Company: RNAC
Filing Date: 2025-03-13
Form Type: 10-K
Source: 0001453687-25-000060
Chunk: 122

Company: Cartesian Therapeutics, Inc.
Filing Date: 2025-03-13
Form: 10-K
Item: Item 1A
Chunk 122
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 the Code, a corporation that undergoes an “ownership change” is subject to limitations on its ability to use its pre-change NOLs to offset future taxable income. If the IRS, challenges our analysis that existing NOLs will not expire before 

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utilization due to previous ownership changes, or if we undergo an ownership change, our ability to use our NOLs could be limited by Section 382 of the Code. Future changes in our stock ownership, some of which are outside of our control, could result in an ownership change under Sections 382 and 383 of the Code.

Furthermore, our ability to use NOLs of companies that we may acquire in the future may be subject to limitations. As a result, we may not be able to use a material portion of the NOLs reflected on our balance sheet, even if we attain profitability. Under current law, NOLs that arose before January 1, 2018 may be carried forward up to 20 years. NOLs that arose after 2017 may be used to offset at most 80% of our taxable income to the extent not offset by pre-2018 NOLs and such NOLs can be carried forward indefinitely. As a result, we may become required to pay federal income taxes in future years despite having generated losses for federal income tax purposes in prior years.

We have recorded a material amount of goodwill and indefinite-lived intangible assets in connection with the Merger. We may record impairment charges, which would adversely impact our financial position and results of operations.

We have recorded a material amount of goodwill and indefinite-lived intangible assets on our balance sheet in connection with the Merger. We review our goodwill and intangible assets for impairment at least annually, or whenever events or changes in circumstances indicate that the carrying amounts of these assets may not be recoverable, in accordance with Accounting Standards Codification Topic 350, Intangibles - Goodwill and Other.

One potential indicator of goodwill impairment is whether the fair value of our equity, as measured by our market capitalization, is below the net book value of our equity. Whether our market capitalization triggers an impairment charge in any future period will depend on the underlying reasons for the decline in stock price, the significance of the decline and the length of time the stock price has been trading at such prices.

In addition, the determination as to whether our indefinite-lived intangible assets related to Descartes-08 are impaired is heavily dependent on the results of our ongoing clinical trials,