RELMADA THERAPEUTICS, INC. Income Taxes Disclosure

NOTE 9 - INCOME TAXES

 

A reconciliation of the statutory U.S. federal income tax rate to the Company’s effective tax rate after the adoption of ASU 2023-09 is as follows:

 

		2025
U.S. Federal Statutory Tax Rate		$	(12,049,955	)			21.00	%
Current State and Local Income Taxes, net of federal income tax benefit			-				0.00	%
Deferred State & Local Income Taxes, net of federal income tax benefit			-				0.00	%
Tax Credits
Research and Development Tax Credits			(812,027	)			1.42	%
Changes in Valuation Allowances			5,827,080				(10.16	)%
Nontaxable or Nondeductible Items
Share-based payment awards			1,154,153				(2.01	)%
Other			461,515				(0.80	)%
Changes in Unrecognized Tax Benefits			-				0.00	%
Other Adjustments
Expiration of Stock Based Compensation			8,874,352				(15.47	)%
Adjustments to NOL due to 382			(3,455,118	)			6.02	%
Effective Tax Rate		$	-				0.00	%

 

A reconciliation of the statutory U.S. federal income tax rate to the Company’s effective tax rate before the adoption of ASU 2023-09 is as follows:

 

		Year Ended December 31, 2024
Statutory federal income tax rate			21.00	%
State (net of federal benefit)			(14.27	)%
Non-deductible expenses			(2.58	)%
R&D Credit			2.15	%
NOL and R&D adjustment due to 382			(2.72	)%
NUBIL – 382 adjustment			5.23	%
Permanent true-ups			(2.28	)%
Other			0.00	%
Change in valuation allowance			(6.53	)%
Effective income tax rate			0	%

Deferred Tax Assets at December 31, 2025 and 2024 are related to the following (rounded to the nearest $000):

 

		December 31, 2025				December 31, 2024
Federal net operating loss		$	51,746,000			$	26,679,000
State net operating loss			2,719,000				1,554,000
Net Unrealized Built in Loss Section 382 - Amortization			-				7,763,000
Research and development tax credits			4,765,000				3,953,000
Capitalized R&D			35,902,000				42,843,000
Nonqualified Stock Options			21,981,000				29,040,000
Accruals			1,608,000				1,398,000
Intangibles and Fixed Assets			3,540,000				2,118,000
Stock appreciation rights			231,000				-
Other			11,000				11,000
Total Gross Deferred Tax Assets			122,503,000				115,359,000
Less: valuation allowance			(122,503,000	)			(115,359,000	)
Total Deferred Tax Assets		$	-			$	-

 

In assessing the realizability of the net deferred tax assets, the Company considers all relevant positive and negative evidence to determine whether it is more likely than not that some portion of the deferred income tax will not be realized. The realization of the gross deferred tax assets is dependent on several factors, including the generation of sufficient taxable income prior to expiration of the net operation loss carryforwards. At December 31, 2025 and 2024, the Company has recorded a full valuation allowance against its net deferred tax assets of approximately $122,503,000 and $115,359,000, respectively. The change in the valuation allowance during the years ended 2025 and 2024 was approximately a decrease of $7,144,000 and $5,222,000, respectively.

 

At December 31, 2025, the Company had federal net operation loss (NOL) carryforwards of approximately $246,407,000. At December 31, 2025, the Company had federal research and development credit carryforwards of approximately $4,765,000.

 

Entities are also required to evaluate, measure, recognize and disclose any uncertain income tax positions taken on their income tax returns. The Company has analyzed its tax positions and concluded that as of December 31, 2025 and 2024 there were no uncertain tax positions. Because the Company is in a loss carryforward position, the Company is generally subject to US federal and state income tax examinations by tax authorities for all years for which a loss carryforward is available. This is because the utilization of net operating losses from prior years opens the relevant tax year to audit by the IRS and/or state taxing authorities. Interest and penalties, if any, as they relate to income tax assessed, are included in the income tax provision. The Company did not have any unrecognized tax benefits and has not accrued any interest or penalties for the years ended December 31, 2025 and 2024. If and when applicable, the Company will recognize interest and penalties as part of income tax expense. 

 

The amounts of cash income taxes paid by the Company were as follows:

		Year Ended				Year Ended
		December 31,				December 31,
		2025				2024
Federal		$	-			$	-
State and Local			4,425				-
Income Taxes, net of amount refunded		$	4,425			$	-

 

In July 2025, the One Big Beautiful Bill Act (OBBBA) was enacted in the United States. The OBBBA makes permanent key elements of the Tax Cuts and Jobs Act of 2017, including domestic research cost expensing among other changes. Many of the tax provisions of the OBBBA are designed to accelerate tax deductions. The new legislation has multiple effective dates, with certain provisions effective in 2025 and others in the future. The Company currently believes that the tax provisions of the legislation will not have a material impact on the Company’s Statement of Operations.