Eledon Pharmaceuticals, Inc. 10-K/A

Item 9A. Controls and Procedures. Evaluation of Disclosure Controls and Procedures As of the end of the period covered by this Annual Report on Form 10-K, our management, with the participation of our principal executive officer and principal financial officer, evaluated the effectiveness of our disclosure controls and procedures. The term “disclosure controls and procedures,” as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act, means controls and other procedures of a company that are 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 recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and forms. 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 61 Table of Contents 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. Internal Control Over Financial Reporting Management’s Report on Internal Control Over Financial Reporting Our management is responsible for establishing and maintaining adequate internal control over financial reporting as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act. Our internal control system is designed to provide reasonable assurance to our management and Board regarding the preparation and fair presentation of published financial statements. All internal control systems, no matter how well designed, have inherent limitations. Therefore, even those systems determined to be effective can provide only reasonable assurance with respect to financial statement preparation and presentation. Our management has assessed the effectiveness of our internal control over financial reporting as of December 31, 2024. In making this assessment, management used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO Framework”) in its 2013 Internal Control—Integrated Framework. Management believes that the COSO Framework is a suitable framework for its evaluation of financial reporting because it is free from bias, permits reasonably consistent qualitative and quantitative measurements of our internal control over financial reporting, is sufficiently complete so that those relevant factors that would alter a conclusion about the effectiveness of our internal control over financial reporting are not omitted and is relevant to an evaluation of internal control over financial reporting. On March 20, 2025, we filed the Original Report. 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, 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 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. 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. 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 62 Table of Contents 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. 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. Changes in Internal Control over Financial Reporting 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 63 Table of Contents 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. Item 9B. Other Information. Insider Trading Arrangements None . Item 9C. Disclosure Regarding Foreign J urisdictions that Prevent Inspection. Not applicable. 64 Table of Contents PART III Item 10. Directors, Executive Off icers and Corporate Governance. 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. Item 11. 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”. Item 12. 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”. Item 13. Certain Relationships and Related Transactions, and Director Independence. 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.”. Item 14. Principal Accountant Fees and Services. 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”. 65 Table of Contents PART IV Item 15. Exhibits, Financi al Statement Schedules. (a) The following documents are filed as part of this Annual Report on Form 10-K: (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. 1 on Form 10-K. (2) Financial Statement Schedules: The financial statement schedules are omitted as they are either not applicable or the information required is presented in the financial statements and notes thereto under Part II, Item 8. Financial Statements and Supplementary Data . (3) Exhibits: Exhibit Incorporated by Reference Filed with Filed Number Exhibit Description Form File No. Exhibit Filing Date Original Report Herewith 2.1 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. 8-K 001-36620 2.1 September 15, 2020 3.1 Restated Certificate of Incorporation of Novus Therapeutics, Inc., a Delaware corporation, dated September 22, 2014 8-K 001-36620 3.1 September 26, 2014 3.2 Certificate of Amendment to Certificate of Incorporation of Novus Therapeutics, Inc. (effecting, among other things a reverse stock-split), filed with the Secretary of the State of Delaware on May 9, 2017 8-K 001-36620 3.1 May 15, 2017 3.3 Certificate of Amendment to Certificate of Incorporation of Novus Therapeutics, Inc. (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 8-K 001-36620 3.2 May 15, 2017 66 Table of Contents 3.4 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 8-K 001-36620 3.1 October 6, 2020 3.5 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 8-K 001-36620 3.1 January 5, 2021 3.6 Amended and Restated Bylaws of Eledon Pharmaceuticals, Inc. 8-K 001-36620 3.4 January 5, 2021 3.7 Certificate of Designations of Series X Convertible Preferred Stock 8-K 001-36620 3.1 February 19, 2020 3.8 Certificate of Designations of Series X 1 Convertible Preferred Stock 8-K 001-36620 3.1 September 15, 2020 4.1 Form of Common Stock Certificate 8-A/A 001-36620 4.1 June 23, 2017 4.2 Form of Warrant 8-K 001-36620 4.1 May 2, 2019 4.3 Form of Placement Agent Warrant 8-K 001-36620 4.2 May 2, 2019 4.4 Form of Common Stock Purchase Warrant 8-K 001-36620 4.1 January 16, 2020 4.5 Description of Securities 10-K 001-36620 4.5 March 31, 2021 4.6 Form of Pre-Funded Warrant to Purchase Common Stock 8-K 001-36620 4.1 May 1, 2023 4.7 Form of Tranche A Warrant to Purchase Common Stock or Pre-Funded Warrants 8-K 001-36620 4.2 May 1, 2023 4.8 Form of Pre-Funded Warrant to Purchase Common Stock 8-K 001-36620 4.1 May 7, 2024 4.9 Form of Pre-Funded Warrant to Purchase Common Stock 8-K 001-36620 4.1 October 30, 2024 67 Table of Contents 10.1 Open Market Sales Agreement by and between the Registrant and Guggenheim Securities, LLC dated September 20, 2024 S-3 333-282260 1.2 September 20, 2024 10.2 Securities Purchase Agreement, dated April 28, 2023 8-K 001-36620 10.1 May 1, 2023 10.3 Registration Rights Agreement, dated April 28, 2023 8-K 001-36620 10.2 May 1, 2023 10.4 Securities Purchase Agreement, dated May 6, 2024 8-K 001-36620 10.1 May 7, 2024 10.5 Registration Rights Agreement, dated May 6, 2024 8-K 001-36620 10.2 May 7, 2024 10.6 * Form of Indemnification Agreement to be entered into with each of the directors and officers of Eledon 8-K 001-36620 10.1 September 21, 2023 10.7 Fourth Amendment to Lease Agreement, dated March 12, 2024, by and between Newport Gateway Office LLC and Eledon Pharmaceuticals, Inc. X 10.8 Lease Agreement, dated September 4, 2024, by and between Blanchard Group LLC and Eledon Pharmaceuticals, Inc. X 10.9 * Tokai Pharmaceuticals, Inc. 2007 Stock Incentive Plan 10-K 001-36620 10.11 April 2, 2018 10.10 * Tokai Pharmaceuticals, Inc. 2014 Stock Incentive Plan 10-Q 001-36620 10.2 August 7, 2018 10.11 * Novus Therapeutics, Inc., 2014 Employee Stock Purchase Plan 10-Q 001-36620 10.3 August 7, 2018 10.12 * Executive Employment Agreement, dated September 9, 2020, between Novus Therapeutics, Inc. and David-Alexandre C. Gros, M.D. 10-K 001-36620 10.8 March 31, 2021 10.13 * David-Alexandre Gros, M.D. Letter Agreement, dated April 27, 2023 8-K 001-36620 10.3 May 1, 2023 68 Table of Contents 10.14 * David-Alexandre Gros, M.D. Letter Agreement, dated December 16, 2024 X 10.15 * Executive Employment Agreement, dated March 15, 2021, between Eledon Pharmaceuticals, Inc. and Paul Little 10-K 001-36620 10.10 March 31, 2021 10.16 * Steve Perrin, Ph.D. Letter Agreement, dated April 27, 2023 8-K 001-36620 10.4 May 1, 2023 10.17 * Novus Therapeutics, Inc., 2020 Long Term Incentive Plan 10-K 001-36620 10.11 March 31, 2021 10.18 * Eledon Pharmaceuticals, Inc. 2020 Long Term Incentive Plan, as amended 8-K 001-36620 10.1 July 10, 2024 10.19* Performance Stock Option Agreement, dated February 1, 2022, between Eledon Pharmaceuticals, Inc. and David-Alexandre C. Gros, M.D. 10-K 001-36620 10.12 March 24, 2022 10.20 Amended and Restated License Agreement by and between ALS Therapy Development Foundation, Inc. and Anelixis Therapeutics, Inc, dated February 18, 2020 10-Q 001-36620 10.1 August 11, 2022 10.21 First Amendment to Restated License Agreement between ALS Therapy Development Foundation, Inc. and Anelixis Therapeutics, Inc. dated September 5, 2020 10-Q 001-36620 10.2 August 11, 2022 10.22 License Agreement between Lonza Sales AG and Anelixis Therapeutics, LLC, dated September 11, 2018 10-Q 001-36620 10.3 August 11, 2022 10.23* Form of Stock Option Agreement, dated May 1, 2023, between Eledon Pharmaceuticals, Inc. and each of David-Alexandre C. Gros, M.D., Steve Perrin, Ph D., Bryan Smith and Paul Little 10-K 001-36620 10.22 March 28, 2024 69 Table of Contents 10.24* Form of Amendment to Stock Option Agreement, dated December 30, 2023, between Eledon Pharmaceuticals, Inc. and David-Alexandre C. Gros, M.D., Steve Perrin, Ph D., Bryan Smith and Paul Little 10-K 001-36620 10.23 March 28, 2024 10.25* 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 X 10.26* 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 X 19.1 Eledon Pharmaceuticals, Inc. Insider Trading Policy X 21.1 Subsidiaries of the Registrant 10-K 001-36620 21.1 March 17, 2020 23.1 Consent of Crowe LLP, independent registered public accounting firm X 23.2 Consent of KMJ Corbin & Company LLP, independent registered public accounting firm X 31.1 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 X 31.2 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 X 70 Table of Contents 31.3 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 X 31.4 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 X 32.1# 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 X 32.2 # Certification of Principal Financial Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 X 32.3# 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 X 32.4# Certification of Principal Financial Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 X 97.1 * Incentive Compensation Recoupment Policy 10-K 001-36620 97.1 March 28, 2024 71 Table of Contents 101.INS 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 X 101.SCH INLINE XBRL Taxonomy Extension Schema with Embedded Linkbase Documents X 104 Cover page formatted as INLINE XBRL and contained in Exhibit 101 X * Indicates a management contract or compensatory plan # 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. Item 16. Form 10-K Summary. None. 72 Table of Contents SIGNAT URES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. Eledon Pharmaceuticals, Inc. Date: August 14, 2025 By: /s/ David-Alexandre C. Gros, M.D. David-Alexandre C. Gros, M.D. Chief Executive Officer and Director (Principal Executive Officer and Duly Authorized Officer) Date: August 14, 2025 By: /s/ Paul Little Paul Little Chief Financial Officer (Principal Financial and Accounting Officer) Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, this Report has been signed below by the following persons on behalf of the Registrant in the capacities and on the dates indicated. Name Title Date /s/ David-Alexandre C. Gros, M.D. Chief Executive Officer and Director August 14, 2025 David-Alexandre C. Gros, M.D. ( Principal Executive Officer) /s/ Paul Little Chief Financial Officer August 14, 2025 Paul Little (Principal Financial and Accounting Officer) /s/ Keith A. Katkin Chairman of the Board of Directors August 14, 2025 Keith A. Katkin /s/ Jan Hillson, M.D. Director August 14, 2025 Jan Hillson, M.D. /s/ James Robinson Director August 14, 2025 James Robinson /s/ Allan Kirk, M.D. Director August 14, 2025 Allan Kirk, M.D. /s/ John S. McBride Director August 14, 2025 John S. McBride /s/ June Lee, M.D. Director August 14, 2025 June Lee, M.D. /s/ Steven Perrin President, Director August 14, 2025 Steven Perrin 73 Table of Contents ELEDON PHARMACEUTICALS, INC. INDEX TO CONSOLIDATED FINANC IAL STATEMENTS Page Report of Independent Registered Public Accounting Firm (Crowe LLP PCAOB ID#: 173 ) F- 2 Report of Independent Registered Public Accounting Firm (KMJ Corbin & Company LLP PCAOB ID#: 170 ) F- 4 Consolidated Balance Sheets as of December 31, 2024 and 2023 (As Restated) F- 5 Consolidated Statements of Operations and Comprehensive Loss for the Years Ended December 31, 2024 and 2023 (As Restated) F- 6 Consolidated Statements of Convertible Preferred Stock and Stockholders’ Equity (Deficit) for the Years Ended December 31, 2024 and 2023 (As Restated) F- 7 Consolidated Statements of Cash Flows for the Years Ended December 31, 2024 and 2023 F- 8 Notes to Consolidated Financial Statements (As Restated) F- 9 F- 1 Table of Contents REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To the Board of Directors and Stockholders of 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 F- 2 Table of Contents 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 F- 3 Table of Contents 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 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 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 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 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 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 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. /s/ KMJ Corbin & Company LLP 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) F- 4 Table of Contents ELEDON PHARMACEUTICALS, INC. CONSOLIDA TED BALANCE SHEETS (In thousands, except share and per share data) December 31, 2024 2023 (As Restated) ASSETS Current assets: Cash and cash equivalents $ 20,549 $ 4,612 Short-term investments 119,629 46,490 Prepaid expenses and other current assets 3,552 5,027 Total current assets 143,730 56,129 Operating lease right-of-use asset, net 926 365 In-process research and development 32,386 32,386 Other assets 363 186 Total assets $ 177,405 $ 89,066 LIABILITIES, CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS’ EQUITY (DEFICIT) Current liabilities: Accounts payable $ 5,833 $ 967 Current operating lease liability 314 383 Accrued expenses and other liabilities 5,430 2,545 Total current liabilities 11,577 3,895 Deferred tax liability 2,183 1,752 Non-current operating lease liability 640 — Warrant liabilities 44,865 76,211 Total liabilities 59,265 81,858 Commitments and contingencies (Note 6) — — 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 53,543 53,543 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 2,151 2,151 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 60 24 Additional paid-in capital 417,946 270,892 Accumulated other comprehensive income 26 — Accumulated deficit ( 355,586 ) ( 319,402 ) Total stockholders’ equity (deficit) 62,446 ( 48,486 ) Total liabilities, convertible preferred stock and stockholders’ equity (deficit) $ 177,405 $ 89,066 See accompanying notes to consolidated financial statements. F- 5 Table of Contents ELEDON PHARMACEUTICALS, INC. CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS (In thousands, except share and per share data) Year Ended December 31, 2024 2023 Operating expenses Research and development $ 51,964 $ 30,312 General and administrative 18,613 12,688 Total operating expenses 70,577 43,000 Other income, net 3,924 2,674 Change in fair value of warrant liabilities and fair value of financial instruments issued in excess of proceeds 30,900 ( 76,211 ) Loss before income taxes ( 35,753 ) ( 116,537 ) Provision for income taxes ( 431 ) — Net loss and comprehensive loss $ ( 36,184 ) $ ( 116,537 ) Basic and diluted earnings per share of common stock (As Restated) $ ( 0.66 ) $ ( 3.74 ) Weighted-average common shares outstanding, basic and diluted 48,543,787 24,619,197 Basic and diluted earnings per share of Series X and Series X 1 non-voting convertible preferred stock (As Restated) $ ( 36.61 ) $ ( 207.58 ) Weighted-average shares outstanding of Series X and Series X 1 non-voting convertible preferred stock, basic and diluted (As Restated) 114,508 118,268 See accompanying notes to consolidated financial statements. F- 6 Table of Contents ELEDON PHARMACEUTICALS, INC. 