Company: PRME
Filing Date: 2025-02-28
Form Type: 10-K
Source: 0001628280-25-008884
Chunk: 292

Company: Prime Medicine, Inc.
Filing Date: 2025-02-28
Form: 10-K
Item: Item 16
Chunk 292
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F-32

Net deferred tax assets (liabilities) consisted of the following:December 31,(in thousands)20242023Deferred tax assets:Capitalized research and development costs$74,605 $49,990 U.S. and state net operating loss carryforwards61,501 35,977 Depreciation and amortization12,829 13,204 Tax credits22,986 12,863 Accrual2,334 5,817 Lease Liability12,228 3,711 Stock Compensation6,005 1,473 Other141 9 Total deferred tax assets192,629 123,044 Deferred tax liabilities:Right of Use Asset(12,852)(3,794)Total deferred tax liabilities(12,852)(3,794)Valuation allowance(179,777)(119,250)Net deferred tax assets (liabilities)$— $— The following is a summary of the Company’s net operating loss and tax credit carryforwards, both of which may be available to reduce future tax liabilities:December 31,(in thousands)20242023U.S. federal net operating loss - do not expire$226,904 $131,608 State net operating loss - expire at various dates beginning in 2039219,351 132,009 Federal research and development tax credits - expire at various dates beginning in 204015,082 8,085 State research and development tax credits - expire at various dates beginning in 203610,005 6,047 Utilization of the U.S. federal and state net operating loss carryforwards and research and development tax credit carryforwards may be subject to a substantial annual limitation under Sections 382 and 383 of the Internal Revenue Code of 1986, and corresponding provisions of state law, due to certain ownership changes that have occurred previously or that could occur in the future. These ownership changes may limit the amount of carryforwards that can be utilized annually to offset future taxable income and tax liabilities. In general, an ownership change, as defined by Section 382, results from transactions increasing the ownership of certain stockholders or public groups in the stock of a corporation by more than 50 percentage points over a three-year period. The Company has not conducted a study to assess whether a change of control has occurred or whether there have been multiple changes of control since inception due to the significant complexity and cost associated with such a study. If