Company: ERAS
Filing Date: 2025-03-20
Form Type: 10-K
Source: 0000950170-25-042682
Chunk: 138

Company: Erasca, Inc.
Filing Date: 2025-03-20
Form: 10-K
Item: Item 16
Chunk 138
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 F-27

At December 31, 2024, the Company also had federal, California, and Massachusetts research tax credit carryforwards of approximately $16.0 million, $9.0 million, and $717,000, respectively. The federal research tax credit carryforwards begin to expire in 2038, the California research tax credit carryforward does not expire and can be carried forward indefinitely until utilized, and the Massachusetts research tax credit carryforwards begin to expire in 2036. At December 31, 2024, the Company also had federal orphan drug credit carryforwards of approximately $1.3 million. The federal orphan drug credit carryforwards begin to expire in 2043. At December 31, 2024, the Company also had federal and California charitable contribution carryforwards of $15.7 million. The charitable contribution carryforwards begin to expire in 2025. The above NOL carryforward and the research tax credit carryforwards are subject to an annual limitation under Section 382 and 383 of the Internal Revenue Code of 1986, as amended (IRC), and similar state provisions due to 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