Telomir Pharmaceuticals, Inc. Income Taxes Disclosure

Note 8 – Income Taxes

 

The significant components of the Company’s net deferred tax assets and liabilities consisted of the following:

Schedule of Net Deferred Tax Assets 

		2025				2024
		December 31,
		2025				2024
Deferred tax assets:
Net operating loss carryforward		$	7,643,465			$	4,427,679
Section 174 capitalized research and development			700,121				995,500
Goodwill and intangibles			23,339				28,007
Stock-based compensation			2,856,673				1,680,018
Tax credits			51,278				51,278
Deferred tax assets, gross			11,274,876				7,182,482
Less: valuation allowance			(11,274,876	)			(7,182,482	)
Deferred tax assets, net			-				-
Deferred tax liabilities			-				-
Total net deferred tax asset		$	-			$	-

 

Provision for (benefit from) income taxes consisted of the following:

Schedule of Provision for Income Taxes 

		2025				2024
		December 31,
		2025				2024
Deferred tax:
Federal		$	(463,477	)		$	-
State			463,477				-
Total deferred tax expense (benefit)			-				-
Total provision for income taxes		$	-			$	-

 

Beginning in 2022, in accordance with Internal Revenue Code Section 174, Qualified Research Expenditures are capitalized for tax purposes and amortized over a period of five years. Accordingly, for income tax purposes, and as of December 31, 2025 and 2024, the Company has recorded a deferred tax asset totaling approximately $0.7 million and $1.0 million, respectively, related to the timing difference between GAAP and Tax recognition of these expenditures. Under current law, beginning in tax years after December 31, 2024, domestic research and experimental expenditures may again be deducted currently for U.S. federal income tax purposes; however, the Company continues to carry deferred tax assets related to research costs capitalized in prior periods that will reverse as amortization deductions are claimed.

 

A reconciliation of the statutory U.S. federal income tax rate to the Company’s effective income tax rate is as follows:

Schedule of Reconciliation Effective Income Tax Rate 

		Amount				Rate
Provision for income taxes at U.S. federal statutory rate		$	(2,186,773	)			21.00	%
State income taxes, net of federal benefit			463,477				(4.45	)%
Other			23,616				(0.02	)%
Changes in valuation allowance			2,928,495				(28.12	)%
True-ups			(1,228,815	)			11.80	%
Net actual effective rate		$	-				0.21	%

 

ASC Topic 740 requires that a deferred tax amount be reduced by a valuation allowance if, based on the weight of available evidence it is more likely than not (a likelihood of more than 50%) that some portion or all of the deferred tax assets will not be realized. The valuation allowance should be sufficient to reduce the deferred tax asset to the amount that is more likely than not to be realized. The Company has recorded a full valuation allowance against its deferred tax assets generated by net operating loss carryforwards as it has determined that such amounts may not be recognizable, given the historical losses of the Company to date. As of December 31, 2025, the Company has a cumulative federal net operating loss carryforward of approximately $30.2 million. The net operating loss carryforward have no expiry date.