Company: ERAS
Filing Date: 2025-03-20
Form Type: 10-K
Source: 0000950170-25-042682
Chunk: 318

Company: Erasca, Inc.
Filing Date: 2025-03-20
Form: 10-K
Item: Item 6
Chunk 318
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 ownership change limitations that have occurred which will limit the amount of NOL and tax credit carryforwards that can be utilized to offset future taxable income and tax, respectively. In general, an ownership change, as defined by Section 382 and 383, results from transactions increasing ownership of certain stockholders or public groups in the stock of the corporation by more than 50 percentage points over a three-year period. The Company has not completed an IRC Section 382/383 analysis regarding the limitation of net operating loss and research and development credit carryforwards. If a change in ownership were to have occurred, additional NOL and tax credit carryforwards could be eliminated or restricted. If eliminated, the related asset would be removed from the deferred tax asset schedule with a corresponding reduction in the valuation allowance. Due to the existence of the valuation allowance, limitations created by future ownership changes, if any, related to the Company’s operations in the United States will not impact the Company’s effective tax rate.  The Company recognizes a tax benefit from an uncertain tax position when it is more likely than not that the position will be sustained upon examination, including resolutions of any related appeals or litigation processes, based on the technical merits. Income tax positions must meet a more likely than not recognition at the effective date to be recognized. A reconciliation of the beginning and ending amount of unrecognized tax benefits for 2024 and 2023, excluding interest and penalties, is as follows (in thousands): 

        Year ended December 31,

        2024

        2023

        Balance at the beginning of the year
         
        $
        4,096

        $
        2,725

        (Decrease) increase related to prior year positions

        (28
        )

        99

        Increase related to current year positions

        1,343

        1,272

        Balance at the end of the year
         
        $
        5,411

        $
        4,096

       Included in the balance of unrecognized tax benefits as of December 31, 2024 is $5.0 million that, if recognized, would reduce the Company’s annual effective tax rate, subject to valuation allowance. The Company does not anticipate any significant changes to unrecognized tax benefits over the next 12 months. The Company has filed income tax returns in Australia, the United States, California, and various other state jurisdictions. The Company is not currently under examination in any of these jurisdictions,