What changed in this filing

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Item 1. Financial Statements

2025-05-14 compared with 2024-11-06 · 337 added, 397 removed, 445 unchanged (62% of the section changed)

3 unchanged sentences

(in thousands, except share and par value data)

September 30, 2024

March 31, 2025

December 31, 2024

11 unchanged sentences

$ 198,264 $ 212,847

Liabilities, convertible preferred stock and stockholders' equity (deficit)

Liabilities and Stockholders' Equity

Current liabilities:

4 unchanged sentences

Total current liabilities

Other long-term liabilities

Operating lease liabilities, net of current portion

Total liabilities

Convertible preferred stock, $ 0.001 par value;

no shares authorized, issued, or outstanding at September 30, 2024;

authorized shares— 16,940,594 at December 31, 2023;

issued and outstanding shares— 15,906,236 shares at December 31, 2023

Stockholders' equity (deficit):

13,496 14,781

Commitments and contingencies (Note 8)

Stockholders' equity:

Class A common stock, $ 0.001 par value;

authorized shares— 200,000,000 and 39,630,511 at September 30, 2024 and December 31, 2023, respectively;

issued and outstanding shares— 19,006,904 and 2,349,554 at September 30, 2024 and December 31, 2023, respectively

authorized shares— 200,000,000 at March 31, 2025 and December 31, 2024;

issued and outstanding shares— 19,142,377 and 19,125,377 at March 31, 2025 and December 31, 2024, respectively.

Class B common stock, $ 0.001 par value;

authorized shares— 20,000,000 at September 30, 2024;

issued and outstanding shares— 6,729,172 at September 30, 2024;

no shares authorized, issued, or outstanding at December 31, 2023

authorized shares— 20,000,000 at March 31, 2025 and December 31, 2024;

issued and outstanding shares— 6,729,172 at March 31, 2025 and December 31, 2024.

Preferred stock, $ 0.001 par value;

authorized shares— 10,000,000 at September 30, 2024;

no shares issued or outstanding at September 30, 2024;

no shares authorized, issued, or outstanding at December 31, 2023

authorized shares— 10,000,000 at March 31, 2025 and December 31, 2024;

no shares issued or outstanding at March 31, 2025 and December 31, 2024.

Additional paid-in-capital

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Accumulated other comprehensive income

Total stockholders' equity (deficit)

Total stockholders' equity

184,768 198,066

Total liabilities, convertible preferred stock and stockholders' equity (deficit)

Total liabilities and stockholders' equity

$ 198,264 $ 212,847

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CONTINEUM THERAPEUTICS, INC.

CONDENSED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)

CONDENSED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

(in thousands, except share and per share data)

Three Months Ended September 30,

Nine Months Ended September 30,

License revenue

Three Months Ended March 31,

Operating expenses:

Research and development

$ 13,712 $ 7,778

General and administrative

Total operating expenses

Income (loss) from operations

Loss from operations

( 18,110 ) ( 9,930 )

Other income (expense):

Interest income

Interest expense

Change in fair value of warrant liability

Change in fair value of investor rights and obligations liability

Other expense, net

Total other income

Income (loss) before income taxes

Provision for (benefit from) income taxes

Net income (loss)

( 130 ) ( 6 )

Total other income, net

$ ( 15,990 ) $ ( 8,417 )

Other comprehensive income (loss):

Unrealized gain (loss) on marketable securities

Comprehensive income (loss)

Net income (loss) attributable to common stockholders, basic

Net income (loss) attributable to common stockholders, diluted

Net income (loss) per share, basic (a)

Net income (loss) per share, diluted (a)

Weighted-average shares of common stock outstanding, basic

Weighted-average shares of common stock outstanding, diluted

Comprehensive loss

$ ( 15,891 ) $ ( 8,583 )

Net loss per share, basic and diluted (a)

$ ( 0.62 ) $ ( 3.55 )

Weighted-average shares of common stock outstanding, basic and diluted

25,868,935 2,369,067

_____________

Basic and diluted per share amounts are the same for Class A and Class B shares.

3 unchanged sentences

(in thousands, except share data)

Class A and Class B Additional

Accumulated Other

Total Stockholders'

Convertible Preferred Stock

Comprehensive

Income (Loss)

Balance at December 31, 2023

15,906,236 $ 192,620 2,349,554 $ 2 $ 7,098 $ 108 $ ( 75,144 ) $ ( 67,936 )

Exercise of stock options

— — 34,872 — 122 — — 122

Stock-based compensation

— — — — 768 — — 768

— — — — — — ( 8,417 ) ( 8,417 )

Unrealized loss on marketable securities

— — — — — ( 166 ) — ( 166 )

Balance at March 31, 2024

15,906,236 $ 192,620 2,384,426 $ 2 $ 7,988 $ ( 58 ) $ ( 83,561 ) $ ( 75,629 )

Issuance of common stock in connection with initial public offering, net of issuance costs of $ 10,912

— — 7,423,682 7 107,860 — — 107,867

Conversion of convertible preferred stock to common stock upon initial public offering

( 15,906,236 ) ( 192,620 ) 15,906,236 17 192,603 — — 192,620

Reclassification of warrants from liability to equity

— — — — 216 — — 216

Exercise of stock options

— — 8,932 — 13 — — 13

Stock-based compensation

— — — — 1,494 — — 1,494

— — — — — — ( 9,009 ) ( 9,009 )

Unrealized loss on marketable securities

— — — — — ( 69 ) — ( 69 )

Balance at June 30, 2024

— $ — 25,723,276 $ 26 $ 310,174 $ ( 127 ) $ ( 92,570 ) $ 217,503

Exercise of stock options

— — 12,800 — 13 — — 13

Stock-based compensation

— — — — 2,291 — — 2,291

— — — — — — ( 10,267 ) ( 10,267 )

Unrealized gain on marketable securities

— — — — — 688 — 688

Balance at September 30, 2024

— $ — 25,736,076 $ 26 $ 312,478 $ 561 $ ( 102,837 ) $ 210,228

Class A and Class B

Accumulated Other

Convertible Preferred Stock

Class A Common Stock

Comprehensive

2 unchanged sentences

25,854,549 $ 26 $ 315,371 $ 71 $ ( 117,402 ) $ 198,066

Vesting of shares of common stock subject to repurchase

— — 5,245 — 5 — — 5

Exercise of stock options

7 unchanged sentences

25,871,549 $ 26 $ 317,964 $ 170 $ ( 133,392 ) $ 184,768

Vesting of shares of common stock subject to repurchase

— — 14,584 — 14 — — 14

Issuance of Series C convertible preferred stock, net of offering costs of $103

3,333,239 49,896 — — — — — —

Exercise of stock options

— — 36,715 — 47 — — 47

Stock-based compensation

— — — — 489 — — 489

Repurchase of stock options

— — ( 2,680 ) — ( 28 ) — — ( 28 )

— — — — — — 41,564 41,564

Unrealized loss on marketable securities

— — — — — ( 56 ) — ( 56 )

Balance at June 30, 2023

15,222,913 $ 182,378 2,320,744 $ 2 $ 5,755 $ ( 65 ) $ ( 61,124 ) $ ( 55,432 )

Vesting of shares of common stock subject to repurchase

— — 1,528 — 2 — — 2

Issuance of Series C convertible preferred stock, net of offering costs of $ 7

Convertible Class A Additional Accumulated Other Comprehensive Total

Preferred Stock

Stockholders'

Balance at December 31, 2023

15,906,236 $ 192,620 2,349,554 $ 2 $ 7,098 $ 108 $ ( 75,144 ) $ ( 67,936 )

6 unchanged sentences

— — — — — ( 166 ) — ( 166 )

Balance at September 30, 2023

Balance at March 31, 2024

15,906,236 $ 192,620 2,384,426 $ 2 $ 7,988 $ ( 58 ) $ ( 83,561 ) $ ( 75,629 )

3 unchanged sentences

(in thousands)

Nine Months Ended September 30,

Three Months Ended March 31,

Operating activities

Net income (loss)

Adjustments to reconcile net income (loss) to cash provided by (used in) operating activities:

$ ( 15,990 ) $ ( 8,417 )

Adjustments to reconcile net loss to cash used in operating activities:

Depreciation and amortization

1 unchanged sentence

Stock-based compensation

Accretion of debt discount and debt issuance costs

Accretion of premiums/discounts on investments, net

Accretion of premiums/discounts on marketable securities, net

( 285 ) ( 1,023 )

Change in fair value of warrant liability

Gain on sale of equipment

(Gain) loss on marketable securities

Change in fair value of investor rights and obligations liability

Gain on marketable securities ( 2 ) —

Loss on disposal of property and equipment

Changes in operating assets and liabilities

Prepaid expenses and other current assets

Other long-term assets

Accounts payable

Accrued expenses

( 2,862 ) ( 380 )

Operating lease liabilities

Net cash provided by (used in) operating activities

Net cash used in operating activities

( 14,412 ) ( 7,975 )

Investing activities

Purchase of property and equipment

Proceeds from sale of equipment

( 47 ) ( 147 )

Purchases of marketable securities

( 33,691 ) ( 30,640 )

Sales and maturities of marketable securities

Net cash used in investing activities

48,653 39,518

Net cash provided by investing activities

Financing activities

Proceeds from issuance of common stock upon initial public offering, net of underwriting discounts and commissions and other offering costs

Proceeds from issuance of Series C convertible preferred stock, net of offering costs

Principal payments on debt

Payments of deferred offering costs

Proceeds from exercise of stock options

Net cash provided by financing activities

Net cash provided by (used in) financing activities

Net increase in cash and cash equivalents

Cash and cash equivalents at beginning of period

21,943 15,526

Cash and cash equivalents at end of period

Supplemental disclosure of noncash investing and financing activities

Conversion of convertible preferred stock to common stock upon initial public offering

Reclassification of warrants from liability to equity

Reclassification of deferred offering costs paid in prior year to equity

$ 22,470 $ 16,264

The accompanying notes are an integral part of these unaudited condensed financial statements.

