Metagenomi Therapeutics, Inc. Income Taxes Disclosure

The Company is a corporation for tax purposes and is subject to income taxes which have been included in the financial statements. All pre-tax losses have been incurred in the U.S.

As discussed in Note 2, we adopted ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures, during the year ended December 31, 2025 on a prospective basis. As a result, our rate reconciliation for 2025 is presented in accordance with the new disclosure requirements, while the reconciliation for 2024 continues to be presented under disclosure requirements in effect for that period.

Cash paid for income taxes, net of refunds received, by jurisdiction pursuant to the disclosure requirements of ASU 2023-09 for the year ended December 31, 2025 only includes a federal refund received of $2.2 million.

A valuation allowance is required to be established when it is more likely than not that all or a portion of a deferred tax asset will not be realized. Realization of deferred tax assets is dependent upon future earnings, the timing and amount of which are uncertain. The Company believes that, based on a number of factors such as the history of operating losses, it is more likely than not that the deferred tax assets will not be fully realized, such that a full valuation allowance has been recorded. The valuation allowance increased by $25.8 million for the year ended December 31, 2025, primarily due to the increase in net operating loss carryforwards. The valuation allowance increased by $18.8 million for the year ended December 31, 2024, primarily due to the increase in net operating loss carryforwards and capitalization of research and development expenses under Section 174.

As of December 31, 2025, the Company had $175.3 million and $213.5 million of net operating loss carryforwards for federal and state income tax purposes, respectively. Federal net operating loss carryforwards do not expire. State net operating loss carryforwards begin expiring in 2037. As of December 31, 2025, the Company had $3.3 million and $6.1 million of research credit carryforwards for federal and state income tax purposes, respectively. Federal research credit carryforwards begin expiring in 2045. State research credit carryforwards do not expire and can be carried forward indefinitely.

Utilization of some of the federal and state net operating losses and credit carryforwards may be subject to annual limitations due to the change in ownership provisions of the Internal Revenue Code of 1986 (“Internal Revenue Code”) and similar state provisions. The annual limitation may result in the expiration of net operating losses and credits before utilization.

The Company uses the “more likely than not” criterion for recognizing the income tax benefit of uncertain income tax positions and establishing measurement criteria for income tax benefits. Although it is reasonably possible that certain unrecognized tax benefits may increase or decrease within the next twelve months due to tax examination changes, settlement activities, expirations of statute of limitations, or the impact on recognition and measurement considerations related to the results of published tax cases or other similar activities, the Company does not anticipate significant changes to unrecognized tax benefits over the next 12 months. The Company recognizes interest related to income tax matters as a component of income tax expense. As of December 31, 2025, the amount of accrued interest related to uncertain tax positions was $0.2 million. During the years ended December 31, 2025 and 2024, no penalties were recognized relating to unrecognized tax benefits. In the event the Company should need to recognize penalties related to unrecognized income tax liabilities, this amount will be recorded as an accrued liability and an increase to income tax expense.

The Company files tax returns in the U.S. and California. The Company is not currently under examination in any of these jurisdictions and all its tax years remain effectively open to examination due to net operating losses from inception. As of December 31, 2025, the balance of unrecognized tax benefits was $7.9 million of which $7.3 million, if recognized, would affect the effective tax rate.