What changed in this filing

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Item 9A. Controls and Procedures

2025-08-14 compared with 2024-08-19 · 539 added, 405 removed, 671 unchanged (58% of the section changed)

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Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is accumulated and communicated to the Company’s management, including its principal executive and principal financial officers, as appropriate to allow timely decisions regarding required disclosure.

Management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving their objectives and management necessarily applies its judgment in evaluating the cost benefit relationship of possible controls and procedures.

Based on this evaluation as of December 31, 2023 and as disclosed in the Original Report, our management concluded that our disclosure controls and procedures were effective at the reasonable assurance level.

Subsequent to the Original Report, management, under the supervision of our principal executive officer and principal financial officer, re-evaluated the assessment of effectiveness of our disclosure controls and procedures in connection with the Restatement and material weakness identified in the course of preparing our unaudited condensed consolidated financial statements as of and for the three and six months ended June 30, 2024.

Management recognizes that any controls and procedures, no matter how well designed and operated, can provide only

reasonable assurance of achieving their objectives and management necessarily applies its judgment in evaluating the cost benefit relationship of possible controls and procedures.

Based on this evaluation as of December 31, 2024 and as disclosed in the Original Report, management concluded that our disclosure controls and procedures were effective at the reasonable assurance level.

Subsequent to the Original Report, management, under the supervision of our principal executive officer and principal financial officer, re-evaluated the assessment of effectiveness of our disclosure controls and procedures in connection with the restatement described herein and material weakness identified in the course of preparing our unaudited condensed consolidated financial statements as of and for the three and six months ended June 30, 2025.

Based upon that re-evaluation, management has concluded that our disclosure controls and procedures were not effective, at the reasonable assurance level, as of December 31, 2024, in light of the material weakness identified in our internal control over financial reporting.

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At that time, our principal executive officer and principal financial officer had performed the foregoing assessment and concluded that our internal control over financial reporting was effective as of December 31, 2024.

In the course of preparing the Company’s unaudited consolidated financial statements as of and for the three and six months ended June 30, 2024, our management concluded that the Common Warrants and Subsequent Closing Warrants do not meet the conditions to be classified as equity instruments under ASC 815-40, “Derivatives and Hedging - Contracts in Entity’s Own Equity,” and must instead be recorded as liabilities on the Company’s consolidated balance sheet at their fair value and remeasured at fair value for each subsequent reporting period.

In light of this determination, on August 13, 2024, management and the audit committee of our Board of Directors together concluded that our previously issued (i) audited consolidated financial statements as of and for the fiscal year ended December 31, 2023 included in the Original Report and (ii) unaudited condensed consolidated financial statements as of and for (a) the three months ended March 31, 2024 included in our Quarterly Report on Form 10-Q filed with the SEC on May 15, 2024, (b) the

three and nine months ended September 30, 2023 included in our Quarterly Report on Form 10-Q filed with the SEC on November 9, 2023 and (c) the three and six months ended June 30, 2023 included in our Quarterly Report on Form 10-Q filed with the SEC on August 10, 2023 (together, the “Impacted Reports”) were each materially misstated.

In the course of preparing the Company’s unaudited consolidated financial statements as of and for the three and six months ended June 30, 2025, our management concluded that the Series X and Series X 1 non-voting convertible preferred stock, $0.001 par value (“Preferred Stock”) should be treated as a separate class of common stock for purposes of calculating earnings per share in accordance with ASC 260-10, “Earnings Per Share” and the Company must instead present earnings per share under the two-class method.

Additionally, our management concluded that the Preferred Stock does not meet the criteria for permanent equity classification and must be classified as temporary equity under ASC 480-10-S99-3A.

As a result, our management, including our principal executive officer and principal financial officer, determined that there existed a material weakness in our internal control over financial reporting related to our accounting for equity instruments for the periods covered by each of the Impacted Reports.

A material weakness is a deficiency, or a combination of deficiencies, in the internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of our annual or interim consolidated financial statements will not be prevented or detected in a timely basis.

Specifically, our management determined that we did not maintain effective controls to timely identify and account for complex derivative type financial instruments.

Specifically, our management determined that we did not maintain effective controls to timely identify and account for equity instruments with complex terms, including certain provisions within our Preferred Stock.

This material weakness resulted in the material misstatement of each of the Impacted Reports and, if not remediated, could result in further material misstatements to our annual or interim consolidated financial statements that would not be prevented or detected.

Due to this material weakness, our management re-assessed the effectiveness of the Company’s internal control over financial reporting and concluded that our internal control over financial reporting was not effective as of December 31, 2024.

As a non-accelerated filer, we are not required to provide an attestation report on our internal control over financial reporting issued by the Company’s independent registered public accounting firm.

Remediation of Material Weakness

Management has implemented remediation steps to address the material weakness described above and to improve our internal control over financial reporting.

While we have processes to properly identify and evaluate the appropriate accounting technical pronouncements and other literature for all significant or unusual transactions, we are improving these processes to ensure that the nuances of such transactions are effectively evaluated in the context of the increasingly complex accounting standards.

Specifically, we plan to increase our access to accounting literature and research materials, and to consult with more third-party professionals regarding complex accounting matters than we have done previously.

In the fourth quarter of 2024, we enhanced our processes to strengthen the identification and evaluation of complex accounting matters, including engaging with independent technical accounting experts to advise and review complex financial matters, ensuring appropriate technical analysis, documentation, and

oversight prior to the preparation of our financial statements, hiring of internal financial expertise within the corporate accounting department, and strengthening financial disclosure and technical guidance resources.

However, the enhanced controls were not applied to equity instruments issued in prior periods, including the Preferred Stock at issue.

As a result, the classification error was not identified until a subsequent review.

Management is in the process of refining these processes to ensure that previously issued instruments are periodically reassessed in the context of evolving technical guidance and accounting interpretations.

Completed Remediation of Prior Year’s Material Weakness

In the course of preparing our unaudited condensed consolidated financial statements as of and for the three and six months ended June 30, 2024, our management concluded that the Common Warrants and Subsequent Closing Warrants do not meet the conditions to be classified as equity instruments under ASC 815-40, “Derivatives and Hedging - Contracts in Entity’s Own Equity,” and must instead be recorded as liabilities on our consolidated balance sheet at their fair value and remeasured at fair value for each subsequent reporting period.

In light of this determination, on August 13, 2024, management and the Audit Committee of our Board together concluded that our previously issued (i) audited consolidated financial statements as of and for the year ended December 31, 2023 included in our Annual Report on Form 10-K filed with the SEC on March 28, 2024 and (ii) unaudited condensed consolidated financial statements as of and for (a) the three months ended March 31, 2024 included in our Quarterly Report on Form 10-Q filed with the SEC on May 15, 2024, (b) the three and nine months ended September 30, 2023 included in our Quarterly Report on Form 10-Q filed with the SEC on November 9, 2023 and (c) the three and six months ended June 30, 2023 included in our Quarterly Report on Form 10-Q filed with the SEC on August 10, 2023 (together, the “Prior Year’s Impacted Reports”) were each materially misstated.

As a result, our management, including our principal executive officer and principal financial officer, determined that there existed a material weakness (the “Prior Year’s Material Weakness”) identified in our internal control over financial reporting related to our accounting for equity instruments for the periods covered by each of the Prior Year’s Impacted Reports.

Specifically, our management determined that we did not maintain effective controls to timely identify and account for complex derivative type financial instruments.

The Prior Year’s Material Weakness resulted in the material misstatement of each of the Prior Year’s Impacted Reports.

As previously disclosed, in August 2024, the Company immediately implemented a plan to address and remediate the Prior Year’s Material Weakness described above and to improve our internal control over financial reporting.

As part of the remediation plan, management identified and implemented a number of actions including, but not limited to, the following actions:

• Engaged with independent technical accounting experts to advise and review complex financial matters, ensuring appropriate technical analysis, documentation, and oversight prior to the preparation of our financial statements.

• Hiring of internal financial expertise within the corporate accounting department.

• Implemented an accounting standards compliance framework to ensure timely adoption and assessment of evolving accounting standards.

• Strengthened financial disclosure and technical guidance resources.

During the fourth quarter of the year ended December 31, 2024, we completed the testing necessary to conclude that the Prior Year’s Material Weakness had been remediated.

However, as discussed above under “Management’s Report on Internal Control Over Financial Reporting” , in the course of preparing the Company’s unaudited condensed consolidated financial statements as of and for the three and six months ended June 30, 2025, the Company concluded that it had incorrectly classified the Preferred Stock, issued in prior periods, as permanent equity in the consolidated balance sheets.

Management will continue to implement the remediation plan described above under “Remediation of Material Weakness” , with a focus on evaluating previously issued financial instruments and any unusual or complex transactions, to ensure they are appropriately assessed in light of current technical guidance and accounting interpretations.

Changes in Internal Control over Financial Reporting

There have been no changes in our internal control over financial reporting (as defined in Rules 13a-15(f) or 15d-15(f) of the Exchange Act) during the quarter ended December 31, 2023, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

In the course of preparing the Company’s consolidated financial statements as of and for the three and six months ended June 30, 2024, the Company identified the material weakness described above and, in response, our management has implemented the remediation steps described above.

Other than as described above, there have been no changes in our internal control over financial reporting (as defined in Rules 13a-15(f) or 15d-15(f) of the Exchange Act) during the quarter ended December 31, 2024, that have materially

affected, or are reasonably likely to materially affect, our internal control over financial reporting.

In the course of preparing the Company’s consolidated financial statements as of and for the three and six months ended June 30, 2025, the Company identified the material weakness described above and, in response, our management is implementing the remediation steps described above.

Other Information.

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Directors, Executive Off icers and Corporate Governance.

The information required by this Item 10 is included under the corresponding item number of Amendment No.

1 on Form 10-K/A as filed with the Securities and Exchange Commission on April 26, 2024 and is hereby incorporated by reference.

Executiv e Compensation.

The information required by this Item 11 is included under the corresponding item number of Amendment No.

1 on Form 10-K/A as filed with the Securities and Exchange Commission on April 26, 2024 and is hereby incorporated by reference.

Security Ownership of Certain Beneficial Own ers and Management and Related Stockholder Matters.

The information required by this Item 12 is included under the corresponding item number of Amendment No.

1 on Form 10-K/A as filed with the Securities and Exchange Commission on April 26, 2024 and is hereby incorporated by reference.

The information required by this Item 10 is incorporated herein by reference to information in our proxy statement for our 2025 Annual Meeting of Stockholders (the “2025 Proxy Statement”), which we filed with the SEC on April 29, 2025, including under headings “Proposal 1:

Election of Class II Directors,” “Executive Officers,” “Corporate Governance—Director Nomination Process,” “Corporate Governance— Committees of the Board” and “Corporate Governance—Insider Trading Policy and Procedures.”

We have adopted a written code of business conduct and ethics that applies to our directors, officers and employees, including our principal executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions.

A copy of the code is available on the Corporate Governance section of our website, which is located at http://ir.eledon.com/corporate-governance/governance-overview .

We intend to disclose on our website any amendments to, or waivers from, the code of business conduct and ethics that are required to be disclosed pursuant to the disclosure requirements of Item 5.05 of Form 8-K within four business days following the date of the amendment or waiver.

Executive Compensation.

The information required by this Item 11 is incorporated herein by reference to information in our 2025 Proxy Statement, including under headings “Executive Compensation,” and “Director Compensation”.

Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.

The information required by this Item 12 is incorporated herein by reference to information in our 2025 Proxy Statement, including under headings “Stock Ownership and Reporting—Security Ownership of Certain Beneficial Owners and Management” and “Securities Authorized for Issuance Under Equity Compensation Plans”.

Certain Relationships and Related Transactions, and Director Independence.

The information required by this Item 13 is included under the corresponding item number of Amendment No.

1 on Form 10-K/A as filed with the Securities and Exchange Commission on April 26, 2024 and is hereby incorporated by reference.

The information required by this Item 13 is incorporated herein by reference to information in our 2025 Proxy Statement, including under headings “Corporate Governance—Policies and Procedures for Related Person Transactions,” “Corporate Governance,” and “Corporate Governance—Committees of the Board.”.

Principal Accountant Fees and Services.

The information required by this Item 14 is included under the corresponding item number of Amendment No.

1 on Form 10-K/A as filed with the Securities and Exchange Commission on April 26, 2024 and is hereby incorporated by reference.

The information required by this Item 14 is incorporated herein by reference to information in our 2025 Proxy Statement, including under headings “Proposal 4:

Ratification of the Appointment of Independent Registered Public Accounting Firm”.

Exhibits, Financi al Statement Schedules.

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(1) Financial Statements:

The Report of Independent Registered Public Accounting Firm, our consolidated financial statements and accompanying notes are set forth beginning on page F-1 immediately following the signature page of this Amendment No.2 on Form 10-K.

1 on Form 10-K.

(2) Financial Statement Schedules:

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(3) Exhibits:

Exhibit Description

Incorporated by Reference

Exhibit Description

Original Report

Agreement and Plan of Merger, dated September 14, 2020, by and among Novus Therapeutics, Inc., Nautilus Merger Sub 1, Inc., Nautilus Merger Sub 2, LLC and Anelixis Therapeutics, Inc.

