What changed in this filing

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Item 9A. Controls and Procedures

2022-03-15 compared with 2021-03-05 · 478 added, 583 removed, 1072 unchanged (50% of the section changed)

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Management’s Report on Internal Control Over Financial Reporting

This Annual Report on Form 10-K does not include a report of management's assessment regarding internal control over financial reporting or an attestation report of the company's registered public accounting firm due to a transition period established by rules of the SEC for newly public companies.

Our management is responsible for establishing and maintaining adequate internal control over financial reporting as such term is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act.

Our internal control system was designed to provide reasonable assurance to our management and our board of directors regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles.

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 assessed the effectiveness of our internal control over financial reporting as of December 31, 2021.

In making this assessment, our management used the criteria set forth in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission in 2013 (COSO criteria).

Based on this assessment, management concluded that our internal control over financial reporting was effective as of December 31, 2021.

This Annual Report on Form 10-K does not include an attestation report of our independent registered public accounting firm because we are exempt from this requirement pursuant to rules of the Securities and Exchange Commission.

Changes in Internal Control over Financial Reporting

There were no changes in our internal control over financial reporting during the quarter ended December 31, 2020 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting .

During the year ended December 31, 2021, we implemented certain internal controls in connection with our adoption of ASC 842.

There were no other changes in our internal control over financial reporting during the year ended December 31, 2021 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting .

Other Information.

Disclosure Regarding Foreign Jurisdictions that Prevent Inspections.

Not applicable.

Directors, Executive Officers and Corporate Governance.

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Non-Employee Directors

Mott ( 1) ( 2) (3)

Chairman of the Board of Directors

Mette Kirstine Agger ( 3)

David Bonita, M.D.

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Carl Goldfischer, M.D.

Sara Nayeem, M.D.

Laura Williams, M.D., MPH ( 2 )

Member of the audit committee.

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Previously, Mr.

Gray held positions including Controller at Reprogenesis Inc., a biotechnology company focused on the development of cell therapy drug candidates, and as an audit

professional for the accounting and consulting firm of Ernst & Young, LLP.

Gray has served on the board of directors of Therapeutics Acquisition Corporation, a special purpose acquisition corporation, since May 2020.

Gray held positions including Controller at Reprogenesis Inc., a biotechnology company focused on the development of cell therapy drug candidates, and as an audit professional for the accounting and consulting firm of Ernst & Young, LLP.

Gray served on the board of directors of Therapeutics Acquisition Corporation, a special purpose acquisition corporation, from May 2020 to July 2021, when it

completed its merger with POINT Biopharma, Inc .

Gray received his M.B.A.

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Attie held clinical development and medical affairs leadership roles of increasing responsibility at Altus Pharmaceuticals Inc., a biopharmaceutical company, from 2007 to 2009, Insmed, Inc., a biopharmaceutical company, from 2005 to 2007, and Genentech, Inc, a biotechnology company, from 1988 to 2000.

Attie received his B.A in music from the University of Michigan and his M.D.

Attie received his B.A.

in music from the University of Michigan and his M.D.

from the New York University School of Medicine.

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Mott has served as a member of our board of directors since January 2016.

Mott has been a private investor through Mott Family Capital since February 2020 and previously served as a General Partner of New Enterprise Associates, Inc., or New Enterprise Associates, an investment firm focused on venture capital and growth equity investments and, with its affiliates, a holder of more than 5% of our voting securities, from September 2008 to February 2020, where he led the healthcare investing practice.

Mott has been a private investor through Mott Family Capital since February 2020 and previously served as a General Partner at New Enterprise Associates, Inc., or New Enterprise Associates, a venture capital firm and, with its affiliates, a holder of more than 5% of our voting securities, from September 2008 to February 2020, where he led the healthcare investing practice.

From 1992 until 2008, Mr.

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Mott also served as Executive Vice President of AstraZeneca from June 2007 to July 2008 following AstraZeneca’s acquisition of MedImmune in June 2007.

Mott has served on the board of directors of several public companies, including Epizyme, Inc., or Epizyme, a public late-stage biopharmaceutical company, since 2009, Ardelyx, Inc., a public specialized biopharmaceutical company, since 2009, Adaptimmune Therapeutics plc, a public clinical-stage biopharmaceutical company, since September 2014 and Mersana Therapeutics, Inc., a public life sciences company, since July 2012, and previously served on the board of Tiburio Therapeutics, Inc., a biopharmaceutical company, from December 2018 to February 2020, Nightstar Therapeutics plc, a public gene therapy company that was acquired by Biogen in June 2019, from November 2015 to June 2019, Clementia Pharmaceuticals, Inc., a clinical-stage company, from June 2015 to February 2018, and Tesaro, Inc., an oncology-focused company, from May 2010 to January 2019.

Mott also serves on the boards of several private biopharmaceutical companies.

Mott has served on the board of directors of several public companies, including Epizyme, Inc., or Epizyme, a public biopharmaceutical company, since 2009, Ardelyx, Inc., a public specialized biopharmaceutical company, since 2009, Adaptimmune Therapeutics plc, a public clinical-stage biopharmaceutical company, since September 2014, Mersana Therapeutics, Inc., a public life sciences company, since July 2012 and Novavax, Inc., a public late-stage biotechnology company, since June 2020, and previously served on the board of Nightstar Therapeutics plc, a public gene therapy company, from November 2015 to June 2019, Clementia Pharmaceuticals, Inc., a clinical-stage company, from June 2015 to February 2018, and Tesaro, Inc., an oncology-focused company, from May 2010 to January 2019.

Mott received his B.A.

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We believe Mr.

Mott is qualified to serve on our board of directors based on his experience as an executive officer at MedImmune and his role on several public and private boards of directors as well as his leadership position in healthcare investing.

Mette Kirstine Agger has served as a member of our board of directors since January 2016.

Since 2009, Ms.

Agger has served as a Managing Partner of Lundbeckfonden Ventures, a life science venture fund and, with its affiliates, a holder of more than 5% of our voting securities.

Prior to joining Lundbeckfonden Ventures, Ms.

Agger co-founded 7TM A/S, a biotech company engaged in therapeutic drug discovery and development, in 2000, and served as its Chief Executive Officer from founding to 2009.

Prior to founding 7TM, Ms.

Agger was part of the management team of NeuroSearch A/S, a drug research and development company.

Agger served on the board of Trevi Therapeutics, Inc., a public life sciences company, from July 2017 to June 2019 and Veloxis Pharmaceuticals A/S, an emerging specialty pharmaceutical company from April 2010 to December 2019, and has served on the board of directors of scPharmaceuticals Inc., a public pharmaceutical company, since March 2014, and Tiburio Therapeutics, Inc., a biopharmaceutical company, since December 2018.

She also serves on the boards of several private companies, including Cydan II, Inc., or Cydan.

Agger received her M.Sc.

in biology from the University of Copenhagen and received her M.B.A.

from Henley Business School at the University of Reading.

We believe Ms.

Agger is qualified to serve on our board of directors based on her experience holding senior leadership positions within biotechnology companies and her role on public and private boards of directors, as well as her experience in investing in healthcare companies.

Mott is qualified to serve on our board of directors based on his experience as an executive officer at MedImmune and his role on several public boards of directors as well as his leadership position in healthcare investing.

David Bonita, M.D.

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Since February 2020, Dr.

Bonita has been a member of OrbiMed Advisors LLC, or OrbiMed , a venture capital firm and, with its affiliates, a holder of more than 5% of our voting securities, where he previously served as a private equity partner from June 2013 to February 2020.

Bonita has been a member of OrbiMed Advisors LLC, or OrbiMed, an investment firm and, with its affiliates, a holder of more than 5% of our voting securities, where he previously served as a private equity partner from June 2013 to February 2020.

From June 2004 to June 2013, Dr.

Bonita held other positions at OrbiMed.

Bonita has served on the board of directors of Tricida , Inc., a pharmaceutical company, since January 2014 , Acutus Medical Inc, an arrhythmia management company, since March 2016, Prelude Therapeutics, Inc., an oncology company, since July 2016 , and Repare Therapeutics Inc., a cancer- focussed biotechnology company, since September 2019.

Bonita has also served as Secretary for Auraeda, Inc.

since October 2021.

Bonita has served on the board of directors of Tricida, Inc., a pharmaceutical company, since January 2014, Acutus Medical Inc, an arrhythmia management company, since March 2016, Ikena Oncology, Inc, an oncology company, since March 2016, Prelude Therapeutics, Inc., an oncology company, since July 2016, and Repare Therapeutics Inc., a cancer-focused biotechnology company, since September 2019.

Bonita also previously served on the boards of directors of Clementia Pharmaceuticals Inc., a public pharmaceutical company, from April 2013 to April 2019, Loxo Oncology, Inc., a public biopharmaceutical company, from October 2013 to December 2017, Si-Bone, Inc., a public medical device company, from April 2014 to June 2019, and ViewRay Inc., a public medical device company from January 2008 to June 2018.

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Mark Chin has served as a member of our board of directors since March 2019.

Chin served as an Investment Director at Arix Bioscience plc, a life science investment company and, with its affiliates, a holder of more than 5% of our voting securities, from August 2016 to April 2020.

Chin has served as a Managing Director at Arix Bioscience plc, a life science investment company and, with its affiliates, a holder of more than 5% of our voting securities, since July 2021 and served as an Investment Director at Arix from August 2016 to April 2020.

From September 2012 to July 2016, Mr.

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Chin earned his B.S.

in management science from the University of California, San Diego, his M.B.A.

in management science from the University of California, San Diego,

from the Wharton School at the University of Pennsylvania and his M.S.

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Since July 2021, Dr.

Conner has served as Senior Vice President and Chief Medical Officer at Audentes Therapeutics, Inc., an Astellas company and a genetic medicines company.

Conner has served as Chief Medical Officer at Locanabio, Inc., a gene therapy company.

From May 2019 to July 2021, Dr.

Conner served as Senior Vice President and Chief Medical Officer at Audentes Therapeutics, Inc., an Astellas company and a genetic medicines company.

From November 2016 to May 2019, he served as Senior Vice President and Chief Medical Officer at Sangamo Therapeutics, Inc., a biotechnology company.

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has served as a member of our board of directors since January 2016.

Dalton is the Vice President of Venture Capital for Pfizer Ventures, the venture capital group of Pfizer Inc.

Dalton has served as the Vice President of Venture Capital for Pfizer Ventures, the venture capital group of Pfizer Inc.

and, with its affiliates, a holder of more than 5% of our voting securities, since she joined Pfizer in 2007.

She serves on the board of Artios Ltd., Cydan, Ixchelsis Ltd, AMRA Medical and Second Genome, which are all private independent biopharmaceutical companies.

She serves on the board of Artios Ltd., Priovant Therapeutics, Inc., Ixchelsis Ltd, AMRA Medical and Second Genome, which are all private independent biopharmaceutical companies.

Barbara also serves on several other Pfizer Venture Investments portfolio companies as a board observer.

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Goldfischer was Chief Financial Officer and VP of Finance and Strategic Planning of ImClone Systems Inc., a biopharmaceutical company.

Goldfischer has served on the board of directors of Epizyme since September 2009.

He has previously served on the board of directors of EnteroMedics Inc., now ReShape Lifesciences Inc., a public medical

device company, from 2004 to September 2017, MAP Pharmaceuticals, Inc., a biopharmaceutical company, from 2004 to 2011 and Poniard Pharmaceuticals, Inc., a public biopharmaceutical company, from 2000 to 2012.

Goldfischer has served on the board of directors of Epizyme, Inc., a public biopharmaceutical company, since September 2009.

He has previously served on the board of directors of EnteroMedics Inc., now ReShape Lifesciences Inc., a public medical device company, from 2004 to September 2017, MAP Pharmaceuticals, Inc., a biopharmaceutical company, from 2004 to 2011 and Poniard Pharmaceuticals, Inc., a public biopharmaceutical company, from 2000 to 2012.

Goldfischer received his B.A.

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Goldfischer is qualified to serve on our board of directors based on his experience as chief financial officer at ImClone Systems and his role on several public and private boards of directors as well as his experience in investing in healthcare companies .

Sara Nayeem, M.D.

has served as a member of our board of directors since January 2016.

Nayeem has been a partner at Avoro Capital Advisors, an investment firm, since February 2021.

From October 2015 to February 2021, Dr.

Nayeem served as a Partner at New Enterprise Associates, a venture capital firm and, with its affiliates, a holder of more than 5% of our voting securities.

From January 2009 to October 2015, Dr.

Nayeem held other positions at New Enterprise Associates.

Prior to joining New Enterprise Associates, Dr.

Nayeem was an Associate with Merrill Lynch and Co.

Inc.’s Global Healthcare Group from August 2006 to January 2009.

Nayeem previously served on the board of directors of Mersana Therapeutics, Inc., a public life sciences company, from July 2012 to June 2018.

Nayeem currently serves on the board of directors of several private biopharmaceutical companies, including Centrexion Therapeutics Corp., Cydan, Cydan LLC, Complexa Inc.

and Tiburio Therapeutics, Inc.

Previously, she served on the boards of Vtesse, Inc.

from December 2014 to April 2017, Eperia Inc.

from July 2016 to December 2018, and Therachon Holding AG, a clinical stage global biotechnology company, from July 2015 to October 2016.

Nayeem received her M.D.

from Yale University and her B.A.

in biology from Harvard University.

Laura Williams, M.D., MPH , has served as a member of our board of directors since June 2021 .

Since October 2021, Dr.

Williams has served as the Chief Medical Officer at Ardelyx, Inc., a biopharmaceutical company, and she served as Senior Vice President, Global Therapeutic Strategies and Patient Advocacy for Ardelyx from November 2020 to October 2021.

Prior to Ardelyx, she served as Senior Vice President and Head of Clinical Development and Biostatistics at AMAG Pharmaceuticals, Inc., a pharmaceutical company, from September 2017 until January 2020.

From September 2016 to August 2017, Dr.

Williams served as Vice President of Clinical Development at Myovant Sciences Ltd., a healthcare company.

From 1998 to July 2016, Dr.

Williams served in roles of increasing responsibility at Abbott Laboratories and AbbVie, Inc.

Williams received her B.S.

from Mississippi State University, her M.D.

from the University of Iowa and MPH in Epidemiology from the University of Washington.

We believe Dr.

Nayeem is qualified to serve on our board of directors based on her experience in healthcare investment banking, her experience in investing in healthcare companies and her role as a member of the boards of directors for several biotechnology companies.

Williams is qualified to serve on our board of directors based on her significant strategic and clinical development experience, as well her experience with patient advocacy.

Delinquent Section 16(a) Reports

Section 16(a) of the Exchange Act requires directors, officers and persons who are beneficial owners of more than 10% of our common stock to file with the SEC reports of their ownership of our securities and of changes in that ownership.

To our knowledge, based upon a review of copies of reports filed with the SEC with respect to the fiscal year ended December 31, 2021 and written representations by our directors and officers that no other reports were required with respect to their transactions, all reports required to be filed under Section 16(a) by our directors and officers and persons who were beneficial owners of more than 10% of our common stock were timely filed, except that Mark Chin filed one late Form 4 with respect to one transaction.

Code of Business Conduct and Ethics

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In addition, we intend to post on our website all disclosures that are required by law or Nasdaq listing standards concerning any amendments to, or waivers from, any provision of the code.

Stockholder Nomination Process

Our nominating and corporate governance committee is responsible for identifying individuals qualified to serve as directors, consistent with criteria approved by our board, and recommending the persons to be nominated for election as directors, except where we are legally required by contract, law or otherwise to provide third parties with the right to nominate director candidates.

Stockholders may recommend individuals to the nominating and corporate governance committee for consideration as potential director candidates.

Any such proposals should be submitted to our corporate secretary at our principal executive offices and should include appropriate biographical and background material to allow the nominating and corporate governance committee to properly evaluate the potential director candidate and the number of shares of our stock beneficially owned by the stockholder proposing the candidate.

If a stockholder wishes to propose a nomination of persons for election to our board of directors at an annual meeting but does not wish to have the proposal considered for inclusion in our proxy statement and proxy card, our amended and restated bylaws establish an advance notice procedure for such nominations and proposals.

Stockholders at an annual meeting may only consider proposals or nominations specified in the notice of meeting or brought before the meeting by or at the direction of the board of directors or by a stockholder of record on the record date for the meeting, who is entitled to vote at the meeting and who has delivered timely notice in proper form to our corporate secretary of the stockholder’s intention to bring such business before the meeting.

The required notice must be in writing and received by our corporate secretary at our principal executive offices not less than 90 days nor more than 120 days prior to the first anniversary of the preceding year’s annual meeting.

However, in the event that the date of the annual meeting is advanced by more than 30 days, or delayed by more than 60 days, from the first anniversary of the preceding year’s annual meeting, or if no annual meeting was held in the preceding year, a stockholder’s notice must be so received no earlier than the 120th day prior to such annual meeting and not later than the close of business on the later of (A) the 90th day prior to such annual meeting and (B) the tenth day following the day on which notice of the date of such annual meeting was mailed or public disclosure of the date of such annual meeting was made, whichever first occurs.

Assuming that biographical and background material has been provided on a timely basis, any recommendations received from stockholders will be evaluated in the same manner as potential nominees proposed by the nominating and corporate governance committee.

If our board of directors decides to nominate a stockholder-recommended candidate and recommends his or her election, then his or her name will be included on our proxy card for the next annual meeting.

Audit Committee

The members of our audit committee are Mark Chin, Carl Goldfischer and Sara Nayeem.

The members of our audit committee are Mark Chin, Carl Goldfischer and David Mott.

Goldfischer is the chair of the audit committee.

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The following discussion relates to the compensation of our President and Chief Executive Officer, Rahul D.

Ballal, Ph.D., and our Chief Financial Officer and Chief Operating Officer, Michael P.

Gray, for the years ended December 31, 2020 and 2019.

We also include discussion of the compensation of our former Chief Medical Officer, Willem Scheele, for the years ended December 31, 2020 and 2019 pursuant to the requirements of the Securities Act of 1933, or the Securities Act.

Ballal, Ph.D., our Chief Financial Officer and Chief Operating Officer, Michael P.

Gray, and our Chief Medical Officer, Kenneth Attie, M.D., for the years ended December 31, 2021 and 2020.

These three individuals are collectively referred to in this Annual Report on Form 10-K as our named executive officers.

We have begun, and expect to continue in the coming months, a thorough review of all elements of our executive compensation program, including the function and design of our equity incentive programs.

We have begun, and expect to continue in the coming months, to evaluate the need for revisions to our executive compensation program to ensure that our program is competitive with the companies with which we compete for executive talent and is appropriate for a public company.

We continuously review all elements of our executive compensation program, including the function and design of our equity incentive programs, to ensure that our program is competitive with the companies with which we compete for executive talent and that it is appropriate for a public company of our size and stage of development.