4 unchanged sentences

Contineum Therapeutics, Inc.

(the “Company”), is a clinical stage biopharmaceutical company focused on discovering and developing novel, oral small molecule therapies for neuroscience, inflammation and immunology indications with high unmet need.

The Company, formerly named Sirocco Therapeutics, Inc.

(“Sirocco” or “legacy Sirocco”), Inception 3, Inc.

(“Inception”) and Versense Pharmaceuticals, Inc.

(“Versense”), was incorporated in the state of Delaware in 2009 as Versense.

Versense changed its name to Inception on October 25, 2011, and commenced active operations on July 13, 2012.

In May 2018, Inception changed its name to Sirocco.

A separate entity named Pipeline Therapeutics, Inc.

(“legacy Pipeline”) was founded and incorporated in the state of Delaware on May 9, 2017.

On May 7, 2019, legacy Sirocco acquired legacy Pipeline in a merger transaction.

As of December 31, 2019, legacy Pipeline was a wholly owned subsidiary of legacy Sirocco.

In January 2020, legacy Pipeline was merged into legacy Sirocco and ceased to exist, and legacy Sirocco changed its name to Pipeline Therapeutics, Inc.

In November 2023, Pipeline Therapeutics, Inc.

changed its name to Contineum Therapeutics, Inc.

(the “Company”), is a clinical-stage biopharmaceutical company pioneering differentiated therapies for the treatment of NI&I indications with significant unmet need.

The Company was incorporated in the state of Delaware in 2009, and in November 2023 changed its name from Pipeline Therapeutics, Inc.

to Contineum Therapeutics, Inc.

Reverse Stock Split

On April 1, 2024, the Company filed an amendment to its fourth amended and restated certificate of incorporation as amended and effected a 1 -for- 5.5972 reverse stock split of its capital stock.

All share and per-share amounts presented in the financial statements and related notes have been retroactively adjusted to reflect the reverse stock split.

All share and per-share amounts presented in the financial statements and related notes have been retroactively adjusted to reflect the reverse stock split as of the beginning of the first period presented.

Initial Public Offering

On April 9, 2024, the Company closed its initial public offering (“IPO”), pursuant to which it issued and sold an aggregate of 6,875,000 shares of its common stock at a public offering price of $ 16.00 per share and on April 19, 2024, the Company issued and sold 548,682 additional shares of its common stock to the underwriters of the IPO pursuant to the partial exercise of their option to purchase additional shares, resulting in net proceeds of approximately $ 107.9 million, after deducting underwriting discounts, commissions and other offering expenses.

On April 9, 2024, the Company closed its initial public offering (the “IPO”), pursuant to which it issued and sold an aggregate of 6,875,000 shares of its common stock at a public offering price of $ 16.00 per share and on April 19, 2024, the Company issued and sold 548,682 additional shares of its common stock to the underwriters of the IPO pursuant to the partial exercise of their option to purchase additional shares, resulting in net proceeds of approximately $ 107.9 million, after deducting underwriting discounts, commissions and other offering expenses.

Upon the closing of the IPO, the Company’s outstanding convertible preferred stock automatically converted into Class A common stock or Class B common stock, as applicable.

1 unchanged sentence

Following the closing of the IPO, no shares of redeemable convertible preferred stock were authorized or outstanding.

In connection with the closing of its IPO, on April 9, 2024, the Company’s certificate of incorporation was amended and restated to (i) authorize 220,000,000 shares of common stock of which 200,000,000 are designated as Class A common stock and 20,000,000 of which are designated as Class B common stock;

In connection with the closing of the IPO, on April 9, 2024, the Company’s certificate of incorporation was amended and restated to (i) authorize 220,000,000 shares of common stock of which 200,000,000 are designated as Class A common stock and 20,000,000 of which are designated as Class B common stock;

(ii) eliminate all references to the previously existing series of preferred stock;

2 unchanged sentences

Since its inception, the Company has devoted substantially all its resources to research and development activities, business planning, establishing and maintaining its intellectual property portfolio, hiring personnel, raising capital to support and expand such activities and providing general and administrative support for these operations.

The Company incurred a net loss of $ 10.3 million and $ 27.7 million for the three and nine months ended September 30, 2024 , respectively.

The Company had an accumulated deficit of $ 102.8 million as of September 30, 2024 .

From its inception through September 30, 2024 , the Company has financed its operations primarily through issuance of convertible promissory notes, convertible preferred stock financings, a term loan, a global license and development agreement (the “J&J License Agreement”) the Company entered in February 2023 with Janssen Pharmaceutica NV, a Johnson & Johnson company, and net proceeds of approximately $ 107.9 million received in April 2024 from the Company's IPO.

As of September 30, 2024 , the Company had cash, cash equivalents and marketable securities of $ 213.9 million.

The Company believes its existing cash, cash equivalents and marketable securities will be sufficient to support operations for at least 12 months from the issuance of these unaudited condensed financial statements.

The Company incurred a net loss of $ 16.0 million for the three months ended March 31, 2025 .

The Company had an accumulated deficit of $ 133.4 million as of March 31, 2025 .

From its inception through March 31, 2025 , the Company has financed its operations primarily through issuance of convertible promissory notes, convertible preferred stock financings, a term loan, a global license and development agreement (the “J&J License Agreement”) the Company entered in February 2023 with Janssen Pharmaceutica NV, a Johnson & Johnson company, and net proceeds of approximately $ 107.9 million received in April 2024 from the IPO.

As of March 31, 2025 , the Company had cash, cash equivalents and marketable securities of $ 190.7 million.

Management believes the Company's existing cash, cash equivalents and marketable securities will be sufficient to support its operations for at least 12 months from the issuance date of these unaudited condensed financial statements.

As the Company continues to pursue its business plan, it expects to finance its operations through both public and private sales of equity, debt financings or other commercial arrangements, which could include income from collaborations, strategic partnerships or marketing, distribution, licensing or other strategic arrangements with third parties.

3 unchanged sentences

Unaudited Interim Condensed Financial Statements

The condensed balance sheet as of September 30, 2024 , condensed statements of operations and comprehensive income (loss) and condensed statements of convertible preferred stock and stockholders’ equity (deficit) for the three and nine months ended September 30, 2024 and 2023, and condensed statements of cash flows for the nine months ended September 30, 2024 and 2023, and related notes to condensed financial statements are unaudited.

The condensed balance sheet as of March 31, 2025 , condensed statements of operations and comprehensive loss, condensed statements of convertible preferred stock and stockholders’ equity (deficit), and condensed statements of cash flows for the three months ended March 31, 2025 and 2024, and related notes to condensed financial statements are unaudited.

These unaudited interim condensed financial statements have been prepared on the same basis as the Company’s annual financial statements and, in the opinion of management, reflect all adjustments (consisting only of normal recurring adjustments) that are necessary for the fair statement of the Company’s financial position, results of operations and cash flows for the periods presented.

The condensed results of operations for the three and nine months ended September 30, 2024 are not necessarily indicative of the results to be expected for the full year or for any other future annual or interim period.

The condensed results of operations for the three months ended March 31, 2025 are not necessarily indicative of the results to be expected for the full year or for any other future annual or interim period.

The condensed balance sheet as of December 31, 2024 included herein was derived from the audited financial statements as of that date.

These interim unaudited condensed financial statements should be read in conjunction with the Company’s audited financial statements for the year ended December 31, 2023 included in the Company’s Form S- 1, as amended (File No.

333 - 278003 ) as filed with the Securities and Exchange Commission ("SEC") pursuant to Rule 424 (b) of the Securities Act of 1933, as amended, on April 1, 2024 and declared effective by the SEC on April 4, 2024 ( the "Registration Statement").

These interim unaudited condensed financial statements should be read in conjunction with the Company’s audited financial statements for the year ended December 31, 2024 included in the Company’s Annual Report on Form 10 -K, filed with the Securities and Exchange Commission (“SEC”) on March 6, 2025.

Summary of Significant Accounting Policies

During the nine months ended September 30, 2024, there were no significant changes to the Company's significant accounting policies as described in the Company's Registration Statement.

During the three months ended March 31, 2025 , there were no significant changes to the Company's significant accounting policies as described in the Company's Annual Report on Form 10 -K for the year ended December 31, 2024, filed with the SEC on March 6, 2025.

Basis of Presentation

The Company has prepared the accompanying condensed financial statements in accordance with U.S.

generally accepted accounting principles (“GAAP”) and the requirements of the SEC for interim reporting.

As permitted under those rules, certain footnotes or other financial information that are normally required by GAAP can be condensed or omitted.

generally accepted accounting principles (“U.S.

GAAP”) and the requirements of the SEC for interim reporting.

As permitted under those rules, certain footnotes or other financial information that are normally required by U.S.

GAAP can be condensed or omitted.

The financial statements are presented in U.S.

2 unchanged sentences

Use of Estimates

During the nine months ended September 30, 2024, there were no significant changes to the Company's accounting estimates as described in the Company's Registration Statement.

Recently Issued Accounting Pronouncements

The preparation of financial statements in conformity with U.S.

GAAP requires management to make estimates and assumptions that affect the amounts reported in the Company’s financial statements and accompanying notes.

Accounting estimates and management judgments reflected in the financial statements include:

the accrual of research and development expenses;

the incremental borrowing rate used to recognize the right-of-use assets and lease liabilities, the fair value of common stock and convertible preferred stock;

and stock-based compensation.

Although these estimates are based on the Company’s knowledge of current events and actions it may undertake in the future, actual results may materially differ from these estimates and assumptions.