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(effecting, among other things a change in the corporation’s name to “Novus Therapeutics, Inc.”), filed with the Secretary of the State of Delaware on May 9, 2017

Certificate of Amendment to the Restated Certificate of

Certificate of Amendment to the Restated Certificate of Incorporation of Novus Therapeutics, Inc., (effecting, among other things a reverse stock-split) effective as of October 5, 2020

October 6, 2020

Incorporation of Novus Therapeutics, Inc., (effecting, among other things a reverse stock-split) effective as of October 5, 2020

Certificate of Amendment to the Restated Certificate of Incorporation of Novus Therapeutics, Inc., (effecting, among other things a change in the corporation’s name to “Eledon Pharmaceuticals, Inc.”) effective as of January 5, 2021

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Form of Tranche A Warrant to Purchase Common Stock or Pre-Funded Warrants

Open Market Sales Agreement by and between the Registrant and Jefferies, LLC dated March 30, 2021

March 31, 2021

Form of Pre-Funded Warrant to Purchase Common Stock

October 30, 2024

Open Market Sales Agreement by and between the Registrant and Guggenheim Securities, LLC dated September 20, 2024

September 20, 2024

Securities Purchase Agreement, dated April 28, 2023

Registration Rights Agreement, dated April 28, 2023

Securities Purchase Agreement, dated May 6, 2024

Registration Rights Agreement, dated May 6, 2024

Form of Indemnification Agreement to be entered into with each of the directors and officers of Eledon

September 21, 2023

Lease Agreement, dated as of September 2, 2015, by and between The Irvine Company LLC and Otic Pharma, Inc.

August 9, 2017

First Amendment to Lease Agreement, dated April 19, 2018, by and between The Irvine Company LLC and Novus Therapeutics, Inc.

August 7, 2018

Second Amendment to Lease Agreement, dated May 3, 2021, by and between Newport Gateway Office LLC and Eledon Pharmaceuticals, Inc.

March 24, 2022

Sublease Agreement, dated as of November 4, 2021, by and between Corporate Technologies, Inc.

and Eledon Pharmaceuticals, Inc.

March 24, 2022

Fourth Amendment to Lease Agreement, dated March 12, 2024, by and between Newport Gateway Office LLC and Eledon Pharmaceuticals, Inc.

Lease Agreement, dated September 4, 2024, by and between Blanchard Group LLC and Eledon Pharmaceuticals, Inc.

Tokai Pharmaceuticals, Inc.

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Letter Agreement, dated April 27, 2023

David-Alexandre Gros, M.D.

Letter Agreement, dated December 16, 2024

Executive Employment Agreement, dated March 15, 2021, between Eledon Pharmaceuticals, Inc.

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2020 Long Term Incentive Plan, as amended

June 22, 2023

July 10, 2024

Performance Stock Option Agreement, dated February 1, 2022, between Eledon Pharmaceuticals, Inc.

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and each of David-Alexandre C.

Gros, M.D., Steve Perrin, Ph D.

and Paul Little

Gros, M.D., Steve Perrin, Ph D., Bryan Smith and Paul Little

March 28, 2024

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and David-Alexandre C.

Gros, M.D., Steve Perrin, Ph D.

and Paul Little

Gros, M.D., Steve Perrin, Ph D., Bryan Smith and Paul Little

March 28, 2024

Form of Amendment to Stock Option Agreement, dated June 13, 2024, between Eledon Pharmaceuticals, Inc.

and David-Alexandre C.

Gros, M.D., Steve Perrin, Ph D., Bryan Smith and Paul Little

Form of Amendment to Stock Option Agreement, dated November 20, 2024, between Eledon Pharmaceuticals, Inc.

and David-Alexandre C.

Gros, M.D., Steve Perrin, Ph D., Bryan Smith and Paul Little

Eledon Pharmaceuticals, Inc.

Insider Trading Policy

Subsidiaries of the Registrant

March 17, 2020

Consent of KMJ Corbin & Company LLP, independent

registered public accounting firm

Certification of Principal Executive Officer Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

Certification of Principal Financial Officer Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

Consent of Crowe LLP, independent registered public accounting firm

Consent of KMJ Corbin & Company LLP, independent registered public accounting firm

Certification of Principal Executive Officer Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

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Certification of Principal Executive Officer Pursuant to 18 U.S.C.

Section 1350, as Adopted Pursuant to

Section 906 of the Sarbanes-Oxley Act of 2002

Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

Certification of Principal Financial Officer Pursuant to 18 U.S.C.

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Incentive Compensation Recoupment Policy

March 28, 2024

INLINE XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document

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These certifications are not deemed filed by the SEC and are not to be incorporated by reference in any filing we make under the Securities Act of 1933 or the Securities Exchange Act of 1934, irrespective of any general incorporation language in any filings.

Filed with Amendment No.

Form 10-K Summary.

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August 14, 2025

/s/ Walter Ogier

August 19, 2024

/s/ June Lee, M.D.

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INDEX TO CONSOLIDATED FINANC IAL STATEMENTS

Report of Independent Registered Public Accounting Firm (Crowe LLP PCAOB ID#:

Report of Independent Registered Public Accounting Firm (KMJ Corbin & Company LLP PCAOB ID#:

Consolidated Balance Sheets as of December 31, 2023 (As Restated) and 2022

Consolidated Statements of Operations and Comprehensive Loss for the Years Ended December 31, 2023 (As Restated) and 2022

Consolidated Statements of Stockholders’ Equity for the Years Ended December 31, 2023 (As Restated) and 2022

Consolidated Statements of Cash Flows for the Years Ended December 31, 2023 (As Restated) and 2022

Notes to Consolidated Financial Statements

Consolidated Balance Sheets as of December 31, 2024 and 2023 (As Restated)

Consolidated Statements of Operations and Comprehensive Loss for the Years Ended December 31, 2024 and 2023 (As Restated)

Consolidated Statements of Convertible Preferred Stock and Stockholders’ Equity (Deficit) for the Years Ended December 31, 2024 and 2023 (As Restated)

Consolidated Statements of Cash Flows for the Years Ended December 31, 2024 and 2023

Notes to Consolidated Financial Statements (As Restated)

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

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Eledon Pharmaceuticals, Inc.

Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheet of Eledon Pharmaceuticals, Inc.

(the "Company") as of December 31, 2024, and the related consolidated statements of operations and comprehensive loss, convertible preferred stock and stockholders’ equity (deficit), and cash flows for the year ended December 31, 2024, and the related notes (collectively referred to as the "financial statements").

In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2024, and the results of its operations and its cash flows for the year then ended, in conformity with accounting principles generally accepted in the United States of America.

Explanatory Paragraph – Restatement

As discussed in Note 12 to the financial statements, the 2024 financial statements have been restated to correct a misstatement.

Basis for Opinion

These financial statements are the responsibility of the Company's management.

Our responsibility is to express an opinion on the Company's financial statements based on our audit.

We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) ("PCAOB") and are required to be independent with respect to the Company in accordance with the U.S.

federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audit in accordance with the standards of the PCAOB.

Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud.

The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting.

As part of our audit we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting.

Accordingly, we express no such opinion.

Our audit included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks.

Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements.

Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements.

We believe that our audit provides a reasonable basis for our opinion.

Critical Audit Matter

The critical audit matter communicated below is a matter arising from the current period audit of the financial statements that was communicated or required to be communicated to the audit committee and that:

(1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments.

The communication of the critical audit matter does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

Classification and Valuation of Pre-Funded Warrants

As described in Note 2, Summary of Significant Accounting Policies, and Note 8, Stockholder’s Equity, to the consolidated financial statements, the Company accounts for issued pre-funded warrants either as a liability or equity in accordance with ASC 815-40, Derivatives and Hedging - Contracts in Entity’s Own Equity.

Liability-classified warrants are measured at fair value on the issuance date and at the end of each reporting period with any change in the fair value of the warrants recorded in the consolidated statements of operations and comprehensive loss as a gain or loss.

The Common Warrants and the Subsequent Closing Warrants (as defined in Note 8) issued in the 2023 Private Placement are liability classified and recorded at fair value

using the Black-Scholes option-pricing model at issuance, with any subsequent changes in fair value recognized in the consolidated statements of operations.

Determining the proper classification of pre-funded warrants as either a derivative liability or as equity instruments requires significant management judgment in assessing the specific terms and conditions.

The valuation of the derivative liability for liability classified pre-funded warrants also requires management judgment in determining the fair value.

The classification and valuation of warrants was determined to be a critical audit matter because of the complexity and significant judgment involved in determining the accounting for the pre-funded warrants and the significant audit effort, including the use of specialists, in assessing management’s conclusions and inputs to its calculation of fair value.

Our audit procedures to evaluate the classification and fair market value of the pre-funded warrants included:

• Obtaining and inspecting the securities purchase agreements to evaluate the contractual terms of the pre-funded warrants.

• Evaluating management's technical accounting analysis on the classification of the pre-funded warrants.

• Consulting with specialists on the classification and valuation of the pre-funded warrants.

• Developing an independent expectation of the valuation of the liability-classified warrants to compare to management’s valuation.

/s/ Crowe LLP

We have served as the Company's auditor since 2024.

Los Angeles, CA

March 20, 2025, Except for Note 12, as to which the date is August 14, 2025

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Stockholders of

Eledon Pharmaceuticals, Inc.

Opinion on the Consolidated Financial Statements

We have audited the accompanying consolidated balance sheets of Eledon Pharmaceuticals, Inc.

(the “Company”) as of December 31, 2023 and 2022, the related consolidated statements of operations and comprehensive loss, stockholders’ equity and cash flows for the each of the two years in the period ended December 31, 2023, and the related notes (collectively referred to as the “consolidated financial statements”).

In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2023 and 2022, and the results of its operations and its cash flows for each of the two years in the period ended December 31, 2023, in conformity with accounting principles generally accepted in the United States of America.

Going Concern

The accompanying consolidated financial statements have been prepared assuming the Company will continue as a going concern.

As discussed in Note 2 to the consolidated financial statements, the Company has incurred recurring operating losses and expects to continue to incur net losses into the foreseeable future.

In addition, the Company has an accumulated deficit of $319.4 million as of December 31, 2023 and is dependent on its ability to raise capital.

These matters raise substantial doubt about the Company’s ability to continue as a going concern.

Management’s plans in regard to these matters are also described in Note 2.

The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.

We have audited the accompanying consolidated balance sheet of Eledon Pharmaceuticals, Inc.

(the “Company”) as of December 31, 2023, the related consolidated statements of operations and comprehensive loss, convertible stock and stockholders’ equity (deficit) and cash flows for the year then ended, and the related notes (collectively referred to as the “consolidated financial statements”).

In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2023, and the results of its operations and its cash flows for the year then ended, in conformity with accounting principles generally accepted in the United States of America.

Basis for Opinion

These consolidated financial statements are the responsibility of the Company’s management.

Our responsibility is to express an opinion on these consolidated financial statements based on our audits.

Our responsibility is to express an opinion on these consolidated financial statements based on our audit.

We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Company in accordance with the U.S.

federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB.

We conducted our audit in accordance with the standards of the PCAOB.

Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud.

The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting.

As part of our audits, we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting.

As part of our audit, we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting.

Accordingly, we express no such opinion.

Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks.

Our audit included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks.

Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements.

Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements.

We believe that our audits provide a reasonable basis for our opinion.

Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements.

We believe that our audit provides a reasonable basis for our opinion.

Restatement of 2023 Consolidated Financial Statements

As discussed in Note 12 to the consolidated financial statements, the 2023 consolidated financial statements have been restated to correct certain misstatements.

Critical Audit Matter

The critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial statements that was communicated or required to be communicated to the audit committee and that:

(1) relates to accounts or disclosures that are material to the consolidated financial statements and (2) involved our especially challenging, subjective, or complex judgments.

The communication of the critical audit matter does not alter in any way our opinion on the consolidated

financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

In-Process Research and Development Intangible Asset Impairment Assessment

Critical Audit Matter Description

As described in Note 3 to the consolidated financial statements, the in-process research and development (“IPR&D”) intangible asset is tested for impairment at least annually and more frequently when indicators of impairment exist.

Management considers various factors for potential impairment, including the current legal and regulatory environment and the competitive landscape.

Certain indicators of impairment could relate to adverse clinical trials, a decrease in the projected market size, changes in anticipated pricing of the product once approved or increases in cost factors, among others.

Management performed a qualitative assessment as of December 31, 2023, in which it assessed significant factors, including those mentioned above, to determine whether it is more likely than not that the IPR&D intangible asset was impaired.

Based on the qualitative assessment, management determined that it was not more likely than not the IPR&D intangible asset was impaired.

Auditing management’s impairment test for the IPR&D intangible asset was complex and required a high degree of auditor judgment when performing procedures due to the significant assumptions used in determining if it was more likely than not that the IPR&D intangible asset was impaired.

Significant judgments made by management were related to:

(i) cost factors such as increases in materials, labor and other costs;

(ii) regulatory factors affecting the Company’s product development;

(iii) industry and market considerations;

and (iii) macroeconomic conditions, including the Company’s ability to access capital to continue product development.

How the Critical Audit Matter Was Addressed in the Audit

Our audit procedures to evaluate the significant judgments made by management described above included, among others, comparing to observable industry data and external market data, evaluating the most relevant drivers of fair value used to record the IPR&D intangible asset when initially acquired and the impact of those drivers since the IPR&D asset was acquired through December 31, 2023, and determining if the available information corroborated or contradicted management’s conclusions.

/s/ KMJ Corbin & Company LLP

We have served as the Company's auditor since 2019.

Irvine, California

March 28, 2024, except for the effects of the Restatement disclosed in Note 13, as to which the date is August 19, 2024

We served as the Company's auditor from 2019 to 2024.

Glendora, California

March 28, 2024 (except for previously disclosed adjustments to 2023, as to which the date is August 19, 2024, Note 10, as to which the date is March 20, 2025, and Note 12, as to which the date is August 14, 2025)

ELEDON PHARMACEUTICALS, INC.

