presents the effects of temporary differences that gave rise to significant portions of deferred tax assets and liabilities as of December 31, 2025, and 2024:

 

Summary of Components of Deferred Tax

		2025				2024
Deferred tax assets (liabilities):
Net operating loss carryforward		$	40,114,803			$	41,070,043
Accrued vacation			799				13,421
Non-qualified stock compensation			940,759				1,228,004
Capitalized Research & Development costs			2,940,435				3,694,354
In-process research and development			2,081,681				2,360,913
Intangibles			234,049				—
Total deferred tax assets			46,312,526				48,366,735
Less valuation allowance			(46,312,526	)			(48,366,735	)
Total net deferred tax asset, net of valuation allowance		$	—			$	—

 

 

At December 31, 2025, the Company has federal and state tax net operating loss carry forwards of $164,834,118 and $138,451,933, respectively.

 

Federal and Florida tax net operating loss carryforwards generated prior to December 31, 2017, will expire through 2038 and are not subject to taxable income limitations. Federal and Florida tax net operating loss carryforwards generated subsequent to December 31, 2017, do not expire but may be subject to 80% deduction limitation based upon pre-NOL deduction taxable income pursuant to the Tax Cuts and Jobs Act that was enacted on December 22, 2017. The Company also has federal research and development tax credit carryforwards of $3,959,813, of which are included as an uncertain tax position. The federal tax credit carryforward will expire beginning in 2022 and continuing through 2044 unless utilized.

 

In assessing the realization of deferred tax assets, management considers whether it is more likely than not that some portion or all the deferred income tax assets will not be realized. The ultimate realization of deferred income tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible. Management considers the scheduled reversal of deferred income tax liabilities, projected future taxable income, and tax planning strategies in making this assessment. Based on consideration of these items, management has determined that a full valuation allowance is required as of December 31, 2025, and 2024.

 

The utilization of the Company’s net operating loss carryforwards could be subject to annual limitations under Section 382 and 383 of the Internal Revenue Code of 1986, as amended (the “Code”), and similar state tax provisions, due to ownership change limitations that may have occurred previously or that could occur in the future. These ownership changes limit the amount of net operating loss carryforwards and other deferred tax assets that can be utilized to offset future taxable income and tax, respectively. In general, an ownership change, as defined by Section 382 and 383 of the Code, results from transactions increasing ownership of certain stockholders or public groups in the stock of the corporation by more than 50 percent points over a three-year period. The Company has not completed an analysis of an ownership change under Section 382 of the Code. To the extent that a study is completed and an ownership change is deemed to occur, the Company’s net operating losses and tax credits could be limited.

 

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 provision of the Tax Cuts and Jobs Act, modification 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 other implemented through 2027. The bill does not materially impact the Company’s 2025 income tax provision.

 

For the years ended December 31, 2025, and 2024, the Company incurred $0 and $0, respectively, of additional unrecognized tax benefits that related to research and development credits. The entire amount of this unrecognized tax benefit, if recognized, would result in an increase to the deferred tax asset valuation allowance, and would not have an impact on the effective tax rate.

 

A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows:

 

Schedule of Reconciliation of Unrecognized Tax Benefits

Balance as of December 31, 2023		$	4,169,354
Additions based on tax positions related to the current year			—
Reductions for the tax positions of prior years			(46,229	)
Expired Tax Credits due to 20-year life			(81,431	)
Balance as of December 31, 2024		$	4,041,694
Additions based on tax positions related to the current year			—
Reductions for the tax positions of prior years			—
Expired Tax Credits due to 20-year life			(81,881	)
Balance as of December 31, 2025		$	3,959,813

 

 

Included in the balance at December 31, 2025, and 2024, are $3,959,813 and $4,041,694, respectively, of tax positions for which there is uncertainty about the validity of certain credits. The disallowance of the credits would impact the amount of gross deferred tax assets reflected in the accompanying footnotes.

 

The Company’s policy is to recognize interest and penalties associated with uncertain tax benefits as part of the income tax provision and include accrued interest and penalties with the related income tax liability on the Company’s Condensed Consolidated Balance Sheets. During the years 2025, and 2024, the Company did not recognize any interest and penalties. Due to the potential offset of the Company’s operating loss carryforward for any future activity, the amount attributed to interest and penalties would be immaterial.