Recently Adopted Accounting Pronouncements

In November 2023, the FASB issued ASU No.

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A public entity should apply the amendments in this ASU retrospectively to all prior periods presented in the financial statements.

The Company is currently evaluating the impact of this guidance on its financial statements.

The Company adopted ASU 2023 - 07 for the fiscal year ended December 31, 2024 and interim financial statements thereafter, on a retrospective basis for all prior periods presented in the financial statements.

The adoption of ASU 2023 - 07 did not change the way that the Company identifies its reportable segments and, as a result, did not have a material impact on the Company’s financial position or results of operations.

See Note 10 - Segment Reporting for further information.

Recently Issued Accounting Pronouncements Not Yet Adopted

In December 2023, the FASB issued ASU No.

4 unchanged sentences

The Company is currently evaluating the impact of this guidance on its financial statements.

In November 2024, the FASB issued ASU No.

2024 - 03, Income Statement — Reporting Comprehensive Income — Expense Disaggregation Disclosures (Subtopic 220 - 40 ):

Disaggregation of Income Statement Expenses (“ASU 2024 - 03” ).

This standard requires a public entity to disaggregate certain income statement expenses.

ASU 2024 - 03 is effective for annual reporting periods beginning after December 15, 2026, and interim reporting periods within annual reporting periods beginning after December 15, 2027, with early adoption permitted.

The Company is currently evaluating the impact of this guidance on its financial statements.

Marketable Securities

2 unchanged sentences

The following table summarizes the amortized cost and fair value of the Company’s marketable securities by major investment category (in thousands):

As of September 30, 2024

March 31, 2025

Maturity in Years

2 unchanged sentences

3 years or less

$ 56,647 $ 88 $ ( 35 ) $ 56,700

Certificate of deposit

6,661 5 — 6,666

Corporate debt securities

2 years or less

71,776 78 ( 14 ) 71,840

Commercial paper

14,664 5 ( 1 ) 14,668

2,923 1 — 2,924

Asset-backed securities

4 years or less

As of December 31, 2023

15,396 46 — 15,442

Total $ 168,067 $ 223 $ ( 50 ) $ 168,240

December 31, 2024

Maturity in Years

2 unchanged sentences

3 years or less

$ 57,232 $ 57 $ ( 134 ) $ 57,155

Certificate of deposit

8,519 6 ( 1 ) 8,524

Corporate debt securities

2 years or less

80,751 110 ( 39 ) 80,822

Commercial paper

22,265 11 ( 1 ) 22,275

2,145 1 — 2,146

Asset-backed securities

2 years or less

11,834 61 — 11,895

Total $ 182,746 $ 246 $ ( 175 ) $ 182,817

The Company regularly reviews the securities in an unrealized loss position and evaluates the current expected credit loss by considering factors such as historical experience, market data, issuer-specific factors, current and expected future economic conditions.

The Company has no requirement or intention to sell these securities before maturity or recovery of their amortized cost basis.

As of September 30, 2024 , the Company did not record an allowance for credit loss related to its investment portfolio.

As of March 31, 2025 and December 31, 2024, the Company did not record an allowance for credit loss related to its investment portfolio.

As of March 31, 2025 , 60 out of 243 of our available-for-sale debt securities were in an aggregate gross unrealized loss position.

As of December 31, 2024, 86 out of 252 of our available-for-sale debt securities were in an aggregate gross unrealized loss position.

As of March 31, 2025 and December 31, 2024, all of our available-for-sale debt securities in an unrealized loss position for which an allowance for credit losses has not been recorded had continuous unrealized loss positions of less than 12 months.

The following tables summarize our available-for-sale debt securities in an unrealized loss position for which an allowance for credit losses has not been recorded, aggregated by major security type (in thousands):

March 31, 2025

Fair Value Unrealized Losses

Government agency securities $ 13,803 $ ( 35 )

Corporate debt securities 22,271 ( 14 )

Commercial paper 8,414 ( 1 )

Total $ 44,488 $ ( 50 )

December 31, 2024

Fair Value Unrealized Losses

Government agency securities $ 30,155 $ ( 134 )

Certificate of deposit 3,722 ( 1 )

Corporate debt securities 22,528 ( 39 )

Commercial paper 4,556 ( 1 )

Total $ 60,961 $ ( 175 )

Fair Value Measurements

9 unchanged sentences

Fair Value Measurements Using

Quoted Prices in

Quoted Prices in Significant Other Significant

Active Markets

Significant Other

for Identical

Assets (Level 1)

Inputs (Level 2)

As of September 30, 2024:

As of March 31, 2025:

Cash equivalents

$ 20,446 $ 20,446 $ — $ —

Government agency securities

56,700 56,700 — —

Certificates of deposits

6,666 — 6,666 —

Corporate debt securities

71,840 — 71,840 —

Commercial paper

14,668 — 14,668 —

2,924 — 2,924 —

Asset-backed securities

15,442 — 15,442 —

Total financial assets

$ 188,686 $ 77,146 $ 111,540 $ —

As of December 31, 2024:

Cash equivalents

$ 21,042 $ 21,042 $ — $ —

Government agency securities

57,155 57,155 — —

Certificates of deposits

8,524 — 8,524 —

Corporate debt securities

80,822 — 80,822 —

Commercial paper

22,275 — 22,275 —

2,146 — 2,146 —

Asset-backed securities

11,895 — 11,895 —

Total financial assets

Preferred stock warrant liability

Total financial liabilities

$ 203,859 $ 78,197 $ 125,662 $ —

The carrying amounts of the Company’s financial instruments, including cash, cash equivalents and marketable securities, prepaid and other current assets, accounts payable, and accrued liabilities, approximate fair value due to their short maturities.

Included in cash and cash equivalents at September 30, 2024 and December 31, 2023 are money market funds with a carrying value and fair value of $ 10.8 million and $ 11.8 million, respectively, based upon a Level 1 fair value assessment.

Upon the closing of the IPO, the warrant to purchase shares of Series B preferred stock converted to a warrant to purchase shares of Class A common stock, and upon conversion the warrant met the equity classification requirements and was reclassified to equity.

The warrant was remeasured to fair value immediately prior to the conversion to a common stock warrant and the Company recognized changes in the fair value of the warrant liability until April 9, 2024.

As of December 31, 2023, the Company had a preferred stock warrant liability (included on the balance sheet under other long-term liabilities), which consisted of the fair value of a warrant to purchase Series B convertible preferred stock and was based on significant unobservable inputs, which represent a Level 3 measurement within the fair value hierarchy.

The Company classified this warrant as a liability on its balance sheets and remeasured to fair value at each reporting date, and the Company recognized changes in the fair value of the warrant liability as a component of other income (expense) in its condensed statements of operations and comprehensive income (loss).

The Company’s valuation of the preferred stock warrant as of April 9, 2024 and December 31, 2023 utilized the Black-Scholes option-pricing model.

The quantitative elements associated with the Company’s Level 3 inputs impacting the fair value measurement of the preferred stock warrant liability include the fair value per share of the underlying Series B convertible preferred stock, the remaining contractual term of the warrant, risk-free interest rate, expected dividend yield and expected volatility of the price of the underlying preferred stock.

The most significant assumption in the Black-Scholes option-pricing model impacting the fair value of the preferred stock warrant is the fair value of the Company’s Series B convertible preferred stock as of each remeasurement date.

The Company determines the fair value per share of the underlying preferred stock by taking into consideration its most recent sales of its convertible preferred stock as well as additional factors that the Company deems relevant.

The Company historically has been a private company and lacks company-specific historical and implied volatility information of its stock.

Therefore, it estimates its expected stock volatility based on the historical volatility of publicly traded peer companies for a term equal to the remaining contractual term of the warrant.

The risk-free interest rate is determined by reference to the U.S.

Treasury yield curve for time periods approximately equal to the remaining contractual term of the warrant.

The Company has estimated a 0 % dividend yield based on the expected dividend yield and the fact that the Company has never paid or declared dividends.

Significant increases or decreases in any of these inputs in isolation would result in a significantly different fair value measurement.

An increase in the risk-free interest rate, and/or an increase in the remaining contractual term or expected volatility, and/or an increase in the fair value of the convertible preferred stock would result in an increase in the fair value of the warrant.

The following table summarizes the change in fair value of the preferred stock warrant liability, a Level 3 recurring fair value measurement, for the nine months ended September 30, 2024 ( in thousands):

Warrant Liability

Balance at December 31, 2023

Change in fair value of warrant liability

Balance at April 9, 2024

Reclassification to equity

Balance at September 30, 2024

Included in cash and cash equivalents at March 31, 2025 and December 31, 2024 are money market funds with a carrying value and fair value of $ 5.0 million and $ 3.9 million, respectively, based upon a Level 1 fair value assessment.

Accrued Expenses

Accrued expenses consisted of the following (in thousands):

September 30,

Accrued compensation expenses

$ 1,192 $ 3,338

Accrued research and development expenses

2 unchanged sentences

Total accrued expenses

Convertible Preferred Stock and Stockholders ’ Equity (Deficit)

Upon the closing of the IPO, the Company’s outstanding convertible preferred stock automatically converted into 9,177,064 shares of Class A common stock and 6,729,172 shares of Class B common stock.

Converted preferred stock outstanding as of the date of the IPO consisted of 15,906,236 shares.

Each share of outstanding Series A, Series A- 1, Series B, and Series C convertible preferred stock was convertible into one share of common stock at the option of the holder, subject to certain anti-dilution adjustments.

Convertible Preferred Stock

As of December 31, 2023, the Company’s Series A, Series A- 1, Series B, and Series C convertible preferred stock were classified as temporary equity in the accompanying condensed balance sheet given that a majority of the Company’s board of director seats were held and/or voted upon by convertible preferred stockholders, and those convertible preferred stockholders could cause certain events to occur requiring redemption of the preferred stock that were outside of the Company’s control.