Summary Compensation Table

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Operating Officer

Willem Scheele ( 9)

Former Chief Medical Officer

Amounts represent a cash bonus award paid to our named executive officers under our bonus program.

Kenneth Attie (8)

Chief Medical Officer

Amounts represent a cash bonus award to our named executive officers under our discretionary annual cash bonus program and with respect to Dr.

Attie, also includes a $50,000 signing bonus paid to Dr.

Attie in connection with the commencement of his employment.

The amounts reported in the “Option awards” column reflect the aggregate fair value of stock-based compensation awarded during the year computed in accordance with the provisions of Financial Accounting Standards Board Accounting Standards Codification, or ASC, Topic 718.

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These amounts reflect the accounting cost for these stock options and do not reflect the actual economic value that may be realized by the named executive officer upon the vesting of the stock options, the exercise of the stock options or the sale of the common stock underlying such stock options.

For 2019 options subject to performance-based vesting, the amounts reflect the grant date fair value of such awards based upon the probable outcome at the time of grant, in the amounts of $353,256, $134,238 and $105,977 for Dr.

Scheele, respectively, which amounts also equal what would have been the grant date fair value of the awards assuming achievement of the highest level of performance conditions.

Ballal also serves as a member of our board of directors but does not receive any additional compensation for his service as a director.

Amount represents compensation of $1,090 from premiums paid on behalf of Dr.

Ballal for life insurance and $1,530 in reimbursements for monthly parking costs.

Ballal for life insurance.

Amount represents compensation of $1,090 from premiums paid on behalf of Dr.

Ballal for life insurance and $1,530 in reimbursements for monthly parking costs.

Gray commenced employment with us on April 8, 2019.

Amount represents compensation of $1,090 from premiums paid on behalf of Mr.

Gray for life insurance and $1,530 in reimbursements for monthly parking costs.

Gray for life insurance.

Amount represents compensation of $1,090 from premiums paid on behalf of Mr.

Gray for life insurance and $1,530 in reimbursements for monthly parking costs.

Scheele commenced employment with us on March 15, 2019 and ceased to be an employee, effective April 22, 2020.

Amount represents compensation of $356 from premiums paid on behalf of Dr.

Scheele for life insurance, $1,530 in reimbursements for monthly parking costs, $246,528 in severance and $9,723 in vacation paid to Dr.

Attie commenced employment with us on January 19, 2021.

Amount represents compensation of $1,090 from premiums paid on behalf of Dr.

Scheele for life insurance and $4,045 in reimbursements for monthly parking costs.

Attie for life insurance.

Narrative to Summary Compensation Table

In 2021, we paid Dr.

Ballal an annualized base salary of $405,000 until April 1, 2019, when his annualized base salary was increased to $425,000.

Effective January 1, 2020, his annualized base salary was increased to $437,750.

Ballal an annualized base salary of $437,750 until February 1, 2021, when his annualized base salary was increased to $525,000.

In 2021, we paid Mr.

Gray an annualized base salary of $385,000, which was pro-rated to reflect the number of days he served with our company following his hire in April 2019 and effective January 1, 2020 his annualized base salary was increased to $393,444.

Gray an annualized base salary of $393,444, until February 1, 2021, when his annualized base salary was increased to $460,000.

In 2021, we paid Dr.

Scheele an annualized base salary of $355,000, which was pro-rated to reflect the number of days he served with our company following his hire in March 2019.

Scheele’s annualized base salary remained $355,000 during 2020 until his cessation of service on April 22, 2020.

We use base salaries to recognize the

experience, skills, knowledge and responsibilities required of all our employees, including our named executive officers.

Attie an annualized base salary of $420,000, which was pro-rated to reflect the number of days he served with our company following his hire in January 2021.

We use base salaries to recognize the experience, skills, knowledge and responsibilities required of all our employees, including our named executive officers.

None of our named executive officers are currently party to an employment agreement or other agreement or arrangement that provides for automatic or scheduled increases in base salary.

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Our letter agreements with Dr.

Scheele provide that they will be eligible for an annual discretionary bonus up to a specified percentage of their salaries based upon our achievements and their performance, as determined by our board of directors.

Attie provide that they will be eligible for an annual discretionary bonus up to a specified percentage of their salaries based upon our achievements and their performance, as determined by our board of directors.

Performance-based bonuses, which are calculated as a percentage of base salary, are designed to motivate our employees to achieve annual goals based on our strategic, financial and operating performance objectives.

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Ballal was eligible to receive a discretionary bonus of up to 45% of his annualized base salary.

Ballal’s annual discretionary bonus eligibility was increased up to 45% of his annualized base salary.

Ballal’s annual discretionary bonus

eligibility was increased up to 50 % of his annualized base salary.

Ballal a discretionary bonus of $1 77 , 289 with respect to 20 20 and $ 232 , 978 with respect to 202 1 .

Gray was eligible to receive a discretionary bonus of up to 35% of his annualized base salary, pro-rated to reflect the number of days he served with our company following his hire in April 2019.

In 20 20 , Mr.

Gray was eligible to receive a discretionary bonus of up to 35% of his annualized base salary .

In 202 1 , Mr.

Gray ’s annual discretionary bonus eligibility was increased up to 40 % of his annualized base salary .

Gray a discretionary bonus of $ 134 , 263 with respect to 20 20 and $ 172,692 with respect to 202 1 .

Scheele was eligible to receive a discretionary bonus of up to 35% of his annualized base salary, pro-rated to reflect the number of days he served with our company following his hire in March 2019.

Scheele a discretionary bonus of $67,900 with respect to 2019.We did not pay Dr.

Scheele a discretionary bonus with respect to 2020 due to his departure from our company.

In 20 21 , Dr.

Attie was eligible to receive a discretionary bonus of up to 35% of his annualized base salary, pro-rated to reflect the number of days he served with our company following his hire in January 2021 .

Attie a discretionary bonus of $ 129 , 500 with respect to 20 21 .

We also paid Dr.

Attie a $50,000 signing bonus in 2021 in connection with his commencement of employment.

Equity Incentives.

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In addition, we believe that equity grants with a time-based vesting feature promote executive retention because this feature incentivizes our executive officers to remain in our employment during the vesting period.

Accordingly, our board of directors periodically reviews the equity incentive compensation of our executive officers, including our named executive officers, and from time to time may grant equity incentive awards to them in the form of stock options.

We granted two options to purchase an aggregate of 421,434 shares of our common stock to Dr.

Ballal in May 2019:

one option to purchase 321,289 shares of our common stock, which award is subject solely to time-based vesting and which we refer to as the Initial Ballal 2019 Option, and a second option to purchase 100,145 shares of our common stock, which award is subject to both time-based and performance-based vesting and which we refer to as the Ballal Milestone Option.

The Initial Ballal 2019 Option vests as to 25% of the shares underlying the option on the first anniversary of the applicable vesting commencement date (which vesting commencement date is March 12, 2019) and in equal quarterly installments for three years thereafter.

The Ballal Milestone Option also vests as to 25% of the shares underlying the option on February 25, 2021, the first anniversary of the closing of the second tranche of our series B preferred stock financing, and in quarterly installments for three years thereafter.

All of the shares underlying the unvested portion of the Initial Ballal 2019 Option and the Ballal Milestone Option will immediately vest if, within twelve months following a change in control, Dr.

Ballal’s service is terminated by us without cause or by Dr.

Ballal with good reason (as each such term is defined in his letter agreement with us).

We granted two options to purchase an aggregate of 262,364 shares of our common stock to Mr.

Gray in May 2019:

one option to purchase 224,309 shares of our common stock, which award is subject solely to time-based vesting and which we refer to as the Initial Gray 2019 Option, and a second option to purchase 38,055 shares of our common stock, which award is subject to both time-based and performance-based vesting and which we refer to as the Gray Milestone Option.

The Initial Gray 2019 Option vests as to 25% of the shares underlying the option on the first anniversary of the vesting commencement date (which vesting commencement date is April 8, 2019) and in equal quarterly installments for three years thereafter.

The Gray Milestone Option also vests as to 25% of the shares underlying the option on February 25, 2021, the first anniversary of the closing of the second tranche of our series B preferred stock financing, and in quarterly installments for three years thereafter.

All of the shares underlying the unvested portion of the Initial Gray 2019 Option and the Gray Milestone Option will immediately vest if, within twelve months following a change in control, Mr.

Gray’s service is terminated by us without cause or by Mr.

Gray with good reason (as each such term is defined in his letter agreement with us).

We granted two options to purchase an aggregate of 207,129 shares of our common stock to Dr.

Scheele in May 2019:

one option to purchase 177,086 shares of our common stock, which award was subject solely to time-based vesting and which we refer to as the Initial Scheele 2019 Option, and a second option to purchase 30,043 shares of our common stock, which award was subject to both time-based and performance-based vesting and which we refer to as the Scheele Milestone Option.

The Initial Scheele 2019 Option vested as to 25% of the shares underlying the option on the first anniversary of the vesting commencement date (which vesting commencement date was March 15, 2019) and ceased vesting thereafter in connection with the termination of Dr.

Scheele’s employment in April 2020.

No shares underlying the Scheele Milestone Option vested prior to the termination of Dr.

Scheele’s employment.

We granted an option to purchase 133,350 shares of our common stock to Dr.

Ballal in January 2021.

The shares underlying the option vest and become exercisable over four years, with 25% of the shares vesting on the first anniversary of the date of grant, and the remaining shares vesting in equal quarterly installments thereafter, subject to Dr.

Ballal’s continuous service with us.

The vesting of this stock option will be fully accelerated upon a qualifying termination of Dr.

Ballal’s employment within twelve months following a change in control.

We granted an option to purchase 60,800 shares of our common stock to Mr.

Gray in January 2021.

Gray’s continuous service with us.

The vesting of this stock option will be fully accelerated upon a qualifying termination of Mr.

Gray’s employment within twelve months following a change in control.

We granted an option to purchase 110,000 shares of our common stock to Dr.

Attie in January 2021 in connection with his commencement of employment.

Attie’s continuous service with us.

The vesting of this stock option will be fully accelerated upon a qualifying termination of Dr.

Attie’s employment within twelve months following a change in control.

We did not grant equity incentive awards to any of our named executive officers during 2020.

Prior to the completion of our initial public offering in March 2020, our executives were eligible to participate in our 2016 Stock Incentive Plan, as amended, or the 2016 Plan.

During 2019, all stock options were granted pursuant to the 2016 Plan, and we did not grant any restricted stock awards during 2019 and 2020.

Our employees and executives are now eligible to receive stock options and other stock-based awards pursuant to our 2020 Equity Incentive Plan, or the 2020 Plan.

We have used stock options and restricted stock awards to compensate our executive officers in the form of initial grants in connection with the commencement of employment and also at various times, often but not necessarily annually, if we have performed as expected or better than expected.

The award of stock options and restricted stock to our executive officers have historically been made by our board of directors or compensation committee.

None of our executive officers is currently party to an employment agreement that provides for automatic award of stock options or restricted stock.

We have granted stock options and restricted stock to our executive officers with time-based and performance-based vesting.

The options and restricted stock that we have granted to our executive officers typically vest as to 25% of the shares underlying the award on the first anniversary of the grant date and in equal quarterly installments for three years thereafter.

We have used stock options and other stock-based awards to compensate our executive officers in the form of initial grants in connection with the commencement of employment and also at various times, often but not necessarily annually, if we have performed as expected or better than expected.

The award of stock options and other stock-based awards to our executive officers have historically been made by our board of directors or compensation committee.

None of our executive officers is currently party to an employment agreement that provides for automatic award of stock options or other stock-based awards.

We have granted stock options and other stock-based awards to our executive officers with time-based and performance-based vesting.

The options that we have granted to our executive officers typically vest as to 25% of the shares underlying the award on the first anniversary of the grant date and in equal quarterly installments for three years thereafter.

We have also granted performance-based awards tied to the achievement of milestones.

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Prior to the exercise of a stock option, the holder has no rights as a stockholder with respect to the shares subject to such option, including no voting rights and no right to receive dividends or dividend equivalents.

We have historically awarded stock options and restricted stock with exercise prices or purchase prices, as applicable, that are equal to the fair market value of our common stock on the date of grant as determined by our board of directors.

We have historically awarded stock options and other stock-based awards with exercise prices or purchase prices, as applicable, that are equal to the fair market value of our common stock on the date of grant as determined by our board of directors.

Outstanding Equity Awards at Fiscal Year-End

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Option expiration

Willem Scheele

This option was granted on October 19, 2018, and the shares underlying the option vest and become exercisable over four years, with 25% of the shares vesting on May 29, 2019 and the remaining shares vesting in equal quarterly installments thereafter, subject to Dr.

Kenneth Attie

This option was granted on October 19, 2018, and the shares underlying the option vest and become exercisable over four years, with 25% of the shares having vested on the first anniversary of the date of grant and the remaining shares vesting in equal quarterly installments thereafter, subject to Dr.

Ballal’s continuous service with us.

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Ballal’s employment within twelve months following a change in control.

This option was granted on May 16, 2019, and the shares underlying the option vest and become exercisable over four years, with 25% of the shares vesting on March 12, 2020 and the remaining shares vesting in equal quarterly installments thereafter, subject to Dr.

This option was granted on May 16, 2019, and the shares underlying the option vest and become exercisable over four years, with 25% of the shares having vested on the first anniversary of the date of grant and the remaining shares vesting in equal quarterly installments thereafter, subject to Dr.

Ballal’s continuous service with us.

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Ballal’s employment within twelve months following a change in control.

Options vest as to 25% of the shares underlying the option on February 25, 2021, the first anniversary of the closing of the second tranche of our series B preferred stock financing, and in quarterly installments for three years thereafter.

All of the shares underlying the unvested portion of the options will immediately vest if, within twelve months following a change in control, the recipient’s service is terminated by us without cause or by the recipient with good reason (as each such term is defined in such recipient’s letter agreement with us).

This option was granted on May 16, 2019, and the shares underlying the option vest and become exercisable over four years, with 25% of the shares vesting on April 8, 2020 and the remaining shares vesting in equal quarterly installments thereafter, subject to Mr.

This option was granted on May 16, 2019, and 25% of the shares underlying the option vested on February 25, 2021, the first anniversary of the closing of the second tranche of our series B preferred stock financing, with the remaining shares vesting in quarterly installments for three years thereafter.

The vesting of this stock option will be fully accelerated upon a qualifying termination of Dr.

Ballal’s employment within twelve months following a change in control.

This option was granted on January 28, 2021, and the shares underlying the option vest and become exercisable over four years, with 25% of the shares having vested on the first anniversary of the date of grant and the remaining shares vesting in equal quarterly installments thereafter, subject to Dr.

Ballal’s continuous service with us.

The vesting of this stock option will be fully accelerated upon a qualifying termination of Dr.

Ballal’s employment within twelve months following a change in control.

This option was granted on May 16, 2019, and the shares underlying the option vest and become exercisable over four years with 25% of the shares having vested on the first anniversary of the date of grant and the remaining shares vesting in equal quarterly installments thereafter, subject to Mr.

Gray’s continuous service with us.

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Gray’s employment within twelve months following a change in control.

Scheele’s unvested options expired in connection with his cessation of service in April 2020.

The vesting of this stock option will be fully accelerated upon a qualifying termination of Mr.

Gray’s employment within twelve months following a change in control

This option was granted on January 26, 2021, and the shares underlying the option vest and become exercisable over four years, with 25% of the shares having vested on the first anniversary of the date of grant and the remaining shares vesting in equal quarterly installments thereafter, subject to Mr.

Gray’s continuous service with us.

The vesting of this stock option will be fully accelerated upon a qualifying termination of Mr.

Gray’s employment within twelve months following a change in control.

Attie’s continuous service with us.

The vesting of this stock option will be fully accelerated upon a qualifying termination of Dr.

Attie’s employment within twelve months following a change in control.

Employment Agreements

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In connection with our initial hiring of Dr.

Ballal as our President and Chief Executive Officer, we entered into a letter agreement with him dated April 17, 2018, which was amended and restated on August 12, 2019 and further amended and restated on September 23, 2019.

We refer to the current amended and restated letter agreement as the Ballal letter agreement.

Ballal as our President and Chief Executive Officer, we entered into a letter agreement with him dated April 17, 2018, which was amended and restated on August 12, 2019 and September 23, 2019, and further amended on November 5, 2021.

We refer to the current letter agreement, as amended, as the Ballal letter agreement.

Under the Ballal letter agreement, Dr.

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Pursuant to the Ballal letter agreement, Dr.

Ballal’s annualized base salary is $425,000, and he is eligible to receive an annual discretionary bonus of up to 40% of his annualized base salary.

Ballal’s current annualized base salary is $550,000, and he is eligible to receive an annual discretionary bonus of up to 50% of his annualized base salary.

We will also reimburse all of Dr.

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Under the Ballal letter agreement, Dr.

Ballal is entitled, subject to his execution and nonrevocation of a release of claims in our favor and his continued compliance with certain restrictive covenants, in the event of the termination of his employment by us without cause or by him for good reason, each as defined in the Ballal letter agreement, to (i) continue receiving his then-current annual base salary for a period of twelve months following the date his employment with us is terminated, and (ii) reimbursement of COBRA premiums for health benefit coverage for a period of up to twelve months following the date that his employment with us is terminated.

employment by us without cause or by him for good reason, each as defined in the Ballal letter agreement, to (i) continue receiving his then-current annual base salary for a period of twelve months following the date his employment with us is terminated, and (ii) reimbursement of COBRA premiums for health benefit coverage for a period of up to twelve months following the date that his employment with us is terminated.

In the event that Dr.

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Ballal with good reason within twelve months following a change of control, each as defined in the Ballal letter agreement, Dr.

Ballal will be entitled, subject to his execution and nonrevocation of a release of claims in our favor and his continued compliance with certain restrictive covenants, to (i) continue receiving his then-current annual base salary for a period of twelve months following the date his employment with us is terminated, (ii) reimbursement of COBRA premiums for health benefit coverage for a period of up to twelve months following the date that his employment with us is terminated and (iii) one hundred percent of his annual bonus target amount for the year in which the termination occurs, payable as a lump sum.

In addition, Dr.

Ballal will be entitled to full acceleration of vesting of the option to purchase 268,999 shares of our common stock granted to Dr.

Ballal in October 2018 in connection with the commencement of his employment with us, the Initial Ballal 2019 Option and the Ballal Milestone Option.

Ballal will be entitled, subject to his execution and nonrevocation of a release of claims in our favor and his continued compliance with certain restrictive covenants, to (i) continue receiving his then-current annual base salary for a period of eighteen months following the date his employment with us is terminated, (ii) reimbursement of COBRA premiums for health benefit coverage for a period of up to eighteen months following the date that his employment with us is terminated and (iii) one hundred and fifty percent of his annual bonus target amount for the year in which the termination occurs, payable as a lump sum.

