Forte Biosciences, Inc. Income Taxes Disclosure

9. Income Taxes

In July 2025, the One Big Beautiful Bill Act (“OBBBA”) modified the Section 174 capitalization rules. Under the OBBBA provisions, the Company discontinued capitalization of domestic Section 174 costs beginning in tax year 2025, while continuing to capitalize foreign Section 174 costs. As a result, deferred tax assets related to capitalized research expenditures increased by $5.8 million during the year ended December 31, 2025.

The Company has evaluated the positive and negative evidence bearing upon the realizability of its deferred tax assets. Based upon the Company’s history of operating losses, the Company has concluded that it is more likely than not that the benefit of its deferred tax assets will not be realized. Accordingly, the Company has provided a full valuation allowance for deferred tax assets as of December 31, 2025 and 2024. During 2025 and 2024, the valuation allowance increased by $15.0 million and $5.9 million, respectively.

As of December 31, 2025, the Company has federal and California research and development tax credit carryforwards of $1.2 million and $0.9 million, respectively. The federal research and development tax credits begin to expire in 2041 unless previously utilized. The California credits do not expire.

The Company is subject to taxation in the U.S., Australia and California. As of December 31, 2025, Tocagen’s tax years beginning 2007 to date are subject to examination by federal and California taxing authorities due to the carry forward of unutilized net operating losses and research and development tax credits. To the extent the Company has tax attribute carryforwards, the tax years in which the attribute was generated may still be adjusted upon examination by the Internal Revenue Service or state tax authorities to the extent utilized in a future period.

Pursuant to Internal Revenue Code (IRC) Sections 382 and 383, annual use of a company’s net operating loss and tax credit carryforwards may be limited if there is a cumulative change in ownership of greater than 50% (by value) within a three-year period. The amount of the annual limitation is determined based on the value of the Company immediately prior to the ownership change. Subsequent ownership changes may further affect the limitation in future years. The Company has completed several equity offerings since its inception which may have resulted in a change in control as defined by Sections 382 and 383 of the IRC, or could result in a change in control in the future. The Company has not completed an IRC Section 382 and 383 analysis regarding the limitation of net operating loss and research and development credit carryforwards. Upon completion of such an analysis, there may be either increases

or decreases to the reported amount of the deferred tax assets for net operating losses and federal and California research and development credits. Any change in the amount of the deferred tax assets would have a corresponding change in the valuation allowance, and therefore is not expected to impact the Company’s effective tax rate.

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 appeals or litigation processes. Income tax positions must meet a more likely than not recognition at the effective date to be recognized.

The Company’s policy is to record interest and penalties relating to uncertain tax positions as a component of income tax expense should the Company believe there is an uncertain tax position liability. As of December 31, 2025, and 2024, there was no accrued interest or penalties for uncertain positions.