The Company did not adjust the carrying values of the convertible preferred stock to the respective liquidation preferences of such shares as the instruments were not currently redeemable and it was not probable that the instruments would become redeemable.

The authorized, issued, and outstanding shares of convertible preferred stock as of December 31, 2023 consisted of the following:

Shares Authorized

Shares Issued and Outstanding

Liquidation Preference

(in thousands)

$ 3,849 $ 6,711

1,429,286 1,423,119 11,179

3,362,377 3,346,607 32,034

10,362,324 9,349,906 140,249

16,940,594 15,906,236 $ 193,462

Stockholders ’ Equity (Deficit)

The Company has two classes of common stock:

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Class A common stock has one vote per share and Class B common stock has no votes per share.

As of September 30, 2024 , of the authorized 200,000,000 shares of Class A common stock, 19,006,904 shares of Class A common stock were issued and outstanding, and of the authorized 20,000,000 shares of Class B common stock, 6,729,172 shares of Class B common stock were issued and outstanding.

Voting, dividend, and liquidation rights of the holders of the common stock were subject to, and qualified by, the rights, preferences and privileges of the holders of the convertible preferred stock.

The holders of the common stock are entitled to one vote for each share of common stock held at all meetings of stockholders.

As of March 31, 2025 , of the authorized 200,000,000 shares of Class A common stock, 19,142,377 shares of Class A common stock were issued and outstanding, and of the authorized 20,000,000 shares of Class B common stock, 6,729,172 shares of Class B common stock were issued and outstanding.

Class A common stock reserved for future issuance consisted of the following:

September 30,

Convertible preferred stock

Common stock options granted and outstanding

5,107,770 4,045,500

Shares available for issuance under the 2024 Plan

Shares available for issuance under the 2012 Plan

Preferred stock warrant

Shares available for issuance under the 2024 Equity Incentive Plan

1,887,766 1,674,309

Common stock warrant

15,764 15,764

Common stock reserved under the 2024 Employee Stock Purchase Plan

520,549 262,004

Total common stock reserved for future issuance

7,531,849 5,997,577

There are no shares of Class B common stock reserved for future issuance as of September 30, 2024 and December 31, 2023.

There are no shares of Class B common stock reserved for future issuance as of March 31, 2025 and December 31, 2024.

Stock Options

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The number of shares initially reserved for issuance under the 2024 Plan was 2,700,000 .

As of September 30, 2024, there were 1,698,056 shares of the Company’s Class A common stock available for issuance under the 2024 Plan.

As of March 31, 2025 , there were 1,887,766 shares of the Company’s Class A common stock available for issuance under the 2024 Plan.

The aggregate number of shares reserved for issuance under the 2024 Plan will automatically increase on the first day of each fiscal year of the Company, commencing in 2025 and ending in (and including) 2034, by a number equal to the lesser of (a) 5 % of the aggregate shares of Class A common stock and Class B common stock issued and outstanding as of the last day of the prior fiscal year, or (b) a number of shares of Class A common stock determined by the Company's board of directors.

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The 2024 Plan will terminate automatically ten years after the date when the Company's board of directors adopted the 2024 Plan.

In March 2024, the Company's board of directors and its stockholders adopted and approved the 2024 Employee Stock Purchase Plan (the "2024 ESPP").

The 2024 ESPP became effective as of April 9, 2024.

The purpose of the 2024 ESPP is to provide eligible employees with an opportunity to increase their interest in the success of the Company by purchasing shares of Class A common stock from the Company on favorable terms and to pay for such purchases through payroll deductions or other approved contributions.

The new payroll deduction rate may be any whole percentage of the participant’s compensation, but not less than 1 % nor more than 15 %.

As of September 30, 2024, there were 280,000 shares of the Company’s common stock reserved and available for issuance under the 2024 ESPP.

The number of shares reserved for issuance under the 2024 ESPP will automatically increase on the first day of each fiscal year of the Company, commencing in 2025 and ending in (and including) 2044, by a number equal to the lesser of (i) 280,000 shares, (ii) 1 % of the aggregate shares of Class A common stock and Class B common stock issued and outstanding on the last day of the prior fiscal year, or (iii) a number of shares determined by the Company's board of directors.

The number of shares reserved under the 2024 ESPP will automatically be adjusted in the event of a stock split, stock dividend or a reverse stock split (including an adjustment to the per-purchase period share limit).

During the nine months ended September 30, 2024, there were no shares purchased under the 2024 ESPP and the recorded expense was not material.

Stock option activity under the 2024 Plan and 2012 Plan is as follows:

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Options cancelled and forfeited

( 2,474 ) 12.42 — —

Options expired

As of September 30, 2024

Balance at March 31, 2025

5,107,770 $ 9.91 7.82 $ 5,910

Options vested and expected to vest as of September 30, 2024

Options Vested and Expected to Vest as of March 31, 2025

5,107,770 $ 9.91 7.82 $ 5,910

Options exercisable as of September 30, 2024

Options Exercisable as of March 31, 2025

2,212,484 $ 5.78 5.86 $ 5,901

The aggregate intrinsic value of options exercised during the three months ended September 30, 2024 and 2023 was $ 0.2 million and $ 0.4 million, respectively, determined as of the date of exercise.

Options exercisable include options which are not vested but are available to be early exercised as of September 30, 2024 .

As of September 30, 2024, of the 2,123,241 options exercisable, 83,161 options are available to be early exercised.

The aggregate intrinsic value of options exercised during the three months ended March 31, 2025 and 2024 was $ 0.2 million and $ 0.3 million, respectively, determined as of the date of exercise.

Options exercisable include options which are not vested but are available to be early exercised.

As of March 31, 2025 , of the 2,212,484 options exercisable, 112 options are available to be early exercised.

As of December 31, 2024, of the 2,114,772 options exercisable, 35,794 options are available to be early exercised.

The Company estimated the fair value of stock options using the Black-Scholes valuation model.

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The fair value of stock options was estimated using the following weighted-average assumptions:

Three Months Ended September 30,

Nine Months Ended September 30,

Three Months Ended March 31,

Expected term (in years)

6.08 6.08 6.03 6.08

Expected volatility

112 % 95 % 110 % 94 %

Risk free interest rate

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Dividend yield

The weighted-average grant-date fair value per share of stock options granted during the three and nine months ended September 30, 2024 wa s $ 16.21 and $ 13.63 per share, respectively.

The Company recorded $ 1.4 million and $ 0.9 million in stock-based compensation in general and administrative and research and development, respectively, for the three months ended September 30, 2024.

The Company recorded $ 0.3 million and $ 0.2 million in stock-based compensation in general and administrative and research and development, respectively, for the three months ended September 30, 2023.

The Company recorded $ 2.6 million and $ 2.0 million in stock-based compensation in general and administrative and research and development, respectively, for the nine months ended September 30, 2024.

The Company recorded $ 0.8 million and $ 0.7 million in stock-based compensation in general and administrative and research and development, respectively, for the nine months ended September 30, 2023.

As of September 30, 2024, there was approximately $ 22.6 million of total unrecognized stock-based compensation related to nonvested stock-based compensation arrangements, which is expected to be recognized over a weighted-average period of approximately 3.1 years.

As of September 30, 2023, there was approximately $ 2.8 million of total unrecognized stock-based compensation related to nonvested stock-based compensation arrangements, which was expected to be recognized over a weighted-average period of approximately 0.9 years.

The Company’s interim income tax provision consists of U.S.

federal and state income taxes based on the estimated annual effective tax rate that the Company expects for the full year together with the tax effect of discrete items.

Each quarter the Company updates its estimate of the annual effective tax rate and records cumulative adjustments as necessary.

For the three and nine months ended September 30, 2024, the Company did not record a U.S.

federal or state income tax provision due to current and expected annual net operating losses for the year ended December 31, 2024.

As of September 30, 2023, the estimated annual effective tax rate for 2023, exclusive of discrete items, was approximatel y 1.96 % of proj ected pre-tax income.

The estimated annual tax expense consists of a provision for federal and state income taxes.

For the three months ended September 30, 2023, the Company recorded a tax benefit of $ 0.1 million.

For the nine months ended September 30, 2023, due to statutory limitations on the ability to utilize research and development credits and net operating losses to offset year to date taxable income, the Company recorded a tax expense of $ 0.6 million, on a pre-tax income of $ 31.1 million.

Under Section 382 and 383 of the Internal Revenue Code ("IRC"), if a corporation undergoes an ownership change (generally defined as a greater than 50% change in its equity ownership over a three -year period), the corporation’s ability to use its pre-change net operating loss carryforwards and other pre-change tax attributes to offset its post-change income may be limited.

The Company has completed an ownership change analysis pursuant to IRC Section 382 for the periods prior to February 9, 2021.

On July 13, 2012, April 29, 2018, March 15, 2019, and February 9, 2021, the Company experienced ownership changes.

Accordingly, the Company’s ability to utilize net operating loss and tax credit carryforwards attributable to periods prior to February 9, 2021, is subject to substantial limitations.

An ownership change analysis pursuant to IRC Section 382 has not been performed for the periods after February 9, 2021, and therefore additional ownership changes may have occurred which may limit the Company’s ability to use its pre-change net operating loss carryforwards and other pre-change tax attributes.

In assessing the realizability of deferred tax assets, the Company evaluates whether it is more likely than not that some portion or all of the deferred tax assets will be realized.

The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income in those periods in which temporary differences become deductible and/or net operating losses can be utilized.

The Company assesses all positive and negative evidence when determining the amount of the net deferred tax assets that are more likely than not to be realized.

This evidence includes, but is not limited to, prior earnings history, scheduled reversal of taxable temporary differences, tax planning strategies and projected future taxable income.