In addition, under the terms of the Ballal letter agreement or the applicable option agreements, Dr.

Ballal will be entitled to full acceleration of vesting on all outstanding options as of the date of his termination.

Under the Ballal letter agreement, if payments and benefits payable to Dr.

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In connection with our initial hiring of Mr.

Gray as our Chief Financial Officer and Chief Operating Officer, we entered into a letter agreement with him dated February 26, 2019, which was amended and restated on June 27, 2019 and further amended and restated on September 23, 2019.

We refer to the current amended and restated letter agreement as the Gray letter agreement.

Gray as our Chief Financial Officer and Chief Operating Officer, we entered into a letter agreement with him dated February 26, 2019, which was amended and restated on June 27, 2019 and September 23, 2019 and further amended on November 5, 2021.

We refer to the current letter agreement, as amended, as the Gray letter agreement.

Under the Gray letter agreement, Mr.

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Pursuant to the Gray letter agreement, Mr.

Gray’s annualized base salary is $385,000, and he is eligible to receive an annual discretionary bonus of up to 35% of his annualized base salary.

Gray’s current annualized base salary is $480,700, and he is eligible to receive an annual discretionary bonus of up to 40% of his annualized base salary.

We will also reimburse all of Mr.

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Gray with good reason within twelve months following a change of control, each as defined in the Gray letter agreement, Mr.

Gray will be entitled, subject to his execution and nonrevocation of a release of claims in our favor and his continued compliance with certain restrictive

covenants, to ( i ) continue receiving his then-current annual base salary for a period of nine months following the date his employment with us is terminated, (ii) reimbursement of COBRA premiums for health benefit coverage for a period of up to nine months following the date that his employment with us is terminated and (iii) seventy-five percent of his annual bonus target amount for the year in which the termination occurs, payable as a lump sum.

In addition, Mr.

Gray will be entitled to full acceleration of vesting of the Initial Gray 2019 Option and the Gray Milestone Option.

Gray will be entitled, subject to his execution and nonrevocation of a release of claims in our favor and his continued compliance with certain restrictive covenants, to (i) continue receiving his then-current annual base salary for a period of twelve months following the date his employment with us is terminated, (ii) reimbursement of COBRA premiums for health benefit coverage for a period of up to twelve months following the date that his employment with us is terminated and (iii) one hundred percent of his annual bonus target amount for the year in which the termination occurs, payable as a lump sum.

In addition, under the terms of the Gray letter agreement or the applicable option agreements, Mr.

Gray will be entitled to full acceleration of vesting on all outstanding options as of the date of his termination.

Under the Gray letter agreement, if payments and benefits payable to Mr.

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Gray under the restrictive covenant agreement he entered into with us described further under “Employee Non-Competition, Non-Solicitation, Confidentiality and Assignment Agreements” below.

Letter Agreement with Willem H.

Scheele, M.D.

Letter Agreement with Kenneth Attie, M.D.

In connection with our initial hiring of Dr.

Scheele as our Chief Medical Officer, we entered into a letter agreement with him dated March 1, 2019, which was amended and restated on June 27, 2019 and further amended and restated on September 23, 2019.

We refer to the most recently amended and restated letter agreement as the Scheele letter agreement.

Under the Scheele letter agreement, Dr.

Scheele was an at-will employee, and his employment with us was terminable by Dr.

Scheele or us at any time and for any reason.

Pursuant to the Scheele letter agreement, Dr.

Scheele’s annualized base salary was $355,000, and he was eligible to receive an annual discretionary bonus of up to 35% of his annualized base salary.

Scheele was also entitled to reimbursement of all of his monthly parking costs at a designated parking garage lot or his commuting costs for public transportation.

In connection with his cessation of service in April 2020, Dr.

Scheele is received severance benefits according to the terms of the Scheele letter agreement including (i) his annual base salary as of the date of termination for a period of nine months following the date of termination and (ii) reimbursement of COBRA premiums for health benefit coverage for a period of up to nine months following the date that date of termination.

Attie as our Chief Medical Officer, we entered into a letter agreement with him dated December 4, 2020, which was amended on November 5, 2021.

We refer to this letter agreement as the Attie letter agreement Under the Attie letter agreement, Dr.

Attie is an at-will employee, and his employment with us can be terminated by Dr.

Attie or us at any time and for any reason.

Pursuant to the Attie letter agreement, Dr.

Attie’s annualized base salary is

$436,800, and he is eligible to receive an annual discretionary bonus of up to 35% of his annualized base salary.

We will also reimburse all of Dr.

Attie’s monthly parking costs at a designated parking garage lot or his commuting costs for public transportation.

Under the Attie letter agreement, Dr.

Attie is entitled, subject to his execution and nonrevocation of a release of claims in our favor and his continued compliance with certain restrictive covenants, in the event of the termination of his employment by us without cause or by him for good reason, each as defined in the Attie letter agreement, to (i) continue receiving his then-current annual base salary for a period of nine months following the date his employment with us is terminated, and (ii) reimbursement of COBRA premiums for health benefit coverage for a period of up to nine months following the date that his employment with us is terminated.

In the event that Dr.

Attie’s employment is terminated by us without cause or by Dr.

Attie with good reason within twelve months following a change of control, each as defined in the Attie letter agreement, Dr.

Attie will be entitled, subject to his execution and nonrevocation of a release of claims in our favor and his continued compliance with certain restrictive covenants, to (i) continue receiving his then-current annual base salary for a period of twelve months following the date his employment with us is terminated, (ii) reimbursement of COBRA premiums for health benefit coverage for a period of up to twelve months following the date that his employment with us is terminated and (iii) one hundred percent of his annual bonus target amount for the year in which the termination occurs, payable as a lump sum.

In addition, Dr.

Attie will be entitled to full acceleration of vesting of the option to purchase 110,000 shares of our common stock granted to Dr.

Attie in January 2021 in connection with the commencement of his employment.

Under the Attie letter agreement, if payments and benefits payable to Dr.

Attie in connection with a change in control are subject to Section 4999 of the Code, then such payments and benefits will either be paid in full or be reduced so that the Section 4999 excise tax does not apply, whichever results in the better after-tax result for Dr.

The severance payments that Dr.

Attie is eligible to receive under the Attie letter agreement will be reduced, but not below $1,000, by the amount of garden leave pay received by Dr.

Attie under the restrictive covenant agreement he entered into with us described further under “Employee Non-Competition, Non-Solicitation, Confidentiality and Assignment Agreements” below.

Employee Non-Competition, Non-Solicitation, Confidentiality and Assignment Agreements

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Each executive officer also agreed to provide us with a non-exclusive, royalty-free, perpetual license to use any prior inventions that such executive officer incorporates into inventions assigned to us under this agreement.

Stock Option and Other Compensation Plans

In this section we describe the 2016 Plan, the 2020 Plan and our 2020 Employee Stock Purchase Plan, or the 2020 ESPP.

Prior to our initial public offering in March 2020, we granted awards to eligible participants under the 2016 Plan.

We currently grant awards to eligible participants under the 2020 Plan.

2016 Stock Incentive Plan

The 2016 Plan was initially approved by our board of directors and stockholders in April 2016 and was subsequently amended in November 2016, May 2018, March 2019, June 2019 and December 2019, in each case solely to increase the total number of shares reserved for issuance under the 2016 Plan.

The 2016 Plan provided for the grant of incentive stock options, nonstatutory stock options, stock appreciation rights, awards of restricted stock, restricted stock units and other stock-based awards.

Our employees, officers, directors, consultants and advisors were eligible to receive awards under the 2016 Plan;

however, incentive stock options could only be granted to our employees.

The type of award granted under the 2016 Plan and the terms of such award were set forth in the applicable award agreement.

Pursuant to the terms of the 2016 Plan, our board of directors (or a committee delegated by our board of directors) administered the plan and, subject to any limitations in the plan, selected the recipients of awards and determines:

the number of shares of our common stock covered by options and the dates upon which the options became exercisable;

the type of options to be granted;

the duration of options, which may not be in excess of ten years;

the exercise price of options, which must be at least equal to the fair market value of our common stock on the date of grant;

the number of shares of our common stock subject to and the terms of any stock appreciation rights, restricted stock awards, restricted stock units or other stock-based awards and the terms and conditions of such awards, including conditions for repurchase, measurement price, issue price and repurchase price (though the measurement price of stock appreciation rights must be at least equal to the fair market value of our common stock on the date of grant and the duration of such awards may not be in excess of ten years).

The maximum number of shares of common stock authorized for issuance under the 2016 Plan was 2,091,969 shares.

Our board of directors may amend, suspend or terminate the 2016 Plan at any time, except that stockholder approval may be required to comply with applicable law.

Effect of Certain Changes in Capitalization.

Upon the occurrence of any stock split, reverse stock split, stock dividend, recapitalization, combination of shares, reclassification of shares, spin-off or other similar change in capitalization or event, or any dividend or distribution to holders of our common stock other than an ordinary cash dividend, under the terms of the 2016 Plan, we are required to equitably adjust (or make substitute awards, if applicable), in the manner determined by our board of directors:

the number and class of securities available under the 2016 Plan;

the number and class of securities and exercise price per share of each outstanding option;

the share and per-share provisions and the measurement price of each outstanding stock appreciation right;

the number of shares subject to and the repurchase price per share subject to each outstanding restricted stock award or restricted stock unit award;

the share and per-share-related provisions and the purchase price, if any, of each outstanding other stock-based award.

Effect of Certain Corporate Transactions.

Upon the occurrence of a merger or other reorganization event (as defined in the 2016 Plan), our board of directors may, on such terms as our board of directors determines (except to the extent specifically provided otherwise in an applicable award agreement or other agreement between the participant and us), take any one or more of the following actions pursuant to the 2016 Plan as to all or any (or any portion of) outstanding awards, other than awards of restricted stock:

provide that outstanding awards will be assumed, or substantially equivalent awards will be substituted, by the acquiring or succeeding corporation (or an affiliate thereof);

upon written notice to a participant, provide that all of the participant’s unexercised awards will terminate immediately prior to the consummation of the reorganization event unless exercised by the participant (to the extent then exercisable) within a specified period following the date of the notice;

provide that outstanding awards shall become exercisable, realizable or deliverable, or restrictions applicable to an award will lapse, in whole or in part, prior to or upon such reorganization event;

in the event of a reorganization event pursuant to which holders of shares of our common stock will receive a cash payment for each share surrendered in the reorganization event, make or provide for a cash payment to participants with respect to each award held by a participant equal to (1) the number of shares of our common stock subject to the vested portion of the award (after giving effect to any acceleration of vesting that occurs upon or immediately prior to the reorganization event) multiplied by (2) the excess, if any, of the cash payment for each share surrendered in the reorganization event over the exercise, measurement or purchase price of such award and any applicable tax withholdings, in exchange for the termination of the award;

provide that, in connection with our liquidation or dissolution, awards will convert into the right to receive liquidation proceeds (if applicable, net of the exercise, measurement or purchase price thereof and any applicable tax withholdings);

any combination of the foregoing.

Our board of directors is not obligated under the 2016 Plan to treat all awards, all awards held by a participant, or all awards of the same type, identically.

In the case of certain restricted stock units, no assumption or substitution is permitted, and the restricted stock units will instead be settled in accordance with the terms of the applicable restricted stock unit agreement.

Upon the occurrence of a reorganization event other than our liquidation or dissolution, the repurchase and other rights with respect to outstanding restricted stock awards will continue for the benefit of the succeeding company and will, unless our board of directors determines otherwise, apply to the cash, securities, or other property which our common stock was converted into or exchanged for in the reorganization event in the same manner and to the same extent as they applied to the common stock subject to the restricted stock award.

However, our board of directors may provide for the termination or deemed satisfaction of such repurchase or other rights under the restricted stock award agreement or any other agreement between a participant and us, either initially or by amendment.

Upon our liquidation or dissolution, except to the extent specifically provided to the contrary in the restricted stock award agreement or any other agreement between the plan participant and us, all restrictions and conditions on all restricted stock awards then outstanding will automatically be deemed terminated or satisfied.

Our board of directors may at any time provide that any award under the 2016 Plan shall become immediately exercisable in whole or in part, free of some or all restrictions or conditions, or otherwise realizable in whole or in part, as the case may be.

No further awards will be made under the 2016 Plan;

however, awards outstanding under the 2016 Plan will continue to be governed by their existing terms.

2020 Equity Incentive Plan

Our 2020 Plan, which became effective on March 11, 2020, was adopted by our board of directors in October 2019 and approved by our stockholders in February 2020.

The 2020 Plan provides for the grant of incentive stock options, non-qualified stock options, stock appreciation rights, restricted stock awards, restricted stock units and other stock-based awards.

The number of shares of our common stock that are reserved for issuance under the 2020 Plan is the sum of:

(1) 1,220,283 shares of our common stock;

plus (2) the number of shares (up to a maximum of 2,091,969 shares) equal to the sum of (x) 228,852 shares, which represents the number of shares of our common stock reserved for issuance under the 2016 Plan that remained available for grant under the 2016 Plan on March 11, 2020 and (y) the number of shares of our common stock subject to outstanding awards granted under the 2016 Plan that expire, terminate or are otherwise surrendered, cancelled, forfeited or repurchased by us at their original issuance price pursuant to a contractual repurchase right;

plus (3) an annual increase, to be added on the first day of each fiscal year, beginning with the fiscal year ending December 31, 2021 and continuing until, and including, the fiscal year ending December 31, 2030, equal to the lesser of (i) 4% of the number of shares of our common stock outstanding on the first day of such fiscal year and (ii) an amount determined by our board of directors.

On January 1, 2021, 701,930 additional shares of common stock became available for future issuance under the 2020 Plan due to the first such annual increase.

No more than 8,541,982 shares of common stock may be issued as incentive stock options under the 2020 Plan.

Our employees, officers, directors, consultants and advisors are eligible to receive awards under the 2020 Plan.

Incentive stock options, however, may only be granted to our employees.

Pursuant to the terms of the 2020 Plan, our board of directors (or a committee delegated by our board of directors) administers the 2020 Plan and, subject to any limitations in the 2020 Plan, selects the recipients of awards and determines:

the number of shares of our common stock covered by options and the dates upon which the options become exercisable;

the type of options to be granted;

the duration of options, which may not be in excess of ten years;

the exercise price of options, which must be at least equal to the fair market value of our common stock on the date of grant;

the number of shares of our common stock subject to and the terms of any stock appreciation rights, restricted stock awards, restricted stock units or other stock-based awards, including conditions for repurchase, measurement price, issue price and repurchase price (though the measurement price of stock appreciation rights must be at least equal to the fair market value of our common stock on the date of grant and the duration of such awards may not be in excess of ten years).

If our board of directors delegates authority to one or more of our officers to grant awards under the 2020 Plan, the officers will have the power to make awards to all of our employees, except executive officers (as such terms are defined in the 2020 Plan).

Our board of directors will fix the terms of the awards to be granted by any such officer, the maximum number of shares subject to awards that such officer may grant, and the time period in which such awards may be granted.

The 2020 Plan contains limits on awards that may be made under the 2020 Plan to our non-employee directors.

The maximum aggregate amount of cash and value (calculated based on grant date fair value for financial reporting purposes) of awards granted in any calendar year under the 2020 Plan to an individual non-employee director may not exceed $750,000, or $1,000,000 in the case of a new director during his or her first year of service.

Fees paid by us on behalf of any non-employee director in connection with regulatory compliance and any amounts paid to a non-employee director as reimbursement of an expense will not count against the foregoing limit.

Our board of directors may make exceptions to this limit for individual non-employee directors in extraordinary circumstances, provided that the non-employee director receiving such additional compensation may not participate in the decision to award such compensation.

Effect of Certain Changes in Capitalization.

Upon the occurrence of any stock split, reverse stock split, stock dividend, recapitalization, combination of shares, reclassification of shares, spin-off or other similar change in capitalization or event or any dividend or distribution to holders of our common stock other than an ordinary cash dividend, under the terms of the 2020 Plan, we are required to equitably adjust (or make substitute awards, if applicable), in the manner determined by our board of directors:

the number and class of securities available under the 2020 Plan;

the share counting rules under the 2020 Plan;

the number and class of securities and exercise price per share of each outstanding option;

the share and per-share provisions and the measurement price of each outstanding stock appreciation right;

the number of shares and the repurchase price per share subject to each outstanding award of restricted stock;

the share and per-share-related provisions and the purchase price, if any, of each outstanding restricted stock unit award and other stock-based award.

Effect of Certain Corporate Transactions.

Upon the occurrence of a merger or other reorganization event (as defined in the 2020 Plan), our board of directors may, on such terms as our board of directors determines (except to the extent specifically provided otherwise in an applicable award agreement or other agreement between the participant and us), take any one or more of the following actions pursuant to the 2020 Plan as to all or any (or any portion of) outstanding awards, other than awards of restricted stock:

provide that outstanding awards will be assumed, or substantially equivalent awards will be substituted, by the acquiring or succeeding corporation (or an affiliate thereof);

upon written notice to a participant, provide that all of the participant’s unvested awards will be forfeited immediately prior to the consummation of the reorganization event and/or unexercised awards will terminate immediately prior to the consummation of the reorganization event unless exercised by the participant (to the extent then exercisable) within a specified period following the date of the notice;

provide that outstanding awards will become exercisable, realizable or deliverable, or restrictions applicable to an award will lapse, in whole or in part, prior to or upon such reorganization event;

in the event of a reorganization event pursuant to which holders of shares of our common stock will receive a cash payment for each share surrendered in the reorganization event, make or provide for a cash payment to participants with respect to each award held by a participant equal to (1) the number of shares of our common stock subject to the vested portion of the award (after giving effect to any acceleration of vesting that occurs upon or immediately prior to such reorganization event) multiplied by (2) the excess, if any, of the cash payment for each share surrendered in the reorganization event over the exercise, measurement or purchase price of such award and any applicable tax withholdings, in exchange for the termination of the award;

any combination of the foregoing.

Our board of directors is not obligated under the 2020 Plan to treat all awards, all awards held by a participant, or all awards of the same type, identically.

Upon the occurrence of a reorganization event other than our liquidation or dissolution, our repurchase and other rights with respect to outstanding awards of restricted stock will continue for the benefit of the succeeding company (or any affiliate of the succeeding company) and will, unless our board of directors determines otherwise, apply to the cash, securities, or other property which our common stock was converted into or exchanged for pursuant to the reorganization event.

However, our board of directors may provide for the termination or deemed satisfaction of such repurchase or other rights under the restricted stock award agreement or in any other agreement between a participant and us, either initially or by amendment.