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 Preferred Stock Series X Non-Voting Convertible Preferred Stock Common Stock Additional Paid-In Accumulated Other Comprehensive Accumulated Total Stockholders' Shares Amount Shares Amount Shares Amount Capital Income Deficit Equity (Deficit) Balance as of December 31, 2022 (As Restated) 117,970 $ 57,378 6,204 $ 3,017 13,776,788 $ 14 $ 226,639 $ — $ ( 202,865 ) $ 23,788 Issuance of common stock and pre-funded warrants in connection with the 2023 Securities Purchase Agreement, net of issuance costs — — — — 8,730,168 9 33,008 — — 33,017 Issuance of common stock in connection with conversion of X non-voting convertible preferred stock — — ( 1,782 ) ( 866 ) 99,000 — 866 — — 866 Issuance of common stock in connection with conversion of X 1 non-voting convertible preferred stock ( 7,884 ) ( 3,835 ) — — 437,977 — 3,834 — — 3,834 Issuance of common stock in connection with exercise of pre-funded warrants — — — — 1,154,197 1 — — — 1 Issuance of common stock in connection with vesting of restricted stock units — — — — 15,000 — — — — — Stock-based compensation — — — — — — 6,545 — — 6,545 Net loss and comprehensive loss — — — — — — — — ( 116,537 ) ( 116,537 ) Balance as of December 31, 2023 (As Restated) 110,086 $ 53,543 4,422 $ 2,151 24,213,130 $ 24 $ 270,892 $ — $ ( 319,402 ) $ ( 48,486 ) Issuance of common stock and pre-funded warrants in connection with the 2024 Securities Purchase Agreement, net of issuance costs — — — — 13,110,484 13 48,051 — — 48,064 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 — — — — 2,636,488 3 6,152 — — 6,155 Issuance of common stock in connection with exercise of pre-funded warrants — — — — 1,423,000 1 — — — 1 Issuance of common stock and pre-funded warrants in connection with 2024 Underwritten Offering, net of issuance costs. — — — — 18,356,173 18 79,515 — — 79,533 Stock Option Exercise — — — — 50,000 1 214 — — 215 Share based compensation — — — — — — 13,122 — — 13,122 Accumulated other comprehensive loss — — — — — — — 26 — 26 Net loss — — — — — — — — ( 36,184 ) ( 36,184 ) Balance as of December 31, 2024 (As Restated) 110,086 $ 53,543 4,422 $ 2,151 59,789,275 $ 60 $ 417,946 $ 26 $ ( 355,586 ) $ 62,446 See accompanying notes to consolidated financial statements. F- 7 Table of Contents ELEDON PHARMACEUTICALS, INC. CONSOLIDATED S TATEMENTS OF CASH FLOWS (In thousands) Year Ended December 31, 2024 2023 Cash flows used in operating activities: Net loss $ ( 36,184 ) $ ( 116,537 ) Adjustments to reconcile net loss to net cash used in operating activities: Gain on lease termination ( 10 ) — Amortization of operating lease right-of-use asset 359 374 Accretion of investment discounts ( 2,799 ) ( 1,203 ) Stock-based compensation 13,122 6,545 Change in fair value of warrant liabilities and fair value of financial instruments issued in excess of proceeds ( 30,900 ) 76,211 Deferred tax provision 431 — Changes in operating assets and liabilities: Prepaid expenses and other assets 1,298 ( 1,954 ) Accounts payable, accrued expenses and other liabilities 7,751 ( 2,600 ) Operating lease liabilities ( 339 ) ( 363 ) Net cash used in operating activities ( 47,271 ) ( 39,527 ) Cash flows from investing activities: Purchase of available-for-sale short-term investments ( 156,131 ) ( 78,287 ) Proceeds from maturities of available-for-sale short-term investments 85,817 33,000 Net cash used in investing activities ( 70,314 ) ( 45,287 ) Cash flows from financing activities: Proceeds from issuances of common stock and pre-funded warrants, net 133,307 33,017 Proceeds from exercise of stock options 215 — Net cash provided by financing activities 133,522 33,017 Net change in cash and cash equivalents 15,937 ( 51,797 ) Cash and cash equivalents at beginning of year 4,612 56,409 Cash and cash equivalents at end of year $ 20,549 $ 4,612 Supplemental disclosure of non-cash investing and financing activities Non-cash activities: Common stock exchanged for X and X 1 non-voting convertible preferred stock $ — $ 1 Unrealized gain on available-for-sale securities $ 26 $ — Increase in operating right-of-use lease asset and liability due to new lease $ 920 $ — Settlement of warrant liability into common stock due to exercise $ 446 $ — See accompanying notes to consolidated financial statements. F- 8 Table of Contents ELEDON PHARMACEUTICALS, INC. NOTES TO CONSOLID ATED FINANCIAL STATEMENTS Note 1. Description of Business (As Restated) Eledon Pharmaceuticals, Inc. 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. Unless otherwise indicated, references to the terms “Eledon,” “our,” “us,” “we,” or the “Company” refer to Eledon Pharmaceuticals, Inc. and its wholly owned subsidiaries, on a consolidated basis. On September 14, 2020 , Eledon acquired Anelixis Therapeutics, Inc. (“Anelixis”), a privately held clinical stage biotechnology company developing a next generation anti-CD40L antibody as a potential treatment for organ and cellular transplantation, autoimmune diseases, and neurodegenerative diseases. The Company maintains its corporate headquarters in Irvine, California and has research and development facilities in Burlington, Massachusetts. 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 12 Restatement of Previously Issued Consolidated Financial Statements for further information. F- 9 Table of Contents Note 2. Summary of Significant Accounting Policies Basis of Presentation and Principles of Consolidation The consolidated financial statements are prepared in accordance with GAAP. Eledon, a Delaware corporation, owns 100 % of the issued and outstanding common stock or other ownership interest in Anelixis Therapeutics, LLC, a Delaware limited liability company, and Otic Pharma, Ltd., a private limited company organized under the laws of the State of Israel (“Otic”). Otic owns 100 % of the issued and outstanding common stock or other ownership interest in its U.S. subsidiary, Otic Pharma, Inc. The functional currency of the Company’s foreign subsidiary is the U.S. Dollar; however, certain expenses, assets and liabilities are transacted at the local currency. These transactions are translated from the local currency into U.S. Dollars at exchange rates during or at the end of the reporting period. The activities of the Company’s foreign subsidiary are not significant to the consolidated financial statements. All significant intercompany accounts and transactions among the entities have been eliminated in consolidation. Use of Estimates 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 (“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. Concentration of Credit Risk Financial instruments which potentially subject the Company to significant concentration of credit risk consists of cash, cash equivalents and short-term investments. The Company maintains deposits in federally insured institutions in excess of federally insured limits and invests in short-term investments with the primary objective of seeking to preserve principal, achieve liquidity requirements and safeguard invested funds. We believe that the Company is not exposed to significant credit risk due to the financial position of the depository institution in which those deposits are held and the nature, including the credit ratings, of our cash equivalents and short-term investments, but we have not eliminated all credit risk. Cash and Cash Equivalents The Company considers all highly liquid investments with original maturities of three months or less when purchased to be cash