Cullinan Therapeutics, Inc. Income Taxes Disclosure

Cullinan did not record income tax expense or benefit in 2025 due to its net loss before income taxes in the current year and expected losses in future years. During 2024, the Company recorded a current federal income tax expense of $0.1 million. The income tax expense recorded for 2024 was driven by the finalization of the federal research and development credits generated during 2023 that were carried back to tax year 2022. The Company’s net loss before income taxes consists solely of domestic losses in each of 2025 and 2024. As of December 31, 2024, Cullinan had recorded $3.0 million within prepaid expenses and other current assets on its consolidated balance sheets for the Company’s tentative refund from the carryback of 2023 federal research and development credits to tax year 2022.

During 2025, Cullinan was refunded $3.0 million for federal income taxes from the carryback of 2023 federal research and development credits to tax year 2022. During 2024, Cullinan paid $1.6 million for federal income taxes due to a refund payment from the Internal Revenue Service (the "IRS") that was in excess of the Company’s 2022 federal refund claim and was refunded $3.9 million for Massachusetts state income taxes from 2022 state refund claims.

The Company's net operating loss ("NOL") and tax credit carryforwards are subject to review and possible adjustment by the Internal Revenue Service ("IRS") and state tax authorities. Under Sections 382 and 383 of the Internal Revenue Code of 1986, as amended, as well as similar state provisions, NOL and tax credit carryforwards may become subject to an annual limitation in the event of certain cumulative changes in the ownership interest of significant stockholders over a three-year period in excess of 50%. The rules generally operate by focusing on changes in ownership among stockholders considered by the rules as owning, directly or indirectly, 5% or more of the stock of a company and any change in ownership arising from new issuances of stock by the company.

As of December 31, 2025 and 2024, the Company had federal NOL carryforwards, of $312.6 million and $125.3 million, respectively, which may be available to offset future income tax liabilities. As of December 31, 2025, $311.2 million of Cullinan's federal NOL carryforwards can be carried forward indefinitely, and the remaining $1.4 million expires in 2037. As of December 31, 2025 and 2024, the Company had state NOL carryforwards of $317.7 million and $128.2 million, respectively, which may be available to offset future income tax liabilities. As of December 31, 2025, Cullinan's state NOL carryforwards begin to expire in 2031.

As of December 31, 2025 and 2024, the Company had federal research and development tax credit carryforwards of $8.7 million and $5.4 million, respectively. As of December 31, 2025, Cullinan’s federal research and development tax credit carryforwards begin to expire in 2036. As of each of December 31, 2025 and 2024, the Company had state research and development tax credit carryforwards of $2.7 million and $2.0 million, respectively. As of December 31, 2025, $0.3 million of Cullinan's state research and development tax credit carryforwards can be carried forward indefinitely, and the remaining $2.4 million expires beginning in 2036.

Cullinan has evaluated the positive and negative evidence bearing upon its ability to realize the deferred tax assets, which primarily consist of capitalized research and development costs, temporary differences on equity-based compensation, and NOL carryforwards. The Company has considered its history of cumulative net losses, estimated future taxable income and prudent and feasible tax planning strategies and has concluded that it is more likely than not that Cullinan will not realize the benefits of its deferred tax assets. As a result, as of December 31, 2025, the Company has maintained a full valuation allowance against its remaining net deferred tax assets.

Cullinan’s valuation allowance increased in 2025 primarily due to the valuation allowance on NOLs generated during the year and in 2024 primarily due to the valuation allowance on capitalized research and development costs and NOLs generated during the year. The following table summarizes activity in Cullinan’s valuation allowance during 2025 and 2024 (in thousands):

The calculation of the Company’s tax liabilities involves dealing with uncertainties in the application of complex tax laws and regulations for both federal taxes and the states in which Cullinan operates or does business in.

The Company recognizes a tax benefit from an uncertain tax position when it is more likely than not that the position will be sustained upon examination, including resolutions of any related appeals or litigation processes, on the basis of the technical merits. Cullinan records uncertain tax positions as liabilities and adjusts these liabilities when its judgment changes as a result of the evaluation of new information not previously available. Due to the complexity of some of these uncertainties, the ultimate resolution may result in a payment that is materially different from the Company’s current estimate of the unrecognized tax benefit liabilities. These differences will be reflected as increases or decreases to income tax expense in the period in which new information is available. As of December 31, 2025 and 2024, Cullinan has not recorded a liability for any uncertain tax positions in its consolidated financial statements.

The Company recognizes interest and penalties related to unrecognized tax benefits on the income tax expense line in the accompanying consolidated statements of operations and comprehensive income (loss). As of December 31, 2025 and 2024, no accrued interest or penalties are included in the consolidated balance sheets.

Cullinan files tax returns as prescribed by the tax laws of the jurisdictions in which it operates. In the normal course of business, the Company is subject to examination by federal and state jurisdictions in the U.S. There are currently no pending tax examinations. Cullinan's federal and state income tax returns are generally subject to tax examinations for tax years 2022 and later. To the extent that the Company has tax attribute carryforwards, the tax years in which the attribute was generated may still be adjusted upon examination by the IRS and the state tax authorities to the extent utilized in a future period.