Company: DNLI
Filing Date: 2025-05-06
Form Type: 10-Q
Source: 0001714899-25-000105
Chunk: 89

Company: Denali Therapeutics Inc.
Filing Date: 2025-05-06
Form: 10-Q
Item: Part I, Item 2
Chunk 89
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 be limited.

As of December 31, 2024, we had federal net operating loss carryforwards of approximately $436.6 million, federal research and development tax credit carryforwards of approximately $64.2 million, and orphan tax credit carryforwards of approximately $56.9 million, some of which will begin to expire in 2034. Under Sections 382 and 383 of the United States Internal Revenue Code of 1986, as amended, (the "Code"), if a corporation undergoes an “ownership change” (generally defined as a greater than 50-percentage-point cumulative change (by value) in the equity ownership of certain stockholders over a rolling three-year period), the corporation’s ability to use its pre-change net operating loss carryforwards and other pre-change tax attributes to offset its post-change taxable income or taxes may be limited. We have experienced ownership changes in the past, and we may also experience ownership changes in the future as a result of subsequent shifts in our stock ownership, including in connection with our October 2022 offering, some of which are outside our control. Limitations may also apply under state law. For example, recently enacted California legislation limits the use of state net operating loss carryforwards for tax years beginning on or after January 1, 2024 and before January 1, 2027. As a result of this legislation or other unforeseen reasons, we may not be able to utilize some or all of our net operating loss carryforwards, even if we attain profitability.

89

Risks Related to Ownership of Our Common Stock

The market price of our common stock has been and may continue to be volatile, which could result in substantial losses for investors.

The trading price of our common stock has been and may continue to be highly volatile and could be subject to wide fluctuations in response to various factors, some of which are beyond our control. In addition to the factors discussed in this "Risk Factors" section and elsewhere in this report, these factors include: 

•the timing and results of clinical trials for our current product candidates and any future product candidates that we may develop;

•commencement or termination of collaborations for our product development and research programs;

•the timing and ability to obtain regulatory approval on our lead product candidates, including DNL310;

•failure to achieve development, regulatory, or commercialization milestones under our collaborations;

•failure or discontinuation of any of our product development and research programs;

•failure to develop our TV platform