equivalents. Cash and cash equivalents include cash in readily available checking accounts, money market funds, U.S. government securities and U.S. government agency securities. Cash and cash equivalents are valued at cost, which approximates their fair value due to the short-term maturities of these investments. Risks and Uncertainties As of December 31, 2024 and 2023, all of the Company’s long-lived assets were located in the United States. The Company’s products will require approval from the U.S. Food and Drug Administration (“FDA”) and foreign regulatory agencies before commercial sales can commence. There can be no assurance that its products will receive any of these required approvals. The denial or delay of such approvals may impact the Company’s business in the future. In addition, after the approval by the FDA, there is still an ongoing risk of adverse events that did not appear during the product approval process. The Company is subject to risks common to companies in the pharmaceutical industry, including, but not limited to, new technological innovations, clinical development risk, establishment of appropriate commercial partnerships, protection of proprietary technology, compliance with government and environmental regulations, uncertainty of market acceptance of products, product liability, the volatility of its stock price and the need to obtain additional financing. 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 F- 10 Table of Contents 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. However, the Company's facilities and systems, as well as those of its third-party suppliers and vendors, may be vulnerable to earthquakes, fire, storm, public health or similar emergencies, power loss, telecommunications failures, physical and software break-ins, software viruses and similar events which could cause substantial delays in its operations, damage or destroy its equipment or inventory, and cause the Company to incur additional expenses and delay research and development activities. In addition, the insurance coverage the Company maintains may not be adequate to cover its losses in any circumstance and may not continue to be available to use on acceptable terms, or at all. Reportable Segments 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 tegoprubart, to develop therapies to protect transplanted organs and prevent rejection, and to treat ALS. Long-Lived Assets Property and equipment are recorded at cost. Depreciation is computed using the straight-line method over the estimated useful lives of the respective assets. Additions, major renewals and improvements are capitalized and repair and maintenance costs are charged to expense as incurred. Leasehold improvements are amortized over the remaining life of the initial lease term or the estimated useful lives of the assets, whichever is shorter. The Company reviews property and equipment for impairment whenever events or changes in circumstances indicate that the carrying value of an asset may not be recoverable. An impairment loss would be recognized when estimated future undiscounted cash flows relating to the asset are less than its carrying amount. An impairment loss is measured as the amount by which the carrying amount of an asset exceeds its fair value. Significant management judgment is required in the forecast of future operating results that are used in the preparation of expected cash flows. No impairments of long-lived assets have been identified during the years presented. In-Process Research and Development 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 Research and development expenses include personnel and facility-related expenses, outside contracted services including clinical trial costs, manufacturing and process development costs, research costs and other consulting services and non-cash stock-based compensation. Research and development costs are expensed as incurred. Amounts due under contracts with third parties may be either fixed fee or fee for service, and may include upfront payments, monthly payments and payments upon the completion of milestones or receipt of deliverables. Non-refundable advance payments under agreements are capitalized and expensed as the related goods are delivered or services are performed. F- 11 Table of Contents 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. Payments under the contracts depend on factors such as the achievement of certain events, successful enrollment of patients, and completion of portions of the clinical trial or similar conditions. The Company’s accrual for clinical trials is based on estimates of the services received and efforts expended pursuant to contracts with clinical trial centers and clinical research organizations. These contracts may be terminated by the Company upon written notice and the Company is generally only liable for actual effort expended by the organizations to the date of termination, although in certain instances the Company may be further responsible for termination fees and penalties. The Company estimates its research and development expenses and the related accrual as of each balance sheet date based on the facts and circumstances known to the Company at that time. There have been no material adjustments to the Company’s prior period accrued estimates for clinical trial activities through December 31, 2024 . 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, 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. The calculation of basic and diluted earnings per share for our common stock and Preferred Stock is as follows: Year Ended December 31, 2024 2023 (As Restated) (In thousands, except share and per share data) Weighted-average common shares outstanding, basic and diluted 48,543,787 24,619,197 Weighted-average shares outstanding of Series X and Series X 1 non-voting convertible preferred stock, basic and diluted 114,508 118,268 Net loss used in the calculation of basic and diluted loss per share $ ( 36,184 ) $ ( 116,537 ) Net loss available to common stock $ ( 31,992 ) $ ( 91,987 ) Net loss per share, common stock, basic and diluted $ ( 0.66 ) $ ( 3.74 ) Net loss available to Series X and Series X 1 non-voting convertible preferred stock $ ( 4,192 ) $ ( 24,550 ) Basic and diluted earnings per share of Series X and Series X 1 non-voting convertible preferred stock $ ( 36.61 ) $ ( 207.58 ) F- 12 Table of Contents The computation of diluted earnings per share excludes incentive stock options, restricted stock units, and warrants that are anti-dilutive. The following table provides a summary as of December 31, 2024 and 2023 common share equivalents that were excluded because their inclusion would have been anti-dilutive. Year Ended December 31, 2024 2023 Stock options outstanding and other equity awards 6,007,789 14,909,155 Common and preferred warrants outstanding 18,567,751 18,577,332 Total 24,575,540 33,486,487 Stock-Based Compensation 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. 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. 