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Total current assets

Operating lease asset, net

Operating lease right-of-use asset, net

In-process research and development

LIABILITIES AND STOCKHOLDERS’ EQUITY

LIABILITIES, CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS’ EQUITY (DEFICIT)

Current liabilities:

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Commitments and contingencies (Note 6)

Stockholders’ equity:

Preferred stock, $ 0.001 par value, 5,000,000 shares authorized at December 31,

2023 and 2022:

Series X 1 non-voting convertible preferred stock, $ 0.001 par value, 515,000

shares designated;

110,086 and 117,970 shares issued and outstanding at

December 31, 2023 and 2022, respectively

Series X non-voting convertible preferred stock, $ 0.001 par value, 10,000

shares designated;

4,422 and 6,204 shares issued and outstanding at

December 31, 2023 and 2022, respectively

Common stock, $ 0.001 par value, 200,000,000 shares authorized at

December 31, 2023 and 2022;

24,213,130 and 13,776,788 shares issued

and outstanding at December 31, 2023 and 2022, respectively

Convertible preferred stock, 5,000,000 shares authorized at December 31, 2024 and 2023:

Series X 1 non-voting convertible preferred stock, $ 0.001 par value, 515,000 shares designated;

110,086 shares issued and outstanding at December 31, 2024 and 2023

Series X non-voting convertible preferred stock, $ 0.001 par value, 10,000 shares designated;

4,422 shares issued and outstanding at December 31, 2024 and 2023

Stockholders’ equity (deficit):

Common stock, $ 0.001 par value, 200,000,000 shares authorized at December 31, 2024 and 2023;

59,789,275 and 24,213,130 shares issued and outstanding at December 31, 2024 and 2023, respectively

Additional paid-in capital

Accumulated other comprehensive income

Accumulated deficit

Total stockholders’ equity

Total liabilities and stockholders’ equity

Total stockholders’ equity (deficit)

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

See accompanying notes to consolidated financial statements.

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(In thousands, except share and per share data)

(As Restated)

Operating expenses

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General and administrative

Goodwill impairment

Total operating expenses

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Change in fair value of warrant liabilities and fair value of financial instruments issued in excess of proceeds

Loss before income taxes

Provision for income taxes

Net loss and comprehensive loss

Net loss per share, basic and diluted

Basic and diluted earnings per share of common stock (As Restated)

Weighted-average common shares outstanding, basic and diluted

Basic and diluted earnings per share of Series X and Series X 1 non-voting convertible preferred stock (As Restated)

Weighted-average shares outstanding of Series X and Series X 1 non-voting convertible preferred stock, basic and diluted (As Restated)

See accompanying notes to consolidated financial statements.

ELEDON PHARMACEUTICALS, INC.

CONSOLIDATED STATEMENTS OF ST OCKHOLDERS’ EQUITY

CONSOLIDATED STATEMENTS OF CONVERTIBLE STOCK AND ST OCKHOLDERS’ EQUITY (DEFICIT)

(In thousands, except share data)

Convertible Preferred Stock

Stockholders' Equity (Deficit)

Series X 1 Non-Voting Convertible

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Series X Non-Voting Convertible Preferred Stock

Accumulated Other Comprehensive

Total Stockholders'

Balance as of December 31, 2021

Cancellation of common stock in connection with exchange for X 1 non-voting convertible preferred stock

Issuance of common stock in connection with vesting of restricted stock units

Stock-based compensation

Net loss and comprehensive loss

Balance as of December 31, 2022

Issuance of common stock and pre-funded warrants in connection with Securities Purchase Agreement, net of issuance costs

Equity (Deficit)

Balance as of December 31, 2022 (As Restated)

Issuance of common stock and pre-funded warrants in connection with the 2023 Securities Purchase Agreement, net of issuance costs

Issuance of common stock in connection with conversion of X non-voting convertible preferred stock

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Stock-based compensation

Net loss and comprehensive loss (as restated)

Net loss and comprehensive loss

Balance as of December 31, 2023 (As Restated)

Issuance of common stock and pre-funded warrants in connection with the 2024 Securities Purchase Agreement, net of issuance costs

Issuance of common stock with the completion of the Second Closing and Third Closing in connection with 2023 Securities Purchase Agreement, net of issuance costs

Issuance of common stock in connection with exercise of pre-funded warrants

Issuance of common stock and pre-funded warrants in connection with 2024 Underwritten Offering, net of issuance costs.

Stock Option Exercise

Share based compensation

Accumulated other comprehensive loss

Balance as of December 31, 2024 (As Restated)

See accompanying notes to consolidated financial statements.

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(In thousands)

(As Restated)

Cash flows used in operating activities:

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

Amortization of operating lease asset

Accretion on investment discounts

Goodwill impairment

Gain on lease termination

Amortization of operating lease right-of-use asset

Accretion of investment discounts

Stock-based compensation

Change in fair value of warrant liabilities and fair value of financial instruments issued in excess of proceeds

Deferred tax provision

Changes in operating assets and liabilities:

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Proceeds from issuances of common stock and pre-funded warrants, net

Proceeds from exercise of stock options

Net cash provided by financing activities

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Common stock exchanged for X and X 1 non-voting convertible preferred stock

Increase in operating lease asset and liability due to lease modification

Unrealized gain on available-for-sale securities

Increase in operating right-of-use lease asset and liability due to new lease

Settlement of warrant liability into common stock due to exercise

See accompanying notes to consolidated financial statements.

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Eledon Pharmaceuticals, Inc.

is a clinical stage biotechnology company using its immunology expertise in targeting the CD40 Ligand (“CD40L” or “CD154”) pathway to develop therapies to protect transplanted organs and prevent rejection, and to treat amyotrophic lateral sclerosis (“ALS”).

is a clinical stage biotechnology company using its immunology expertise in targeting the CD40 Ligand (“CD40L”) pathway to develop therapies to protect transplanted organs and prevent rejection, and to treat amyotrophic lateral sclerosis (“ALS”).

The Company’s lead compound in development is tegoprubart, an IgG1, anti-CD40L antibody with high affinity for the CD40 Ligand, a well-validated biological target that we believe has broad therapeutic potential.

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The Company maintains its corporate headquarters in Irvine, California and has research and development facilities in Burlington, Massachusetts.

Restatement of Previously Consolidated Issued Financial Statements

In the course of preparing the Company’s Condensed Consolidated Financial Statements as of and for the three and six months ended June 30, 2024, the Company determined that the Common Warrants and the Subsequent Closing Warrants (See Note 10) do not meet the conditions to be classified as equity instruments under ASC 815-40, “Derivatives and Hedging — Contracts in Entity’s Own Equity,” (“ASC 815-40”) and must instead be recorded as liabilities on the Company’s consolidated balance sheet at their fair value and remeasured at fair value for each subsequent reporting period.

As a result, the Company determined that a correction was necessary with respect to the Company’s reporting and recording of the fair value of the Common Warrants and the Subsequent Closing Warrants.

Restatement of Previously Issued Consolidated Financial Statements

In the course of preparing the Company’s Condensed Consolidated Financial Statements as of and for the three and six months ended June 30, 2025, the Company reassessed the rights and preferences of its Series X and Series X 1 non-voting convertible preferred stock, $ 0.001 par value (“Preferred Stock”), and concluded that, because they are substantially identical to those of its common stock, $ 0.001 par value, the Preferred Stock should be treated as a separate class of common stock for purposes of calculating earnings per share in accordance with Accounting Standards Codification (“ASC”) 260-10, “Earnings Per Share.” As a result, the Company determined that it should have presented earnings per share under the two-class method in prior reporting periods.

Additionally, in connection with this reassessment, the Company concluded that it had incorrectly classified the Preferred Stock as permanent equity in the consolidated balance sheets.

The Preferred Stock includes a provision that, upon the occurrence of a fundamental transaction (which includes a third-party tender or exchange offer) in which more than 50 percent of the common stockholders receive cash or other assets, the holders of Preferred Stock, upon any subsequent conversion, are entitled to receive the same form of consideration, even if they did not participate in the original transaction.

Because this feature may result in settlement in cash or other non-equity consideration upon an event outside the Company’s control, the Preferred Stock does not meet the criteria for permanent equity classification and is instead classified as temporary equity under ASC 480-10-S99-3A.

Although a tender offer is not considered probable as of the current reporting date and redemption is not deemed probable, the existence of this provision requires classification as temporary equity.

The Preferred Stock is not subsequently remeasured to its redemption value because redemption is not considered probable.

Certain consolidated financial statements and financial information are presented herein as restated.

See Note 13 for further information.

Going Concern and Management’s Plans (As Restated)

The accompanying consolidated financial statements have been prepared under the assumption the Company will continue to operate as a going concern, which contemplates the realization of assets and the settlement of liabilities in the normal course of business.

The consolidated financial statements do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or the amounts of liabilities that may result from uncertainty related to the Company’s ability to continue as a going concern.

The Company had a net loss of $ 116.5 million for the year ended December 31, 2023 and an accumulated deficit of $ 319.4 million as of December 31, 2023, as a result of incurring losses since our inception.

Due to continuing research and development activities, the Company expects to continue to incur net losses into the foreseeable future.

The Company expects to continue to incur net losses into the foreseeable future in connection with its ongoing activities, particularly as the Company expands its clinical program with tegoprubart, continues the research and development of, and seeks marketing approval for, its product candidates.

In addition, if the Company obtains marketing approval for any of its product candidates, the Company expects to incur significant commercialization expenses related to product sales, marketing, manufacturing and distribution.

The Company has financed operations primarily by net proceeds from the sale of preferred and common stock and warrants.

On April 28, 2023, the Company entered into a Securities Purchase Agreement (the “Securities Purchase Agreement”) with certain institutional and accredited investors (the “Purchasers”), pursuant to which the Company agreed to issue and sell to the Purchasers in a private placement (the “Private Placement”) shares of common stock and warrants in a series of three potential closings.

On May 5, 2023, the initial closing occurred and the Company received $ 35.0 million, in exchange for 8,730,168 shares of common stock, pre-funded warrants to purchase 6,421,350 shares of common stock and additional common stock warrants to purchase 15,151,518 shares of common stock (or pre-funded warrants in lieu thereof).

The Company may receive up to an additional $ 105.0 million in tranche financing in a second and a third closing, subject to achieving specified clinical development milestones and volume weighted average share price levels and trading volume conditions, and an additional $ 45.5 million assuming the exercise of all common stock warrants issued in the initial closing of the Private Placement.

“Stockholders’ Equity” for further information regarding the Private Placement.

Due to the contingent nature of the exercise of the common stock warrants and the second and third closings of the Private Placement, accounting principles generally accepted in the United States of America (“GAAP”) requires the Company to

exclude them from its going concern analysis.

If these events do not occur or the Company is unable to secure additional capital or is unable to do so on acceptable terms, it will be forced to significantly alter its business strategy, substantially curtail its current operations, or liquidate and cease operations altogether.

As of December 31, 2023, the Company had cash and cash equivalents and short-term investments of approximately $ 51.1 million.

Additionally, in view of the Company’s expectation to incur significant losses for the foreseeable future, the Company will be required to raise additional capital resources in order to fund its operations, although the availability of, and the Company’s access to, such resources is not assured.

Accordingly, management believes that there is substantial doubt regarding the Company’s ability to continue operating as a going concern through at least the next twelve months from the date of this filing.

See Note 12 Restatement of Previously Issued Consolidated Financial Statements for further information.

Summary of Significant Accounting Policies

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The preparation of the Company’s consolidated financial statements in conformity with GAAP requires management to make informed estimates and assumptions that affect the reported amounts of assets, liabilities and expenses and the disclosure of contingent assets and liabilities in the Company’s consolidated financial statements and accompanying notes.

The most significant estimates in the Company’s consolidated financial statements relate to stock-based compensation expense, warrant liabilities, the fair value of right-of-use assets and liabilities, accruals for liabilities, impairment of long-lived assets, and other matters that affect the consolidated financial statements and related disclosures.

The most significant estimates in the Company’s consolidated financial statements relate to stock-based compensation expense, warrant liabilities, the fair value of right-of-use (“ROU”) assets and liabilities, accruals for liabilities, impairment of long-lived assets, and other matters that affect the consolidated financial statements and related disclosures.

Management bases its estimates on historical experience and on various other market-specific and relevant assumptions that management believes to be reasonable under the circumstances.

Actual results could differ materially from those estimates under different assumptions or conditions and the differences may be material to the consolidated financial statements.

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The Company's facilities and equipment, including those of the Company's suppliers and vendors, may be affected by natural or man-made disasters.

The Company's administrative office is based in Irvine, California and the Company manages all its research and development activities through third parties that are located throughout the world.

The Company's administrative office is based in Irvine, California and the Company manages

all its research and development activities through third parties that are located throughout the world.

The Company has taken precautions to safeguard its facilities, equipment and systems, including insurance, health and safety protocols, and off-site storage of computer data.

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Operating segments under GAAP are defined as components of an enterprise about which separate financial information is available that is evaluated regularly by the Chief Operating Decision Maker (“CODM”), or decision-making group, in deciding how to allocate resources and in assessing performance.

The CODM is the Company’s Chief Executive Officer and the Company has determined that it operates in one business segment, which is the development of products for therapeutic medicines selectively targeting critical pathways associated with the underlying molecular pathogenesis for patients with severe inflammation and autoimmune diseases.

Goodwill represents the difference between the consideration transferred and the fair value of the net assets acquired under the acquisition method of accounting.

