TherapeuticsMD, Inc. Income Taxes Disclosure

10. Income taxes 

 

The components of loss from continuing operations before income tax for the years ended December 31, 2025 and 2024 is as follows (in thousands):

 

		Year Ending December 31,
		2025				2024
United States		$	(653	)		$	(2,343	)

 

Our (loss) income allocated between continuing operations and discontinued operations before income taxes is as follows (in thousands):

 

		Year Ending December 31,
		2025				2024
Loss from continuing operations before income taxes		$	(653	)		$	(2,343	)
(Loss) income from discontinued operations before income taxes		$	84			$	131

For the year ended December 31, 2025, there was no provision for income taxes in continuing and discontinued operations, current or deferred. For the year ended December 31, 2024, the Company recorded an income tax benefit of $31 thousand, as reflected in the rate reconciliation table below.

 

As of December 31, 2025, we had a federal net operating loss (“NOL”) carryforwards of $584.6 million, which is available to offset future taxable income. Approximately $27.6 million of the federal NOLs can be carried forward for 20 years and will begin to expire in 2035. The remaining $557.1 million can be carried forward indefinitely. In the event of future income, the NOL deduction arising from NOLs generated in taxable years beginning in 2021 will be limited to 80% of the excess taxable income. The Company experienced an ownership change pursuant to IRC Sec. 382 in 2022. As a result, our NOLs carryforward as of December 31, 2022 is limited. 

 

A reconciliation of the income tax provision with the amount of tax computed by applying the federal statutory rate to pretax income for years ended December 31, 2025 is as follows (in thousands):

 

		2025
		Amount				Percent
U.S. Federal Statutory Rate		$	(137	)			21.0	%
State tax rate, net of federal tax benefit (1)			-				0.0	%
Foreign Tax Effects			-				0.0	%
Effects of Changes in Tax Laws or Rates Enacted in Current Period			-				0.0	%
Effects of Cross-Border Tax Laws			-				0.0	%
Tax Credits:
R&D Credit			186				(28.6	)%
Change in Valuation Allowance			(996	)			152.7	%
Nontaxable or Nondeductible Items:
Excess stock benefits			908				(139.2	)%
Receivable Write-Off			39				(5.9	)%
Changes in Unrecognized Tax Benefits			-				0.0	%
Other Adjustments:
Deferred True-Ups			-				0.0	%
Effective Tax Rate		$	0				0.0	%

 

(1)	State taxes in South Carolina and Illinois make up the majority (greater than 50 percent) of the effect of this category for the period ended December 31, 2025.

 

The reconciliation of the federal statutory rate to effective income tax rate for the years ended December 31, 2024, prior to the adoption of ASU 2023-09 is as follows (in thousands):

 

		2024
		Amount				Percent
Federal statutory rate		$	(492	)			21.0	%
State tax rate, net of federal tax benefit			(8,745	)			373.3	%
Adjustment in valuation allowance			9,772				(417.1	)%
Excess stock benefits			566				(24.2	)%
Interest expense accretion			-				0.0	%
Permanent and other differences			(1,132	)			48.3	%
Benefit for income taxes		$	(31	)			1.3	%

 

Deferred income taxes result from temporary differences between the amount of assets and liabilities recognized for financial reporting and tax purposes. The components of the net deferred income tax asset as of December 31, 2025, and 2024 are as follows (in thousands):

 

		December 31,
		2025				2024
Deferred income tax assets:
Net operating loss		$	154,284			$	167,366
Share-based payment compensation			1,023				2,222
Interest expense limitation			19,240				20,901
Gain on sale of ANNOVERA			(2,888	)			(3,637	)
Accrual for sales returns and coupons			621				670
R&D credit			—				186
Other, net			59				319
Deferred income tax asset			172,339				188,027
Valuation allowance			(172,339	)			(188,027	)
Deferred income tax assets, net		$	—			$	—

Income taxes paid (net of refunds) are as follows:

 

		December  31,
		2025				2024
Jurisdiction:
South Carolina		$	(18	)		$	—
Illinois			(13	)			—
New Jersey			(4	)			—
Texas			—				(8	)
Pennsylvania			—				(53	)
Tennessee			—				(10	)
All Other States			(1	)			(9	)
Total Taxes Paid		$	(36	)		$	(80	)

 

State taxes in South Carolina and Illinois make up the majority (greater than 50 percent) of the effect of this category for the period ended December 31, 2025.

 

We believe that it is more likely than not that we will not generate sufficient future taxable income to realize a portion of tax benefits related to the deferred tax assets and as such, a valuation allowance has been established against a portion of the deferred tax assets as of both December 31, 2025 and 2024.

 

Since our first year of operations in 2011, we generated net operating losses, and our U.S. federal and state tax returns remain open to examination.

 

As of December 31, 2025, and 2024, we had no tax positions relating to open tax returns that were considered to be uncertain, and we had no unrecognized tax benefits. On July 4, 2025, the One Big Beautiful Bill Act (“OBBBA”) was signed into law in the U.S., which contains a broad range of tax reform provisions affecting businesses. The Company evaluated the enacted effects of the legislation on its effective tax rate and cash tax position, finding that the legislation did not have a material impact on its financial statements.