Upon our liquidation or dissolution, except to the extent specifically provided to the contrary in the restricted stock award agreement or any other agreement between the participant and us, all restrictions and conditions on all restricted stock awards then outstanding will automatically be deemed terminated or satisfied.

At any time, our board of directors may provide that any award under the 2020 Plan will become immediately exercisable in full or in part, free of some or all restrictions or conditions, or otherwise realizable in whole or in part, as the case may be.

Except with respect to certain actions requiring stockholder approval under the Code or Nasdaq Stock Market rules, our board of directors may amend, modify or terminate any outstanding award under the 2020 Plan, including but not limited to, substituting for the award another award of the same or a different type, changing the date of exercise or realization, and converting an incentive stock option to a non-qualified stock option, subject to certain participant consent requirements.

However, unless our stockholders approve such action, the 2020 Plan provides that we may not (except as otherwise permitted in connection with a change in capitalization or reorganization event):

amend any outstanding stock option or stock appreciation right granted under the 2020 Plan to provide an exercise or measurement price per share that is lower than the then-current exercise or measurement price per share of such outstanding award;

cancel any outstanding stock option or stock appreciation right (whether or not granted under the 2020 Plan) and grant a new award under the 2020 Plan in substitution for the cancelled award (other than substitute awards permitted in connection with a merger or consolidation of an entity with us or our acquisition of property or stock of another entity) covering the same or a different number of shares of our common stock and having an exercise or measurement price per share lower than the then-current exercise or measurement price per share of the cancelled award;

cancel in exchange for a cash payment any outstanding option or stock appreciation right with an exercise or measurement price per share above the then-current fair market value of our common stock (valued in the manner determined by (or in the manner approved by) our board of directors);

take any other action that constitutes a “repricing” within the meaning of Nasdaq Stock Market rules or rules of any other exchange or marketplace on which our common stock is listed or traded.

No award may be granted under the 2020 Plan on or after March 11, 2030.

Our board of directors may amend, suspend or terminate the 2020 Plan at any time, except that stockholder approval may be required to comply with applicable law or stock market requirements.

2020 Employee Stock Purchase Plan

Our 2020 ESPP, which became effective on March 11, 2020, was adopted by our board of directors in October 2019 and approved by our stockholders in February 2020.

The 2020 ESPP is administered by our board of directors or by a committee appointed by our board of directors.

The 2020 ESPP initially provides participating employees with the opportunity to purchase up to an aggregate of 193,216 shares of our common stock.

The number of shares of our common stock reserved for issuance under the 2020 ESPP will automatically increase on the first day of each fiscal year, beginning with the fiscal year commencing on January 1, 2021 and continuing until, and including, the fiscal year commencing on January 1, 2031, in an amount equal to the lowest of (i) 386,432 shares of our common stock, (ii) 1% of the number of shares of our common stock outstanding on the first day of such fiscal year and (iii) an amount determined by our board of directors.

All of our employees and employees of any designated subsidiary, as defined in the 2020 ESPP, are eligible to participate in the 2020 ESPP, provided that:

such person is customarily employed by us or a designated subsidiary for more than 20 hours a week and for more than five months in a calendar year;

such person was our employee or an employee of a designated subsidiary on the first day of the applicable offering period under the 2020 ESPP.

We retain the discretion to determine which eligible employees may participate in an offering under applicable regulations.

We expect to make one or more offerings to our eligible employees to purchase stock under the 2020 ESPP, with the first such offering having commenced on June 15, 2020 and the first purchase having occurred on December 14, 2020.

Each offering will consist of a six-month offering period during which payroll deductions will be made and held for the purchase of our common stock at the end of the offering period.

Our board of directors or a committee designated by the board of directors may, at its discretion, choose a different period of not more than 27 months for offerings.

On each offering commencement date, each participant will be granted the right to purchase, on the last business day of the offering period, up to a number of shares of our common stock determined by multiplying $2,083 by the number of full months in the offering period and dividing that product by the closing price of our common stock on the first day of the offering period.

No employee may be granted an option under the 2020 ESPP that permits the employee’s rights to purchase shares under the 2020 ESPP and any other employee stock purchase plan of ours or of any of our subsidiaries to accrue at a rate that exceeds $25,000 of the fair market value of our common stock (determined as of the first day of each offering period) for each calendar year in which the option is outstanding.

In addition, no employee may purchase shares of our common stock under the 2020 ESPP that would result in the employee owning 5% or more of the total combined voting power or value of our stock or the stock of any of our subsidiaries.

Each eligible employee may authorize up to a maximum of 15% of his or her compensation to be deducted by us during the offering period.

Each employee who continues to be a participant in the 2020 ESPP on the last business day of the offering period will be deemed to have exercised an option to purchase from us the number of whole shares of our common stock that his or her accumulated payroll deductions on such date will pay for, not in excess of the maximum numbers set forth above.

Under the terms of the 2020 ESPP, the purchase price shall be determined by our board of directors or the committee for each offering period and will be at least 85% of the applicable closing price of our common stock.

If our board of directors or the committee does not make a determination of the purchase price, the purchase price will be 85% of the lesser of the closing price of our common stock on the first business day of the offering period or on the last business day of the offering period.

An employee may at any time prior to the close of business on the fifteenth business day prior to the end of an offering period (or such other number of days as is determined by us), and for any reason, permanently withdraw from participating in an offering and permanently withdraw the balance accumulated in the employee’s account.

Partial withdrawals are not permitted.

If an employee elects to discontinue his or her payroll deductions during an offering period but does not elect to withdraw his or her funds, funds previously deducted will be applied to the purchase of common stock at the end of the offering period.

If a participating employee’s employment ends before the last business day of an offering period, no additional payroll deductions will be taken and the balance in the employee’s account will be paid to the employee.

We will be required to make equitable adjustments to the extent determined by our board of directors or a committee thereof to the number and class of securities available under the 2020 ESPP, the share limitations under the 2020 ESPP, and the purchase price for an offering period under the 2020 ESPP to reflect stock splits, reverse stock splits, stock dividends, recapitalizations, combinations of shares, reclassifications of shares, spin-offs and other similar changes in capitalization or events or any dividends or distributions to holders of our common stock other than ordinary cash dividends.

In connection with a merger or other reorganization event, as defined in the 2020 ESPP, our board of directors or a committee of our board of directors may take any one or more of the following actions as to outstanding options to purchase shares of our common stock under the 2020 ESPP on such terms as our board of directors or committee thereof determines:

provide that options will be assumed, or substantially equivalent options will be substituted, by the acquiring or succeeding corporation (or an affiliate thereof);

upon written notice to employees, provide that all outstanding options will be terminated immediately prior to the consummation of such reorganization event and that all such outstanding options will become exercisable to the extent of accumulated payroll deductions as of a date specified by our board of directors or committee thereof in such notice, which date shall not be less than ten days preceding the effective date of the reorganization event;

upon written notice to employees, provide that all outstanding options will be cancelled as of a date prior to the effective date of the reorganization event and that all accumulated payroll deductions will be returned to participating employees on such date;

in the event of a reorganization event under the terms of which holders of our common stock will receive upon consummation thereof a cash payment for each share surrendered in the reorganization event, change the last day of the offering period to be the date of the consummation of the reorganization event and make or provide for a cash payment to each employee equal to (1) the cash payment for each share surrendered in the reorganization event times the number of shares of our common stock that the employee’s accumulated payroll deductions as of immediately prior to the reorganization event could purchase at the applicable purchase price, where the cash payment for each share surrendered in the reorganization event is treated as the fair market value of our common stock on the last day of the applicable offering period for purposes of determining the purchase price and where the number of shares that could be purchased is subject to the applicable limitations under the 2020 ESPP minus (2) the result of multiplying such number of shares by the purchase price;

provide that, in connection with our liquidation or dissolution, options will convert into the right to receive liquidation proceeds (net of the purchase price thereof).

Our board of directors may at any time, and from time to time, amend or suspend the 2020 ESPP or any portion of the 2020 ESPP.

We will obtain stockholder approval for any amendment if such approval is required by Section 423 of the Code.

Further, our board of directors may not make any amendment that would cause the 2020 ESPP to fail to comply with Section 423 of the Code.

The 2020 ESPP may be terminated at any time by our board of directors.

Upon termination, we will refund all amounts in the accounts of participating employees.

We maintain a defined contribution employee retirement plan for our employees, including our named executive officers.

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We maintain a general liability insurance policy that covers specified liabilities of our directors and officers arising out of claims based on acts or omissions in their capacities as directors or officers.

In addition, we entered into new indemnification agreements with all of our directors and executive officers prior to the completion of our initial public offering.

In addition, we have entered into indemnification agreements with all of our directors and executive officers.

These indemnification agreements may require us, among other things, to indemnify each such executive officer or director for some expenses, including attorneys’ fees, judgments, fines and settlement amounts incurred by him or her in any action or proceeding arising out of his or her service as one of our executive officers or directors.

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Option awards ($) (1)(2)

Mette Kirstine Agger ( 3)

Carl Goldfischer, M.D.

Dalton, Ph.D.

James McArthur, Ph.D.

Sara Nayeem, M.D.

David Bonita, M.D.

Laura Williams.

M.D., MPH ( 4 )

Mette Kristine Agger ( 5 )

The amounts reported in the “Option awards” column reflect the aggregate fair value of stock-based compensation awarded during the year computed in accordance with the provisions of ASC 718.

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Dalton, 23,185 shares;

McArthur, 126,544 shares;

Nayeem, 5,151 shares;

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Conner, 23,185 shares;

Agger earned $34,099 in fees related to her service as a director of the company and was granted an option on March 11, 2020, each of which Ms.

Williams, 15,457 shares.

Nayeem resigned from our board effective November 15, 2021.

Williams was elected to our board on June 29, 2021.

Agger earned $21,261 in fees related to her service as a director of the company which Ms.

Agger decided to voluntarily forego.

Agger voluntarily surrendered her option in full on June 30, 2020 pursuant to a stock option termination agreement.

McArthur resigned from our board of directors in April 2020.

Upon his resignation, the board amended Dr.

McArthur’s stock option award agreement to extend the exercise period of any vested options to September 22, 2021.

All unvested options expired in connection with his resignation.

Agger did not stand for re-election to our board at our 2021 annual meeting of stockholders and served as a member of our board until June 29, 2021.

Ballal, one of our directors who also serves as our President and Chief Executive Officer, does not receive any additional compensation for his service as director.

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Ballal is discussed under “—Summary Compensation Table” and “—Narrative to Summary Compensation Table.”

In October 2019, our board of directors approved a director compensation program that became effective on March 11, 2020.

In October 2019, our board of directors approved a director compensation program that became effective on March 11, 2020, and which was amended on December 22, 2021.

Under this director compensation program, we pay our non-employee directors a cash retainer for service on the board of directors and for service on each committee on which the director is a member.

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All options issued to our non-employee directors under our director compensation program are issued at exercise prices equal to the fair market value of our common stock on the date of grant, will have a term of ten years and will become exercisable in full upon a change in control of our company.

Prior to our initial public offering in March 2020, we paid cash fees and granted shares of restricted stock to certain of our non-employee directors for their service on our board of directors;

however, we did not have a written agreement with any of our directors or a formal non-employee director compensation policy.

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

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

The following table sets forth information with respect to the beneficial ownership of our common stock as of January 15, 2022 by:

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Beneficially Owned

Entities affiliated with New Enterprise Associates 14, L.P.

OrbiMed Private Investments VII, LP (1)

Entities affiliated with New Enterprise Associates 14, L.P.

Arix Bioscience Holdings Limited (3)

Entities affiliated with Pfizer Ventures (US) LLC (5)

Entities affiliated with RA Capital Healthcare Fund, L.P.

Lundbeckfond Invest A/S (6)

Arix Bioscience Holdings Limited ( 7)

Directors and Named Executive Officers:

Sara Nayeem, M.D.

David Bonita, Ph.D.

Mark Chin (3)(8)

Dalton, Ph.D.

Mette Kirstine Agger ( 6)

Carl Goldfischer, M.D.

Laura Williams, M.D., MPH

Ballal, Ph.D.

Mark Chin ( 11)

Kenneth Attie, M.D.

All current executive officers and directors as a group(10 persons) (13)

Less than one percent.

Consists of (i) 4,013,995 shares of common stock held by New Enterprise Associates 14, L.P., or NEA, and (ii) 3,175 shares of common stock held by NEA Ventures 2016, L.P., or NEA Ventures.

The shares held by NEA are indirectly held by NEA Partners 14, L.P., or NEA Partners, the sole general partner of NEA, NEA 14 GP, LTD, or NEA GP, the sole general partner of NEA Partners and each of the individual directors of NEA GP.

The individual directors, or the Directors, of NEA GP are Forest Baskett, Anthony A.

Florence, Jr., Patrick J.

Kerins, Peter Sonsini and Scott Sandell.

NEA, NEA Partners, NEA GP and the Directors share voting and dispositive power with regard to the shares directly held by NEA.

With regard to the shares directly held by NEA Ventures, Mr.

Nayeem have neither voting nor dispositive power, and disclaim beneficial ownership of such shares, except to the extent of their pecuniary interests therein, if any.

With regard to the shares directly held by NEA, Dr.

Nayeem has no voting or dispositive power over any of such shares directly held by NEA and disclaims beneficial ownership of such shares, except to the extent of her pecuniary interest therein, if any.

Nayeem are also members of our board of directors.

The address for NEA is 1954 Greenspring Drive, Suite 600, Timonium, MD 21093.

Based solely on a Schedule 13D filed with the SEC on March 20, 2020.

Consists of (i) 4,199,068 shares of common stock held by OrbiMed Private Investments VII, LP, or OPI VII and (ii) 187,500 shares of common stock held by The Biotech Growth Trust PLC, or BIOG.

OrbiMed Capital GP VII LLC, or OrbiMed GP, is the general partner of OPI VII and OrbiMed Advisors LLC, or OrbiMed Advisors, is the managing member of OrbiMed GP.

As a result, OrbiMed Advisors and OrbiMed GP share power to direct the vote and disposition of the shares held by OPI VII and may be deemed to be

the beneficial owners of the shares held by OPI VII.

OrbiMed Capital GP VII LLC, or GP VII, is the general partner of OPI VII and OrbiMed Advisors LLC, or OrbiMed Advisors, is the managing member of GP VII.

By virtue of such relationships, GP VII and OrbiMed Advisors may be deemed to have voting and investment power with respect to the shares held by OPI VII and as a result may be deemed to have beneficial ownership of such shares.

David Bonita, M.D., an employee of OrbiMed Advisors, is a member of our Board of Directors.

OrbiMed Advisors exercises this investment and voting power through a management committee comprised of Carl L.

Gordon, Sven H.

Borho and Jonathan T.

Silverstein, each of whom disclaims beneficial ownership of the Shares held by OPI VII.

OrbiMed Capital LLC, or OrbiMed Capital, is the investment advisor of BIOG.

As a result, OrbiMed Capital has the power to direct the vote and disposition of the shares held by BIOG and may be deemed to be the beneficial owner of the shares held by BIOG.

Carter Neild.

Each of GP VII, OrbiMed Advisors, and David Bonita M.D.

disclaims beneficial ownership of the shares held by OPI VII, except to the extent of its or his pecuniary interest therein if any.

OrbiMed Capital LLC, or OrbiMed Capital, is the sole portfolio manager of BIOG.

OrbiMed Capital disclaims any beneficial ownership over the shares.

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Gordon, Sven H.

Borho and Jonathan T.

Silverstein, each of whom disclaims beneficial ownership of the Shares held by BIOG.

The business address for OPI VII is c/o OrbiMed Advisors LLC, 601 Lexington Avenue 54th Floor, New York, NY 10022.

Carter Neild.

OrbiMed Capital disclaims beneficial ownership of the shares held by BIOG, except to the extent of its or his pecuniary interest therein if any.

The business address for OPI VII and BIOG is c/o OrbiMed Advisors LLC, 601 Lexington Avenue 54th Floor, New York, NY 10022.

Based solely on a Form 4 filed with the SEC on January 25, 2022.

The securities are directly held by New Enterprise Associates 14, L.P., or NEA 14, and are indirectly held by NEA Partners 14, L.P., or NEA Partners 14, the sole general partner of NEA 14, NEA 14 GP, LTD, or NEA 14 LTD, the sole general partner of NEA Partners 14 and each of the individual directors of NEA 14 LTD (NEA Partners 14, NEA 14 LTD and the individual

directors of NEA 14 LTD , or collectively the Indirect Reporting Persons.

The individual directors are Forest Baskett, Anthony A.

Florence, Jr., Patrick J.

Kerins, Scott D.

Sandell and Peter Sonsini.

The Indirect Reporting Persons disclaim beneficial ownership of such portion of the NEA 14 securities in which the Indirect Reporting Persons have no pecuniary interest.

The address for NEA is 1954 Greenspring Drive, Suite 600, Timonium, MD 21093.

Based solely on a Schedule 13D/A filed with the SEC on July 20, 2021.

Consists of 2,344,072 shares of common stock held by Arix Bioscience Holdings Limited, or Arix Ltd.

Arix Bioscience Plc, or Arix Plc, is the sole owner and parent of Arix Ltd.

and may be deemed to indirectly beneficially own the shares held by Arix Ltd.

Mark Chin, a Managing Director at Arix Plc, is a member of our Board of Directors.

The address for Arix Ltd.

and Arix Plc is 20 Berkeley Square, London, W1J 6EQ, United Kingdom.

Based solely on a Schedule 13G/A filed with the SEC on February 9, 2022.

Consists of 2,010,154 shares of common stock held by FMR LLC.

Johnson is a Director, the Chairman and the Chief Executive Officer of FMR LLC.

Members of the Johnson family, including Abigail P.

Johnson, are the predominant owners, directly or through trusts, of Series B voting common shares of FMR LLC.

Johnson, are the predominant owners, directly or through trusts, of Series B voting common shares of FMR LLC, representing 49% of the voting power of FMR LLC.

The Johnson family group and all other Series B shareholders have entered into a shareholders' voting agreement under which all Series B voting common shares will be voted in accordance with the majority vote of Series B voting common shares.

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Pfizer Ventures is a wholly-owned subsidiary of Pfizer and Pfizer may be deemed to beneficially own the shares directly owned by Pfizer Ventures.

Barbara Dalton, the Vice President of Venture Capital at Pfizer Ventures, is a member of our Board of Directors.

The address of Pfizer and Pfizer Ventures is 235 East 42nd Street, New York, New York 10017.

Consists of (i) 1,151,230 shares of common held by RA Capital Healthcare Fund, L.P., or RA Capital, (ii) 108,083 shares of common stock held by RA Capital Nexus Fund, L.P.

and (iii) 195,035 shares of common stock held by a separately managed account, or the Account.

