Sensus Healthcare, Inc. Income Taxes Disclosure

Note 10 — Income Taxes

 

The provision (benefit) for income taxes consisted of the following:

Schedule of Provision for Income Taxes

		For The Years Ended
		December 31,
(in thousands)		2025				2024
Current - Federal		$	(25	)		$	1,576
Current - State			1				856
Deferred - Federal			(1,700	)			(71	)
Deferred - State			(181	)			14
Income tax provision (benefit)		$	(1,905	)		$	2,375

 

 

For the years ended December 31, 2025 and 2024, the expected tax expense (benefit) based on the statutory rate is reconciled with the actual tax expense (benefit) as follows:

 Schedule of Tax Expense Based on the Statutory Rate is Reconciled with the Actual Tax Expense

 

		For The Years Ended
		December 31,
		2025								2024
(in thousands)		In USD				Percent of Pre-Tax Income				In USD				Percent of Pre-Tax Income
US federal statutory tax rate		$	(2,021	)			21.0	%		$	1,895				21.0	%
State and local income taxes, net of federal income tax effect (a)			(250	)			2.6	%			726				8.0	%
Foreign tax effects			—
Israel			(2	)			0.0	%			2				0.0	%
Effect of changes in tax laws or rates enacted in the current period			69				(0.7	%)			(35	)			(0.4	%)
Effect of cross-border tax laws			—
FDII			—				0.0	%			(30	)			(0.4	%)
Tax credits			—
Research and development tax credits			(150	)			1.6	%			(135	)			(1.5	%)
Changes in valuation allowances			—				0.0	%			—				0.0	%
Nontaxable or nondeductible items			389				(4.0	%)			(61	)
Changes in unrecognized tax benefits			—				0.0	%			—				(0.6	%)
Other adjustments			60				(0.6	%)			13				0.1	%
Total income tax expense (benefit)		$	(1,905	)			19.9	%		$	2,375				26.2	%

 

(a)	State taxes in Florida and Illinois made up the majority of the tax effect in this category.

 

As of December 31, 2025 and December 31, 2024, the Company’s net deferred tax asset consisted of the tax effects of temporary differences attributable to the following:

 Schedule of Net Deferred Tax Asset

 

		As of December 31,
(in thousands)		2025				2024
Deferred tax assets:
Net operating losses		$	2,230			$	647
Stock-based compensation			109				115
Depreciation and amortization			1,304				942
Accrued expenses and reserves			170				243
Inventory capitalization			293				165
Customer deposits			14				18
Tax credits			411				267
Charitable contributions			—				—
Lease accounting, net			6				6
Other, net			—				—
Gross deferred tax assets			4,537				2,403
Valuation allowance			(446	)			(185	)
Total deferred tax assets			4,091				2,218
Deferred tax liabilities
Prepaid expenses			(12	)			(21	)
Depreciation and amortization			—				—
Total deferred tax liabilities			(12	)			(21	)
Net deferred tax assets		$	4,079			$	2,197

 

As of December 31, 2025, the Company has federal net operating loss (“NOL”) carryforwards of approximately $5.6 million and state NOL carryforwards spread across various jurisdictions with a combined total of approximately $12.8 million. The federal NOL carryforwards have an indefinite carryforward period and are usable against up to 80% of taxable income annually. The state NOL carryforwards relate to various jurisdictions, the majority of which are attributable to the State of Illinois, and begin to expire in 2037. Additionally, as of December 31, 2025, the Company has federal tax credit carryforwards of approximately $0.2 million, and state tax credit carryforwards of approximately $0.3 million. If not claimed, federal research and development (“R&D”) credits will start to expire in 2045, whereas California R&D credits have no expiration date. Utilization of the Company’s federal NOL carryforwards and certain tax credit carryforwards may be subject to an annual limitation under IRC Section 382 if an ownership change, as defined by the IRC, has occurred or occurs in the future. The Company has not completed a formal IRC Section 382 study. If an ownership change has occurred or were to occur, the Company’s ability to utilize its pre-change tax attributes could be limited.

In assessing the realization of deferred tax assets, management considers whether it is more likely than not that some or all of the deferred tax assets will be realized. The ultimate realization of deferred tax assets is dependent upon the future generation of taxable income during the periods in which those temporary differences become deductible. In making this assessment, management considers, by tax jurisdiction, the future reversal of existing taxable temporary differences, projected future taxable income exclusive of reversing temporary differences and carryforwards, taxable income in prior carryback periods where carryback is permitted, and available tax planning strategies. Based on this evaluation, management has continued to maintain a full valuation allowance against the Company’s net deferred tax assets in Israel and recorded a valuation allowance during the current year against California research and development credit carryforwards, as it is more likely than not that these deferred tax assets will not be realized as of the balance sheet date. The valuation allowance related to the California research and development tax credit increased by $260 thousand for the year ended December 31, 2025, compared to no change in the valuation allowance for the year ended December 31, 2024.

 

Management has evaluated and concluded that there were no material uncertain tax positions requiring recognition in the Company’s consolidated financial statements as of December 31, 2025 and 2024. The Company does not expect any significant changes in its unrecognized tax benefits within 12 months of the reporting date. The Company has U.S. federal and certain state tax returns subject to examination by tax authorities beginning with those filed for the year ended December 31, 2018. The Company’s policy is to classify assessments, if any, for tax related interest as interest expense and penalties as general and administrative expenses.

 

Cash paid and received for income taxes by jurisdiction pursuant to the disclosure requirements of ASU No. 2023-09 for the years ended December 31, 2025 and 2024 is as follows:

 

Schedule of Cash paid and received for income taxes

		For The Years Ended
		December 31,
(in thousands)		2025				2024
Cash (paid) received for income taxes:
Federal income taxes paid		$	(720	)		$	(1,735	)
State income taxes paid
Florida			(16	)			(173	)
Illinois			(240	)			(641	)
Other			(4	)			(32	)
Foreign income taxes paid			—				—
Total income taxes paid		$	(980	)		$	(2,581	)
Cash received for income taxes:
Federal income taxes received		$	355			$	—
State income taxes received
Florida			—				—
Illinois			—				—
Other			40				—
Foreign income taxes received			—				—
Total income taxes received		$	395			$	—