Company: IOBT
Filing Date: 2025-03-31
Form Type: 10-K
Source: 0000950170-25-047744
Chunk: 198

Company: IO Biotech, Inc.
Filing Date: 2025-03-31
Form: 10-K
Item: Item 1A
Chunk 198
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 such shareholders at any time during the prior three years (calculated on a rolling basis). If we were to incur losses in the United States in the future, our ability to realize a tax benefit from these losses would be limited. Due to potential ownership changes under Section 382 of the Code, we may be limited in our ability to realize a tax benefit from the use of such losses, whether or not we attain profitability in future years. 

In addition, our ability to utilize any future net operating losses may be limited by Pub. L. 115-97, enacted in 2017 and commonly known as the Tax Cuts and Jobs Act of 2017 (the “TCJA”).  

We may be subject to current taxation on some of the income of our foreign subsidiaries even absent any cash distributions. 

Because we hold directly or indirectly all of the shares of our foreign subsidiaries, including IO Biotech ApS and IO Biotech Limited, such subsidiaries are treated as controlled foreign corporations (“CFC”) for U.S. federal income tax purposes. For U.S. federal income tax purposes, IO Biotech, Inc. will therefore need to include in its taxable income each year its “global intangible low-taxed income” and IO Biotech ApS’s and IO Biotech Limited’s “subpart F income,” if any, even if no distributions are made. 

Our foreign subsidiaries may directly become subject to U.S. federal income tax and be subject to a branch profits tax in the United States, which could reduce our after-tax returns and the value of our shares. 

We currently intend to conduct substantially all of our businesses and operations in a manner such that our foreign subsidiaries will not be treated as engaged in a trade or business in the United States and will not be subject to additional U.S. income tax or branch profits tax. However, it is not entirely clear when a foreign subsidiary is treated as being engaged in a trade or business in the United States for U.S. federal income tax purposes. Accordingly, we cannot assure you that the Internal Revenue Service (“IRS”) will not contend, perhaps successfully, that our foreign subsidiaries were engaged in a trade or business in the United States or are subject to more U.S. income tax than they currently incur. A foreign corporation deemed to be so engaged would be subject to U.S. federal income tax on its income that is treated as effectively connected with the conduct of that trade or business, as well as to branch profits tax on its “dividend equivalent amount,” unless the corporation is