Goodwill is not amortized but is evaluated for impairment as of December 31 of each year or if indicators of impairment exist that would, more likely than not, reduce the fair value from its carrying amount.

The Company performs its goodwill impairment analysis at the reporting unit level, which aligns with the Company’s reporting structure and availability of discrete financial information.

The Company performs its annual impairment analysis by either comparing the reporting unit’s estimated fair value to its carrying amount or doing a qualitative assessment of a reporting unit’s fair value from the last quantitative assessment to determine if there is potential impairment.

The Company may do a qualitative assessment when the results of the previous quantitative test indicated the reporting unit’s estimated fair value was significantly in excess of the carrying value of its net assets and it does not believe there have been significant changes in the reporting unit’s operations that would significantly decrease its estimated fair value or significantly increase its net assets.

If a quantitative assessment is performed, the evaluation includes management estimates of cash flow projections based on internal future projections and/or use of a market approach by looking at market values of comparable companies.

Key assumptions for these projections include revenue growth, future gross and operating margin growth, and its weighted cost of capital and terminal growth rates.

The revenue and margin growth is based on increased sales of new products as the Company maintains investments in research and development.

Additional assumed value creators may include increased efficiencies from capital spending.

The resulting cash flows are discounted using a weighted average cost of capital.

Operating mechanisms and requirements to ensure that growth and efficiency assumptions will ultimately be realized are also considered in the evaluation, including timing and probability of regulatory approvals for Company products to be commercialized.

The Company’s market capitalization is also considered as a part of its analysis.

The Company’s annual evaluation for impairment of goodwill consists of one reporting unit.

In accordance with the Company’s policy, the Company completed its annual evaluation for impairment using the quantitative assessment, utilizing the market approach and due to declining market conditions, determined that the fair value of the reporting unit was below its carrying value.

As a result, the Company recognized $ 48.6 million of goodwill impairment, reducing the goodwill balance to

zero for the year ended December 31, 2022, and accordingly, no goodwill impairment was recorded for the year ended December 31, 2023.

The CODM is the Company’s Chief Executive Officer and the Company has determined that it operates in one business segment, which is the development of tegoprubart, to develop therapies to protect transplanted organs and prevent rejection, and to treat ALS.

Long-Lived Assets

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In-Process Research and Development

The fair values of in-process research and development (“IPR&D”) projects acquired in a business combination that are not complete are capitalized and accounted for as indefinite-lived intangible assets until completion or abandonment of the related research and development (“R&D”) efforts.

Upon successful completion of the project, the capitalized amount is amortized over its estimated useful life.

If a project is abandoned, all remaining capitalized amounts are written off immediately.

Major risks and uncertainties are often associated with IPR&D projects because we are required to obtain regulatory approvals before marketing the resulting products.

Such approvals require completing clinical trials that demonstrate a product candidate is safe and effective.

Consequently, the eventual realized value of the acquired IPR&D project may vary from its fair value at the date of acquisition, and IPR&D impairment charges may occur in future periods.

Capitalized IPR&D projects are tested for impairment annually and whenever events or changes in circumstances indicate that the carrying amount may not be recoverable.

We consider various factors for potential impairment, including the current legal and regulatory environment and the competitive landscape.

Adverse clinical trial results, significant delays in obtaining marketing approval, the inability to bring a product to market and the introduction or advancement of competitors’ products could result in partial or full impairment of the related intangible assets.

Amounts allocated to in-process research and development (“IPR&D”) in connection with a business combination are recorded at fair value and are considered indefinite-lived intangible assets until completion or abandonment of the associated research and development efforts.

If and when development is complete, which generally occurs when regulatory approval to market a product is obtained, the associated assets are deemed finite-lived and amortized over a period that best reflects the economic benefits provided by these assets.

During the period the assets are considered indefinite-lived, they will not be amortized but will be tested annually for impairment or more frequently if indicators of impairment exist.

The Company first assesses qualitative factors to determine whether it is more likely than not that the fair value of the IPR&D is less than its carrying amount as a basis for determining whether it is necessary to perform a quantitative assessment.

If, after assessing qualitative factors, the Company determines it is not more likely than not that the fair value is less than its carrying amount, then a quantitative assessment is unnecessary.

If the quantitative assessment is deemed necessary, the excess of the carrying value over fair value will be recorded as an impairment.

The qualitative assessment focuses on the key inputs, assumptions and rationale utilized in the establishment of the carrying value and related changes since the last quantitative assessment.

Based on the results of the Company’s annual qualitative assessment, the Company concluded that it is not more likely than not that IPR&D was impaired for any of the periods presented.

Research and Development Expenses

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Non-refundable advance payments under agreements are capitalized and expensed as the related goods are delivered or services are performed.

The Company’s contracts with third parties to perform various clinical trial activities in the on-going development of potential products.

The Company contracts with third parties to perform various clinical trial activities in the on-going development of potential products.

The financial terms of these agreements are subject to negotiation, vary from contract to contract and may result in uneven payment flows to its vendors.

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Net Loss Per Share (As Restated)

Basic and diluted net loss per share are calculated using the two-class method in accordance with ASC Topic 260, Earnings Per Share.

The two-class method allocates undistributed losses to the Company’s outstanding common stock, and the Preferred Stock, based on each class’s proportionate share of the total weighted-average shares outstanding.

Since the Company has never declared dividends, net loss and undistributed losses are equivalent.

Basic net loss per common share is calculated by dividing the net loss attributable to common stockholders by the weighted-average number of common shares outstanding during the period, without consideration for potentially dilutive securities.

Diluted net loss per share is computed by dividing the net loss attributable to common stockholders by the weighted-average number of common shares and potentially dilutive securities outstanding for the period determined using the treasury-stock and if-converted methods.

The process is used for both common stock and Preferred Stock.

As the rights and preferences of the Preferred Stock are substantially identical to each other, they are considered a single class of common stock for earnings per share purposes.

For purposes of the diluted net loss per share calculation, incentive stock options, restricted stock units and warrants are considered to be potentially dilutive securities and are excluded from the calculation of diluted net loss per share because their effect would be anti-dilutive.

Therefore, basic and diluted net loss per share was the same for the periods presented due to the Company’s net loss position.

Basic weighted average shares outstanding for the years ended December 31, 2023 and 2022 include 5,776,270 and 509,117 , respectively, shares underlying pre-funded warrants to purchase common shares.

Basic weighted average shares outstanding for the years ended December 31, 2024 and 2023 includ e 12,443,755 and 5,776,270 , respectively, shares underlying pre-funded warrants to purchase common shares.

As the shares underlying these pre-funded warrants can be issued for little consideration (an exercise price per share equal to $ 0.001 per share), these shares are deemed to be issued for purposes of basic earnings per share.

(In thousands, except share and per share data)

The calculation of basic and diluted earnings per share for our common stock and Preferred Stock is as follows:

(As Restated)

Net loss per share, basic and diluted

Weighted-average number of common shares

(In thousands, except share and per share data)

Weighted-average common shares outstanding, basic and diluted

Weighted-average shares outstanding of Series X and Series X 1 non-voting convertible preferred stock, basic and diluted

Net loss used in the calculation of basic and diluted loss per share

Net loss available to common stock

Net loss per share, common stock, basic and diluted

Net loss available to Series X and Series X 1 non-voting convertible preferred stock

Basic and diluted earnings per share of Series X and Series X 1 non-voting convertible preferred stock

The computation of diluted earnings per share excludes incentive stock options, restricted stock units, and warrants that are anti-dilutive.

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The first step is to evaluate the tax position for recognition by determining if the weight of available evidence indicates that it is more likely than not that the position will be sustained on audit, including resolution of related appeals or processes, if any.

The second step is to measure the tax benefit as the largest amount that is more than 50 % likely of being realized upon settlement.

The second step is to measure the tax benefit as the largest amount that is

more than 50 % likely of being realized upon settlement.

While the Company believes it has appropriate support for the positions taken on its tax returns, the Company regularly assesses the potential outcomes of examinations by tax authorities in determining the adequacy of its provision for income taxes.

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For additional information, see Note 7.

Income Taxes.

Income Taxes of the Notes to Financial Statements.

Warrant Liabilities

The Company accounts for issued warrants either as a liability or equity in accordance with ASC 815-40 Derivatives and Hedging - Contracts in Entity’s Own Equity (“ASC 815-40”).

Under ASC 815-40, contracts that may require settlement for cash are liabilities, regardless of the probability of the occurrence of the triggering event.

Liability-classified warrants are measured at fair value on the issuance date and at the end of each reporting period.

Any change in the fair value of the warrants after the issuance date is recorded in the consolidated statements of operations and comprehensive loss as a gain or loss.

If warrants do not require liability classification under ASC 815-40, in order to conclude warrants should be classified as equity, the Company assesses whether the warrants are indexed to its common stock and whether the warrants are classified as equity under ASC 815-40 or other applicable GAAP standard.

Equity-classified warrants are accounted for at fair value on the issuance date with no changes in fair value recognized after the issuance date.

Recent Adopted Accounting Pronouncements

In November 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No.

2023-07, Segment Reporting (Topic 280):

Improvements to Reportable Segment Disclosures.

This update requires public entities to disclose information about their reportable segments’ significant expenses and other segment items on an interim and annual basis.

Public entities with a single reportable segment are required to apply the disclosure requirements in ASU 2023-07, as well as all existing segment disclosures and reconciliation requirements in ASC 280, on an interim and annual basis.

ASU 2023-07 is effective for fiscal years beginning after December 15, 2023 and for interim periods beginning after December 15, 2024, with early adoptions permitted.

The Company adopted ASU 2023-07, effective December 31, 2024 , in these consolidated financial statements.

ASU 2023-07 only impacted the disclosures and did no t impact the consolidated financial statements.

See Note 10, Segment Reporting , for disclosures related to the adoption of ASU 2023-07.

Recent Accounting Pronouncements Issued But Not Adopted

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In November 2024, the FASB issued ASU No.

2023-07, Segment Reporting (Topic 280):

Improvements to Reportable Segment Disclosures.

This update requires public entities to disclose information about their reportable segments’ significant expenses and other segment items on an interim and annual basis.

ASU 2023-07 is effective for fiscal years beginning after December 15, 2023 and for interim periods beginning after December 15, 2024, with early adoptions permitted.

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

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

Disaggregation of Income Statement Expenses, which requires new financial statement disclosures in tabular format, in the notes to financial statements, of specified information about certain costs and expenses.

The amendments in this update do not change or remove current expense disclosure requirements.

The amendments in this update are effective for fiscal years beginning after December 15, 2026, and interim periods within fiscal years beginning after December 15, 2027.

Early adoption is permitted.

The Company is currently evaluating the impact of the new standard on its financial statement disclosures.

Other recent accounting pronouncements issued by the FASB (including its Emerging Issues Task Force), the American Institute of Certified Public Accountants, and the SEC did not, or are not believed by management to, have a material impact on the Company’s present or future financial position, results of operations or cash flows.

Warrant Liabilities (As Restated)

The Company accounts for issued warrants either as a liability or equity in accordance with ASC 815-40.

Under ASC 815-40, contracts that may require settlement for cash are liabilities, regardless of the probability of the occurrence of the triggering event.

Liability-classified warrants are measured at fair value on the issuance date and at the end of each reporting period.

Any change in the fair value of the warrants after the issuance date is recorded in the consolidated statements of operations and comprehensive loss as a gain or loss.

Equity-classified warrants are accounted for at fair value on the issuance date with no changes in fair value recognized after the issuance date.

Short-Term Investments

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government agency securities.

The Company has classified these investments as available-for-sale securities, as the sale of such investments may be required prior to maturity to implement management strategies, and therefore has classified all investments with maturity dates beyond three months at the date of purchase as current assets in the accompanying unaudited condensed consolidated balance sheets.

investments with maturity dates beyond three months at the date of purchase as current assets in the accompanying consolidated balance sheets.

Any premium or discount arising at purchase is amortized and/or accreted to interest income as an adjustment to yield using the straight-line method over the life of the instrument.

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Unrealized gains and losses are included in accumulated other comprehensive loss as a component of stockholders' equity until realized.

The following is a summary of short-term investments, which were classified as available-for-sale securities as of December 31, 2023:

The following is a summary of short-term investments, which were classified as available-for-sale securities as of December 31, 2024 and 2023:

December 31, 2024

Amortized Cost

Unrealized Gains

Unrealized Losses

government securities

Total short-term investments

December 31, 2023

Amortized Cost

Unrealized Gains

Unrealized Losses

government securities

government agency securities

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All of the Company's available-for-sale securities have a stated maturity of less than one year.

The Company did no t hold any short-term investments as of December 31, 2022 .

Fair Value Measurements (As Restated)

Fair Value Measurements

Financial assets and liabilities are recorded at fair value.

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Total cash equivalents

Short-term investments:

government securities

government agency securities

Total short-term investments

Total financial assets

Warrant Liabilities

The following table summarizes the Company's warrant liabilities (see Note 10) measured at fair value on a recurring basis as of December 31, 2023 (in thousands) and was based on significant inputs not observable in the market, which represents a Level 3 measurement within the fair value hierarchy.

The following table summarizes the Company's warrant liabilities (see Note 8.

Stockholders' Equity ) measured at fair value on a recurring basis as of December 31, 2024 and 2023 (in thousands) and was based on significant inputs not observable in the market, which represents a Level 3 measurement within the fair value hierarchy.