Peter Kolchinsky is the managing member of RA Capital Management, L.P., the general partner of RA Capital and the investment advisor of the Account.

Kolchinsky and RA Capital Management, L.P.

may be deemed to beneficially own the shares held by RA Capital and the Account.

Kolchinsky and RA Capital Management, L.P.

disclaim beneficial ownership of all applicable shares except to the extent of their actual pecuniary interest therein.

The address for the entities listed above is 200 Berkeley Street, 18th Floor, Boston, MA 02116.

Consists of 1,432,722 shares of common stock held by Lundbeckfond Invest A/S, or Lunbeckfonden.

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The board of directors of Lunbeckfonden and Lene Skole, the chief executive officer of Lunbeckfonden, may be deemed to share voting and investment authority over the shares held by Lundbeckfonden.

Mette Kirstine Agger, a member of our board of directors, is a Managing Partner at Lundbeckfon Ventures, which is an affiliate of Lundbeckfonden.

The address of Lundbeckfonden and the above-mentioned persons is Scherfigsvej 7, DK-2100 Copenhagen, Denmark.

Based solely on a Schedule 13D/A filed with the SEC on January 8, 2021.

Consists of 1,068,255 shares of common stock held by Arix Bioscience Holdings Limited, or Arix Ltd.

Arix Bioscience Plc, or Arix Plc, is the sole owner and parent of Arix Ltd.

and may be deemed to indirectly beneficially own the shares held by Arix Ltd.

The address for Arix Ltd.

And Arix Plc is 20 Berkeley Square, London, W1J 6EQ, United Kingdom.

Consists of 5,151 shares of common stock issuable upon the exercise of options that are exercisable as of January 15, 2022 or will become exercisable within 60 days after such date.

Includes 10,304 shares of common stock issuable upon the exercise of options that are exercisable as of January 15, 2022 or will become exercisable within 60 days after such date.

Consists of (i) 690,232 shares of common stock held by Bay City Capital Fund V, L.P., or Bay City Capital Fund V, and (ii) 13,148 shares of common stock held by Bay City Capital Fund V Co-Investment Fund, L.P., or Bay City Capital Fund V Co-Investment.

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BCC LLC disclaims beneficial ownership of these shares, except to the extent of its pecuniary interest therein.

Carl Goldfischer and Fred Craves are managing directors of Bay City Capital LLC and have voting and dispositive power with respect to shares held by Bay City Capital Funds.

Carl Goldfischer and Fred Craves are managing directors of BCC LLC and have voting and dispositive power with respect to shares held by Bay City Capital Funds.

Goldfischer disclaims beneficial ownership of these shares, except to the extent of its pecuniary interest therein.

The address for Bay City Capital Fund V is 750 Battery Street, Suite 400, San Francisco, CA 94111.

Consists of 365,616 shares of common stock issuable upon the exercise of options that are exercisable as of January 15, 2021 or will become exercisable within 60 days after such date.

Consists of 106,398 shares of common stock issuable upon the exercise of options that are exercisable as of January 15, 2021 or will become exercisable within 60 days after such date.

Includes 571,561 shares of common stock issuable upon the exercise of options that are exercisable as of January 15, 2022 or will become exercisable within 60 days after such date.

Includes 187,189 shares of common stock issuable upon the exercise of options that are exercisable as of January 15, 2022 or will become exercisable within 60 days after such date.

Consists of 27,500 shares of common stock issuable upon the exercise of options that are exercisable as of January 15, 2022 or will become exercisable within 60 days after such date.

Consists of 8,994,063 shares of common stock and 842,921 shares of common stock issuable upon the exercise of options that are exercisable as of January 15, 2022 or will become exercisable within 60 days after such date.

Securities Authorized for Issuance under Equity Compensation Plans

Securities A uthorized for I ssuance under E quity C ompensation P lans

The following table contains information about our equity compensation plans as of December 31, 2021 :

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(1) Our 2020 Equity Incentive Plan, or 2020 Plan, has an evergreen provision that allows for an annual increase in the number of shares available for issuance under the 2020 Plan to be added on the first day of each fiscal year, beginning with the fiscal year ending December 31, 2021 and continuing for each fiscal year until, and including, the fiscal year ending December 31, 2030, equal to the least of (i) 4% of the outstanding shares on such date and (ii) an amount determined by our board of directors.

On January 1, 2021, 701,930 additional shares were reserved for issuance under the 2020 Plan pursuant to this provision.

On January 1, 2022, a further 1,051,490 shares were reserved for future issuance under the 2020 Plan pursuant to this provision.

(2) Our 2020 Employee Stock Purchase Plan, or 2020 ESPP, has an evergreen provision that allows for an annual increase in the number of shares available for issuance under the 2020 Plan to be added on the first day of each fiscal year, commencing on January 1, 2021 and ending on January 1, 2031, equal to the least of (i) 386,432 shares of common stock, (ii) 1% of the outstanding shares on such date and (iii) an amount determined by the Board .

On January 1, 2022, 262,872 additional shares were reserved for issuance under the 2020 ESPP pursuant to this provision.

Certain Relationships and Related Transactions, and Director Independence.

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We believe that all of these transactions were on terms as favorable as could have been obtained from unrelated third parties.

Cydan Business Services Agreement

In January 2016, we entered into a Business Services Agreement with Cydan, or the Business Services Agreement, pursuant to which Cydan provided office space, personnel assistance, and other business services to us on an as-needed basis.

At the time the agreement was signed, Cydan was a holder of more than 5% of our capital stock, Dr.

McArthur was our founder, President and Chief Executive Officer, a member of our board of directors and a holder of more than 5% of our capital stock and the Chief Scientific Officer of Cydan;

Adams was our Treasurer and Secretary, a member of our board of directors and a holder of more than 5% of our capital stock and the Chief Executive Officer of Cydan;

Bisker-Leib was a holder of more than 5% of our capital stock and the Chief Business Officer of Cydan;

and certain other members of our board of directors, including Ms.

Nayeem, were also members of the board of directors of Cydan and continue to serve on both our board of directors and the board of directors of Cydan.

We paid Cydan $1.0 million in 2017, $0.7 million in 2018 and $0.3 million in 2019, related to these services under the Business Services Agreement.

We agreed with Cydan to terminate the Business Services Agreement and all related services rendered by Cydan to us effective as of August 17, 2019.

Lundbeck Exclusive License Agreement

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Lundbeck A/S, or Lundbeck, pursuant to which Lundbeck granted us a worldwide license under certain patent rights and certain know-how owned or otherwise controlled by Lundbeck within the field of prevention, treatment or diagnosis of hemoglobinopathy disorders and/or diseases or disorders, including those directly or indirectly related to hemoglobinopathies.

As partial consideration for the licenses granted under

the agreement, we issued 167,523 shares of our common stock to Lundbeck in April 2016.

As partial consideration for the licenses granted under the agreement, we issued 167,523 shares of our common stock to Lundbeck in April 2016.

We issued 127,002 shares of our common stock to Lundbeck in December 2016 and 148,746 shares of our common stock in August 2017 as a result of antidilution provisions contained in the exclusive license agreement triggered by subsequent closings of our series A preferred stock, described below.

In addition, pursuant to this exclusive license agreement, we have made cash payments to Lundbeck of $1.8 million to date consisting of an upfront payment and ongoing milestone payments.

See “Business—Exclusive License Agreement” for additional information regarding the exclusive license agreement.

Agger, a member of our board of directors, is also the Managing Partner of Lundbeckfond Invest A/S, the majority stockholder of Lundbeck.

See “Business—License and Acquisition Agreements” for additional information regarding the exclusive license agreement.

Mette Kirstine Agger, who was a member of our board of directors until June 29, 2021, is the Managing Partner of Lundbeckfond Invest A/S, the majority stockholder of Lundbeck.

Lundbeckfond Invest A/S owns more than 5% of our capital stock.

Series B Preferred Stock Financing

Between March 2019 and February 2020, we issued and sold an aggregate of 36,166,661 shares of series B preferred stock, at a price per share of $1.7419 in cash, for an aggregate purchase price of $63.0 million.

In February 2020, we issued and sold an aggregate of 9,845,348 shares of series B preferred stock, at a price per share of $1.7419 in cash, for an aggregate purchase price of $17.1 million.

The following table sets forth the aggregate number of shares of series B preferred stock that we issued and sold to our directors and 5% stockholders and their affiliates and the aggregate purchase price for such shares:

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Entities affiliated with Bay City Capital (8)

See “Principal Stockholders” for additional information about shares held by certain of these entities.

Mott, the chairman of our board of directors, was a general partner of New Enterprise Associates and Sara Nayeem, M.D., a member of our board of directors, is a partner of New Enterprise Associates.

David Bonita, M.D., a member of our board of directors, is a Partner of OrbiMed Advisors.

Mark Chin, a member of our board of directors, was an Investment Director at Arix Bioscience until April 2020.

See Part III, Item 12.

“Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters” of this Annual Report on Form 10-K for additional information about shares held by certain of these entities.

Mott, the chairman of our board of directors, was a general partner of New Enterprise Associates, and Sara Nayeem, M.D., who was a member of our board of directors until November 15, 2021, was a partner at New Enterprise Associates until February 2021.

David Bonita, M.D., a member of our board of directors, is a General Partner of OrbiMed Advisors.

Mark Chin, a member of our board of directors, is a Managing Director at Arix Bioscience.

RA Capital Healthcare Fund, L.P.

is a 5% stockholder.

was a 5% stockholder at the time of the transaction.

Dalton, Ph.D., a member of our board of directors, is Vice President of Venture Capital of Pfizer, Inc., an affiliate of Pfizer Ventures (US) LLC.

Mette Kirstine Agger, a member of our board of directors, is the Managing Partner of Lundbeckfonden Ventures.

Carl Goldfischer, M.D., a member of our board of directors, is the Managing Director of Bay City Capital.

Mette Kirstine Agger, who was a member of our board of directors until June 29, 2021, is a Managing Partner of Lundbeckfonden Ventures.

Carl Goldfischer, M.D., a member of our board of directors, is a Managing Director of Bay City Capital.

The series B preferred stock converted into common stock on a 6.299-for-1 basis upon the closing of our initial public offering on March 16, 2020.

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Lundbeckfond Invest A/S (7)

See “Principal Stockholders” for additional information about shares held by these entities.

Mott, the chairman of our board of directors, was a general partner of New Enterprise Associates and Sara Nayeem, M.D., a member of our board of directors, is a partner of New Enterprise Associates.

See Part III, Item 12.

David Bonita, M.D., a member of our board of directors, is a Partner of OrbiMed Advisors.

Mark Chin, a member of our board of directors, was an Investment Director at Arix Bioscience until April 2020.

Mark Chin, a member of our board of directors, is a Managing Director at Arix Bioscience.

RA Capital Healthcare Fund, L.P.

and its affiliates is a 5% stockholder.

was a 5% stockholder at the time of the transaction.

Dalton, Ph.D., a member of our board of directors, is Vice President of Venture Capital of Pfizer, Inc., an affiliate of Pfizer Ventures (US) LLC.

Mette Kirstine Agger, a member of our board of directors, is the Managing Partner of Lundbeckfonden Ventures.

Mette Kirstine Agger, who was a member of our board of directors until June 29, 2021, is a Managing Partner of Lundbeckfonden Ventures.

Follow On Offering

In July 2021, we closed a follow-on public offering, pursuant to which we issued and sold approximately $50.0 million in shares of our common stock.

The following table sets forth the aggregate number of shares of our common stock that we

issued and sold to our directors and 5% stockholders and their affiliates and the aggregate purchase price for such shares.

Such purchases were made through the underwriters at the public offering price of $6.00 per share.

Purchaser (1)

OrbiMed Private Investments VII, LP ( 2 )

Arix Bioscience Holdings Limited ( 3 )

See Part III, Item 12.

David Bonita, M.D., a member of our board of directors, is a General Partner of OrbiMed Advisors.

Mark Chin, a member of our board of directors, is a Managing Director at Arix Bioscience.

Registration Rights

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This investors’ rights agreement provides these stockholders the right, subject to certain conditions, to demand that we file a registration statement or to request that their shares be covered by a registration statement that we are otherwise filing.

See “Description of Capital Stock—Registration Rights” for additional information regarding these registration rights.

Indemnification Agreements

Our certificate of incorporation provides that we will indemnify our directors and officers to the fullest extent permitted by Delaware law.

In addition, we entered into indemnification agreements with all of our directors and executive officers in connection with our initial public offering.

In addition, we have entered into indemnification agreements with all of our directors and executive officers.

These indemnification agreements may require us, among other things, to indemnify each such director or executive officer for some expenses, including attorneys’ fees, judgments, fines and settlement amounts incurred by him or her in any action or proceeding arising out of his or her service as one of our directors or executive officers.

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For more information regarding the agreements with Dr.

Ballal and Mr.

Gray, see “Executive Compensation.”

Attie, see Part III, Item 11.

“Executive Compensation.” of this Annual Report on Form 10-K.”

Policies and Procedures for Related Person Transactions

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If a related person proposes to enter into such a transaction, arrangement or relationship, which we refer to as a “related person transaction,” the related person must report the proposed related person transaction to our chief financial officer.

policy calls for the proposed related person transaction to be reviewed and, if deemed appropriate, approved by our audit committee.

The policy calls for the proposed related person transaction to be reviewed and, if deemed appropriate, approved by our audit committee.

Whenever practicable, the reporting, review and approval will occur prior to entry into the transaction.

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The policy provides that transactions involving compensation of executive officers shall be reviewed and approved by our compensation committee in the manner specified in the compensation committee’s charter.

The transactions described in this section occurred prior to the adoption of the policy.

Except with respect to our July 2021 follow-on public offering, the transactions described in this section occurred prior to the adoption of the policy.

The transactions associated with our July 2021 follow-on public offering were approved in accordance with the policy.

Director Independence

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and (2) whether the director is affiliated with the company or any of its subsidiaries or affiliates.

In October 2019, our board of directors undertook a review of the composition of our board of directors and its committees and the independence of each director and in April 2020 undertook this review with respect to Edward Conner upon his appointment to our board of directors.

In March 2022, our board of directors undertook a review of the composition of our board of directors and its committees and the independence of each director.

Based upon information requested from and provided by each director concerning his or her background, employment and affiliations, including family relationships, our board of directors has determined that each of our directors, with the exception of Rahul D.

Ballal, are “independent directors” as defined under the Nasdaq Listing Rules.

Our board of directors had also previously determined that James McArthur, a former director who served during the year ended December 31, 2019, was not an independent director as defined under applicable Nasdaq rules prior to his resignation from our board of directors in 2020.

In making such determinations, our board of directors considered the relationships that each such director has with our company and all other facts and circumstances that our board of directors deemed relevant in determining his or her independence, including the beneficial ownership of our capital stock by each director.

determining his or her independence, including the beneficial ownership of our capital stock by each director.

Ballal is not an independent director under these rules because he is our President and Chief Executive Officer .

McArthur was not an independent director under these rules because he served as our President and Chief Executive Officer until May 2018.

Principal Accoun t ant Fees and Services.

Principal Accountant Fees and Services.

The following table summarizes the fees of Ernst & Young LLP, our independent registered public accounting firm, billed us for each of the last two fiscal years (in thousands) :

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All Other Fees

Audit fees consist of fees billed for professional services by Ernst & Young LLP for audit and quarterly review of our consolidated financial statements and review of the registration statement on Form S-1 for our IPO, and related services that are normally provided in connection with statutory and regulatory filings or engagements.

Audit fees consist of fees billed for professional services by Ernst & Young LLP for audits, quarterly reviews of our consolidated financial statements included in our quarterly reports on Form 10-Q, and services in connection with our initial, follow-on, and at-the-market public offerings, including registration statements, comfort letters, and consents.

These services included services performed in connection with our Form S-1, S-3 and S-8 filings.

Audit-related fees consisted of fees for accounting consultations reasonably related to the performance of audits or reviews of our financial statements.

Tax fees consist of fees for professional services performed by Ernst & Young LLP with respect to tax compliance, tax advice and tax planning.

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(1) The financial statements listed below are filed as part of this Annual Report on Form 10-K.

Report of Independent Registered Public Accounting Firm

Report of Independent Registered Public Accounting Firm (PCAOB ID:

Consolidated Balance Sheets

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Exhibit Index

Asset Purchase Agreement, dated October 19, 2020, by and between Complexa (assignment for the benefit of creditors), LLC and the Registrant

Restated Certificate of Incorporation of the Registrant (incorporated by reference to Exhibit 3.1 to the Registrant’s Current Report on Form 8-K filed with the SEC on March 16, 2020)

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Amended and Restated Investors’ Rights Agreement, dated as of March 15, 2019, by and among the Registrant and the other parties thereto (incorporated by reference to Exhibit 4.2 of the Registrant’s Registration Statement on Form S-1, filed with the SEC on February 14, 2020)

Description of Securities of the Registrant*

Sales Agreement by and between the Registrant and Cantor Fitzgerald & Co.

dated as of April 1, 2021 (incorporated by reference to Exhibit 1.2 to the Registrant’s universal shelf registration statement on Form S-3 filed with the SEC on April 1, 2021).

2016 Stock Incentive Plan, as amended (incorporated by reference to Exhibit 10.1 of the Registrant’s Registration Statement on Form S-1/A, filed with the SEC on March 3, 2020)

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Form of Stock Option Agreement under the 2020 Equity Incentive Plan (incorporated by reference to Exhibit 10.5 of the Registrant’s Registration Statement on Form S-1, filed with the SEC on February 14, 2020)

Form of Restricted Stock Unit Agreement under the 2020 Equity Incentive Plan

2020 Employee Stock Purchase Plan (incorporated by reference to Exhibit 10.6 of the Registrant’s Registration Statement on Form S-1/A, filed with the SEC on March 3, 2020)

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Lundbeck A/S and the Registrant, as amended (incorporated by reference to Exhibit 10.7 of the Registrant’s Registration Statement on Form S-1, filed with the SEC on February 14, 2020)

Exclusive License Agreement, dated as of April 23, 2012, by and between the UAB Research Foundation and the Registrant (as successor-in-interest to Complexa, Inc.)

Non-Exclusive License Agreement, dated as of May 27, 2021, by and between the University of Pittsburgh – Of the Commonwealth System of Higher Education and the Registrant

First Amendment to Non-Exclusive License Agreement, dated as of December 8, 2021, by and between the University of Pittsburgh – Of the Commonwealth System of Higher Education and the Registrant

Amended and Restated Letter Agreement, dated as of September 23, 2019, by and between the Registrant and Rahul D.

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(incorporated by reference to Exhibit 10.8 of the Registrant’s Registration Statement on Form S-1, filed with the SEC on February 14, 2020)

Amended and Restated Letter Agreement, dated as of September 23, 2019, by and between the Registrant and Willem H.