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. We assess the likelihood that deferred tax assets will be recovered as deductions from future taxable income. The evaluation of the need for a valuation allowance is performed on a jurisdiction-by-jurisdiction basis and includes a review of all available positive and negative evidence. Factors reviewed include projections of pre-tax book income for the foreseeable future, determination of cumulative pre-tax book income after permanent differences, earnings history, and reliability of forecasting. We have provided a valuation allowance on our deferred tax assets as of December 31, 2024 and 2023 because we believe it is more likely than not that a majority of our deferred tax assets will not be realized as of this date. The Company evaluates the accounting for uncertainty in income tax recognized in its consolidated financial statements and determines whether it is more likely than not that a tax position will be sustained upon examination by the appropriate taxing authorities before any part of the benefit is recorded in its consolidated financial statements. For those tax positions where it is “not more likely than not” that a tax benefit will be sustained, no tax benefit is recognized. Where applicable, associated interest and penalties are also recorded. The Company has not accrued any liabilities for any such uncertain tax positions as of December 31, 2024 and 2023. The Company is subject to U.S. federal and state tax authority examinations for all the years since inception due to net operating loss and tax credit carryforwards. The net operating losses and tax credits are subject to adjustment until the statute closes on the year the attributes are ultimately utilized. The Company’s income tax returns are based on calculations and assumptions that are subject to examination by the Internal Revenue Service and other tax authorities. In addition, the calculation of the Company’s tax liabilities involves dealing with uncertainties in the application of complex tax regulations. The Company recognizes liabilities for uncertain tax positions based on a two-step process. 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 F- 13 Table of Contents 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. The Company continually assesses the likelihood and amount of potential revisions and adjusts the income tax provision, income taxes payable and deferred taxes in the period in which the facts that give rise to a revision become known. For additional information, see Note 7. 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 In December 2023, the FASB issued ASU No. 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures. This update requires disaggregated information about a reporting entity’s effective tax rate reconciliation as well as information on income taxes paid. ASU No. 2023-09 is effective for public entities with annual periods beginning after December 15, 2024, with early adoption permitted. The Company is currently evaluating the impact of this guidance on its consolidated financial statements. In November 2024, the FASB issued ASU No. 2024-03, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses, 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. Note 3. Short-Term Investments The objectives of the Company’s investment policy are to preserve principal, meet the Company's liquidity requirements and safeguard invested funds. Short-term investments consist of U.S. government securities and U.S. 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 F- 14 Table of Contents 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. The amortized cost of available-for-sale securities is adjusted for amortization of premiums and accretion of discounts to maturity. Investments are reported at their estimated fair value. 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, 2024 and 2023: December 31, 2024 Amortized Cost Unrealized Gains Unrealized Losses Fair Value U.S. government securities $ 119,603 $ 55 $ ( 29 ) $ 119,629 Total short-term investments $ 119,603 $ 55 $ ( 29 ) $ 119,629 December 31, 2023 Amortized Cost Unrealized Gains Unrealized Losses Fair Value U.S. government securities $ 33,213 $ 3 $ ( 3 ) $ 33,213 U.S. government agency securities 13,277 2 ( 2 ) 13,277 Total short-term investments $ 46,490 $ 5 $ ( 5 ) $ 46,490 All of the Company's available-for-sale securities have a stated maturity of less than one year. Note 4. Fair Value Measurements Financial assets and liabilities are recorded at fair value. The Company classifies fair value measurements using a three-level hierarchy that prioritizes the inputs used to measure fair value. This hierarchy requires entities to maximize the use of observable inputs and minimize the use of unobservable inputs. The three levels of inputs used to measure fair value are as follows: • Level 1—Quoted market prices (unadjusted) in active markets for identical assets and liabilities. • Level 2—Observable inputs other than quoted market prices included in Level 1, such as quoted market prices for markets that are not active or other inputs that are observable or can be corroborated by observable market data. • Level 3—Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities, including certain pricing models, discounted cash flow methodologies and similar techniques that use significant unobservable inputs. These fair values are obtained from independent pricing services which utilize Level 1 and Level 2 inputs. F- 15 Table of Contents Financial Assets The following table summarizes the Company's financial asset instruments measured at fair value on a recurring basis as of December 31, 2024 and 2023 (in thousands). Included within cash and cash equivalents on the consolidated balance sheets, but excluded from the fair value hierarchy table, are cash deposits held at financial institutions. December 31, 2024 Level 1 Level 2 Level 3 Total Assets: Cash equivalents: Money market funds $ 1,215 $ — $ — $ 1,215 U.S. Treasuries — 17,464 — 17,464 Total cash equivalents 1,215 17,464 — 18,679 Short-term investments: U.S. government securities — 119,629 — 119,629 U.S. government agency securities — — — — Total short-term investments — 119,629 — 119,629 Total financial assets $ 1,215 $ 137,093 $ — $ 138,308 December 31, 2023 Level 1 Level 2 Level 3 Total Assets: Cash equivalents: Money market funds $ 4,246 $ — $ — $ 4,246 Total cash equivalents 4,246 — — 4,246 Short-term investments: U.S. government securities — 33,213 — 33,213 U.S. government agency securities — 13,277 — 13,277 Total short-term investments — 46,490 — 46,490 Total financial assets $ 4,246 $ 46,490 $ — $ 50,736 Warrant Liabilities 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 Level 1 Level 2 Level 3 Total Warrant liabilities $ — $ — $ 44,865 $ 44,865 December 31, 2023 Level 1 Level 2 Level 3 Total Warrant liabilities $ — $ — $ 76,211 $ 76,211 F- 16 Table of Contents 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 $ 76,211 Change in fair value of warrant liabilities and fair value of financial instruments issued in excess of proceeds ( 30,900 ) Settlement of warrant liability ( 446 ) Balance as of December 31, 2024 $ 44,865 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 . Note 5. 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): Year Ended December 31, 2024 2023 Prepaid clinical $ 1,915 $ 4,128 Prepaid insurance 693 624 Prepaid other 215 185 Other current assets 729 90 Total prepaid expenses and other current assets $ 3,552 $ 5,027 Accrued expenses and other liabilities consisted of the following as of December 31, 2024 and 2023 (in thousands): Year Ended December 31, 2024 2023 Accrued clinical $ 3,642 $ 451 Accrued compensation and related expenses 1,601 2,003 Accrued professional services 140 47 Accrued other 47 44 Total accrued expenses and other liabilities $ 5,430 $ 2,545 Note 6. Commitments and Contingencies Operating Leases The Company leases office space under various operating leases. 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. 