December 31, 2024

Warrant liabilities

December 31, 2023

Warrant liabilities

The following table provides a roll-forward of the aggregate fair value of the warrant liabilities categorized with Level 3 inputs (in thousands):

Warrant Liability

Balance as of December 31, 2023

Issuance of warrants

Change in fair value of warrant liabilities

Change in fair value of warrant liabilities and fair value of financial instruments issued in excess of proceeds

Settlement of warrant liability

Balance as of December 31, 2024

The issuance of warrants and the change in fair value of warrant liabilities of $ 104.5 million and ($ 28.3 ) million, respectively, netting to $ 76.2 million, were recorded in the consolidated statement of operations and comprehensive loss as change in fair value of warrant liabilities and fair value of financial instruments issued in excess of proceeds for the year ended December 31, 2023.

The change in fair value of warrant liabilities and fair value of financial instruments issued in excess of proceeds includes the reversal of $ 59.1 million in warrant liabilities associated with the Subsequent Closing Warrants (as defined in Note 8.

Stockholders' Equity ), which expired and or settled as of year ended December 31, 2024 .

Prepaid Expenses, Other Assets, Accrued Expenses and Other Liabilities

Prepaid expenses and other current assets consisted of the following as of December 31, 2024 and 2023 (in thousands):

Prepaid insurance

Prepaid clinical

Prepaid insurance

Prepaid other

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Accrued expenses and other liabilities consisted of the following as of December 31, 2024 and 2023 (in thousands):

Accrued compensation and related expenses

Accrued clinical

Accrued compensation and related expenses

Accrued professional services

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Total accrued expenses and other liabilities

In 2022, the Company determined that the sustained decrease in our market capitalization constituted an indicator of impairment and as a result, a quantitative goodwill impairment test, utilizing the market approach, determined that the fair value of the reporting unit was below its carrying value and the goodwill was fully impaired.

The Company recorded an impairment of $ 48.6 million for the year ended December 31, 2022 for the full write-down of the goodwill recorded as part of the acquisition of Anelixis.

No impairment was recorded for the year ended December 31, 2023.

Balance as of December 31, 2021

Balance as of December 31, 2022

Balance as of December 31, 2023

Commitments and Contingencies

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Total rent expense for all operating leases in the consolidated statements of operations and comprehensive loss was approximately $ 0.4 million for each of the years ended December 31, 2024 and 2023.

The Company has an operating lease for 5,197 square feet of office space in Irvine, California, that expires on December 31, 2024 , as amended.

On November 4, 2021, the Company entered into an operating lease for 6,138 square feet of office space in Burlington, Massachusetts, that expires on November 20, 2024 .

On April 19, 2024, the Company entered into a 38-month operating lease for 5,817 square feet of office space in Irvine, California, that expires on June 30, 2027 (the “Irvine Lease Agreement”).

On April 19, 2024, in conjunction with the Irvine Lease Agreement, the Company terminated an existing operating lease for 5,197 square feet of office space in Irvine, California, that was set to expire on December 31, 2024 .

On April 19, 2024, the effective date of the Irvine Lease Agreement, the Company recognized additional net ROU assets and lease liabilities in the amount of $ 0.5 million .

On September 4, 2024, the Company entered into a 36-month operating lease for 6,138 square feet of office space in Burlington, Massachusetts, that expires on November 21, 2027 (the “Burlington Lease Agreement”).

The existing lease expired on November 20, 2024.

On November 21, 2024, the effective date of the Burlington Lease Agreement, the Company recognized additional net ROU assets and lease liabilities in the amount of $ 0.5 million.

The Company determines if a contract contains a lease at inception.

Our office leases have remaining terms of approximately 12 months and do not include options to extend the leases for additional periods.

Our office leases have a remaining term of approximately 3 years and do not include options to extend the leases for additional periods.

Operating lease assets and liabilities are recognized at the lease commencement date.

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Leases with an initial term of 12 months or less, that do not include an option to purchase the underlying asset that we are reasonably certain to exercise, are not recorded on the consolidated balance sheet.

The components of lease expense were as follows (in thousands):

The total operating lease expense were as follows (in thousands):

Operating lease cost (a)

(a) Includes variable operating lease expenses, which are immaterial.

Other information related to leases was as follows (in thousands, except lease term and discount rate):

Supplemental Cash Flows Information

Other supplemental cash flow information related to leases were as follows (in thousands):

Cash paid for amounts included in the measurement of lease liability:

Operating cash flows from operating lease

Operating lease asset obtained in exchange for lease liability:

Operating lease

Remaining lease term

Operating lease

Discount rate

Operating lease

Future payments under noncancelable operating leases having initial or remaining terms of one year or more are as follows for the succeeding fiscal year and thereafter (in thousands):

Operating cash flows from operating leases

Weighted-average remaining lease term (in years)

Weighted-average discount rate

As of December 31, 2024, future minimum payments under non-cancelable operating leases, were as follows (in thousands):

Total minimum lease payments

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Present value of lease liabilities

Less current portion of operating lease liability

Non-current operating lease liability

Less current portion of operating lease liabilities

Non-current operating lease liabilities

Grants and Licenses

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The fee due for the achievement of these milestones was $ 1.0 million each.

During 2018 and 2017, Anelixis issued $ 1.0 million worth of its common stock in lieu of making a cash payment.

During 2018 and 2017, Anelixis issued $ 1.0 million wort h of its common stock in lieu of making a cash payment.

There were no milestones achieved during 2024 or 2023.

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In addition to the milestone payments, the Company is required to pay ALS TDI an amended annual license maintenance fee of $ 0.1 million beginning on the earlier of January 1, 2022, the Company’s first sublicense, or change in control, as defined in the Agreement.

The Company made a $ 0.1 million annual license maintenance fee in each of 2023 and 2022.

Furthermore, the Company shall pay ALS TDI fees based on reaching certain levels of annual net sales of any product produced with the patent rights.

The Company has made a $ 0.1 million annual license maintenance fee in each year since 2022.

Furthermore, the Company is required to pay ALS TDI fees based on reaching certain levels of annual net sales of any product produced with t he patent rights.

A royalty in the low single digits will be due on aggregate net sales.

Upon the first calendar year of reaching $ 500.0 million in aggregate net sales, the Company shall pay ALS TDI a one-time milestone payment of $ 15.0 million.

Upon the first calendar year of reaching $ 500.0 million in aggregate net sales, the Company will be required to pay ALS TDI a one-time milestone payment of $ 15.0 million.

Upon the first calendar year of reaching $ 1.0 billion in aggregate net sales, the Company is obligated to pay ALS TDI a one-time milestone payment of $ 30.0 million.

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(the “eGenesis Agreement”), under which eGenesis will gain access to tegoprubart for eGenesis’ ongoing preclinical research and development xenotransplant studies of human-compatible organs and cells for the treatment of organ failure.

eGenesis will pay Eledon for supplies of tegoprubart based on the number of study days per animal needed for the eGenesis preclinical xenotransplant studies.

eGenesis will pay Eledon for supplies of tegoprubart based on the number of study days per animal needed for the eGenesis preclinical xenotransplant studies to offset manufacturing expenses.

As of year ended December 31, 2024 , the Company offset $ 0.1 million of manufacturing expenses.

The eGenesis agreement continues until September 2025, unless terminated earlier by either party.

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The Company’s exposure under these agreements is unknown because it involves future claims that may be made against the Company but have not yet been made.

Company has not paid any claims or been required to defend any action related to its indemnification obligations.

To date, the Company has not paid any claims or been required to defend any action related to its indemnification obligations.

However, the Company may record charges in the future because of these indemnification obligations.

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There have been no contingent liabilities requiring accrual at December 31, 2024 and 2023 .

Income Taxes (As Restated)

Loss before income taxes are as follows (in thousands):

Losses before income taxes:

The provision (benefit) for income taxes are as follows (in thousands):

Provision (benefit) for income taxes

The Company is subject to income taxes under U.S.

The Company is subject to an Israeli corporate tax rate of 23 % in 2020 and thereafter.

The Company was subject to a blended U.S.

tax rate (federal as well as state corporate tax) of 21 % in 2023 and 2022.

The provision for income taxes are as follows (in thousands):

Total current income tax provision

Total deferred income tax provision

Total provision for income taxes

Significant judgment is required in determining the Company’s provision for income taxes, deferred tax assets and liabilities and the valuation allowance recorded against net deferred tax assets.

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State rate differential

Goodwill impairment

Change in valuation allowance

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The deferred income tax assets have been offset by a valuation allowance, as realization is dependent on future earnings, if any, the timing and amount of which are uncertain.

The net valuation allowance increased by $ 9.1 million from December 31, 2022 to December 31, 2023.

The net valuatio n allowance increased by $ 15.6 million from December 31, 2023 to December 31, 2024 .

The net valuation allowance increased by $ 9.1 million from December 31, 2022 to December 31, 2023.

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The state net operating losses begin to expire in 2035 .

As of December 31, 2023 and 2022 , the Company had Israeli net operating losses of $ 7.9 million, which carryforward indefinitely.

As of December 31, 2024 and 2023 , the Company had federal research and development tax credit carryforwards of approximately $ 8.0 million and $ 4.0 million, respectively.

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Pursuant to Internal Revenue Code (IRC) Sections 382 and 383, annual use of the Company’s net operating loss and research and development credit carryforwards may be limited in the event a cumulative change in ownership of more than 50 % occurs within a three-year period.

The Company has not completed an IRC Section 382/383 analysis regarding the limitation of net operating loss and research and development credit carryforwards.

The Company has not completed an IRC Section 382/383 analysis regarding the

limitation of net operating loss and research and development credit carryforwards.

Due to the existence of the valuation allowance, future changes in the Company’s unrecognized tax benefits will not impact the Company’s effective tax rate.

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Stockholders’ Equity (As Restated)

Preferred Stock

Convertible Preferred Stock

The Company has 5,000,000 authorized shares of preferred stock with a par value of $ 0.001 per share:

• Series X 1 non-voting convertible preferred stock, 515,000 shares designated;

110,086 shares and 117,970 shares issued and outstand ing at December 31, 2023 and 2022, respectively;

110,086 shares issued and outstand ing at December 31, 2024 and 2023, and

• Series X non-voting convertible preferred stock, 10,000 shares designated;

4,422 shares and 6,204 shares issued and outstanding at December 31, 2023 and 2022, respectively.

4,422 shares issued and outstanding at December 31, 2024 and 2023.

Each share of the Series X 1 or X non-voting convertible preferred stock (the “Preferred Stock”) is convertible into 55.5556 shares of common stock, at the option of the holder at any time, subject to certain limitations, including, that the holder will be prohibited from converting the Preferred Stock into common stock if, as a result of such conversion, the holder, together with its affiliates, would beneficially own a number of shares of common stock above a conversion blocker, which is initially set at 9.99 % or 9.9 % of the total common stock then issued and outstanding immediately following the conversion of such shares of Series X Preferred Stock or Series X 1 Preferred Stock, respectively.

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In the event of any liquidation, dissolution or winding up, the holder of the Preferred Stock will be entitled to receive out of the assets, whether capital or surplus, the same amount that a holder of common stock would receive if the Preferred Stock were fully converted to common stock, which amounts shall be paid pari passu with all holders of common stock.

Shares of the Preferred Stock will generally have no voting rights, except as required by law and except that the consent of a majority of the holders of either series of outstanding Preferred Stock will be required to amend the terms of the such series.

2021 Equity Distribution Agreement

On March 31, 2021, the Company filed a registration statement on Form S-3 containing a prospectus and prospectus supplement (the “Prospectus”) under which the Company may offer and sell up to $ 75.0 million in shares of its common stock, from time to time, pursuant to an open market sale agreement with Jefferies LLC and by any method deemed to be an “at the market offering” as defined in Rule 415(a)(4) promulgated under the Securities Act of 1933 (the “ATM Program”).

Pursuant to the “baby shelf rules” promulgated by the SEC, if the Company’s public float is less than $ 75.0 million as of specified measurement periods, the number of shares of common stock that may be offered and sold by the Company under a Form S-3 registration statement, including pursuant to the ATM Program, in any twelve-month period is limited to an aggregate amount that does not exceed one-third of the Company’s public float.

As of December 31, 2023 , due to the SEC’s “baby shelf rules,” the Company was permitted to sell up to $ 12.3 million of shares of common stock pursuant to the ATM Program.

The Company will remain subject to the “baby shelf rules” under the Form S-3 registration statement until such time as its public float exceeds $ 75.0 million.

During the years ended December 31, 2023 and 2022 , no shares were sold under the Prospectus.

This Form S-3 registration statement pursuant to which the ATM Program is registered will expire in May 2024, and no shares of common stock may be sold under the ATM Program after that date.

2021 Warrant Exchange Agreement

On September 21, 2021, the Company issued warrants exercisable for 298,692 shares of common stock in exchange for warrants exercisable for 5,376.456 shares of Series X 1 Non-Voting Convertible Preferred Stock previously issued as part of the Anelixis merger.

These Series X 1 Non-Voting Convertible Preferred Stock warrants were replaced by Eledon for the outstanding warrants issued by Anelixis that were not settled upon completion of the merger.

The Preferred Stock includes a provision that, in the event of a tender or exchange offer by a third party in which more than 50 % of the common stockholders receive cash or other assets, allows holders of Preferred Stock, upon any subsequent conversion, to redeem their shares for the same form of consideration.

Because this redemption right may be triggered by an event outside the Company’s control and could result in settlement in cash, the Preferred Stock is classified as temporary equity.

As of the current reporting date, a tender offer is not probable, and the preferred stock is not deemed probable of becoming redeemable.

Because redemption is not considered probable, the Preferred Stock is not subsequently remeasured to its redemption value.

