v3.26.1
Income Taxes
 12 Months Ended
Dec. 31, 2024
Income Tax Disclosure [Abstract]  
Income Taxes

Note 9 – Income Taxes

 

The loss before income taxes consists of the following US and Israeli components:

 

       
   For The Years Ended 
   December 31, 
   2024   2023 
         
United States  $(4,121,246)  $(4,704,333)
Israel   (391,396)   (616,879)
Loss before income taxes  $(4,512,642)  $(5,321,212)

 

The provision for income taxes consists of the following expenses (benefits):

 

       
   For The Years Ended 
   December 31, 
   2024   2023 
Deferred          
Federal   (787,495)   (853,959)
Foreign   11,665    (70,906)
U.S. State and local   (487,497)   (554,250)
Total Deferred   (1,263,327)   (1,479,115)
Change in valuation allowance   1,263,327    1,479,115 
Provision for income taxes  $-   $- 

 

The provision for income taxes differs from the United States federal statutory rate as follows:

 

       
   For The Years Ended 
   December 31, 
   2024   2023 
         
Tax benefit at the federal statutory rate   (21.0)%   (21.0)%
State and local taxes, net of federal benefit   (11.9)%   (11.5)%
Statutory rate differential - domestic versus foreign   (0.2)%   (0.2)%
Permanent differences   2.8%   3.9%
Prior period true-up and other   2.2%   1.0%
Change in valuation allowance   28.0%   27.8%
           
Effective income tax rate   0.0%   0.0%

 

The tax effects of temporary differences that give rise to deferred tax assets and liabilities are presented below:

 

       
   December 31, 
   2024   2023 
         
Net operating loss carryforwards  $10,753,257   $9,997,830 
Stock-based compensation   612,808    604,164 
Accrued expenses   379,270    208,283 
Deferred research and development expenses   1,268,013    939,744 
Deferred tax assets   13,013,348    11,750,021 
Valuation allowance   (13,013,348)   (11,750,021)
Deferred tax assets, net  $-   $- 

 

As of December 31, 2024, the Company had approximately $22,600,000 of domestic federal, state and local net operating loss carryforwards (“NOLs”), respectively, that may be available to offset future taxable income in those jurisdictions. Approximately $4,000,000 of those NOLs will expire during the years ranging from 2034 to 2037, and approximately $18,600,000 of those NOLs have no expiration dates for federal purposes, but expire in 2034 to 2043 for state and local purposes. The utilization of NOLs to offset future taxable income may be subject to annual limitations under Internal Revenue Code Section 382 and similar state and local statutes as a result of ownership changes that could occur in the future. As of December 31, 2024, the Company had approximately $13,400,000 of Israeli NOLs, respectively, that may be available to offset future taxable income in that jurisdiction. Those NOLs have no expiration dates.

 

 

CELL SOURCE, INC.

 

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

 

The Company has assessed the likelihood that deferred tax assets will be realized in accordance with the provisions of ASC 740 Income Taxes (“ASC 740”). ASC 740 requires that such a review considers all available positive and negative evidence, including the scheduled reversal of deferred tax liabilities, projected future taxable income, and tax planning strategies. ASC 740 requires that a valuation allowance be established when it is “more likely than not” that all, or a portion of, deferred tax assets will not be realized. After the performance of such reviews as of December 31, 2024 and 2023, management believes that uncertainty exists with respect to future realization of its deferred tax assets and has, therefore, established a full valuation allowance as of those dates. Thus, the Company increased the valuation allowance by approximately $1,263,000 and $1,479,000 during the years ended December 31, 2024 and 2023, respectively.

 

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, 2024 and 2023. The Company does not expect any significant changes in its unrecognized tax benefits within twelve months of the reporting date.

 

No tax audits were commenced or were in process during the years ended December 31, 2024 and 2023. No tax related interest or penalties were incurred during the years ended December 31, 2024 and 2023. The Company’s 2021 domestic federal tax returns remain subject to audit, while the Company’s 2022, 2023 and 2024 domestic federal tax returns have not been filed yet. The Company’s Israeli federal tax returns remain subject to audit, beginning with the 2014 tax returns. No tax audits were commenced or were in process during the years ended December 31, 2024 and 2023.