Significant weight is given to positive and negative evidence that is objectively verifiable.

Based on these factors, including cumulative losses in recent years, the Company continues to maintain a full valuation allowance against its net deferred tax assets as of September 30, 2024.

The weighted-average grant-date fair value per share of stock options granted during the three months ended March 31, 2025 and 2024 wa s $ 7.64 and $ 13.66 per share, respectively.

The Company recorded $ 1.5 million and $ 1.1 million in stock-based compensation in general and administrative and research and development, respectively, for the three months ended March 31, 2025 .

The Company recorded $ 0.4 million and $ 0.4 million in stock-based compensation in general and administrative and research and development, respectively, for the three months ended March 31, 2024.

As of March 31, 2025 , there was approximately $ 26.3 million of total unrecognized stock-based compensation related to nonvested stock-based compensation arrangements, which is expected to be recognized over a weighted-average period of approximately 3.1 years.

As of March 31, 2024, there was approximately $ 9.2 million of total unrecognized stock-based compensation related to nonvested stock-based compensation arrangements, which was expected to be recognized over a weighted-average period of approximately 1.3 years.

Employee Stock Purchase Plan

In March 2024, the Company's board of directors and its stockholders adopted and approved the 2024 Employee Stock Purchase Plan (the “2024 ESPP”).

The 2024 ESPP became effective as of April 9, 2024.

The new payroll deduction rate may be any whole percentage of the participant’s compensation, but not less than 1 % nor more than 15 %.

The number of shares initially reserved for issuance under the 2024 ESPP was 280,000 .

As of March 31, 2025 , there were 520,549 shares of the Company’s common stock reserved and available for issuance under the 2024 ESPP.

During the three months ended March 31, 2025 , there were no shares purchased under the 2024 ESPP and the recorded expense was not material.

License Agreement

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The remaining consideration consists of future contingent milestone-based payments and sales-based royalties.

As of September 30, 2024 , all variable consideration under the J&J License Agreement was fully constrained.

As of March 31, 2025 , all variable consideration under the J&J License Agreement was fully constrained.

In August 2023, the Company elected to conduct a Phase 2 trial using PIPE- 307 for patients with multiple sclerosis, which was considered a contract modification under the accounting guidance that added promised goods or services that are distinct at a price that is below the standalone selling price.

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Accordingly, the variable consideration allocated to the Phase 2 trial will be recognized as the study is completed using a cost-based measure of progress and when the amounts are no longer probable of a significant reversal.

As of September 30, 2024 , no amounts had been recognized related to the Phase 2 trial as no additional variable consideration has been received subsequent to the contract modification.

As of March 31, 2025 , no amounts had been recognized related to the Phase 2 trial as no additional variable consideration has been received subsequent to the contract modification.

Commitments and Contingencies

Operating Lease

The Company leases office and lab space in San Diego, California under a non-cancelable operating lease (“Science Center Drive Lease”).

The lease commenced in March 2018 and has a 5 -year initial term.

The lease includes a renewal option, which includes an option to renew for five additional years.

During 2021, the Company amended the lease to include additional space in the building with the right to use the new space beginning in October 2021, for an additional 3 years.

In October 2023, the Company executed a noncancelable operating lease for new premises to be used for office, research and development and laboratory purposes (“General Atomics Court Lease”), with the same landlord as the Science Center Drive Lease.

The General Atomics Court Lease commenced for accounting purposes in October 2024 when the Company took control of the premises and has a 5 -year initial term from the commencement date.

The General Atomics Court Lease has a five -year term with an option to extend for another three -year period subject to certain conditions, which the Company is not reasonably certain to exercise and therefore was not considered in determining the right-of-use (“ROU”) assets and lease liabilities balance.

As a result of the new lease, the Company received rent abatement from January to October 2024 on the Science Center Drive Lease.

This resulted in a modification of the Science Center Drive Lease and a remeasurement of the existing lease liability and the associated right-of-use asset in October 2023.

As a result, $ 0.6 million from the payments of the new lease were allocated to the Science Center Drive Lease, based on a relative standalone selling price analysis.

The Company’s operating lease ROU asset and the related lease liabilities are initially measured at the present value of future lease payments over the lease term.

Upon commencement of the new lease, in October 2024, the Company recorded an ROU asset and lease liability of approximately $ 5.6 million.

This includes the $ 0.6 million allocation, which led to a corresponding decrease in the ROU asset value for the new lease.

The lease agreement includes variable payments which are not included in the measurement of the ROU assets and lease liability.

Below is a summary of the Company’s operating lease right-of-use assets and lease liabilities (in thousands, except for years and %):

March 31, December 31,

Operating lease right-of-use assets $ 5,235 $ 5,467

Operating lease liability obligations, current $ 1,455 $ 1,452

Operating lease liability obligations, less current portion 4,547 4,807

Total lease liability obligations $ 6,002 $ 6,259

Weighted-average remaining lease term 4.5 4.4

Weighted-average discount rate 9.0 % 9.0 %

During the three months ended March 31, 2025 and 2024, the Company recognized $ 0.4 million and $ 0.3 million, respectively, in operating lease expenses, which are included in operating expenses in the Company's statements of operations and comprehensive loss.

Supplemental cash flow information related to operating leases are as follows (in thousands):

March 31, March 31 ,

Cash paid for amounts included in the measurement of lease liabilities $ 378 $ —

Future minimum lease payments for the Company’s operating lease liabilities as of March 31, 2025 are as follows (in thousands):

Total minimum lease payments 7,268

amount representing interest 1,266

Total lease liability obligations 6,002

Current portion of operating lease liabilities 1,455

Operating lease liabilities, net of current portion $ 4,547

From time to time, the Company may become involved in various legal proceedings and claims that arise in the ordinary course of our business activities.

As of March 31, 2025, the Company was not currently a party to any material legal proceedings.

Other Commitments

The Company has various manufacturing, clinical, research and other contracts with vendors in the conduct of the normal course of its business.

Such contracts are generally terminable with advanced written notice and payment for any products or services received by the Company through the effective time of termination and any non-cancelable and non-refundable obligations incurred by the vendor at the effective time of the termination.

In the case of terminating a clinical trial agreement at a particular site, the Company would also be obligated to provide continued support for appropriate medical procedures at that site until completion or termination.

Net Loss Per Share

The following table sets forth the computation of the basic and diluted net income (loss) per share (in thousands, except share and per share amounts):

Three Months Ended September 30,

Nine Months Ended September 30,

Numerator, basic:

Net income (loss)

Allocation of earnings to participating preferred stockholders

Net income (loss) applicable to common stockholders

Denominator, basic:

Weighted-average common shares issued

weighted-average unvested common stock issued upon early exercise of stock options

Weighted-average shares used to compute net income (loss) per common share, basic

Numerator, diluted:

Net income (loss) attributable to common stockholders

Change in fair value of warrant liability

Change in fair value of put option

Net income (loss) applicable to common stockholders

Denominator, diluted:

Weighted-average shares used to compute net income (loss) per common share, diluted

Common stock options

Unvested common stock issued upon early exercise of stock options

Preferred stock warrant (as converted to common stock)

Investor rights and obligations

Weighted-average shares used to compute net income (loss) per common share, diluted

Net income (loss) per share, basic

Net income (loss) per share, diluted

For the three and nine months ended September 30, 2024, net loss is attributable equally to each share of Class A common stock and Class B common stock and is determined based on the weighted-average number of the respective class of common stock outstanding.

The following table sets forth the computation of the basic and diluted net loss per share (in thousands, except share and per share amounts):

Three Months Ended March 31,

Net loss applicable to common stockholders

$ ( 15,990 ) $ ( 8,417 )

Weighted average shares used to compute net loss per common share, basic and diluted

25,868,935 2,369,067

Net loss per share:

Basic and diluted

$ ( 0.62 ) $ ( 3.55 )

For the three months ended March 31, 2025 , net loss is attributable equally to each share of Class A common stock and Class B common stock and is determined based on the weighted-average number of the respective class of common stock outstanding.

Weighted-average common shares include shares of the Company's Class A common stock and Class B common stock.

The basic and diluted net loss per share amounts are the same for Class A common stock and Class B common stock.

For the three and nine months ended September 30, 2023, there were no shares of Class B common stock outstanding.

The Company’s potentially dilutive securities, which include convertible preferred stock, common stock options, a common stock warrant, unvested common stock issued upon early exercise of stock options, common stock reserved under the 2024 ESPP, and a preferred stock warrant have been excluded from the computation of diluted net loss per share for the three and nine months ended September 30, 2024 and the three months ended September 30, 2023, as the effect would reduce the net loss per share.

The Company’s potentially dilutive securities, which include convertible preferred stock, common stock options, a preferred stock warrant, and a common stock warrant have been excluded from the computation of diluted net loss per share for the three months ended March 31, 2025 and 2024 , as the effect would reduce the net loss per share.

Therefore, the weighted-average number of shares of common stock outstanding used to calculate both basic and diluted net loss per share attributable to common stockholders is the same.

The following potentially dilutive securities have been excluded from the diluted per share calculation for the periods presented as they would be anti-dilutive:

Three Months Ended September 30,

Nine Months Ended September 30,

As of March 31,

Convertible preferred stock (as converted to common stock)

Common stock options

Common stock warrant

Unvested common stock issued upon early exercise of stock options

Common stock reserved under the 2024 ESPP

5,107,770 2,881,863

Preferred stock warrant (as converted to common stock)

Common stock warrant

Total potentially dilutive securities 5,123,534

Segment Reporting

The Company operates in one reportable segment, pioneering differentiated therapies for the treatment of NI&I indications with significant unmet need.

Our chief operating decision maker (“CODM”) is our President and Chief Executive Officer, Carmine Stengone.