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 . F- 17 Table of Contents 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 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. Operating lease liabilities represent the present value of lease payments not yet paid. Operating lease assets represent our right to use an underlying asset and are based upon the operating lease liabilities as adjusted for prepayments or accrued lease payments, initial direct costs, lease incentives, and impairment of operating lease assets. To determine the present value of lease payments not yet paid, we estimate incremental secured borrowing rates corresponding to the maturities of the leases. As we have no outstanding debt nor committed credit facilities, secured or otherwise, we estimate this rate based on prevailing financial market conditions, comparable company and credit analysis, and management’s judgment. Our leases contain rent escalations over the lease term. We recognize expense for these leases on a straight-line basis over the lease term. Additionally, tenant incentives used to fund leasehold improvements are recognized when earned and reduce our right-of-use asset related to the lease. These are amortized through the right-of-use asset as reductions of expense over the lease term. Our lease agreements do not contain any material residual value guarantees or material restrictive covenants. While we do not currently have any lease agreement with lease and non-lease components, we elected to account for lease and non-lease components as separate components. We have elected the short-term lease recognition exemption for all applicable classes of underlying assets. Short-term disclosures include only those leases with a term greater than one month and 12 months or less, and expense is recognized on a straight-line basis over the lease term. 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 total operating lease expense were as follows (in thousands): Year Ended December 31, 2024 2023 Operating lease cost (a) $ 407 $ 400 (a) Includes variable operating lease expenses, which are immaterial. Other supplemental cash flow information related to leases were as follows (in thousands): Year Ended December 31, 2024 2023 Cash paid for amounts included in the measurement of lease liability: Operating cash flows from operating leases $ 378 $ 378 Year Ended December 31, 2024 2023 Weighted-average remaining lease term (in years) 2.7 1.0 Weighted-average discount rate 9.46 % 2.49 % F- 18 Table of Contents As of December 31, 2024, future minimum payments under non-cancelable operating leases, were as follows (in thousands): Year Ended December 31, 2024 2025 $ 391 2026 403 2027 293 Total minimum lease payments 1,087 Less imputed interest ( 133 ) Present value of lease liabilities 954 Less current portion of operating lease liabilities ( 314 ) Non-current operating lease liabilities $ 640 Grants and Licenses ALS Therapy Development Foundation, Inc. License Agreement In May 2015, Anelixis executed a License Agreement (the “Agreement”), which is an exclusive patent rights agreement with ALS Therapy Development Foundation, Inc. (“ALS TDI”) for certain patents and “know-how” of ALS TDI. This agreement continues until the licensee terminates the agreement with ninety days written notice. The Agreement requires license fees payable to ALS TDI, subject to the achievement of certain milestones and other conditions. The first and second milestones of the Agreement are the dosing of the first subjects in a first toxicity study in non-human primates and the dosing of the first patient in a Phase I Clinical Trial, respectively. Both of these milestones were achieved as of December 31, 2018 and 2017. The fee due for the achievement of these milestones was $ 1.0 million each. 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. The Agreement was amended and restated in February 2020, and a first amendment to the restated license agreement was executed in September 2020. As amended in September 2020, the remaining milestone payments for a first licensed product total $ 6.0 million. In the event that the Company develops a second licensed product, the Company is obligated to pay up to $ 2.5 million in additional milestone payments. 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 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 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. Lonza Sales AG Inc. License Agreement In September 2018, Anelixis executed a License Agreement (the “Lonza Agreement”), which is a manufacturing know-how rights agreement with Lonza Sales AG Inc. (“Lonza”) for the use of certain processes and know-how related to the manufacture of tegoprubart. The Lonza Agreement continues until the later of the last Valid Claim (as defined therein) or ten years from the First Commercial Sale of tegoprubart, as defined and subject to the conditions therein. A royalty in the low single digits will be due on aggregate net sales of tegoprubart that is manufactured by Lonza or any other third-party or licensee. F- 19 Table of Contents eGenesis, Inc. Collaboration Agreement In September 2022, and subsequently amended in January 2023, Eledon executed a non-exclusive collaborative research agreement with eGenesis, Inc. (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 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. Legal Matters The Company and its subsidiaries are not a party to or the subject of any claim or lawsuit that individually or in the aggregate is anticipated to have a material effect on the Company’s results of operations, financial condition or cash flows. Indemnifications In the normal course of business, the Company enters into contracts and agreements that contain a variety of representations and warranties and provide for general indemnification. 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. 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. No amounts associated with such indemnifications have been recorded to date. Contingencies From time to time, the Company may have certain contingent liabilities that arise in the ordinary course of business activities. The Company accrues a liability for such matters when it is probable that future expenditures will be made and such expenditures can be reasonably estimated. There have been no contingent liabilities requiring accrual at December 31, 2024 and 2023 . Note 7. Income Taxes Loss before income taxes are as follows (in thousands): Year Ended December 31, 2024 2023 Losses before income taxes: U.S. $ ( 35,951 ) $ ( 116,736 ) Non-U.S. 198 199 Total $ ( 35,753 ) $ ( 116,537 ) F- 20 Table of Contents The provision for income taxes are as follows (in thousands): Year Ended December 31, 2024 2023 Current: Federal $ — $ — State — — Foreign — — Total current income tax provision — — Deferred: Federal — — State 431 — Foreign — — Total deferred income tax provision 431 — Total provision for income taxes $ 431 $ — 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. Deferred tax assets and liabilities are determined using the enacted tax rates in effect for the years in which those tax assets are expected to be realized. A valuation allowance is established when it is more likely than not the future realization of all or some of the deferred tax assets will not be achieved. The evaluation of the need for a valuation allowance is performed on a jurisdiction-by-jurisdiction basis, and includes a review of all available positive and negative evidence. Factors reviewed include projections of pre-tax book income for the foreseeable future, determination of cumulative pre-tax book income after permanent differences, earnings history, and reliability of forecasting. Based on its review, the Company concluded that it was more likely than not that they would not realize the benefit of a portion of its deferred tax assets in the future. This conclusion was based on historical and projected operating performance, as well as the Company’s expectation that its operations will not generate sufficient taxable income in future periods to realize the tax benefits associated with the deferred tax assets within the statutory carryover periods. Therefore, the Company has a valuation allowance on its deferred tax assets as of December 31, 2024. The Company will continue to assess the need for a valuation allowance on its deferred tax assets by evaluating both positive and negative evidence that may exist. Any adjustment to the net deferred tax asset valuation allowance would be recorded in the statement of operations for the period that the adjustment is determined to be required. A reconciliation of the U.S. federal statutory income tax rate to the Company’s effective income tax rate is as follows (in thousands): Year Ended December 31, 2024 2023 Statutory