Company: DAWN
Filing Date: 2025-02-25
Form Type: 10-K
Source: 0000950170-25-026654
Chunk: 205

Company: Day One Biopharmaceuticals, Inc.
Filing Date: 2025-02-25
Form: 10-K
Item: Item 1A
Chunk 205
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 same taxable year. Certain repurchases are not counted in the base of the excise tax.

Future changes in corporate tax rates, the realization of net deferred tax assets relating to our operations, the taxation of foreign earnings, and the deductibility of expenses under the Tax Cuts and Jobs Act, or future reform legislation could have a material impact on the value of our deferred tax assets, could result in significant one-time charges, and could increase our future U.S. tax expense.  

Our ability to use our net operating loss carryforwards and certain other tax attributes may be limited. 

We have incurred substantial losses during our history and do not expect to become profitable in the near future, and we may never achieve profitability. U.S. federal net operating losses generated in tax years beginning after December 31, 2017, will not expire and may be carried forward indefinitely but the deductibility of such federal net operating losses is limited to 80% of current year taxable income (without regard to certain deductions).

In addition, both our current and our future unused losses and other tax attributes may be subject to limitation under Sections 382 and 383 of the Internal Revenue Code of 1986, as amended, or the Code, if we undergo, or have undergone, an “ownership change,” generally defined as a greater than 50 percentage point change (by value) in our equity ownership by certain stockholders over a three-year period. During the year ended December 31, 2024, the Company has completed a Section 382 study to determine whether an ownership change per the provisions of Section 382 of the Internal Revenue Code, as well as similar state provisions, has occurred. The study found that one of our predecessor companies experienced an ownership change on June 16, 2022 and that the tax attributes that it generated are subject to a change pursuant to Section 382; however, based on the study all of these attributes are fully available for use as of December 31, 2023. The Company’s current year utilization of net operating losses and income tax credits is not impacted by the provisions of Section 382 or 383. As a result, if we undergo an ownership change (or if we previously underwent such an ownership change), our ability to use our pre-change net operating loss carryforwards and other pre-change tax attributes (such as research tax credits) to offset our post-change income or taxes may be limited. Similar provisions of state tax law may also apply to limit our use of accumulated state tax attributes. In addition