The CODM uses operating expenses, as reported on our statements of operations and comprehensive loss.

The CODM makes decisions on resource allocation, assesses performance of the business, and monitors budget versus actual results of the Company as a whole using operating expenses.

Net loss is also a measure that is considered in monitoring budget versus actual results.

The CODM does not review assets in evaluating the results of the Company, and therefore, such information is not presented.

Significant segment expenses within net loss include research and development related to PIPE- 791, PIPE- 307, CTX- 343, discovery programs and unallocated internal costs, general and administrative and interest income.

The following table provides the operating financial results of our single reportable segment (in thousands):

Three Months Ended March 31,

Significant and other segment expenses

Research and development

PIPE-791 $ 5,554 $ 2,861

PIPE-307 2,615 2,075

CTX-343 1,378 312

Discovery programs 1,382 1,104

Unallocated internal costs 2,783 1,426

General and administrative 4,398 2,152

Interest income 2,250 1,636

Other segment items (1) ( 130 ) ( 123 )

Net loss $ ( 15,990 ) $ ( 8,417 )

______________________

Other segment items primarily include change in fair value of warrant liability and other expense, net.

Management ’ s Discussion and Analysis of Financial Condition and Results of Operations.

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our unaudited financial statements and related notes included in this Quarterly Report on Form 10-Q and the audited condensed financial statements and notes thereto as of and for the year ended December 31, 2023 and the related Management ’ s Discussion and Analysis of Financial Condition and Results of Operations, both of which are included in our final prospectus filed with the Securities and Exchange Commission ( “ SEC ” ) pursuant to Rule 424(b) under the Securities Act of 1933, as amended ( “ Securities Act ” ) on April 8, 2024 ( “ Prospectus ” ) that forms a part of our registration statement on Form S-1 (File No.

This Quarterly Report on Form 10-Q may contain “ forward-looking statements ” within the meaning of Section 27A of the Securities Act, and Section 21E of the Securities Exchange Act of 1934, as amended (the “ Exchange Act ” ).

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our unaudited condensed financial statements and related notes included in this Quarterly Report on Form 10-Q and our audited financial statements and related notes thereto as of and for the year ended December 31, 2024 and the related Management ’ s Discussion and Analysis of Financial Condition and Results of Operations, both of which are included in our Annual Report on Form 10-K for the year ended December 31, 2024, filed with the SEC on March 6, 2025.

This Quarterly Report on Form 10-Q may contain “ forward-looking statements ” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended (the “ Exchange Act ” ).

Such forward-looking statements, which represent our intent, belief, or current expectations, involve risks and uncertainties.

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We undertake no obligation to update these forward-looking statements to reflect events or circumstances after the date of this report or to reflect actual outcomes.

We are a clinical stage biopharmaceutical company focused on discovering and developing novel, oral small molecule therapies that target biological pathways associated with specific clinical impairments for the treatment of neuroscience, inflammation and immunology (“NI&I”) indications with high unmet need.

We have focused our efforts on developing selective compounds targeting challenging molecular pathways, and through these efforts, have built a portfolio of small molecule drug candidates.

Our wholly-owned lead asset, PIPE-791, is a novel, brain penetrant, small molecule inhibitor of lysophosphatidic acid 1 receptor (“LPA1R”) in development for idiopathic pulmonary fibrosis (“IPF”) and Progressive multiple sclerosis (“Progressive MS”).

LPA1R antagonism is a clinically validated mechanism, and we believe that our preclinical studies and Phase 1 healthy volunteer data support the continued development of PIPE-791 for both IPF and Progressive MS.

Specifically, based on its high bioavailability, low plasma protein binding, and long receptor residence time in our preclinical studies compared to the preclinical data of other LPA1R antagonists that we know are currently in development, we also believe PIPE-791 has the potential to be a differentiated LPA1R therapy.

We completed a Phase 1 clinical trial of PIPE-791 in healthy volunteers in support of clinical development in both IPF and Progressive MS.

In September 2024, we submitted a clinical trial application ("CTA") to the Medicines and Healthcare products Regulatory Agency ("MHRA") to commence a Phase 1b open-label trial of PIPE-791 to measure the relationship of pharmacokinetics to lung and brain receptor occupancy by positron emission tomography imaging ("PET").

This Phase 1b trial will inform dose selection for our planned future Phase 2 trials of PIPE-791 in IPF and Progressive MS.

Our second drug candidate, PIPE-307, is a novel, small molecule selective inhibitor of the muscarinic type 1 M1 receptor (“M1R”), in development for depression and relapse-remitting multiple sclerosis (“RRMS”).

M1R antagonism has been clinically validated in third-party trials in both depression and RRMS by scopolamine and clemastine, respectively.

We have completed two Phase 1 trials of PIPE-307 in healthy volunteers, and we are conducting a Phase 2 trial of PIPE-307, which we have named VISTA, for the potential treatment of RRMS.

To our knowledge, PIPE-307 is the most clinically advanced selective M1R antagonist in development.

We are developing PIPE-307 in collaboration with Johnson & Johnson ("J&J").

In addition, we are leveraging our drug discovery capabilities synergistically with our clinical portfolio.

In January 2024, we nominated and commenced preclinical studies for CTX-343, a peripherally-restricted (unable to cross the blood brain barrier) LPA1R antagonist.

We are a clinical-stage biopharmaceutical company pioneering differentiated therapies for the treatment of NI&I indications with significant unmet need.

We target biological pathways associated with specific clinical impairments that we believe, once modulated, will demonstrably alter the course of disease.

We have focused our efforts on developing selective compounds targeting challenging molecular pathways and have built a portfolio of small molecule drug candidates.

We believe our two clinical stage, internally-discovered drug candidates, PIPE-791 and PIPE-307, will have broad applicability across multiple NI&I indications.

We are developing PIPE-307 in collaboration with J&J.

Our wholly-owned lead asset, PIPE-791, is a novel, brain penetrant, small molecule inhibitor of the lysophosphatidic acid 1 receptor (“LPA1R”) in development for idiopathic pulmonary fibrosis (“IPF”), progressive multiple sclerosis (“PrMS”), and chronic pain.

LPA1R antagonism is a clinically validated mechanism in IPF, and we believe that our preclinical studies and Phase 1 healthy volunteer data support the development of PIPE-791 for IPF, as well as PrMS and chronic pain.

Specifically, based on its high bioavailability, low plasma protein binding, and long receptor residence time in our preclinical studies compared to the preclinical data of other LPA1R antagonists, we believe PIPE-791 has the potential to be a differentiated LPA1R therapy.

We have completed a Phase 1 clinical trial of PIPE-791 in healthy volunteers in support of clinical development in IPF, PrMS and chronic pain.

In December 2024, we commenced a Phase 1b open-label trial to measure the relationship of pharmacokinetics to lung and brain receptor occupancy by positron emission tomography (“PET”) imaging.

We expect the top-line data from this trial will be available in the second quarter of 2025.

This Phase 1b PET trial will inform dose selection for our planned Phase 2 trials of PIPE-791 in IPF and PrMS.

On March 4, 2025, we announced the initiation of patient dosing in an exploratory PIPE-791 Phase 1b, randomized, double-blind, placebo-controlled, crossover, chronic pain trial for the treatment of chronic pain associated with two separate indications, osteoarthritis and low back pain.

We expect to enroll approximately 40 patients at up to five sites in the U.S., and a treatment duration of 28 days.

We anticipate top-line data from this trial in early 2026.

Our second drug candidate, PIPE-307, is a novel, small molecule selective inhibitor of the muscarinic type 1 receptor (“M1R”), in development for depression and relapse-remitting multiple sclerosis (“RRMS”).

We have completed two Phase 1 trials of PIPE-307 in healthy volunteers.

In 2023, we initiated a Phase 2 VISTA trial of PIPE-307 for the potential treatment of RRMS.

In January 2025, we announced that we have fully enrolled our Phase 2 VISTA trial.

We expect the top-line data from this trial will be available in the second half of 2025.

In December 2024, J&J began recruiting an estimated 124 adult participants for a Phase 2 trial of PIPE-307/JNJ-89495120 for the potential treatment of major depressive disorder (“MDD”).

This trial is a randomized, double-blind, multicenter, placebo-controlled, proof-of-concept study to evaluate the efficacy, safety and tolerability of PIPE-307/JNJ-89495120 as monotherapy in adult participants with MDD.

We believe PIPE-307 is the most advanced selective M1R antagonist in clinical development.

In addition, we are leveraging our drug discovery capabilities to expand our clinical portfolio.

In January 2024, we nominated and commenced preclinical studies for CTX-343, a peripherally-restricted (unable to access the central nervous system) LPA1R antagonist.

In parallel, we are actively conducting preclinical and discovery-phase experiments targeting other NI&I indications where our internally-discovered molecules may have therapeutic potential.

We are currently focused on developing the following product candidates in our pipeline:

We expect our operating expenses to significantly increase as we continue to develop, conduct clinical trials, and seek regulatory approvals for our drug candidates, engage in other research and development activities to expand our pipeline of drug candidates, expand our operations and headcount, maintain and expand our intellectual property portfolio, and, if we obtain approval for one or more of our drug candidates, launch commercial activities.

We have a portfolio of novel and proprietary small molecule programs that we believe can modulate innate pathways to restore function in NI&I indications.

We retain worldwide rights to our LPA1R programs and discovery portfolio, and we have partnered with J&J for the development and potential commercialization efforts of PIPE-307.

We expect our operating expenses to significantly increase as we continue to develop, conduct clinical trials, and seek regulatory approvals for our drug candidates, engage in other research and development activities to expand the indications for our existing drug candidates and develop a pipeline of additional drug candidates, expand our operations and headcount, maintain and expand our intellectual property portfolio, and, if we obtain approval for one or more of our drug candidates, launch commercial activities.