federal income tax rate $ ( 7,508 ) $ ( 24,473 ) State income taxes, net of federal tax benefits ( 908 ) ( 3,170 ) Tax credits ( 2,358 ) ( 972 ) Stock-based compensation 2,819 728 Permanent items 12 9 Change in fair value of warrant liabilities and fair value of financial instruments issued in excess of proceeds ( 7,273 ) 18,078 State rate differential 490 32 NOL true-up ( 4 ) 2 Other 24 566 Change in valuation allowance 15,137 9,200 Total provision for income taxes $ 431 $ — F- 21 Table of Contents Significant components of the Company’s deferred tax assets and liabilities as of December 31, 2024 and 2023 consisted of the following (in thousands): Year Ended December 31, 2024 2023 Net operating loss carryforwards $ 22,740 $ 18,089 Research and development tax credits 5,560 3,202 Accruals and reserves 366 475 Research expenditures 18,809 10,567 Stock-based compensation 3,281 3,085 Depreciation and amortization 1,056 1,319 Lease liability 225 91 Total deferred tax assets 52,037 36,828 Right-of-use asset ( 218 ) ( 87 ) Acquired IPR&D ( 7,623 ) ( 7,682 ) Total deferred tax liabilities ( 7,841 ) ( 7,769 ) Less: valuation allowance ( 46,379 ) ( 30,811 ) Net deferred tax liabilities $ ( 2,183 ) $ ( 1,752 ) The following table reconciles the beginning and ending amounts of unrecognized tax benefits for the years presented (in thousands): Year Ended December 31, 2024 2023 Gross unrecognized tax benefits at the beginning of the year $ 3,636 $ 2,664 Additions from tax positions taken in the current year 2,596 972 Additions from tax positions taken in prior years — — Gross unrecognized tax benefits at the end of the year $ 6,232 $ 3,636 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 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. The Company’s accounting for deferred taxes involves the evaluation of a number of factors concerning the realizability of its net deferred tax assets. The Company primarily considered such factors as its history of operating losses, the nature of the Company’s deferred tax assets, and the timing, likelihood, and amount, if any, of future taxable income during the periods in which those temporary differences and carryforwards become deductible. At present, the Company does not believe that it is more likely than not that the deferred tax assets will be realized; accordingly, a valuation allowance has been established. As of December 31, 2024 and 2023 , the Company had federal net operating loss carryforwards of approximately $ 88.7 million and $ 68.9 million, respectively, available to reduce future taxable income. As of December 31, 2024 and 2023 , the Company also has state net operating loss carryforwards of $ 37.7 million and $ 30.1 million, respectively. Both the federal and state net operating loss carryforwards incurred before 2018 begin expiring in 2035 , if not utilized. The federal net operating losses incurred since 2018 of $ 87.9 million do not expire. The state net operating losses begin to expire in 2035 . 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. If not utilized, the carryforwards will begin expiring in 2036 . As of December 31, 2024 and 2023 , the Company has state research and development credit carryforwards or approximately $ 2.6 million and $ 1.5 million, respectively, which will begin expiring in 2030 if not utilized . 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 F- 22 Table of Contents 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. The Company’s ability to use its remaining net operating loss and tax credit carryforwards may be further limited if the Company experiences a Section 382 ownership change in connection with future changes in our stock ownership. In the United States, the Company files income tax returns in the U.S. Federal jurisdiction, California and Massachusetts. The Company’s tax years for 2018 and forward are subject to examination by the Federal and California tax authorities due to the carryforward of unutilized net operating losses and research and development credits. The Company’s policy is to recognize interest expense and penalties related to income tax matters as a component of income tax expense. There was no accrued interest and penalties associated with uncertain tax positions as of December 31, 2024 and 2023 . The Company has no t recorded any interest or penalties in 2024 or 2023 . Note 8. Stockholders’ Equity (As Restated) 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 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 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. The holder of the Preferred Stock is entitled to receive dividends on shares of the Preferred Stock equal (on an as-if-converted-to-common-stock basis and without regard to any beneficial ownership limitations) to and in the same form as dividends actually paid on shares of the common stock. No other dividends will be paid on shares of the Preferred Stock. 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 such series. 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 Ser ies X 1 Non-Voting Convertible Preferred Stock. F- 23 Table of Contents 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. 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 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: Year Ended December 31, 2024 2023 Expected stock price volatility 96.4 % 89.1 % - 94.3 % Risk-free interest rate 4.4 % 3.8 % - 3.9 % Expected life of options (in years) 3.5 4.5 - 6.0 Share price $ 4.14 $ 1.80 F- 24 Table of Contents 2023 Conversion Agreement of 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. 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”). F- 25 Table of Contents 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. (the “Exercising Stockholder”) exercised Pre-Funded Warrants to purchase 501,197 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 14, 2023, the Company issued 501,197 shares of common stock to the Exercising Stockholder in accordance with such exercise . 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, 2024, 33,052,744 warrants were exercisable into common stock (after rounding for fractional shares and subject to beneficial ownership limitations). F- 26 Table of Contents The following table shows the warrants to purchase common stock activity: Roll-Forward of Warrant Activity Common Stock Warrants Pre-Funded Warrants Total Balance as of December 31, 2023 15,788,032 5,776,270 21,564,302 Issued — 12,921,023 12,921,023 Exercised — ( 1,423,000 ) ( 1,423,000 ) Cancelled/Expired ( 9,581 ) — ( 9,581 ) Balance as of December 31, 2024 15,778,451 17,274,293 33,052,744 As of December 31, 2024, the Company's outstanding warrants to purchase shares of common stock consisted of the following: Date Issued Number of Shares of Common Stock Issuable Exercise Price Expiration Date January 2020 common warrants 5,586 $ 18.90 July 14, 2025 January 2020 common warrants 3,591 $ 18.90 July 17, 2025 January 2020 common warrants 247,264 $ 12.96 July 14, 2025 January 2020 common warrants 71,800 $ 12.96 July 17, 2025 September 2020 common warrants 298,692 $ 3.08 September 14, 2025 2023 Securities Purchase Agreement common warrants 15,151,518 $ 3.00 May 5, 2028 January 2021 pre-funded warrants 509,117 $ 0.001 December 31, 2030 2023 Securities Purchase Agreement pre-funded warrants 3,844,153 $ 0.001 N/A 2024 Securities Purchase Agreement pre-funded warrants 7,989,516 $ 0.001 N/A 2024 Underwritten Offering pre-funded warrants 4,931,507 $ 0.001 N/A Balance as of December 31, 2024 33,052,744 Preferred Stock Warrants 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 Total Balance as of December 31, 2023 50,207.419 Assumed and replaced — Exercised — Cancelled/Expired — Balance as of December 31, 2024 50,207.419 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 . F- 27 Table of Contents Note 9. Stock-Based Compensation Stock Option Plans 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. 