Scheele, M.D.

((incorporated by reference to Exhibit 10.9 of the Registrant’s Registration Statement on Form S-1, filed with the SEC on February 14, 2020)

First Amendment to the Amended and Restated Letter Agreement, dated as of November 5, 2021, by and between the Registrant and Rahul D.

Ballal, Ph.D.

(incorporated by reference to Exhibit 10.1 of the Registrant’s Quarterly Report on Form 10-Q, filed with the SEC on November 9, 2021)

Amended and Restated Letter Agreement, dated as of September 23, 2019, by and between the Registrant and Michael P.

Gray (incorporated by reference to Exhibit 10.10 of the Registrant’s Registration Statement on Form S-1, filed with the SEC on February 14, 2020)

First Amendment to the Amended and Restated Letter Agreement, dated as of November 5, 2021, by and between the Registrant and Michael P.

Gray (incorporated by reference to Exhibit 10.2 of the Registrant’s Quarterly Report on Form 10-Q, filed with the SEC on November 9, 2021)

Letter Agreement, dated as of December 4, 2020, by and between the Registrant and Kenneth M.

First Amendment to the Letter Agreement, dated as of November 5, 2021, by and between the Registrant and Kenneth M.

Form of Indemnification Agreement with directors and executive officers (incorporated by reference to Exhibit 10.12 of the Registrant’s Registration Statement on Form S-1, filed with the SEC on February 14, 2020)

Office Lease Agreement, dated as of May 20, 2019, by and between Columbia REIT – 116 Huntington, LLC and the Registrant (incorporated by reference to Exhibit 10.13 of the Registrant’s Registration Statement on Form S-1, filed with the SEC on February 14, 2020)

Form of Restricted Stock Unit Agreement under the 2020 Equity Incentive Plan (incorporated by reference to Exhibit 10.14 of the Registrant’s Registration Statement on Form S-1, filed with the SEC on February 14, 2020)

Separation and Release of Claims Agreement, dated as of May 1, 2020, by and between the Registrant and Willem H.

Scheele, M.D.

(incorporated by reference to Exhibit 10.1 of the Registrant’s Quarterly Report on Form 10-Q, filed with the SEC on August 14, 2020)

List of Subsidiaries of the Registrant (incorporated by reference to Exhibit 21.1 of the Registrant’s Registration Statement on Form S-1, filed with the SEC on February 14, 2020)

First Amendment to Office Lease Agreement, dated June 8, 2021, by and between the Company and Columbia REIT – 116 Huntington, LLC (incorporated by reference as Exhibit 10.1 to the Company’s Current Report on Form 8-K filed with the SEC on June 11, 2021).

List of Subsidiaries of the Registrant

Consent of Ernst & Young LLP, independent registered public accounting firm

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

XBRL Instance Document

XBRL Taxonomy Extension Schema Document

XBRL Taxonomy Extension Calculation Linkbase Document

XBRL Taxonomy Extension Definition Linkbase Document

XBRL Taxonomy Extension Label Linkbase Document

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

Inline XBRL Taxonomy Extension Schema Document

Inline XBRL Taxonomy Extension Calculation Linkbase Document

Inline XBRL Taxonomy Extension Definition Linkbase Document

Inline XBRL Taxonomy Extension Presentation Linkbase Document

XBRL Taxonomy Extension Presentation Linkbase Document

The cover page from the Company’s Annual Report on Form 10-K for the year ended December 31, 2021, has been formatted in Inline XBRL.

Filed herewith.

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March 15, 2022

/s/ Mette Kirstine Agger

March 5, 2021

Mette Kirstine Agger

/s/ David Bonita

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/s/ Edward Conner

Edward Conner

/s/ Carl Goldfischer

March 15, 2022

Carl Goldfischer, M.D.

Edward Conner, M.D.

/s/ Barbara J.

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Dalton, Ph.D.

/s/ Sara Nayeem

/s/ Carl Goldfischer

March 15, 2022

Sara Nayeem, M.D.

Carl Goldfischer, M.D.

/s/ Laura Williams

March 15, 2022

Laura Williams, M.D., MPH

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

Report of Independent Registered Public Accounting Firm

Report of Independent Registered Public Accounting Firm (PCAOB ID:

Consolidated Balance Sheets

Consolidated Statements of Operations and Comprehensive Loss

Consolidated Statements of Convertible Preferred Stock and Stockholders’ Equity (Deficit)

Consolidated Statements of C onvertible Preferred Stock and Stockholders’ Equity ( Deficit)

Consolidated Statements of Cash Flows

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Report of Independent Registered Public Accounting Firm

To the Shareholders and the Board of Directors of IMARA Inc.

To the Stockholders and the Board of Directors of IMARA Inc.

Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheets of IMARA Inc.

(the Company) as of December 31, 2020 and 2019, and the related consolidated statements of operations and comprehensive loss, convertible preferred stock and stockholders’ equity (deficit) and cash flows for each of the two years in the period ended December 31, 2020, and the related notes (collectively referred to as the “consolidated financial statements”).

(the Company) as of December 31, 2021 and 2020, the related consolidated statements of operations and comprehensive loss, convertible preferred stock and stockholders’ equity (deficit) and cash flows for each of the two years in the period ended December 31, 2021, 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 at December 31, 2021 and 2020, and the results of its operations and its cash flows for each of the two years in the period ended December 31, 2021, in conformity with U.S.

generally accepted accounting principles.

The Company's Ability to Continue as a Going Concern

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

As discussed in Note 1 to the consolidated financial statements, based on the Company’s recurring and expected continuing losses from operations and negative cash flows from operations and the need to raise additional capital to finance its future operations, the Company has stated that substantial doubt exists about the Company’s ability to continue as a going concern.

Management's evaluation of the events and conditions and management’s plans regarding these matters are also described in Note 1.

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

Adoption of ASU No.

As discussed in Note 2 to the consolidated financial statements, the Company changed its method of accounting for leases in 2021 due to the adoption of Accounting Standards Update (ASU) No.

2016-02 Leases (Topic 842), and the related amendments.

Basis for Opinion

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Property and equipment, net

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

Right of use assets - operating leases

Liabilities and stockholders' equity

Current liabilities:

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Accrued expenses and other current liabilities

Operating lease liability, current

Total current liabilities

Deferred rent

Operating lease liability, non-current

Total liabilities

Commitments and contingencies (Note 8)

Series Seed convertible preferred stock, par value of $0.001 per share;

and 2,712,960 shares authorized, issued and outstanding as of December 31,

2020 and 2019, respectively;

liquidation value of $0 December 31, 2020

Series A convertible preferred stock, par value of $0.001 per share;

and 31,499,040 shares authorized, issued and outstanding as of December 31,

2020 and 2019, respectively

Series B convertible preferred stock, par value of $0.001 per share;

issued and outstanding as of December 31, 2020;

36,166,661 shares

authorized and 26,321,313 shares issued and outstanding as of December 31,

Stockholders' equity (deficit):

Stockholders' equity:

Preferred stock, $ 0.001 par value per share;

10,000,000 shares authorized;

shares issued or outstanding as of December 31, 2020;

no shares authorized,

issued or outstanding as of December 31, 2019

shares issued or outstanding as of December 31, 2021 and December 31, 2020

Common stock, par value of $ 0.001 per share;

200,000,000 and 100,000,000

shares authorized as of December 31, 2020 and 2019, respectively;

and 702,510 shares issued and outstanding as of December 31, 2020 and

2019, respectively

200,000,000 shares authorized;

26,287,264 and 17,548,263 shares

issued and outstanding as of December 31, 2021 and 2020, respectively

Additional paid-in capital

Accumulated other comprehensive income

Accumulated other comprehensive (loss) income

Accumulated deficit

Total stockholders' equity (deficit)

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

Total stockholders' equity

Total liabilities and stockholders’ equity

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

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Loss from operations

Total other income:

Total other income, (net):

Interest income

Other income (expense)

Other expense

Total other income, (net)

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Other comprehensive loss:

Unrealized gain (loss) on investments, net

Unrealized loss on investments

Comprehensive loss

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STOCKHOLDERS’

Balance at December 31,

Issuance of Series B

convertible preferred

stock, net of issuance

costs of $274

compensation expense

Unrealized gain on

INCOME (LOSS)

Balance at December 31,

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Balance at December 31,

Issuance of common stock under ATM and July 2021 offering, net of issuance costs of $ 579

Exercise of stock options and issuance of stock under the Employee Stock Purchase Plan

Stock-based compensation

Unrealized loss on

Balance at December 31,

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

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Accrued expenses and other current liabilities

Operating lease assets and liabilities, net

Deferred rent

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net of issuance costs

Proceeds from July 2021 Offering, net of underwriting discounts and commissions

Proceeds from ATM offering, net of underwriting discounts and commissions

Proceeds from exercise of options

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additional paid-in capital

Deferred offering costs included in accounts payable and accrued

Offering costs included in accounts payable and accrued expenses

Property and equipment purchases included in accrued expenses

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Nature of the Business

(“IMARA” or the “Company”) is a clinical-stage biopharmaceutical company dedicated to developing and commercializing novel therapeutics to treat rare inherited genetic disorders of hemoglobin, known as hemoglobinopathies, which have significant unmet medical need.

(“IMARA” or the “Company”) is a clinical-stage biopharmaceutical company dedicated to developing and commercializing novel therapeutics to treat patients suffering from rare inherited genetic disorders of hemoglobin, known as hemoglobinopathies, and other serious diseases.

The Company was incorporated in January 2016 under the laws of the State of Delaware, and its principal offices are in Boston, Massachusetts.

The Company is subject to risks and uncertainties common to early-stage companies in the biotechnology industry, including but not limited to, risks associated with completing preclinical studies and clinical trials, receiving regulatory approvals for product candidates, development by competitors of new biopharmaceutical products, dependence on key personnel, protection of proprietary technology, compliance with government regulations and the ability to secure additional capital to fund operations.

The Company’s sole product candidate currently under development, IMR-687, as well as any other product candidates the Company may develop, will require significant additional research and development efforts, including preclinical and clinical testing and regulatory approval, prior to commercialization.

The Company’s lead product candidate currently under development, tovinontrine (IMR-687), as well as any other product candidates the Company may develop, will require significant additional research and development efforts, including preclinical and clinical testing and regulatory approval, prior to commercialization.

These efforts require significant amounts of additional capital, adequate personnel and infrastructure and extensive compliance-reporting capabilities.

Even if the Company’s product development efforts are successful, it is uncertain when, if ever, the Company will realize revenue from product sales .

In February 2020, the Company effected a 1-for-6.299 reverse stock split of the Company’s issued and outstanding shares of common stock and a proportional adjustment to the existing conversion ratios for each of the Company’s outstanding series of Series Seed convertible preferred stock (“Series Seed Preferred Stock”), Series A convertible preferred stock (“Series A Preferred Stock”), Series B convertible preferred stock (“Series B Preferred Stock”), collectively referred to as “Preferred Stock.”.

All share and per share amounts in the consolidated financial statements and notes thereto have been retroactively adjusted for all periods presented to give effect to the reverse stock split, including reclassifying an amount equal to the change in par value of common stock to additional paid-in capital.

On February 25, 2020, the Company issued and sold 1,562,994‬ shares of Series B Preferred Stock at a price of $10.9722 per share, upon a waiver of specified milestone conditions from the holders of a majority of the shares then held by holders of Series B Preferred Stock, and raised approximately $17.1 million in net proceeds after deducting less than $0.1 million of issuance costs.

On February 25, 2020, the Company issued and sold 1,562,994 ‬ shares of Series B convertible preferred stock (“Series B Preferred Stock”) at a price of $ 10.9722 per share, upon a waiver of specified milestone conditions from the holders of a majority of the shares then held by holders of Series B Preferred Stock, and raised approximately $ 17.1 million in net proceeds after deducting less than $ 0.1 million of issuance costs.

On March 16, 2020, the Company completed an initial public offering (“IPO”) of its common stock and issued and sold 4,700,000 shares of common stock at a public offering price of $ 16.00 per share, resulting in gross proceeds of $ 75.2 million.

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Upon conversion of the convertible preferred stock, the Company reclassified the carrying value of the convertible preferred stock to common stock and additional paid-in capital.

The Company has incurred recurring negative cash flows since inception and has funded its operations primarily from the sale of Preferred Stock.

On April 1, 2021, the Company filed a Registration Statement on Form S-3 (the “Shelf”) with the SEC in relation to the registration and potential future issuance of common stock, preferred stock, debt securities, warrants and/or units of any combination thereof in the aggregate amount of up to $ 200.0 million.

The Shelf was declared effective on April 8, 2021.

The Company also simultaneously entered into a sales agreement with Cantor Fitzgerald & Co, LLC, as sales agent, providing for the offering, issuance and sale by the Company of up to an aggregate $ 75.0 million of its common stock from time to time in “at-the-market” offerings under the Shelf.

As of December 31, 2021, the Company had issued and sold 231,291 shares of common stock under the sales agreement, resulting in net proceeds of $ 1.4 million after deducting commissions and offering expenses.

The extent to which the Company utilizes the sales agreement as a source of funding will depend on a number of factors, including the prevailing market price of the Company’s common stock, general market conditions, the extent to which the Company is able to secure funds from other sources, and restrictions on the Company’s ability to sell common stock pursuant to the sales agreement to the extent the Company is then subject to restrictions on its ability to utilize the Shelf

to sell more than one-third of the market value of the Company’s public float, meaning the aggregate market value of voting and non-voting common stock held by non-affiliates, in any trailing 12-month period.

The Company’s public float did not exceed $75 million at any point during the 60 days prior to filing of this Annual Report on Form 10-K.

As a result, until such time as its public float exceeds $75 million , the Company will be subject to the restrictions on its ability to utilize the Shelf as described in the prior sentence.

On July 16, 2021, the Company completed a public offering of shares of its common stock.

In connection with the offering, the Company issued and sold 8,333,333 shares of common stock at a public offering price of $ 6.00 per share, resulting in net proceeds of $ 46.8 million after deducting underwriting discounts and commissions and offering expenses.

In accordance with the Financial Accounting Standards Board (“FASB”) Accounting Standards Update (“ASU”) 2014-15, Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern (Subtopic 205-40), the Company has evaluated whether there are conditions and events, considered in the aggregate, that raise substantial doubt about the Company’s ability to continue as a going concern within one year after the date that the consolidated financial statements are issued.

The Company has incurred recurring negative cash flows since inception and has funded its operations primarily from the sale of convertible preferred stock and proceeds from the IPO and subsequent common stock offerings.

As of December 31, 2021, the Company had cash, cash equivalents, and investments of $ 90.3 million and an accumulated deficit of $ 147.5 million.

The Company expects its operating losses and negative operating cash flows to continue into the foreseeable future as it continues to expand its research and development efforts.

The Company believes its cash, cash equivalents and investments will be sufficient to fund its operating expenses and capital expenditure requirements for at least twelve months from the date of filing this Annual Report on Form 10-K.

The Company will need additional funding to support its planned operating activities.

There can be no assurances, however, that

the current operating plan will be achieved or that additional funding will be available on terms acceptable to the Company, or at all.

As of the issuance date of these consolidated financial statements, the Company expects its cash, cash equivalents, and investments of $ 90.3 million as of December 31, 2021 will not be sufficient to fund the operating expenses and capital expenditure requirements necessary to advance its research efforts and clinical trials for the next twelve months, and the Company will need to obtain additional funding.

The Company expects to finance its operations through potential public or private equity financings, debt financings, collaboration agreements or other capital sources.

There can be no assurances, however, that the current operating plan will be achieved or that additional funding will be available on terms acceptable to the Company, or at all.

If the Company is unable to obtain sufficient funding, it could be required to delay its development efforts, limit activities and reduce research and development costs, which could adversely affect its business prospects.

Based on the Company’s recurring losses and negative cash flows from operations since inception, expectation of continuing operating losses and negative cash flows from operations for the foreseeable future, and the need to raise additional capital to finance its future operations, the Company’s management concluded that there is substantial doubt about the Company’s ability to continue as a going concern for at least twelve months from the date of filing this Annual Report on Form 10-K.

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

Accordingly, the consolidated financial statements have been prepared on a basis that assumes the Company will continue as a going concern and which contemplates the realization of assets and satisfaction of liabilities and commitments in the ordinary course of business.

Summary of Significant Accounting Policies

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The accompanying consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“GAAP”).

Any reference in these notes to applicable guidance is meant to refer to the authoritative GAAP as found in the Accounting Standards Codification (“ASC”) and as amended by Accounting Standards Updates of the Financial Accounting Standards Board (“FASB”).

Principles of Consolidation

The accompanying consolidated financial statements of the Company include the accounts of its wholly owned subsidiaries, IMARA Security Corporation and IMARA E.U.

The accompanying consolidated financial statements of the Company include the accounts of its then-existing wholly owned subsidiaries, IMARA Security Corporation and IMARA E.U.

All intercompany transactions and balances have been eliminated in consolidation.

Limited was dissolved in July 2021 and the dissolution of the subsidiary

did not have any material accounting implications on the Company’s consolidated financial statements as of and for the year ended December 3 1 , 2021 .

Use of Estimates

The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of expenses during the reporting periods.

Significant estimates and assumptions reflected in these consolidated financial statements include, but are not limited to, accrued research and development expenses, stock-based compensation expense, the fair value of the common stock and the intrinsic value of the beneficial conversation feature present in the second tranche of the Series B Preferred Stock issued in February of 2020 and income taxes.

Actual results could differ materially from those estimates.

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Restricted Cash

Restricted cash of less than $0.1 million as of December 31, 2020 and December 31, 2019, represents a letter of credit held as collateral in support of the Company’s facility lease.

Restricted cash of $ 0.2 million and $ 0.1 million as of December 31, 2021 and December 31, 2020, respectively, represents a letter of credit held as collateral in support of the Company’s operating lease at 116 Huntington Avenue in Boston, Massachusetts.

Restricted cash is included as a component of other assets on the Company’s consolidated balance sheets.

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If the Company determines from this analysis that it does not expect to receive cash flows sufficient to recover the entire amortized cost of the security, a credit loss exists, the impairment is considered other-than-temporary and is recognized in the consolidated statements of operations and comprehensive loss.

Deferred Offering Costs

Offering Costs

The Company capitalizes certain legal, professional, accounting and other third-party fees that are directly associated with in-process equity issuances as deferred offering costs until such equity issuances are consummated.

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Should the equity issuance be abandoned, the deferred offering costs will be expensed immediately as a charge to operating expenses in the consolidated statement of operations and comprehensive loss .

On March 16, 2020, the Company completed its IPO;

accordingly, the Company recognized the deferred offering costs of approximately $3.9 million as a reduction from gross proceeds associated with the IPO through additional paid-in capital in the accompanying consolidated balance sheet.