We also expect to incur additional operating expenses as we continue operating as a public company.

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Collaboration

In February 2023, we entered into the license agreement with J&J (the "J&J License Agreement"), pursuant to which we granted J&J an exclusive, worldwide license to develop, manufacture and commercialize PIPE-307 in all indications.

In February 2023, we entered into a license agreement with J&J (the “J&J License Agreement”), pursuant to which we granted J&J an exclusive, worldwide license to develop, manufacture and commercialize PIPE-307 in all indications.

J&J is generally responsible for all development, manufacturing and commercialization activities for PIPE-307.

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We are conducting, at our own expense, a Phase 2 clinical trial of PIPE-307 in patients with RRMS.

We completed enrollment of our Phase 2 clinical trial in December 2024, and expect the top-line data from this trial will be available in the second half of 2025.

J&J has the right to discontinue our clinical trial if it has good faith concerns that this trial presents safety risks or could have a material adverse effect on its development or commercialization of PIPE-307.

In addition, J&J has the right, in its sole discretion, to further develop or to elect not to develop PIPE-307 for this indication.

In December 2024, J&J began recruiting an estimated 124 adult participants for a Phase 2 trial of PIPE-307/JNJ-89495120 for the potential treatment of MDD.

The J&J License Agreement expires on a licensed product-by-product and country-by-country basis upon the last to occur of:

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We do not have any products approved for sale and we have not yet generated any revenue from product sales.

We did not recognize any revenue for the three months ended March 31, 2025 or 2024.

Operating Expenses

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expenses incurred in connection with research, laboratory consumables and preclinical studies;

expenses incurred in connection with conducting clinical trials, including investigator grants and site payments for time and pass-through expenses and expenses incurred under agreements with clinical research organizations ("CROs"), other vendors or central laboratories and service providers engaged to conduct our trials;

expenses incurred in connection with conducting clinical trials, including investigator grants and site payments for time and pass-through expenses and expenses incurred under agreements with contract research organizations (“CROs”), other vendors or central laboratories and service providers engaged to conduct our trials;

the cost of consultants engaged in research and development related services;

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Certain employee activities that cannot be allocated to any one specific project or management related activities are considered indirect costs.

The following table summarizes our research and development expenses for the three and nine months ended September 30, 2024 and 2023.

The following tables summarize our research and development expenses for the three months ended March 31, 2025 and 2024.

The direct external development program expenses reflect external costs attributable to our clinical development and preclinical programs and personnel costs that can be directly attributed to a development program.

The unallocated internal research and development costs include unallocated personnel costs, facility costs, stock-based compensation, laboratory consumables and discovery and research related activities.

Three Months Ended September 30,

Nine Months Ended September 30,

(in thousands)

Three Months Ended

(in thousands)

Direct external development program expense

Discovery programs

Unallocated internal research and development costs

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Interest income consists of interest earned on our cash, cash equivalents and marketable securities.

Interest Expense

Interest expense consists of (i) interest on our outstanding loan and security agreement (the "Loan Agreement") with First Citizens Bank ("First Citizens"), and (ii) amortization of our debt discount associated with the Loan Agreement recorded in connection with the fair value of the warrant issued to First Citizens, the debt issuance costs incurred and the obligation to make a final payment fee.

We repaid all of the outstanding principal on the Loan Agreement as of June 2023.

Results of Operations

Comparison of the Three Months Ended September 30, 2024 and 2023

Comparison of the Three Months Ended March 31, 2025 and 2024

The following table summarizes our results of operations (in thousands) for the periods indicated:

Three Months Ended September 30,

License revenue

Three Months Ended

Operating expenses:

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Interest income

Other expense, net

Total other income

Loss before income taxes

Benefit from income taxes

Research and development expenses .

Research and development expenses were $9.7 million and $6.5 million for the three months ended September 30, 2024 and 2023, respectively.

The increase of $3.2 million from period to period was primarily due to a $1.1 million increase in contract research organization costs primarily related to our ongoing VISTA Phase 2 clinical trial for PIPE-307 for the potential treatment of RRMS, a $1.5 million increase in expenses for toxicology studies primarily for PIPE-791, a $0.6 million increase in personnel-related expense, and a $0.7 million increase in stock-based compensation.

Partially offsetting these increases was a $0.7 million decrease in manufacturing expenses for PIPE-791.

General and administrative expenses .

General and administrative expenses were $3.3 million and $1.6 million for the three months ended September 30, 2024 and 2023, respectively.

The increase of $1.7 million was primarily due to a $0.2 million increase in consulting and legal expenses, a $1.1 million increase in stock-based compensation, and a $0.3 million increase in personnel-related expenses.

Interest income .

Interest income was $2.7 million and $1.7 million for the three months ended September 30, 2024 and 2023, respectively.

The increase of $1.0 million was due to an increase in funds invested in marketable securities and an increase in the yields earned on our marketable securities from the three months ended September 30, 2023 to the three months ended September 30, 2024.

Comparison of the Nine Months Ended September 30, 2024 and 2023

The following table summarizes our results of operations (in thousands) for the periods indicated:

Nine Months Ended September 30,

License revenue

Operating expenses:

Research and development

General and administrative

Total operating expenses

Income (loss) from operations

Other income (expense):

Interest income

Interest expense

Change in fair value of warrant liability

Change in fair value of investor rights and obligations liability

Other expense, net

Total other income

Income (loss) before income taxes

Provision for income taxes

Net income (loss)

License revenue .

There was no revenue recognized for the nine months ended September 30, 2024.

License revenues were $50.0 million for the nine months ended September 30, 2023 and was solely attributable to the upfront payment from J&J pursuant to the J&J License Agreement.

Total other income, net

Research and development expenses .

Research and development expenses were $25.4 million and $19.6 million for the nine months ended September 30, 2024 and 2023, respectively.

The increase of $5.8 million was primarily due to a $4.1 million increase in contract research organization costs primarily related to our ongoing VISTA Phase 2 clinical trial for PIPE-307 for the potential treatment of RRMS and our completed Phase 1 healthy volunteer clinical trial for PIPE-791, a $3.4 million increase in expenses for toxicology studies primarily for PIPE-791, a $1.7 million increase in personnel-related expense, and a $1.2 million increase in stock-based compensation.

Partially offsetting these increases was a $3.0 million decrease in consulting expense associated with contractual milestone payments related to the receipt of the upfront payment from the J&J License Agreement and a $2.4 million decrease in manufacturing expenses for PIPE-791.

Research and development expenses were $13.7 million and $7.8 million for the three months ended March 31, 2025 and 2024, respectively.

The increase of $5.9 million from period to period was due to the following:

$3.8 million increase in contract research organization costs primarily related to our ongoing VISTA Phase 2 clinical trial for PIPE-307 for the potential treatment of RRMS, Phase 1b trial for PIPE-791 for the treatment of chronic pain, and Phase 1b PET trial for PIPE-791,

$0.8 million increase in personnel-related expense related to an overall increase in personnel from period to period,

$0.7 million increase in non-cash stock-based compensation,

$0.3 million increase in facilities costs,

$0.2 million increase in biology and chemistry supplies, and

$0.1 million increase in expenses for toxicology studies primarily for PIPE-791.

General and administrative expenses .

General and administrative expenses were $8.4 million and $4.7 million for the nine months ended September 30, 2024 and 2023, respectively.

The increase of $3.8 million was primarily due to a $1.3 million increase in consulting and legal expenses, a $1.8 million increase in stock-based compensation, and a $0.5 million increase in personnel-related expenses.

General and administrative expenses were $4.4 million and $2.2 million for the three months ended March 31, 2025 and 2024, respectively.

The increase of $2.2 million was due to a $1.1 million increase in non-cash stock-based compensation, a $0.7 million increase in personnel-related expenses related to an overall increase in personnel from period to period, a $0.2 million increase in director and officer insurance associated with our recently completed IPO, and a $0.1 million increase in facilities costs.

Interest income .

Interest income was $6.4 million and $2.8 million for the nine months ended September 30, 2024 and 2023, respectively.

The increase of $3.6 million was due to an increase in funds invested in marketable securities and an increase in the yields earned on our marketable securities from the nine months ended September 30, 2023 to the nine months ended September 30, 2024.

Change in fair value of investor rights and obligations liability.

We recognized a $2.9 million gain related to the decrease in fair value of our investor rights and obligations liability for the nine months ended September 30, 2023 as a result of reducing the Series B convertible preferred stock premium liability to zero.

This was the result of the termination of certain rights due to the change in a specified limited partner’s status in May 2023.

Provision for income taxes .

For the nine months ended September 30, 2024, the Company did not record a U.S.

federal or state income tax provision due to forecasted pretax operating losses for the year ended December 31, 2024.

For the nine months ended September 30, 2023, the Company recorded a tax expense of $0.6 million on pretax income of $31.1 million.

Interest income was $2.3 million and $1.6 million for the three months ended March 31, 2025 and 2024, respectively.

The increase of $0.6 million was due to an increase in funds invested in marketable securities.

Liquidity and Capital Resources

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We also expect to incur additional costs associated with our operating as a public company, including significant legal, accounting, investor relations, director and officer insurance, and other expenses that we did not incur as a private company.

Through September 30, 2024, we have funded our operations primarily through the issuance of convertible promissory notes, the private placements of our convertible preferred stock, the J&J License Agreement, our Loan Agreement with First Citizens, and net proceeds from our initial public offering ("IPO").

Through September 30, 2024, we have raised gross proceeds of approximately $312.8 m illion from the issuance of our convertible preferred stock, promissory notes, our Class A common stock in the IPO, and have received an upfront payment from the J&J License Agreement of $50.0 million.

Upon the closing of the IPO, the Company’s outstanding convertible preferred stock automatically converted into Class A common stock or Class B common stock, as applicable.