2022 Exchange Agreement

On January 11, 2022, the Company entered into an exchange agreement (the “Series X 1 Exchange Agreement”) with Biotechnology Value Fund, L.P., Biotechnology Value Fund II, L.P., Biotechnology Value Trading Fund OS, L.P., MSI BVF SPV, L.L.C.

(collectively, the “BVF Exchanging Stockholders”), pursuant to which the Series X 1 Exchanging Stockholders exchanged (the “Series X 1 Exchange”) 550,000 shares of the Company’s common stock for 9,899.99 shares of Series X 1 Non-Voting Convertible Preferred Stock.

2023 Securities Purchase Agreement (As Restated)

On April 28, 2023, the Company entered into the Securities Purchase Agreement with Purchasers, pursuant to which the Company agreed to issue and sell to the Purchasers in the Private Placement (i) in an initial closing, (a) an aggregate of 15,151,518 shares (the “Shares”) of the Company’s common stock, $ 0.001 par value per share, or pre-funded warrants in lieu thereof (the “Pre-Funded Warrants”), and (b) common stock warrants exercisable into an aggregate of 15,151,518 shares of

common stock (or Pre-Funded Warrants in lieu thereof) (the “Common Warrants” and, together with the Pre-Funded Warrants, the “Warrants”);

(ii) in a second closing, upon the satisfaction of specified conditions set forth in the Securities Purchase Agreement, an aggregate of 20,202,024 shares of common stock (or Pre-Funded Warrants);

and (iii) in a third closing, upon the satisfaction of specified conditions set forth in the Securities Purchase Agreement, an aggregate of 25,252,530 shares of common stock (or Pre-Funded Warrants), in each case subject to customary adjustments as provided in the Securities Purchase Agreement, Pre-Funded Warrant or Common Warrant, as applicable.

2023 Securities Purchase Agreement

On April 28, 2023, the Company entered into a Securities Purchase Agreement (the “2023 Securities Purchase Agreement”) with certain investors, pursuant to which the Company agreed to issue and sell to the investors in a private placement (the “2023 Private Placement”) (i) in an initial closing, (a) an aggregate of 15,151,518 shares (the “Shares”) of the Company’s common stock, $ 0.001 par value per share, or pre-funded warrants in lieu thereof (the “Pre-Funded Warrants”), and (b) common stock warrants exercisable into an aggregate of 15,151,518 shares of common stock (or Pre-Funded Warrants in lieu thereof) (the “Common Warrants” and, together with the Pre-Funded Warrants, the “Warrants”);

(ii) in a second closing (the “Second Closing”), upon the satisfaction or waiver of specified conditions set forth in the 2023 Securities Purchase Agreement, an aggregate of 20,202,024 shares of common stock (or Pre-Funded Warrants);

and (iii) in a third closing (the “Third Closing”), upon the satisfaction or waiver of specified conditions set forth in the 2023 Securities Purchase Agreement, an aggregate of 25,252,530 shares of common stock (or Pre-Funded Warrants), in each case subject to customary adjustments as provided in the 2023 Securities Purchase Agreement, Pre-Funded Warrant or Common Warrant, as applicable.

Each Common Warrant has an exercise price of $ 3.00 per share and expires five years after issuance.

The Pre-Funded Warrants are exercisable immediately and until exercised in full, with an exercise price of $ 0.001 per share.

The Pre-Funded Warrants and Common Warrants are subject to specified beneficial ownership limitations, which are generally set at 9.99 % of the total common stock then issued and outstanding immediately following the exercise of such warrants, and provided that any beneficial ownership limitation may not exceed 19.99 % unless otherwise permitted.

The Shares, the Warrants, and the shares of common stock issuable upon the exercise of the Warrants, have not been registered under the Securities Act of 1933, as amended, and were offered pursuant to the exemption from registration provided in Section 4(a)(2) under the Securities Act of 1933, as amended, and Rule 506(b) promulgated thereunder.

On May 5, 2023, the initial closing occurred, and the Company received $ 35.0 million, or net proceeds of approximately $ 33.0 million after deducting offering costs, in exchange for 8,730,168 shares of common stock and Pre-Funded Warrants to purchase 6,421,350 shares of common stock.

The Company may receive an additional $ 105.0 million upon sale of the shares to be issued in the second and third closings, subject to achieving specified clinical development milestones and volume weighted average share price levels and trading volume conditions, and an additional $ 45.5 million assuming the exercise of all Common Warrants issued in the initial closing of the Private Placement.

In connection with the Private Placement, the Company filed on May 18, 2023, a registration statement on Form S-3 (“Registration Statement”) with the SEC to register for resale the Shares and the shares of common stock issuable upon the exercise of the Warrants.

On July 8, 2024, the Second Closing occurred, and the Company received gross proceeds of $ 2.1 million, or net proceeds of approximately $ 2.0 million after deducting offering costs, in exchange for 909,088 shares of common stock.

On September 30, 2024, and October 1, 2024, the Third Closing occurred, and the Company received gross proceeds of $ 4.0 million, or net proceeds of approximately $ 3.8 million after deducting offering costs, in exchange for 1,727,400 shares of common stock.

In connection with the 2023 Private Placement, the Company filed on May 18, 2023, a registration statement on Form S-3 (the “2023 Registration Statement”) with the SEC to register for resale the Shares and the shares of common stock issuable upon the exercise of the Warrants.

The 2023 Registration Statement became effective on June 2, 2023.

In August 2024, the Company concluded that the Common Warrants, and the potential issuance of Pre-Funded Warrants in lieu of additional shares of common stock in the second and third closings of the Private Placement as specified in the Securities Purchase Agreement (the “Subsequent Closing Warrants”) do not meet the conditions to be classified as equity instruments under ASC 815-40 and must instead be recorded as liabilities on the Company’s consolidated balance sheets at their fair value and remeasured at fair value for each subsequent reporting period, with corresponding entries to change in fair value of warrant liabilities and fair value of financial instruments issued in excess of proceeds on the Company’s consolidated statement of operations and comprehensive loss.

In August 2024, the Company concluded that the Common Warrants, and the potential issuance of Pre-Funded Warrants in lieu of additional shares of common stock in the Second Closing and Third Closing (the “Subsequent Closing Warrants”) do not meet the conditions to be classified as equity instruments under ASC 815-40 and must instead be recorded as liabilities on the Company’s consolidated balance sheets at their fair value and remeasured at fair value for each subsequent reporting period.

The valuation of the Common Warrants and the Subsequent Closing Warrants is adjusted to fair value (Level 3) at each balance sheet date until the Common Warrants and the Subsequent Closing Warrants are settled or expired.

The following table presents the assumptions used in the Black-Scholes option pricing model to determine the fair value of Common Warrants and Subsequent Closing Warrants granted as of December 31, 2024, and as of the issuance date:

December 31, 2023

April 28, 2023

(Date of Issuance)

Risk-free interest rate

3.84 % - 3.88 %

Expected volatility

Expected stock price volatility

89.1 % - 94.3 %

Risk-free interest rate

3.8 % - 3.9 %

Expected term (in years)

Expected life of options (in years)

2023 Conversion Agreement of Non-Voting Convertible Preferred Stock

On May 16, 2023, Cormorant Global Healthcare Master Fund LP provided notice to convert (i) 1,782 shares of Series X Non-Voting Convertible Preferred Stock for 99,000 shares of common stock in accordance with the Certificate of Designation of Preferences, Rights and Limitations of the Series X Non-Voting Convertible Preferred Stock, and (ii) 7,883.586 shares of Series X 1 Non-Voting Convertible Preferred Stock for 437,977 shares of common stock in accordance with the Certificate of Designation of Preferences, Rights and Limitations of the Series X 1 Non-Voting Convertible Preferred Stock.

O n May 16, 2023, Cormorant Global Healthcare Master Fund LP provided notice to convert (i) 1,782 shares of Series X Non-Voting Convertible Preferred Stock for 99,000 shares of common stock in accordance with the Certificate of Designation of Preferences, Rights and Limitations of the Series X Non-Voting Convertible Preferred Stock, and (ii) 7,883.586 shares of Series X 1 Non-Voting Convertible Preferred Stock for 437,977 shares of common stock in accordance with the Certificate of Designation of Preferences, Rights and Limitations of the Series X 1 Non-Voting Convertible Preferred Stock.

The conversion was completed on May 23, 2023.

2023 Exercise of Pre-Funded Warrants

2024 Securities Purchase Agreement

On May 6, 2024, the Company entered into a Securities Purchase Agreement (the “2024 Securities Purchase Agreement”) with certain institutional and accredited investors, pursuant to which the Company agreed to issue and sell to the investors in a private placement (the “2024 Private Placement”) an aggregate of 13,110,484 shares (the “2024 Shares”) of the Company’s common stock, at a price of $ 2.37 per share, and pre-funded warrants (the “2024 Pre-Funded Warrants”) at a price of $ 2.369 per underlying share, which are exercisable to purchase 7,989,516 shares of common stock at an exercise price of $ 0.001 per share.

The 2024 Pre-Funded Warrants were issued in lieu of shares of common stock and are exercisable immediately and until exercised in full.

The 2024 Pre-Funded Warrants are subject to specified beneficial ownership limitations (equal to 4.99 % or 9.99 % as determined by holder of each such warrant) of the total common stock then issued and outstanding immediately following the exercise of such warrants, and provided that any beneficial ownership limitation may not exceed 19.99 % unless otherwise permitted.

The 2024 Shares, the 2024 Pre-Funded Warrants, and the shares of common stock issuable upon the exercise of the 2024 Pre-Funded Warrants, have not been registered under the Securities Act of 1933, as amended, and were offered pursuant to the exemption from registration provided in Section 4(a)(2) under the Securities Act of 1933, as amended, and Rule 506(b) promulgated thereunder.

The 2024 Pre-Funded Warrants were classified as a component of permanent stockholders’ equity within additional paid-in-capital.

The 2024 Pre-Funded Warrants are equity classified because they are freestanding financial instruments that are legally detachable and separately exercisable from the equity instruments, are immediately exercisable, do not embody an obligation for the Company to repurchase its shares, permit the holders to receive a fixed number of common shares upon exercise, are indexed to the Company’s common stock and meet the equity classification criteria.

In addition, the 2024 Pre-Funded Warrants do not provide any guarantee of value or return.

The 2024 Private Placement resulted in gross proceeds to the Company of $ 50.0 million, or net proceeds of approximately $ 48.1 million after deducting offering costs.

In connection with the 2024 Private Placement, the Company filed on May 24, 2024, a registration statement on Form S-3 (the “2024 Registration Statement”) with the SEC to register for resale the 2024 Shares and the shares of common stock issuable upon the exercise of the 2024 Pre-Funded Warrants.

The 2024 Registration Statement became effective on June 5, 2024.

2024 Equity Distribution Agreement

On September 20, 2024, the Company entered into an Open Market Sale Agreement (the “Sales Agreement”) with Guggenheim Securities, LLC (“Guggenheim Securities”) to sell shares of the Company’s common stock, having aggregate sales proceeds of up to $ 75.0 million, from time to time, through an “at the market” equity offering program under which Guggenheim Securities will act as sales agent.

In connection with the Sales Agreement, the Company filed on September 20, 2024 a registration statement on Form S-3 containing a prospectus and prospectus supplement (the “Shelf Registration Statement”) with the SEC.

The Shelf Registration Statement became effective on October 2, 2024.

As of the year ended December 31, 2024, the Company has not sold any shares under the Sales Agreement.

2024 Underwritten Offering

On October 29, 2024, the Company entered into an underwriting agreement with Leerink Partners, LLC, as representative of the several underwriters named therein (the “Underwriters”) in connection with the underwritten offering, issuance and sale by the Company (the “2024 Underwritten Offering”) of 18,356,173 shares of the Company’s common stock, at an offering price of $ 3.65 per share, and pre-funded warrants at a price of $ 3.649 per pre-funded warrant, which are exercisable to purchase 4,931,507 shares of the Company’s common stock at an exercise price of $ 0.001 per share (the “Offering Pre-Funded Warrants”).

The Offering Pre-Funded Warrants were classified as a component of permanent stockholders’ equity within additional paid-in-capital.

The Offering Pre-Funded Warrants are equity classified because they are freestanding financial instruments that are legally detachable and separately exercisable from the equity instruments, are immediately exercisable, do not embody an obligation for the Company to repurchase its shares, permit the holders to receive a fixed number of common shares upon exercise, are indexed to the Company’s common stock and meet the equity classification criteria.

In addition, the Offering Pre-Funded Warrants do not provide any guarantee of value or return.

The 2024 Underwritten Offering closed on October 30, 2024 and resulted in gross proceeds of $ 85 million, or net proceeds of approximately $ 79.5 million after deducting underwriting discounts and commissions and offering expenses.

The 2024 Underwritten Offering was made pursuant to the Shelf Registration Statement and a prospectus supplement relating to the 2024 Underwritten Offering dated October 29, 2024.

A holder of the Offering Pre-Funded Warrants (together with its affiliates) may not exercise any portion of an Offering Pre-Funded Warrant to the extent that the that, after giving effect to such exercise, the holder (together with the holder’s affiliates, and any other persons acting as a group together with the holder or any of the holder’s affiliates) would beneficially own in excess of 4.99 % (or, at the holder’s option upon issuance, 9.99 %) of the number of shares of the Company's common stock outstanding immediately after giving effect to the issuance of shares of common stock issuable upon exercise of such Offering Pre-Funded Warrant.

Exercise of Pre-Funded Warrants from 2023 Securities Purchase Agreement

On July 10, 2023, Armistice Capital Master Fund Ltd.

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On July 14, 2023, the Company issued 501,197 shares of common stock to the Exercising Stockholder in accordance with such exercise .

On November 2, 2023, Armistice Capital Master Fund Ltd.

(the “Exercising Stockholder”), exercised Pre-Funded Warrants to purchase 653,000 shares of common stock at an exercise price of $ 0.001 per share, which were issued in conjunction with the Securities Purchase Agreement.

On November 2, 2023, the Exercising Stockholder exercised Pre-Funded Warrants to purchase 653,000 shares of common stock at an exercise price of $ 0.001 per share, which were issued in conjunction with the 2023 Securities Purchase Agreement.

On November 6, 2023, the Company issued 653,000 shares of common stock to the Exercising Stockholder in accordance with such exercise.

On January 30, 2024, the Exercising Stockholder exercised Pre-Funded Warrants to purchase 600,000 shares of common stock at an exercise price of $ 0.001 per share, which were issued in conjunction with the 2023 Securities Purchase Agreement.

On January 30, 2024, the Company issued 600,000 shares of common stock to the Exercising Stockholder in accordance with such exercise.

On May 7, 2024, the Exercising Stockholder exercised Pre-Funded Warrants to purchase 583,000 shares of common stock at an exercise price of $ 0.001 per share, which were issued in conjunction with the 2023 Securities Purchase Agreement.

On May 9, 2024, the Company issued 583,000 shares of common stock to the Exercising Stockholder in accordance with such exercise.

On July 11, 2024, the Exercising Stockholder exercised their remaining Pre-Funded Warrants to purchase 240,000 shares of common stock at an exercise price of $ 0.001 per share, which were issued in conjunction with the 2023 Securities Purchase Agreement.

On July 11, 2024, the Company issued 240,000 shares of common stock to the Exercising Stockholder in accordance with such exercise.

Common Stock Warrants

As of December 31, 2023 , 21,564,302 warrants were exercisable into common stock (after rounding for fractional shares and subject to beneficial ownership conversion blockers).

As of December 31, 2024, 33,052,744 warrants were exercisable into common stock (after rounding for fractional shares and subject to beneficial ownership limitations).

The following table shows the warrants to purchase common stock activity:

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Pre-Funded Warrants

All Other Warrants

Balance as of December 31, 2023

1 unchanged sentence

Balance as of December 31, 2024

As of December 31, 2024, the Company's outstanding warrants to purchase shares of common stock consisted of the following:

Number of Shares of Common Stock Issuable

Exercise Price

Expiration Date

January 2020 common warrants

July 14, 2025

January 2020 common warrants

July 17, 2025

January 2020 common warrants

July 14, 2025

January 2020 common warrants

July 17, 2025

September 2020 common warrants

September 14, 2025

2023 Securities Purchase Agreement common warrants

January 2021 pre-funded warrants

December 31, 2030

2023 Securities Purchase Agreement pre-funded warrants

2024 Securities Purchase Agreement pre-funded warrants

2024 Underwritten Offering pre-funded warrants

Balance as of December 31, 2024

Preferred Stock Warrants

As of December 31, 2023 , there were 50,207.419 warrants exercisable into Series X 1 Preferred Stock which are convertible into 2,789,301 shares of common stock (after rounding for fractional shares and subject to beneficial ownership conversion blockers).

As of December 31, 2024, there were 50,207.419 warrants exercisable into Series X 1 Preferred Stock which are convertible into 2,789,301 shares of common stock (after rounding for fractional shares and subject to beneficial ownership limitations).

Roll-Forward of Series X 1 Convertible Preferred Warrant Activity

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Balance as of December 31, 2024

The Series X 1 Preferred Warrants were issued on September 14, 2020, with an exercise price of $ 8.96 and an expiration date of September 14, 2025 .

Stock-Based Compensation

Stock Option Plans

On June 21, 2023, the Company held its Annual Meeting of Stockholders (the “Annual Meeting”).

The Company recognizes compensation expense for all stock-based awards based on the grant-date estimated fair value.

The fair value of stock options is determined using the Black-Scholes option pricing model, using assumptions which are subjective and require significant judgment and estimation by management.

The risk-free rate assumption was based on observed yields from governmental zero-coupon bonds with an equivalent term.

The expected volatility assumption was based on historical volatilities of a group of comparable industry companies whose share prices are publicly available.

The peer group was developed based on companies in the pharmaceutical industry.

The expected term of stock options represents the weighted-average period that the stock options are expected to be outstanding.

Because the Company does not have historical exercise behavior, the Company determined the expected life assumption using the simplified method for stock options granted to employees, which is an average of the options ordinary vesting period and the contractual term.

For stock options granted to the Company’s board of directors (the “Board”), the Company determined the expected life assumption using the simplified method as the starting point with an average period of 12 months added to take into account the extended range of time of 12 to 18 months that vested stock options granted to Board members may be exercised upon termination.

The expected dividend assumption was based on the Company’s history and expectation of dividend payouts.

The Company has not paid and does not expect to pay dividends at any time in the foreseeable future.

The Company recognizes forfeitures on an actual basis and as such did not estimate forfeitures to calculate stock-based compensation .

Restricted Stock Units (“RSUs”) are measured and recognized based on the quoted market price of our common stock on the date of grant.

On July 10, 2024, the Company held its Annual Meeting of Stockholders (the “Annual Meeting”).

At the Annual Meeting, the Company’s stockholders approved an amendment to the Company's 2020 Long Term Incentive Plan (the “2020 Plan”).

The 2020 Plan, as amended, (i) reflects an increase in the limit on the aggregate number of shares of the Company’s common stock that may be delivered pursuant to all awards granted under the 2020 Incentive Plan by an additional 3,500,000 shares so that the new aggregate share limit under the 2020 Plan is 17,960,000 shares, and (ii) extends the date through which the Company may grant new awards under the 2020 Plan from November 15, 2030 to April 28, 2034.

In 2023, the Company issued stock option awards to its employees with both time-based and performance-based vesting requirements totaling 7,381,857 stock options, with 1,476,372 of the granted stock options subject to the Company’s customary time-based vesting schedule.

The remaining 5,905,485 stock options granted are subje ct to both customary time-based vesting requirements and performance-based vesting requirements that are based on the same clinical development milestones applicable to the second and third closings of the Private Placement as specified in the Securities Purchase Agreement.

Further, for the performance-based stock options granted to senior management, upon such second and third closing, a full or prorated amount of each closing shall vest based on the percentage of funding received relative to the total funding opportunity represented by the purchasers' second and third closing subscription amounts.

No specified clinical development milestones were achieved during the year ended December 31, 2023.

The 2014 Plan was closed to new grants following the approval of the 2020 Plan, and therefore, there were no shares reserved for issuance under the 2014 Plan as of December 31, 2023 .

The number of shares reserved for issuance under the 2020 Plan and ESPP was 3,093,742 and 24,077 shares, respectively, as of December 31, 2023.

The following table summarizes all option activity under the 2007 Plan, 2014 Plan, 2020 Plan and inducement grants:

On May 1, 2023, the Company issued stock option awards to its employees with both time-based and performance-based vesting requirements, totaling 7,381,857 stock options, with 1,476,372 of the granted stock options subject to the Company’s customary time-based vesting schedule.

The remaining 5,905,485 stock options granted are subject to both customary time-based vesting requirements and performance-based vesting requirements that are based on the same clinical development milestones applicable to the Second Closing and Third Closing of the 2023 Private Placement as specified in the 2023 Securities Purchase Agreement.

In December 2023, the Company amended the performance-based vesting requirements with its named executive officers and other employees that upon the Second Closing and Third Closing, a full or prorated amount of each closing installment shall vest based on the percentage of funding received relative to the total funding opportunity represented by the investors’ Second Closing and Third Closing subscription amounts.

On June 13, 2024 and November 20, 2024, the performance-based vesting requirement based on the milestones applicable to the Second Closing and Third Closing were satisfied and 5,763,085 stock options were issued.

The 2014 Stock Incentive Plan (the “2014 Plan”) was closed to new grants following the approval of the 2020 Plan, and therefore, there were no shares reserved for issuance under the 2014 Plan as of December 31, 2024 .

The number of shares reserved for issuance under the 2020 Plan and Employee Stock Purchase Plan was 6,373,242 and 24,077 shares, respectively, as of December 31, 2024.

The following table summarizes all option activity under the 2014 Plan, 2020 Plan and inducement grants:

Under Options

10 unchanged sentences

Intrinsic value is calculated as the difference between the exercise price of the underlying options and the fair value of the common stock for the options that had exercise prices that were lower than the fair value per share of the common stock on the date of exercise.

There was no aggregate intrinsic value of options exercised during the year ended December 31, 2023.

The aggregate intrinsic value of options exercised during the year ended December 31, 2024 was $ 0.1 million.

The Company estimates the fair value of stock option awards on the grant date using the Black-Scholes option pricing model with the following weighted-average assumptions:

1 unchanged sentence

Risk-free interest rate

Expected life of options

Expected life of options (in years)

Estimated dividend yield

The per share weighted average grant date fair value of stock options granted during the years ended December 31, 2023 and 2022 wa s $ 1.60 and $ 2.76 , r espectively.

The per share weighted average grant date fair value of stock options granted during the years ended December 31, 2024 and 2023 was $ 1.93 and $ 1.60 , respectively.

Restricted Stock Units

12 unchanged sentences

Total stock-based compensation expense

As of December 31, 2023 , total unrecognized stock-based compensation expense related to non-vested equity awards was $ 12.4 million, which is expected to be recognized over an estimated weighted-average period of 2.4 years.

As of December 31, 2024, total unrecognized stock-based compensation expense related to non-vested equity awards wa s $ 17.6 million, which is expected to be recognized over an estimated weighted-average period of 2.4 years.

Segment Reporting

The Company currently operates and manages its business as one reportable segment, to develop therapies to protect transplanted organs and prevent rejection.

The Company's chief operating decision maker (the “CODM ”), is the chief executive officer .

The financial results of the Company's operations are managed and reported to the CODM.

Managing and allocating resources on a consolidated basis enables the CODM to assess the overall level of resources available and how to best deploy these resources across functions.

As a single reportable segment entity, the CODM assesses performance and allocates resources based on the Company's consolidated statements of operations.

Significant segment expenses, as provided to the CODM, are presented as the following:

Operating expenses:

Tegoprubart - kidney transplantation programs

Tegoprubart - other development programs

Manufacturing

Personnel-related

Stock-based compensation

General and administrative expense

Total operating expenses

Loss from operations

Other income, net

Change in fair value of warrant liabilities and fair value of financial instruments issued in excess of proceeds

Provision for income taxes

Segment and net loss

Subsequent Events

On January 30, 2024, Armistice Capital Master Fund Ltd.

(the “Exercising Stockholder”), exercised Pre-Funded Warrants to purchase 600,000 shares of common stock at an exercise price of $ 0.001 per share, which were issued in conjunction with the Securities Purchase Agreement.

On January 30, 2024, the Company issued 600,000 shares of common stock to the Exercising Stockholder in accordance with such exercise.

The Company has evaluated events subsequent to December 31, 2024 through the filing date of this Annual Report on Form 10-K.

Any material subsequent events that occurred during this time have been properly recognized or disclosed in the consolidated financial statements and accompanying notes.

Restatement of Previously Issued Consolidated Financial Statements

In the course of preparing the Company’s Condensed Consolidated Financial Statements as of and for the three and six months ended June 30, 2024, the Company determined that a correction was necessary with respect to the Company’s reporting and recording of the fair value of the Common Warrants and the Subsequent Closing Warrants (such correction, the "Restatement";

see Note 10).

The Company has historically reported the Common Warrants and Subsequent Closing Warrants as equity instruments, because (i) of the respective holders’ ability to settle the Common Warrants and Subsequent Closing Warrants by issuance of a fixed number of shares of common stock or Pre-funded Warrants and (ii) the Common Warrants and Subsequent Closing Warrants contain a fixed exercise price and contain no cash settlement obligation.

However, in the course of preparing the Company’s Condensed Consolidated Financial Statements as of and for the three and six months ended June 30, 2024, management of the Company concluded that the Common Warrants and the Subsequent Closing Warrants do not meet the conditions to be classified as equity instruments under ASC 815-40, “Derivatives and Hedging — Contracts in Entity’s Own Equity,” and must instead be recorded as liabilities on the Company’s consolidated balance sheet at their fair value and remeasured at fair value for each subsequent reporting period, with the initial fair value and fair value of financial instruments issued in excess of proceeds and any change in fair value recorded in the consolidated statement of operations and comprehensive loss as a gain or loss.

Management prepared a quantitative and qualitative analysis of the errors in accordance with the U.S.

SEC Staff's Accounting Bulletin Nos.

99 and 108, Materiality, and concluded the impact of the errors are material to the Company's previously reported interim condensed consolidated financial statements for the three and six months ended June 30, 2023 and the three and nine months ended September 30, 2023, and the Company’s previously reported audited consolidated financial statements as of and for the year ended December 31, 2023 (collectively the “previously reported financial statements”).

As a result, the accompanying financial statements as of and for the year ended December 31, 2023, and related notes hereto, have been restated to correct the errors.

The Restatement includes adjustments to Change in fair value of warrant liabilities and fair value of financial instruments issued in excess of proceeds, Warrant liabilities, and Accumulated Deficit.

The errors had no impact on the Company's previous financial statements as of and for the year ended December 31, 2022.

that, because they are substantially identical to those of its common stock, $ 0.001 par value, the Preferred Stock should be treated as a separate class of common stock for purposes of calculating earnings per share in accordance with ASC 260-10, “Earnings Per Share.” As a result, the Company determined that it should have presented earnings per share under the two-class method in prior reporting periods.

Additionally, in connection with this reassessment, the Company concluded that it had incorrectly classified the Preferred Stock as permanent equity in the consolidated balance sheets.

The Preferred Stock includes a provision that, upon the occurrence of a fundamental transaction (which includes a third-party tender or exchange offer) in which more than 50 percent of the common stockholders receive cash or other assets, entitles holders of Preferred Stock, upon any subsequent conversion, are entitled to receive the same form of consideration, even if they did not participate in the original transaction.

Although a tender offer is not considered probable as of the current reporting date and redemption is not deemed probable, the existence of this provision requires classification as temporary equity.

The Preferred Stock is not subsequently remeasured to its redemption value because redemption is not considered probable.

As a result of these conclusions, the Company determined that a correction was necessary with respect to the classification of Preferred Stock as temporary equity and the presentation of earnings per share under the two-class method.

Accordingly, the accompanying financial statements as of and for the year ended December 31, 2024 and December 31, 2023, and related notes hereto, have been restated to correct the classification of the Preferred Stock as temporary equity and to include EPS calculations under the two-class method.

The impact of the correction of the misstatements is summarized below (in thousands):

December 31, 2023

Corrected Consolidated Balance Sheets

As Previously Reported

Restatement Impact

Warrant liabilities

Total liabilities

LIABILITIES, CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS’ EQUITY (DEFICIT)

Convertible preferred stock, 5,000,000 shares authorized at December 31, 2023 and 2022:

Series X 1 non-voting convertible preferred stock, $ 0.001 par value, 515,000 shares designated;

110,086 and 117,970 shares issued and outstanding at December 31, 2023 and 2022, respectively

Series X non-voting convertible preferred stock, $ 0.001 par value, 10,000 shares designated;

4,422 and 6,204 shares issued and outstanding at December 31, 2023 and 2022

Stockholders’ equity (deficit):

Convertible preferred stock, 5,000,000 shares authorized at December 31, 2023 and 2022:

Series X 1 non-voting convertible preferred stock, $ 0.001 par value, 515,000 shares designated;

110,086 and 117,970 shares issued and outstanding at December 31, 2023 and 2022, respectively

Series X non-voting convertible preferred stock, $ 0.001 par value, 10,000 shares designated;

4,422 and 6,204 shares issued and outstanding at December 31, 2023 and 2022

Additional paid-in capital

Accumulated deficit

Total Stockholders' Equity

For the Fiscal Year Ended

Total stockholders’ equity (deficit)

December 31, 2024

Corrected Consolidated Statements of Operations and Comprehensive Loss

As Previously Reported

Restatement Impact

Change in fair value of warrant liabilities and fair value of financial instruments issued in excess of proceeds

Net loss and comprehensive loss

Net loss per share, basic and diluted

For the Fiscal Year Ended December 31, 2023

Accumulated Deficit

LIABILITIES, CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS’ EQUITY

Convertible preferred stock, 5,000,000 shares authorized at December 31, 2024 and 2023:

Series X 1 non-voting convertible preferred stock, $ 0.001 par value, 515,000 shares designated;

110,086 shares issued and outstanding at December 31, 2024 and 2023

Series X non-voting convertible preferred stock, $ 0.001 par value, 10,000 shares designated;

4,422 shares issued and outstanding at December 31, 2024 and 2023

Stockholders’ equity:

Convertible preferred stock, 5,000,000 shares authorized at December 31, 2024 and 2023:

Series X 1 non-voting convertible preferred stock, $ 0.001 par value, 515,000 shares designated;

110,086 shares issued and outstanding at December 31, 2024 and 2023

Series X non-voting convertible preferred stock, $ 0.001 par value, 10,000 shares designated;

4,422 shares issued and outstanding at December 31, 2024 and 2023

Additional paid-in capital

Total stockholders’ equity

Corrected Consolidated Statements of Stockholders' Equity

Balance as of December 31, 2022

Issuance of common stock and pre-funded warrants in connection with Securities Purchase Agreement, net of issuance costs

Issuance of common stock in connection with conversion of X 1 non-voting convertible preferred stock

Issuance of common stock in connection with exercise of pre-funded warrants

Stock-based compensation

Net loss and comprehensive loss

Balance as of December 31, 2023

For the Fiscal Year Ended

December 31, 2023

Corrected Consolidated Statements of Cash Flows

As Previously Reported

Restatement Impact

Change in fair value of warrant liabilities and fair value of financial instruments issued in excess of proceeds

Net cash used in operating activities

Basic and diluted earnings per share of common stock

Basic and diluted earnings per share of Series X and Series X 1 non-voting convertible preferred stock

Weighted-average shares outstanding of Series X and Series X 1 non-voting convertible preferred stock, basic and diluted

For the Fiscal Year Ended

December 31, 2024

As Previously Reported

Basic and diluted earnings per share of common stock

Basic and diluted earnings per share of Series X and Series X 1 non-voting convertible preferred stock

Weighted-average shares outstanding of Series X and Series X 1 non-voting convertible preferred stock, basic and diluted

Restatement of Interim Financial Information

The misstatements described above were also material to the Company's unaudited condensed consolidated financial statements as of and for the three and six months ended June 30, 2023 and as of and for the three and nine months ended September 30, 2023.The Company has restated its unaudited Condensed Consolidated Balance Sheets, Condensed Consolidated Statements of Operations and Comprehensive Loss, Condensed Consolidated Statements of Stockholders' Equity, and Condensed Consolidated Statements of Cash Flows for the quarterly and year to date periods ended June 30, 2023 and September 30, 2023.

The misstatements described above were also material to the Company's unaudited condensed consolidated financial statements as of and for the three months ended March 31, 2024, as of and for the three and six months ended June 30, 2024 and as of and for the three and nine months ended September 30, 2024.

The Company has restated its unaudited Condensed Consolidated Balance Sheets, Condensed Consolidated Statements of Operations and Comprehensive Loss, and Condensed

Consolidated Statements of Convertible Preferred Stock and Stockholders' Equity (Deficit) for the quarterly and year to date periods ended March 31, 2024, June 30, 2024 and September 30, 2024.

The restated impact of the correction of the misstatements is summarized below (in thousands):

As of September 30, 2023

Corrected Condensed Consolidated Balance Sheets (Unaudited)

March 31, 2024

As Previously Reported

Restatement Impact

Warrant liabilities

Total liabilities

LIABILITIES, CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS’ EQUITY (DEFICIT)

Convertible preferred stock, 5,000,000 shares authorized at March 31, 2024 and December 31, 2023:

Series X 1 non-voting convertible preferred stock, $ 0.001 par value, 515,000 shares designated;

110,086 shares issued and outstanding at March 31, 2024 and December 31, 2023

Series X non-voting convertible preferred stock, $ 0.001 par value, 10,000 shares designated;

4,422 shares issued and outstanding at March 31, 2024 and December 31, 2023

Stockholders’ equity (deficit):

Convertible preferred stock, 5,000,000 shares authorized at March 31, 2024 and December 31, 2023:

Series X 1 non-voting convertible preferred stock, $ 0.001 par value, 515,000 shares designated;

110,086 shares issued and outstanding at March 31, 2024 and December 31, 2023

Series X non-voting convertible preferred stock, $ 0.001 par value, 10,000 shares designated;

4,422 shares issued and outstanding at March 31, 2024 and December 31, 2023

Additional paid-in capital

Accumulated deficit

Total Stockholders' Equity

For the Three Months Ended

September 30, 2023

For the Nine Months Ended

September 30, 2023

Corrected Condensed Consolidated Statements of Operations and Comprehensive Loss (Unaudited)

Change in fair value of warrant liabilities and fair value of financial instruments issued in excess of proceeds

Net loss and comprehensive loss

Net loss per share, basic and diluted

For the Nine Months Ended September 30, 2023

Accumulated Deficit

Total Stockholders' Equity

Corrected Condensed Consolidated Statements of Stockholders' Equity (Unaudited)

Total stockholders’ equity (deficit)

For the Three Months

Ended March 31, 2024

As Previously Reported

Restatement Impact

Basic and diluted earnings per share of common stock

Basic and diluted earnings per share of Series X and Series X 1 non-voting convertible preferred stock

Weighted-average shares outstanding of Series X and Series X 1 non-voting convertible preferred stock, basic and diluted

June 30, 2024

As Previously Reported

Restatement Impact

Balance as of December 31, 2022

Stock-based compensation

Net loss and comprehensive loss

Balance as of March 31, 2023

Issuance of common stock and pre-funded warrants in connection with Securities Purchase Agreement, net of issuance costs

Stock-based compensation

Net loss and comprehensive loss

Balance as of June 30, 2023

Stock-based compensation

Net loss and comprehensive loss

Balance as of September 30, 2023

For the Nine Months September 30, 2023

Corrected Condensed Consolidated Statements of Cash Flows (Unaudited)

LIABILITIES, CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS’ EQUITY (DEFICIT)

Convertible preferred stock, 5,000,000 shares authorized at June 30, 2024 and December 31, 2023:

Series X 1 non-voting convertible preferred stock, $ 0.001 par value, 515,000 shares designated;

110,086 shares issued and outstanding at June 30, 2024 and December 31, 2023

Series X non-voting convertible preferred stock, $ 0.001 par value, 10,000 shares designated;

4,422 shares issued and outstanding at June 30, 2024 and December 31, 2023

Stockholders’ equity (deficit):

Convertible preferred stock, 5,000,000 shares authorized at June 30, 2024 and December 31, 2023:

Series X 1 non-voting convertible preferred stock, $ 0.001 par value, 515,000 shares designated;

110,086 shares issued and outstanding at June 30, 2024 and December 31, 2023

Series X non-voting convertible preferred stock, $ 0.001 par value, 10,000 shares designated;

4,422 shares issued and outstanding at June 30, 2024 and December 31, 2023

Additional paid-in capital

Total stockholders’ equity (deficit)

For the Three Months

Ended June 30, 2024

For the Six Months

Ended June 30, 2024

As Previously Reported

Restatement Impact

Change in fair value of warrant liabilities and fair value of financial instruments issued in excess of proceeds

Net cash used in operating activities

As of June 30, 2023

Corrected Condensed Consolidated Balance Sheets (Unaudited)

As Previously Reported

Basic and diluted earnings per share of common stock

Basic and diluted earnings per share of Series X and Series X 1 non-voting convertible preferred stock

Weighted-average shares outstanding of Series X and Series X 1 non-voting convertible preferred stock, basic and diluted

September 30, 2024

As Previously Reported

Restatement Impact

Warrant liabilities

Total liabilities

LIABILITIES, CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS’ EQUITY

Convertible preferred stock, 5,000,000 shares authorized at September 30, 2024 and December 31, 2023:

Series X 1 non-voting convertible preferred stock, $ 0.001 par value, 515,000 shares designated;

110,086 shares issued and outstanding at September 30, 2024 and December 31, 2023

Series X non-voting convertible preferred stock, $ 0.001 par value, 10,000 shares designated;

4,422 shares issued and outstanding at September 30, 2024 and December 31, 2023

Stockholders’ equity:

Convertible preferred stock, 5,000,000 shares authorized at September 30, 2024 and December 31, 2023:

Series X 1 non-voting convertible preferred stock, $ 0.001 par value, 515,000 shares designated;

110,086 shares issued and outstanding at September 30, 2024 and December 31, 2023

Series X non-voting convertible preferred stock, $ 0.001 par value, 10,000 shares designated;

4,422 shares issued and outstanding at September 30, 2024 and December 31, 2023

Additional paid-in capital

Accumulated deficit

Total stockholders’ equity

For the Three Months Ended

June 30, 2023

For the Six Months Ended

June 30, 2023

Corrected Condensed Consolidated Statements of Operations and Comprehensive Loss (Unaudited)

Change in fair value of warrant liabilities and fair value of financial instruments issued in excess of proceeds

Net loss and comprehensive loss

Net loss per share, basic and diluted

For the Six Months Ended June 30, 2023

Accumulated Deficit

Total Stockholders' Equity

Corrected Condensed Consolidated Statements of Stockholders' Equity (Unaudited)

Balance as of December 31, 2022

Stock-based compensation

Net loss and comprehensive loss

Balance as of March 31, 2023

Issuance of common stock and pre-funded warrants in connection with Securities Purchase Agreement, net of issuance costs

Stock-based compensation

Net loss and comprehensive loss

Balance as of June 30, 2023

For the Six Months Ended June 30, 2023

Corrected Condensed Consolidated Statements of Cash Flows (Unaudited)

For the Three Months

Ended September 30, 2024

For the Nine Months

Ended September 30, 2024

(In thousands, except share and per share data)

As Previously Reported

Restatement Impact

Change in fair value of warrant liabilities and fair value of financial instruments issued in excess of proceeds

Net cash used in operating activities

As Previously Reported

Net loss attributable to common shares - diluted

Diluted earnings per share of common stock

Net income attributable to Series X and Series X 1 non-voting convertible preferred stocks - basic

Basic earnings per share of Series X and Series X 1 non-voting convertible preferred stock

Weighted-average shares outstanding of Series X and Series X 1 non-voting convertible preferred stock, basic

Net loss attributable to Series X and Series X 1 non-voting convertible preferred stocks - diluted

Diluted earnings per share of Series X and Series X 1 non-voting convertible preferred stock

Weighted-average shares outstanding of Series X and Series X 1 non-voting convertible preferred stock, diluted

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-K/A

Item 9A. Controls and Procedures