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. F- 28 Table of Contents The following table summarizes all option activity under the 2014 Plan, 2020 Plan and inducement grants: Shares Issuable Under Options Weighted Average Exercise Price Weighted Average Remaining Contractual Term Aggregate Intrinsic Value (in thousands) (In years) Outstanding as of January 1, 2023 5,218,033 $ 8.69 8.1 $ — Granted 11,026,451 2.10 Forfeited / Canceled ( 862,631 ) 8.07 Outstanding as of December 31, 2023 15,381,853 $ 4.21 8.9 $ 235 Granted 622,000 2.22 Exercised ( 50,000 ) 2.30 Forfeited / Canceled ( 316,465 ) 7.29 Outstanding as of December 31, 2024 15,637,388 $ 4.02 7.5 $ 20,628 Options vested and expected to vest as of December 31, 2024 15,637,388 $ 4.02 7.5 $ 20,628 Options exercisable as of December 31, 2024 8,667,177 $ 5.37 6.8 $ 7,898 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. 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: Year Ended December 31, 2024 2023 Expected stock price volatility 101.3 % 90.5 % Risk-free interest rate 4.2 % 3.7 % Expected life of options (in years) 6.9 6.1 Estimated dividend yield — % — % 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 The following table shows the RSU activity, as follows: Shares Issuable Under RSUs Weighted Average Grant Date Fair Value (In years) Outstanding as of January 1, 2023 15,000 $ 2.47 Granted — — RSUs Vested ( 15,000 ) 2.47 Forfeited / Canceled — — Outstanding as of December 31, 2023 — $ — Granted 46,000 1.97 RSUs Vested — — Forfeited / Canceled — — Outstanding as of December 31, 2024 46,000 $ 1.97 F- 29 Table of Contents Stock-based Compensation Expense Total compensation expense related to all of the Company’s stock-based awards for the years ended December 31, 2024 and 2023 was comprised of the following (in thousands): Year Ended December 31, 2024 2023 Stock-based compensation classified as: Research and development expense $ 4,277 $ 1,491 General and administrative expense 8,845 5,054 Total stock-based compensation expense $ 13,122 $ 6,545 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. Note 10. 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: Year Ended December 31, 2024 2023 Operating expenses: Tegoprubart - kidney transplantation programs $ 27,452 $ 11,940 Tegoprubart - other development programs 306 3,186 Manufacturing 12,448 8,048 Personnel-related 10,706 8,351 Stock-based compensation 13,122 6,545 General and administrative expense 6,543 4,930 Total operating expenses 70,577 43,000 Loss from operations ( 70,577 ) ( 43,000 ) Other income, net 3,924 2,674 Change in fair value of warrant liabilities and fair value of financial instruments issued in excess of proceeds 30,900 ( 76,211 ) Provision for income taxes ( 431 ) — Segment and net loss $ ( 36,184 ) $ ( 116,537 ) Note 11. Subsequent Events 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. Note 12. 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 Preferred Stock, and concluded F- 30 Table of Contents 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. 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. 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): As of December 31, 2023 As Previously Reported Restatement Impact As Restated 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 $ — $ 53,543 $ 53,543 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 — 2,151 2,151 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 326,586 ( 55,694 ) 270,892 Total stockholders’ equity (deficit) $ 7,208 $ ( 55,694 ) $ ( 48,486 ) F- 31 Table of Contents As of December 31, 2024 As Previously Reported Restatement Impact As Restated 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 $ — $ 53,543 $ 53,543 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 — 2,151 2,151 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 473,640 ( 55,694 ) 417,946 Total stockholders’ equity $ 118,140 $ ( 55,694 ) $ 62,446 For the Fiscal Year Ended December 31, 2023 As Previously Reported As Restated Basic and diluted earnings per share of common stock $ ( 4.73 ) $ ( 3.74 ) Basic and diluted earnings per share of Series X and Series X 1 non-voting convertible preferred stock $ — $ ( 207.58 ) Weighted-average shares outstanding of Series X and Series X 1 non-voting convertible preferred stock, basic and diluted — 118,268 For the Fiscal Year Ended December 31, 2024 As Previously Reported As Restated Basic and diluted earnings per share of common stock $ ( 0.75 ) $ ( 0.66 ) Basic and diluted earnings per share of Series X and Series X 1 non-voting convertible preferred stock $ — $ ( 36.61 ) Weighted-average shares outstanding of Series X and Series X 1 non-voting convertible preferred stock, basic and diluted — 114,508 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 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 F- 32 Table of Contents 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 March 31, 2024 As Previously Reported Restatement Impact As Restated 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 $ — $ 53,543 $ 53,543 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 — 2,151 2,151 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 328,280 ( 55,694 ) 272,586 Total stockholders’ equity (deficit) $ ( 14,728 ) $ ( 55,694 ) $ ( 70,422 ) For the Three Months Ended March 31, 2024 As Previously Reported As Restated Basic and diluted earnings per share of common stock $ ( 0.79 ) $ ( 0.65 ) Basic and diluted earnings per share of Series X and Series X 1 non-voting convertible preferred stock $ — $ ( 36.12 ) Weighted-average shares outstanding of Series X and Series X 1 non-voting convertible preferred stock, basic and diluted — 114,508 F- 33 Table of Contents As of June 30, 2024 As Previously Reported Restatement Impact As Restated 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 $ — $ 53,543 $ 53,543 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 — 2,151 2,151 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 379,400 ( 55,694 ) 323,706 Total stockholders’ equity (deficit) $ ( 8,501 ) $ ( 55,694 ) $ ( 64,195 ) For the Three Months Ended June 30, 2024 For the Six Months Ended June 30, 2024 As Previously Reported As Restated As Previously Reported As Restated Basic and diluted earnings per share of common stock $ ( 1.06 ) $ ( 0.92 ) $ ( 1.90 ) $ ( 1.61 ) Basic and diluted earnings per share of Series X and Series X 1 non-voting convertible preferred stock $ — $ ( 51.29 ) $ — $ ( 89.60 ) Weighted-average shares outstanding of Series X and Series X 1 non-voting convertible preferred stock, basic and diluted — 114,508 — 114,508 F- 34 Table of Contents As of September 30, 2024 As Previously Reported Restatement Impact As Restated 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 $ — $ 53,543 $ 53,543 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 — 2,151 2,151 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 386,884 ( 55,694 ) 331,190 Total stockholders’ equity $ 76,058 $ ( 55,694 ) $ 20,364 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 As Restated As Previously Reported As Restated Net loss attributable to common shares - diluted $ ( 17,504 ) $ ( 15,703 ) $ ( 61,086 ) $ ( 53,230 ) Diluted earnings per share of common stock $ ( 0.32 ) $ ( 0.28 ) $ ( 1.42 ) $ ( 1.23 ) Net income attributable to Series X and Series X 1 non-voting convertible preferred stocks - basic $ — $ 6,666 $ — $ 852 Basic earnings per share of Series X and Series X 1 non-voting convertible preferred stock $ — $ 58.21 $ — $ 7.44 Weighted-average shares outstanding of Series X and Series X 1 non-voting convertible preferred stock, basic — 114,508 — 114,508 Net loss attributable to Series X and Series X 1 non-voting convertible preferred stocks - diluted $ — $ ( 1,801 ) $ — $ ( 7,856 ) Diluted earnings per share of Series X and Series X 1 non-voting convertible preferred stock $ — $ ( 15.73 ) $ — $ ( 68.60 ) Weighted-average shares outstanding of Series X and Series X 1 non-voting convertible preferred stock, diluted — 114,508 — 114,508 F- 35