In April 2024, we raised approximately $107.9 million in net proceeds from the IPO of our shares of Class A common stock.

As of September 30, 2024, we had an accumulated deficit of $102.8 million.

As of September 30, 2024, we had cash, cash equivalents and marketable securities of $213.9 million.

Management believes our existing cash, cash equivalents, and marketable securities will be sufficient to support our operations for at least 12 months from the date of this Quarterly Report on Form 10-Q.

Through March 31, 2025, we have funded our operations primarily through the issuance of convertible promissory notes, private placements of our convertible preferred stock, the J&J License Agreement, and net proceeds from the IPO.

Through March 31, 2025, we have raised gross proceeds of approximately $312.8 million from the issuance of our convertible preferred stock, promissory notes, and Class A common stock in our IPO.

In addition, we received an upfront payment from the J&J License Agreement of $50.0 million and borrowed $5.0 million at the inception of the loan and security agreement with First Citizens Bank.

Upon the closing of the IPO, our outstanding convertible preferred stock automatically converted into Class A common stock or Class B common stock, as applicable.

In April 2024, we raised approximately $107.9 million in net proceeds from the IPO.

As of March 31, 2025, we had an accumulated deficit of $133.4 million.

As of March 31, 2025, we had cash, cash equivalents and marketable securities of $190.7 million.

Based on our current operating plan, we believe that our existing cash and cash equivalents and short-term investments, will be sufficient to meet our anticipated operating expenses and capital expenditure requirements through at least the next 12 months, following the date of this Quarterly Report on Form 10-Q.

As we continue to pursue our business plan, we expect to finance our operations through both public and private sales of equity, debt financings or other commercial arrangements, which could include milestone payments from collaborations, strategic partnerships or marketing, distribution, licensing or other strategic arrangements with third parties.

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The following table sets forth a summary of our cash flows for the periods indicated (in thousands):

Nine Months Ended September 30,

Net cash provided by (used in) operating activities

Net cash used in investing activities

Net cash provided by financing activities

Three Months Ended

Net cash used in operating activities

Net cash provided by investing activities

Net cash provided by (used in) financing activities

Net increase in cash and cash equivalents

Operating Activities

Net cash used in operating activities was $22.6 million for the nine months ended September 30, 2024, which primarily related to our net loss of $27.7 million, partially offset by $2.6 million of non-cash charges for stock-based compensation, depreciation and amortization, accretion of premiums/discounts on investments, and non-cash operating lease expense and a $2.4 million change in operating assets and liabilities.

Net cash provided by operating activities was $30.1 million for the nine months ended September 30, 2023, which primarily related to our net income of $30.5 million and a $1.8 million change in operating assets and liabilities, partially offset by $2.2 million of non-cash charges such as accretion of debt discount and debt issuance costs, stock-based compensation, depreciation and amortization, accretion of premiums/discounts on investments, and non-cash operating lease expense.

Net cash used in operating activities was $14.4 million for the three months ended March 31, 2025, which related to our net loss of $16.0 million and a $1.1 million change in operating assets and liabilities, partially offset by $2.7 million of non-cash charges for stock-based compensation, depreciation and amortization, accretion of premiums/discounts on investments, and non-cash operating lease expense.

Net cash used in operating activities was $8.0 million for the three months ended March 31, 2024, which was due to our net loss of $8.4 million, partially offset by $0.1 million of non-cash charges such as stock-based compensation, depreciation and amortization, amortization of premiums/discounts on marketable securities and amortization of right-of-use assets and a $0.3 million change in operating assets and liabilities.

Investing Activities

Net cash used in investing activities was $60.4 million for the nine months ended September 30, 2024, which primarily related to $172.1 million of purchases of marketable securities and $0.3 million of purchases of property and equipment, partially offset by $112.0 million of sales and maturities of marketable securities.

Net cash used in investing activities was $74.6 million for the nine months ended September 30, 2023, which primarily related to $119.9 million of purchases of marketable securities and $0.1 million of purchases of property and equipment, partially offset by $45.4 million of sales and maturities of marketable securities.

Net cash provided by investing activities was $14.9 million for the three months ended March 31, 2025, which related to $48.7 million of sales and maturities of marketable securities, partially offset by $33.7 million of purchases of marketable securities.

Net cash provided by investing activities was $8.7 million for the three months ended March 31, 2024, which consisted of $39.5 million of sales and maturities of marketable securities, partially offset by $30.7 million of purchases of marketable securities and $0.1 million of purchases of property and equipment.

Financing Activities

Net cash provided by financing activities was $108.4 million for the nine months ended September 30, 2024, which primarily related to $107.9 mil lion of net proceeds from the issuance of common stock in the Company's IPO and $0.1 million of proceeds from the exercise of stock options.

Net cash provided by financing activities was $56.5 million for the nine months ended September 30, 2023, which primarily related to $60.1 million of net proceeds from the issuance of Series C convertible preferred stock and $0.1 million of proceeds from the exercise of stock options, partially offset by $3.8 million of principal payments on debt.

Net cash provided by financing activities was approximately $24,000 for the three months ended March 31, 2025, which related to proceeds from the exercise of stock options.

Net cash used in financing activities was approximately $18,000 for the three months ended March 31, 2024, which was primarily due to payment of deferred offering costs offset by proceeds from the exercise of stock options.

Funding Requirements

We expect our operating expenses to significantly increase as we continue to develop and seek regulatory approvals for our drug candidates, engage in other research and development activities to expand our pipeline of drug candidates, expand our operations and headcount, maintain and expand our intellectual property portfolio, and, if we obtain approval for one or more of our drug candidates, launch commercial activities.

However, our forecast of the period of time through which our financial resources will be adequate to support our operations is a forward-looking statement that involves risks and uncertainties, and our actual results could vary materially.

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Our contractual obligations and commitments relate to our operating leases that relate primarily to our leases of office and laboratory space in San Diego, California.

Our total contractual commitments for our lease agreements amount to approximately $7.8 million as of September 30, 2024.

Our total contractual commitments for our lease agreements amount to approximately $7.3 million as of March 31, 2025.

We enter into contracts in the normal course of business for contract research services, contract manufacturing services, professional services and other services and products for operating purposes.

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Critical Accounting Policies and Significant Judgments and Estimates

Our discussion and analysis of financial condition and results of operations are based upon our condensed financial statements, which have been prepared in accordance with U.S.

generally accepted accounting principles.

The preparation of these financial statements requires us to make significant estimates and judgments that affect the reported amounts of assets, liabilities, revenue and expenses and related disclosures.

On an ongoing basis, our actual results may differ significantly from our estimates.

There have been no material changes to our critical accounting estimates from those described under our “Management’s Discussion and Analysis of Financial Condition and Results of Operations – Critical Accounting Policies and Significant Judgements and Estimates” included in our Prospectus, except that from the effectiveness date of our registration statement on Form S-1 (File No.

333-278003), our common stock is publicly traded and we therefore no longer require common stock valuations.

Management’s discussion and analysis of our financial condition and results of operations are based on our financial statements, which have been prepared in accordance with U.S.

The preparation of these financial statements requires us to make estimates and judgments that affect the reported amounts of our assets, liabilities, revenue, and expenses and the disclosure of contingent assets and liabilities in our financial statements and accompanying notes.

On an ongoing basis, we evaluate our estimates and judgments, including those related to the accrual of research and development expenses;

the incremental borrowing rate used to recognize the right-of-use assets and lease liabilities, the fair value of common stock and convertible preferred stock;

and stock-based compensation We base our estimates and assumptions on historical experience, known trends and events, and various other factors that we believe are reasonable and appropriate under the circumstances, the results of which form the basis for making judgments about the carrying values of our assets and liabilities that are not readily apparent from other sources.

Our actual results may differ from these estimates under different assumptions or conditions.

There have been no material changes to our critical accounting estimates from those described under our “Management’s Discussion and Analysis of Financial Condition and Results of Operations – Critical Accounting Policies and Significant Judgements and Estimates” included in our Annual Report on Form 10-K for the year ended December 31, 2024.

Emerging growth company and smaller reporting company status

We are an “emerging growth company”, as defined in the Jumpstart Our Business Startups Act of 2012 (the "JOBS Act").

We are an “emerging growth company”, as defined in the JOBS Act.

Under the JOBS Act, emerging growth companies can delay adopting new or revised accounting standards issued subsequent to the enactment of the JOBS Act until such time as those standards apply to private companies.

We have elected to use this extended transition period for complying with new or revised accounting standards that have different effective dates for public and private companies until the earlier of the date we (i) are no longer an emerging growth company or (ii) affirmatively and irrevocably opt out of the extended transition period provided in the JOBS Act.

We will remain an emerging growth company until the earlier of (i) December 31, 2029, the last day of the fiscal year following the fifth anniversary of the completion of the Company's IPO, (ii) the last day of the fiscal year (a) in which we have total annual gross revenue of at least $1.235 billion or (b) in which we are deemed to be a large accelerated filer, which means the market value of our voting and non-voting common stock that is held by non-affiliates exceeds $700 million as of the prior June 30th, or (iii) the date on which we have issued more than $1.0 billion in non-convertible debt during the prior three-year period.

We will remain an emerging growth company until the earlier of (i) December 31, 2029, the last day of the fiscal year following the fifth anniversary of the completion of the IPO, (ii) the last day of the fiscal year (a) in which we have total annual gross revenue of at least $1.235 billion or (b) in which we are deemed to be a large accelerated filer, which means the market value of our voting and non-voting common stock that is held by non-affiliates exceeds $700 million as of the prior June 30th, or (iii) the date on which we have issued more than $1.0 billion in non-convertible debt during the prior three-year period.

As a result, our financial statements may not be comparable to companies that comply with new or revised accounting pronouncements as of public company effective dates.

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements