Company: IOBT
Filing Date: 2025-03-31
Form Type: 10-K
Source: 0000950170-25-047744
Chunk: 134

Company: IO Biotech, Inc.
Filing Date: 2025-03-31
Form: 10-K
Item: Item 7
Chunk 134
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 to unrecognized tax benefits within the provision for taxes in our statements of operations and comprehensive loss. 

We operate in Denmark and may be subject to audits from various tax authorities. Management’s judgment is required in determining our provision for income taxes, our deferred tax assets and liabilities, liabilities for uncertain tax positions, and any valuation allowance recorded against our net deferred tax assets. We will monitor the extent to which our deferred tax assets may be realized and adjust the valuation allowance accordingly. 

Warrants Issued in Connection with Sale of Common Stock

The Company accounts for warrants issued as a separable unit in connection with sale of common stock as either liability or equity in accordance with Accounting Standards Codification (“ASC”) 480-10, Accounting for Certain Financial Instruments with Characteristics of both Liabilities and Equity (“ASC 480-10”) or ASC 815-40, Accounting for Derivative Financial Instruments Indexed to, and Potentially Settled in, a Company’s Own Stock (“ASC 815-40”). Under ASC 480-10, warrants are considered liabilities if they are mandatorily redeemable and they require settlement in cash or other assets, or a variable number of shares. If warrants do not meet liability classification under ASC 480-10, the Company considers the requirements of ASC 815-40 to determine whether the warrants should be classified as liability or equity. If warrants do not require liability classification under ASC 815-40 or other applicable generally accepted accounting principles in the United States of America (“U.S. GAAP”) the warrants should be classified as equity.  

The proceeds received from the sale of equity classified warrants and shares of common stock in a bundled transaction are allocated based on the relative fair values of warrants and shares with no changes in fair value of warrants recognized after the issuance date. 

Recently Adopted Accounting Pronouncements 

Refer to Note 2, “Summary of Significant Accounting Policies” in the accompanying notes to our financial statements for the years ended December 31, 2024 and 2023 appearing elsewhere in this Annual Report on Form 10-K for a discussion of recently issued accounting standards. 

Off-Balance Sheet Arrangements 

During the periods presented, we did not have, nor do we currently have, any off-balance sheet arrangements as defined under SEC rules. 

Emerging Growth Company Status 

As an EGC under the JOBS Act, we may delay the adoption of certain accounting standards until such time as those standards apply to private companies. We have elected to use this extended transition period for complying with new