Deferred offering costs classified in other assets on the accompanying consolidated balance sheet as of December 31, 2019 were $2.1 million.

There were no deferred offering costs as of December 31, 2020.

There were no deferred offering costs as of December 31, 202 1 or December 31, 2020 .

Concentrations of Credit Risk and Off-Balance Sheet Risk

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Comprehensive loss includes net loss and certain changes in stockholders’ equity (deficit) that are excluded from net loss.

For the years ended December 31, 2020 and 2019, as a result of the Company’s investments in available-for-sale securities, the Company’s comprehensive loss includes unrealized gains and losses on those available-for-sale securities.

For the years ended December 31, 2021 and 2020, as a result of the Company’s investments in available-for-sale securities, the Company’s comprehensive loss includes unrealized losses on those available-for-sale securities.

Fair Value Measurements

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Expenditures for maintenance and repairs are expensed as incurred.

Deferred Rent

Deferred rent consists of rent escalation payment terms, tenant improvement allowances and other incentives received from landlords related to the Company’s operating leases.

Rent escalation represents the difference between actual operating lease payments due and straight-line rent expense, which is recorded by the Company over the term of the lease.

Tenant improvement allowances and other incentives are recorded as deferred rent and amortized as a reduction of periodic rent expense, over the term of the applicable lease.

In February 2016, the FASB issued ASU No.

2016-02, Leases (Topic 842) (“ASU 2016-02”).

This standard established a right-of-use model that requires all lessees to recognize on their balance sheets right-of-use assets and lease liabilities that arise from leases as well as provide disclosures with respect to certain qualitative and quantitative information related to a company’s leasing arrangements to meet the objective of allowing users of financial statements to assess the amount, timing and uncertainty of cash flows arising from leases.

The FASB subsequently issued the following amendments to ASU 2016-02 that have the same effective date and transition date:

2018-01, Leases (Topic 842):

Land Easement Practical Expedient for Transition to Topic 842, ASU No.

2018-10, Codification Improvements to Topic 842, Leases, ASU No.

2018-11, Leases (Topic 842):

Targeted Improvements, ASU No.

2018-20, Narrow-Scope Improvement for Lessors, and ASU No.

2019-01, Leases (Topic 842):

Codification Improvements.

The Company early adopted these amendments with ASU 2016-02 (collectively, the “new leasing standards”), effective January 1, 2021.

The Company adopted the new leasing standards using the modified retrospective transition approach, with no restatement of prior periods and there was no cumulative adjustment to retained earnings.

Upon adoption, the Company elected the package of transition practical expedients, which allowed the Company to not reassess the following:

(i) whether any expired or existing contracts are or contain leases, (ii) the lease classification for any expired or existing leases and (iii) the treatment of initial direct costs for existing leases.

The Company made an accounting policy election to not recognize short-term leases with an initial term of twelve months or less within its consolidated balance sheets and to recognize those lease payments on a straight-line basis in its consolidated statements of operations over the lease term.

Upon adopting the new leasing standards, the Company recognized an operating lease right-of-use asset of $ 0.7 million and a corresponding current and non-current operating lease liability of $ 0.3 million and $ 0.6 million, respectively, which are included in its consolidated balance sheets.

The adoption of the new leasing standards did not have a material impact on the Company’s consolidated statements of operations.

The Company determines if an arrangement is a lease at contract inception.

Operating lease right-of-use assets represent the Company’s right to use an underlying asset for the lease term and operating lease liabilities represent its obligation to make lease payments arising from the lease.

Operating right-of-use assets and liabilities are recognized at the commencement date of the lease based upon the present value of lease payments over the lease term.

When determining the lease term, the Company includes options to extend or terminate the lease when it is reasonably certain that the option will be exercised.

The Company uses the implicit rate when readily determinable and uses its incremental borrowing rate when the implicit rate is not readily determinable, based upon the information available at the commencement date in determining the present value of the lease payments.

The incremental borrowing rate is determined using a secured borrowing rate for the same currency and term as the associated lease.

The lease payments used to determine operating lease right-of-use assets may include lease incentives and stated rent increases.

The Company’s lease agreements may include both lease and non-lease components, which the Company accounts for as a single lease component when the payments are fixed, for all classes of underlying assets.

Variable payments included in the lease agreement are expensed as incurred.

The Company’s operating leases are reflected in operating lease right-of-use assets and in current operating lease liabilities and long-term operating lease liabilities in its consolidated balance sheets.

The Company’s operating lease right-of-use asset as of December 31 , 2021 did not include any material lease incentives.

Lease expense for future lease payments is recognized on a straight-line basis over the lease term.

Prior to the adoption of the new leasing standards, the Company recognized lease costs on a straight-line basis once it gained control of the space, without regard to deferred payment terms, such as rent holidays, that would defer the commencement date of required payments or escalating payment amounts.

Any lease incentives received were treated as a reduction of costs over the term of the lease agreement, as they were considered an inseparable part of the lease agreement.

The difference between required lease payments and rent expense was recorded as deferred rent, which was reflected as deferred rent in the December 31, 2020 consolidated balance sheet.

Research and Development Expenses

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For stock-based awards issued to employees and members of the Company’s board of directors (the “Board”) for their services as a member of the Board, the Company measures the estimated fair value of the stock-based award on the date of grant.

Since the Company’s initial public offering in March 2020, the fair value of the common stock has been determined based on the closing price of the Company’s stock on the date of grant.

Since the Company’s initial public offering in March 2020, the fair value of the common stock has been determined based on the closing price of the Company’s stock o n the Nasdaq Global Select Market on the date of grant.

Prior to the Company’s initial public offering, the Company determined the fair value of the underlying common stock based on input from management and approved by the Board, which utilized the valuation of the Company’s enterprise value determined utilizing various methods including the back-solve method, the option-pricing method (“OPM”) or a hybrid of the probability-weighted expected return method (“PWERM”) and the OPM.

The total enterprise value was then allocated to the various outstanding equity instruments, including the underlying common stock, utilizing the option-pricing model.

The total enterprise value was then allocated to the various outstanding equity instruments, including the underlying common stock, utilizing the OPM.

For employee and non-employee awards, the Company recognizes compensation expense over the requisite service period, which is generally the vesting period of the respective award based on the grant date fair value of the award.

For awards that include performance-based vesting conditions expense is recognized using the accelerated attribution method when the performance condition is deemed to be probable.

awards that include performance-based vesting conditions expense is recognized using the accelerated attribution method when the performance condition is deemed to be probable.

The Company accounts for forfeitures as they occur.

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Diluted net loss per share is computed using the more dilutive of (a) the two-class method or (b) the if-converted method.

The Company allocates earnings first to preferred stockholders based on dividend rights and then to common and preferred stockholders based on ownership interests.

The Company allocates earnings first to preferred stockholders based on dividend rights and then to

common and preferred stockholders based on ownership interests.

The weighted-average number of common shares included in the computation of diluted net loss effect to all potentially dilutive common equivalent shares, including outstanding stock options and Preferred Stock.

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Recently Issued Accounting Pronouncements

In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842), which, among other things, requires lessees to recognize an obligation to make lease payments arising from a lease, measured on a discounted basis, and a right-of-use asset, which is an asset that represents the lessee's right to use, or control the use of, a specified asset for the lease term.

Expenses are recognized in the consolidated statement of operations in a manner similar to current accounting guidance.

The Company expects to make an accounting policy election to not recognize an asset and liability for leases with a term of twelve months or less.

The standard is effective for fiscal years beginning after December 15, 2021.

The Company will early adopt the accounting standard effective January 1, 2021 using a modified retrospective approach, which applies the provisions of the new guidance at the effective date without adjusting the comparative periods presented.

The Company is finalizing its evaluation of the impacts that the adoption of this accounting guidance will have on the consolidated financial statements and estimates approximately $1 million of right-to-use assets and lease liabilities will be recognized in the balance sheet upon adoption.

In June 2016, the FASB issued ASU 2016-13, Financial Instruments—Credit Losses (Topic 326):

Measurement of Credit Losses on Financial Instruments (“ASU 2016-13”), which requires entities to estimate all expected credit losses for certain types of financial instruments, including trade receivables, held at the reporting date based on historical experience, current conditions, and reasonable and supportable forecasts.

The updated guidance also expands the disclosure requirements to enable users of financial statements to understand the entity’s assumptions, models and methods for estimating expected credit losses over the entire contractual term of the instrument from the date of initial recognition of that instrument.

For public business entities that meet the definition of a United States Securities and Exchange Commission (“SEC”) filer,

excluding entities eligible to be smaller reporting companies as defined by the SEC, the standard is effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years.

In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842), which sets out the principles for the recognition, measurement, presentation and disclosure of leases for both parties to a contract (i.e., lessees and lessors).

The new standard requires lessees to apply a dual approach, classifying leases as either finance or operating leases based on the principle of whether or not the lease is effectively a financed purchase by the lessee.

This classification will determine whether lease expense is recognized based on an effective interest method or on a straight-line basis over the term of the lease, respectively.

A lessee is also required to record a right-of-use asset and a lease liability for all leases with a term of greater than 12 months regardless of their classification.

Leases with a term of 12 months or less will be accounted for similar to existing guidance for operating leases today.

ASU 2016-02 supersedes the previous leases standard, ASC 840, Leases.

For additional information on the adoption of the new leasing standards, please read the Company’s policy above entitled Leases, and Note 8, Commitments and Contingencies, to these consolidated financial statements.

In March 2020, the FASB issued “ASU 2020-03”, Codification Improvements to Financial Instruments, (“ASU 2020-03”) which addressed, among other topics, Amendments related to ASU 2016-13 Financial Instruments—Credit Losses (Topic 326):

Measurement of Credit Losses on Financial Instruments ("ASU 2016-13”).

The amendments align the contractual term under Topic 326 and Topic 842 (Leases) to be consistent, and also clarifies when an entity should record an allowance for credit losses in accordance with Topic 326.

For public business entities that meet the definition of a SEC filer, excluding entities eligible to be smaller reporting companies as defined by the SEC, the standard is effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years.

For all other entities, the standard is effective for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years.

Early adoption is permitted.

The Company is currently evaluating the impact of this new guidance on the Company’s consolidated financial statements and related disclosures, but does not expect the adoption of ASU 2016-13 to be material.

In July 2017, the FASB issued ASU 2017-11, Earnings Per Share (Topic 260), Distinguishing Liabilities from Equity (Topic 480), Derivatives and Hedging (Topic 815) I.

Accounting for Certain Financial Instruments with Down Round Features II.

Replacement of the Indefinite Deferral for Mandatorily Redeemable Financial Instruments of Certain Nonpublic Entities and Certain Mandatorily Redeemable Noncontrolling Interests with a Scope Exception (“ASU 2017-11”) .

Part I applies to entities that issue financial instruments such as warrants, convertible debt or convertible preferred stock that contain down-round features.

Part II replaces the indefinite deferral for certain mandatorily redeemable noncontrolling interests and mandatorily redeemable financial instruments of nonpublic entities contained within ASC Topic 480 with a scope exception and does not impact the accounting for these mandatorily redeemable instruments.

The amendments in Part I of this update became effective for the Company for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019, and interim periods within fiscal years beginning after December 15, 2020.

Early adoption is permitted for all entities, including adoption in an interim period.

The adoption had no material impact on the Company’s financial position, results of operations or cash flows.

The amendments in Part II of this update do not require any transition guidance because those amendments do not have an accounting effect.

On August 5, 2020, the FASB issued ASU 2020-06, Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40):

Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity (“ASU-2020-06”), which simplifies the accounting for certain financial instruments with characteristics of liabilities and equity, including convertible instruments and contracts on an entity’s own equity.

ASU 2020-06 eliminates the beneficial conversion and cash conversion accounting models in ASC 470-20 that require separate accounting for embedded conversion features from convertible instruments.

As a result, after adopting the ASU’s guidance, entities will not separately present in equity an embedded conversion feature in such debt.

Additionally, the guidance simplifies the evaluation of whether a contract in the issuer’s own equity can be classified in equity or an embedded feature qualifies for the derivative scope exception.

Although the guidance is not effective until 2022, early adoption of ASU 2020-06 is permitted for all entities for fiscal years beginning after December 15, 2020.

The Company is currently evaluating the impact of this new guidance on the Company’s consolidated financial statements and related disclosures.

The Company is currently evaluating the impact of this new guidance on the Company’s consolidated financial statements and related disclosures but does not expect the adoption of ASU 2020-03 or ASU 2016-13 to be material.

Fair Value of Financial Assets and Liabilities

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Marketable securities:

Corporate debt securities

Commercial paper

Corporate debt securities

Total financial assets

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Corporate debt securities

As of December 31, 2020 and 2019, the Company had no available-for-sale securities in unrealized loss positions.

As o f December 31, 2021, the Company held seven available-for-sale securities with an aggregate value of approximately $ 15.8 million in an unrealized loss position for less than twelve months.

As of December 31, 2020, the Company had no available-for-sale securities in unrealized loss positions.

The Company has the intent and ability to hold such securities until recovery.

The Company determined that there was no material change in the credit risk of its investments.

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Property and equipment, net

Depreciation expense was $0.1 million and less than $0.1 million for the years ended December 31, 2020 and 2019, respectively.

Depreciation expense was $ 0.1 million and $ 0.1 million for the years ended December 31, 2021 and 2020, respectively.

Accrued Expenses

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Total accrued expenses

License Agreements

Agreement with Lundbeck

License and Purchase Agreements

Tovinontrine (IMR-687) – Exclusive License Agreement with Lundbeck

In April 2016, the Company entered into a license agreement with Lundbeck (the “Lundbeck Agreement”) pursuant to which Lundbeck granted the Company the following licenses within the field of prevention, treatment or diagnosis of hemoglobinopathy disorders and/or other diseases or disorders, including those directly or indirectly related to hemoglobinopathies:

(1) an exclusive, royalty-bearing license to certain patent rights and certain know-how owned or otherwise controlled by Lundbeck (“Licensed Technology”) to research, develop, make, use, sell, and commercialize products (“Licensed Products”) from PDE9 inhibitors, which included IMR-687 (“Licensed Compounds”);

(2) a non-exclusive license to the Licensed Technology to make, research, develop, and use such Licensed Technology to enable research and development, with certain restrictions;

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To date, pursuant to the license agreement, the Company has made cash payments to Lundbeck of $ 1.8 million consisting of an upfront payment and ongoing milestone payments, which are recorded as research and development expense.

No payments were made during the year ended December 31, 2020.

No payments were made during the years ended December 31, 2021 or December 31, 2020.

As partial consideration for the license, the Company issued 167,523 shares of common stock to Lundbeck in 2016, which represented 8.0 % of the Company’s then outstanding equity pursuant to a restricted stock agreement.

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The Company or Lundbeck may terminate the agreement by written notice within a specified period of time in the event of a material breach.

IMR-261 – Asset Purchase Agreement with Complexa (assignment for the benefit of creditors), LLC and related license agreements

In October 2020, the Company entered into an asset purchase agreement (“Complexa APA”) with Complexa (assignment for the benefit of creditors), LLC (“Complexa ABC”), pursuant to which the Company acquired all of Complexa ABC’s right, title and interest in and to the assets comprising the Nrf2 program, including CXA-10 (subsequently renamed IMR-261).

As consideration for the assets acquired under the Complexa APA, the Company made a one-time payment of approximately $ 0.1 million which was expensed to research and development expense and agreed to pay up to an additional approximately $ 3.8 million in milestone payments based on the achievement of specified clinical and commercial sale milestones as set for the in the Complexa APA.

As of December 31, 2021, no Milestone payments have been triggered under this agreement.

Commitments and Contingencies

Lease Agreements

In 2016, the Company entered into an agreement for office space located in Cambridge, Massachusetts, which was a month-to-month lease, with a related party (see Note 14).

The Company recorded rent expense of $0.2 million and $0.2 million during the years ended December 31, 2020 and 2019, respectively.

In May 2019, the Company entered into a new operating lease agreement for office space totaling 4,210 square feet, located in Boston, Massachusetts with a 62-month term.

In May 2019, the Company entered into a new operating lease agreement for office space totaling 4,210 square feet, located in Boston, Massachusetts with a 62 -month term (the “May 2019 Lease Agreement).

The lease includes a rent escalation clause which results in cash rental payments of approximately $ 0.3 million annually.

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The Company occupied the space in August 2019 and commenced recognition of rent expense.

The following table summarizes the future minimum lease payments due under the Company’s operating leases as of December 31, 2020 exclusive of amounts prepaid by the Company (in thousands):

The Company recorded rent expense of $ 0.3 million and $ 0.2 million during the years ended December 31, 2021 and 2020, respectively

In June 2021, the Company entered into an amendment to the May 2019 Lease Agreement (the “June 2021 Amended Lease Agreement”).

Under the terms of the June 2021 Amended Lease Agreement, the Company will expand its current premises in Boston, Massachusetts by an additional 5,026 square feet, bringing the total office space to 9,236 square feet.

The term of the June 2021 Amended Lease Agreement will commence upon completion of the buildout of the additional space, which is expected to occur by the end of March 2022, and expires on March 31, 2027 .

As of the date of this Annual Report on Form 10-K, the Company has not taken possession of the expanded space and as such has not recognized a lease liability or a right of use asset related to this space.

The Company has the option to extend the term for one additional five-year period upon the Company’s written notice to the landlord at least 12 months and no more than 15 months in advance of the extension period.

Upon commencement of the term of the June 2021 Amended Lease Agreement, the annual base rent obligation is approximately $ 0.6 million, with a total cash obligation for base rent over the initial five-year term of the lease of approximately $ 3.2 million.

In addition to the base rent, the Company is also responsible for its share of operating expenses, electricity and real estate taxes.

Upon execution of the June 2021 Amended Lease Agreement, the Company provided an additional security deposit in the amount of $ 0.1 million, with security deposits under the May 2019 Lease Agreement and June 2021 Amended Lease Agreement totaling $ 0.2 million.

The following table summarizes the future lease payments due under the May 2019 Lease Agreement only, as the term of the June 2021 Amended Lease Agreement has not yet commenced (in thousands):

Total Lease Payments

Less Imputed Interest

Present Value of operating lease liabilities

Operating cash flows used for operating leases

Weighted-average remaining lease term (years)

Weighted-average discount rate

Under the prior lease accounting guidance, minimum rental commitments under non-cancelable leases as of December 31, 2020 were as follows (in thousands):

Minimum Lease

Legal Proceedings

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Prior to the sale of common stock in connection with its IPO, the Company had funded its operations primarily with proceeds from the sale of preferred stock.

In March 2019, the Company issued Series B Preferred Stock and, in connection with such issuance, restated its certificate of incorporation (the “Second Amended and Restated Certificate of Incorporation” or “Second A&R COI”) such that as of December 31, 2019, the authorized capital stock of the Company included 70,378,661 shares of $0.001 par value Preferred Stock, of which 36,166,661 are designated as Series B Preferred Stock, 31,499,040 have been designated as Series A Preferred Stock, and 2,712,960 have been designated as Series Seed Preferred Stock.

In March 2019, the Company issued and sold 25,316,663 shares of Series B Preferred Stock, at a price of $1.7419 per share.

The terms of the Series B Preferred Stock Purchase Agreement included the obligation of the investors to purchase, and the Company to sell, 10,849,998 additional shares of Series B Preferred Stock at a purchase price of $1.7419 per share, contingent upon the achievement of a specified pre-designated milestone event.

The Company concluded that the tranche

feature is not a freestanding financial instrument as the right to purchase the future tranche is not legally detachable from the shares of Series B Preferred Stock.

The pre-designated milestone event was not achieved and as such, the milestone tranche closing may take place within 18 months of the initial closing upon a waiver from the holders of a majority of the shares purchased at the initial closing.

In addition, any Series B Preferred Stock investor has an option to purchase all or some of its milestone shares prior to any waiver of the milestone conditions.

In May 2019, one of the investors exercised this option to purchase 1,004,650 of its milestone shares prior to the milestone closing, at a purchase price of $ 1.7419 per share.

At initial issuance and subsequent closing, the Company concluded that no beneficial conversion features were present.

On February 25, 2020, the Company raised $ 17.1 million in net proceeds from the sale of 1,562,994 ‬ shares of Series B Preferred Stock, at a price of $ 10.9722 per share, upon a waiver of specified milestone conditions from the holders of a majority of the shares then held by the holders of Series B Preferred Stock.

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Given the proximity of the issuance to the Company’s public offering, the Company utilized the $ 16.00 public offing price of its common stock to determine the intrinsic value of the beneficial conversion feature.

As a result, the Company recorded the intrinsic value of the beneficial conversion feature of $7.9 million as a discount on the Series B Preferred Stock at issuance.

As a result, the Company recorded the intrinsic value of the beneficial conversion feature of $ 7.9 million as a discount on the

Series B Preferred Stock at issuance.

Because the Series B Preferred Stock was immediately convertible upon issuance and did not include mandatory redemption provisions, the discount on the Series B Preferred Stock was immediately accreted.

Upon the completion of the IPO on March 16, 2020, all 70,378,661 shares of outstanding Preferred Stock automatically converted into 11,172,955 shares of common stock.

As of December 31, 2019, convertible preferred stock consisted of the following (in thousands, except share data):

December 31, 2019

Series Seed Preferred Stock

Series A Preferred Stock

Series B Preferred Stock

Liquidation Rights

In the event of any voluntary or involuntary liquidation event, dissolution, winding up of the Company or upon the occurrence of certain other deemed liquidation events described in the Company’s charter, each holder of the then outstanding Series B Preferred Stock was entitled to receive, prior and in preference to any distributions to the holders of Series A Preferred Stock, Series Seed Preferred Stock and common stock, an amount equal to $1.7419 per share (adjusted in the event of any stock dividend, stock split, combination or other similar recapitalization) plus any declared but unpaid dividends thereon.

After the payment of all preferential amounts to the holders of Series B Preferred Stock, each holder of the then outstanding Series A Preferred Stock was entitled to receive, prior and in preference to any distributions to the holders of Series Seed Preferred Stock and common stock, an amount equal to $1.00 per share (adjusted in the event of any stock dividend, stock split, combination or other similar recapitalization) plus any declared but unpaid dividends thereon.

After the payment of all preferential amounts to the holders of Series A Preferred Stock, each holder of the then outstanding Series Seed Preferred Stock was entitled to receive, prior and in preference to any distributions to the holders of common stock, an amount equal to $1.00 per share (adjusted in the event of any stock dividend, stock split, combination or other similar recapitalization) plus any declared but unpaid dividends thereon.

After payments were made in full to the holders of the Preferred Stock, then, to the extent available, the remaining amounts would have been distributed among the holders of the shares of common stock, Series A Preferred Stock and Series B Preferred Stock, pro rata based on the number of shares held by each holder (determined on an as-converted basis).

Pursuant to the Second A&R COI, each share of Preferred Stock is convertible into common stock, at any time, at the option of the holder, and without the payment of additional consideration, at the applicable conversion ratio then in effect for each series of Preferred Stock.

In addition, each share of Preferred Stock will be automatically converted into common stock at the applicable conversion ratio then in effect for each series of Preferred Stock upon either (i) the closing of a firm commitment underwritten public offering of its common stock at a price per share of at least $2.6129 per share (subject to adjustment for any stock split, combination or similar recapitalization) resulting in $60.0 million or more of gross offering proceeds to the Company, or (ii) the date and time, or the occurrence of an event, specified by vote or written consent of the requisite holders of Preferred Stock.

Upon certain change in control events that are outside of the Company’s control, including liquidation, sale or transfer of control of the Company, holders of the Preferred Stock could have caused redemption of the Preferred Stock.

Shares of Preferred Stock must be redeemed by the Company in an amount equal to the liquidation preference for each series of Preferred Stock.

Upon the completion of the IPO on March 16, 2020, all 70,378,661 shares of outstanding preferred stock of the Company automatically converted into 11,172,955 shares of common stock.

No dividends have been declared by the Company’s board of directors since inception.

Stockholders’ Equity (Deficit)

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As of December 31, 2021 and December 31, 2020, the Company has reserved for future issuance the following shares of common stock:

Conversion of outstanding preferred stock

Shares reserved for future issuance under the 2016 Stock Incentive Plan

Shares reserved for future issuance under the 2020 Equity Incentive Plan

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The Company’s 2016 Stock Incentive Plan, (the “2016 Plan”) provided for the grant of restricted stock, restricted stock units, stock appreciation rights, incentive stock options, non-statutory stock options and other stock-based awards to employees, officers, members of the Board, consultants and advisors of the Company.

As of December 31, 2019, the number of shares of common stock authorized to be issued under the 2016 Plan was 2,091,969, of which 228,852 shares remained available for future grants as of December 31, 2019.

As of the effective date of the 2020 Equity Incentive Plan, no shares remained available for future issuance under the 2016 Plan.

Any options or awards outstanding under the 2016 Plan remain outstanding and effective.

Any options or awards outstanding under the 2016 Plan remained outstanding and effective.

2020 Equity Incentive Plan

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The number of shares reserved shall be annually increased on the first day of each fiscal year, beginning with the fiscal year ending December 31, 2021 and continuing until, and including, the fiscal year ending December 31, 2030, equal to the lesser of (i) 4 % of the number of shares of the Company’s common stock outstanding on the first day of such fiscal year and (ii) an amount determined by the Company’s board of directors.

On January 1, 2021, 701,930 additional shares were reserved for issuance under the 2020 Plan pursuant to this provision.

On January 1, 2022, a further

1,051,490 shares were reserved for future under the 2020 Plan pursuant to this provision.

No more than 8,541,982 shares of common stock may be issued as incentive stock options under the 2020 Plan.

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As of December 31, 2021, there were 1,216,532 shares available for future issuance under the 2020 Plan.

For financial reporting purposes, the Company performed common stock valuations with the assistance of a third-party specialist through October 23, 2019 to determine stock-based compensation expense for stock options.

For financial reporting purposes, prior to the IPO the Company performed common stock valuations with the assistance of a third-party specialist to determine stock-based compensation expense for stock options.

Upon completion of the IPO, the fair value of the common stock on the grant date was based on the closing price of the stock on the Nasdaq Global Select Market on the date of grant.

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Stock-based compensation expense associated with performance-based stock options is recognized if the performance conditions are considered probable of being achieved, using management’s best estimates.

As a result of the performance condition being met on February 25, 2020, these options will vest as to 25% of the shares underlying each option on February 25, 2021 and as to the remainder of the shares in equal quarterly installments for three years thereafter.

The Company recognized stock-based compensation expense of $0.3 million for these options during the year ended December 31, 2020.

As a result of the performance condition being met on February 25, 2020, these options vested as to 25 % of the shares underlying each option on February 25, 2021 and vest as to the remainder of the shares in equal quarterly installments for three years thereafter.

The Company recognized stock-based compensation expense of $ 0.2 million and $ 0.3 million for these options during the years ended December 31, 2021 and December 31, 2020, respectively.

Stock-Based Compensation

Stock-based compensation expense included in the Company’s consolidated statements of operations and comprehensive loss is as follows (in thousands):

Research and development

General and administrative

Research and development

Total stock-based compensation expense

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The number of shares of the Company’s common stock reserved for issuance under the 2020 ESPP will automatically increase on the first day of each fiscal year, beginning with the fiscal year commencing on January 1, 2021 and continuing until, and including, the fiscal year commencing on January 1, 2031, in an amount equal to the lowest of (i) 386,432 shares of the Company’s common stock, (ii) 1 % of the number of shares of the Company’s common stock outstanding on the first day of such fiscal year and (iii) an amount determined by the Company’s board of directors.

The Company’s board of directors decided not to increase the number of shares of the Company’s common stock reserved for issuance under the 2020 ESPP for the 2021 fiscal year.

On January 1, 2022, 262,872 additional shares were reserved for issuance under the 2020 ESPP pursuant to this provision.

During the year ended December 31, 2021, less than $ 0.1 million was withheld from employees, on an after-tax basis, in order to purchase 15,696 shares of the Company’s common stock.

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The CARES Act also established a Paycheck Protection Program whereby certain small businesses are eligible for a loan to fund payroll expenses, rent, and related costs.

The Company considered the provisions under the CARES Act and elected not to take advantage of the provisions of CARES Act as the effect of such provisions was not expected to have a material impact on the Company’s results of operations, cash flows and consolidated financial statements.

The CARES Act provided for an Employee Retention Credit (“ERC”), which is a refundable payroll tax credit that encouraged businesses to keep employees on the payroll during the COVID-19 pandemic.

Eligible employers are entitled to a refundable tax credit equal to 50 % of qualified wages paid to employees between March 13, 2020, and December 31, 2020,

up to a maximum of $ 5,000 credit per employee.

In late December 2020 Congress expanded and amended the CARES Act by enacting Public Law 116-260.

Per the amendment to the CARES Act, eligible employers are entitled to a refundable tax credit equal to 70 % of the qualified wages paid to employees between January 1, 2021, and June 30, 2021, up to a maximum of $ 10,000 of wages per employee per quarter, with a maximum of $ 7,000 per employee per calendar quarter.

Congress further extended the credit with the American Rescue Plan signed into law on March 11, 2021;

the American Rescue Plan extended the credit for the period July 1, 2021 to December 31, 2021 with the same limitations as the prior amendment (i.e., tax credit equal to 70 % of qualified wages up to a maximum of $ 10,000 of wages per employee per quarter).

However, on November 15, 2021, President Biden signed into law the Infrastructure Investment and Jobs Act which redacted the credit for calendar quarter 4 of 2021.

Qualified Wages must be paid on or after March 13, 2020 and before October 1, 2021, and may include wages paid to employees, as well as so much of the employer’s qualified health plan expenses as are properly allocable to such wages, not to exceed $ 10,000 per employee for calendar year 2020 or $ 10,000 per employee per calendar quarter in quarter 1, 2, or 3 of 2021 (“2021 Eligible Quarter”).

The Retention Credit may be claimed for up to $ 5,000 per employee for calendar year 2020 (i.e., 50 % of the $ 10,000 maximum in Qualified Wages for calendar year 2020) or $ 7,000 per employee per 2021 Eligible Quarter (i.e., 70 % of the $ 10,000 maximum in Qualified Wages per 2021 Eligible Quarter).

Therefore, the maximum Retention Credit per employee in 2020 is $ 5,000 and in 2021 is $ 21,000 .

Based on the Company’s evaluation of this provision and pandemic-related impact on its operations in 2020 and 2021, it was determined that the Company qualified to claim ERC in the second, third and fourth calendar quarters of 2020, as well as in both the first, second, and third calendar quarters of 2021.

The Company recognized an ERC of approximately $ 1.0 million as an offset to payroll tax expenses for the year ended December 31, 2021, respectively, in its consolidated statements of operations.

A reconciliation of income tax expense (benefit) computed at the statutory federal income tax rate to income taxes as reflected in the consolidated financial statements is as follows:

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Lease incentive liability

Lease liability

Unrealized gains/losses on investments

Total deferred tax assets

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Unrealized gains/losses on investments

Right of Use Asset

Total deferred tax liabilities

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federal and state deferred tax assets.

Accordingly, a full valuation allowance has been established against these net

deferred tax assets as of December 31, 20 20 and 20 19 , respectively.

Accordingly, a full valuation allowance has been established against these net deferred tax assets as of December 31, 2021 and 2020, respectively.

The Company reevaluates the positive and negative evidence at each reporting period.

The Company’s valuation allowance increased during 20 20 by approximately $ 1 4 .

8 million primarily due to the generation of net operating loss and tax credit carryforwards.

The Company’s valuation allowance increased during 2021 by approximately $ 16.6 million primarily due to the generation of net operating loss and tax credit carryforwards.

As of December 31, 2021 and 2020, the Company had U.S.

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Utilization of the U.S.

federal and state net operating loss and research and development and orphan drug credit carryforwards may be subject to a substantial annual limitation under Sections 382 and 383 of the Internal Revenue Code of 1986, as amended, and corresponding provisions of state law, due to ownership changes that have occurred previously or that could occur in the future.

federal and state net operating loss and research and development and orphan drug credit carryforwards may be subject to a substantial annual limitation under Section s 382 and 383 of the Internal Revenue Code of 1986, as amended, and corresponding provisions of state law, due to ownership changes that have occurred previously or that could occur in the future.

These ownership changes may limit the amount of net operating loss and research and development credit carryforwards that can be utilized annually to offset future taxable income and tax liabilities, respectively.

18 unchanged sentences

Net loss per share—basic and diluted

As of December 31, 2020 and 2019, the Company’s potentially dilutive securities were Preferred Stock, shares reserved for issuance under the ESPP and stock options, which have been excluded from the computation of diluted net loss per share attributable to common stockholders for the years ended December 31, 2020 and 2019, as the effect would be to reduce the net loss per share.

All the Company’s restricted stock was vested as of December 31, 2019.

Net loss applicable to common stockholders for the year ended December 31, 2020 did not equal net loss due to the accretion of the beneficial conversion feature of Series B Preferred Stock in the amount of $7.9 million.

In 2020, the net loss applicable to common stockholders did not equal net loss due to the accretion of the beneficial conversion feature of Series B Preferred Stock in the amount of $ 7.9 million.

The beneficial conversion feature was initially recorded as a discount on the Series B Preferred Stock with a corresponding amount recorded to Additional Paid-in Capital.

4 unchanged sentences

Year Ended December 31,

Series Seed Preferred Stock

Series A Preferred Stock

Series B Preferred Stock

Options to purchase common stock

1 unchanged sentence

Related Party Transactions

Lundbeckfond Invest A/S is one of the Company’s stockholders and participated in all tranches of the Series A preferred stock financing and both tranches of the Series B preferred stock financing.

Prior to the conversion of the Company’s preferred stock, Lundbeckfond Invest A/S owned 5,470,492 shares of Series A Preferred Stock as of December 31, 2019, and 478,749 shares of Series Seed Preferred Stock as of December 31, 2019.

Lundbeckfond Invest A/S is one of the Company’s stockholders and participated in all tranches of the Series A convertible preferred stock (“Series A Preferred Stock”) financing and both tranches of the Series B Preferred Stock financing.

Lundbeckfond Invest A/S owned 1,326,111 shares of Series B Preferred Stock as of December 31, 2019.

2 unchanged sentences

This reflects a 5.0 % and a 7.4 % ownership interest on a fully diluted basis as of December 31, 2021 and 2020, respectively.

Mette Kirstine Agger, a member of the Company’s board of directors, is a Managing Partner at Lundbeckfonden Ventures, which is an affiliate of Lundbeckfond Invest A/S.

Mette Kirstine Agger, who was a member of the Company’s board of directors until June 29, 2021, is a Managing Partner at Lundbeckfonden Ventures, which is an affiliate of Lundbeckfond Invest A/S.

Lundbeck, an affiliate of Lundbeckfond Invest A/S, is also one of the Company’s stockholders and participated in the fourth tranche of the Company’s Series A Preferred Stock financing.

Prior to the conversion of the Company’s Preferred Stock, Lundbeck owned 499,069 shares of Series A Preferred Stock as of December 31, 2019, as well as 443,271 shares of

common stock issued in conjunction with the Lundbeck Agreement (See Note 7).

All shares of P referred S tock converted into shares of common stock upon closing of the IPO.

Prior to the conversion of the Company’s preferred stock, Lundbeck owned 499,069 shares of Series A Preferred Stock as of December 31, 2019, as well as 443,271 shares of common stock issued in conjunction with the Lundbeck Agreement (See Note 7).

All shares of preferred stock converted into shares of common stock upon closing of the IPO.

This reflects a 1.8 % and a 2.7 % ownership interest on a fully diluted basis as of December 31, 2021 and 2020, respectively.

1 unchanged sentence

To date, pursuant to the Lundbeck Agreement, the Company has made cash payments to Lundbeck of $ 1.8 million consisting of an upfront payment and ongoing milestone payments which are recorded as research and development expense .

Cydan Development, Inc.

In January 2016, the Company entered into a Business Services Agreement with Cydan Development, Inc., or Cydan, pursuant to which Cydan provided office space, personnel assistance, and other business services to the Company on an as-needed basis.

At the time the agreement was signed, Cydan was considered a related party because Cydan was a holder of more than 5% of the Company’s capital stock and Dr.

James McArthur was the Company’s founder, President and Chief Executive Officer, a member of the Company’s board of directors and a holder of more than 5% of the Company’s capital stock and the Chief Scientific Officer of Cydan.

As of June 30, 2020, Cydan was no longer considered a related party.

The Company paid Cydan less than $0.3 million during the year ended December 31, 2019 related to the Business Services Agreement, all of which was recorded as research and development expense.

The Company agreed with Cydan to terminate the Business Services Agreement and all related services rendered by Cydan to the Company effective as of August 17, 2019.

Accordingly, there were no amounts due to Cydan as of December 31, 2020 and 2019, respectively .

Benefit Plans

2 unchanged sentences

Matching contributions to the plan may be made at the discretion of the Board.

The Company contributed a match of $0.1 million to the 401(k) plan during the year ended December 31, 2020.

The Company did not make any contributions to the plan in 2019.

The Company contributed a match of $ 0.2 million and $ 0.1 million to the plan during the years ended December 31, 2021 and 2020, respectively.

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

What changed 10-K

Item 9A. Controls and Procedures