What changed in this filing

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Item 1. Financial Statements

2025-05-08 compared with 2024-11-07 · 79 added, 163 removed, 222 unchanged (52% of the section changed)

3 unchanged sentences

(In thousands, except share and per share data)

September 30,

Current assets

18 unchanged sentences

Preferred stock, $ .0001 par value per share;

200,000,000 shares authorized and no shares issued or outstanding as of September 30, 2024 and December 31, 2023

200,000,000 shares authorized and no shares issued or outstanding as of March 31, 2025 and December 31, 2024

Common stock, $ .0001 par value per share;

1,000,000,000 shares authorized as of September 30, 2024 and December 31, 2023;

94,408,911 shares and 70,453,342 shares issued and outstanding as of September 30, 2024 and December 31, 2023, respectively

1,000,000,000 shares authorized as of March 31, 2025 and December 31, 2024;

95,205,683 shares and 94,838,466 shares issued and outstanding as of March 31, 2025 and December 31, 2024, respectively

Additional paid-in capital

7 unchanged sentences

(In thousands, except share and per share data)

Three months ended September 30,

Nine months ended September 30,

Three months ended March 31,

Operating expenses

6 unchanged sentences

Other comprehensive income (loss):

Unrealized gain on available-for-sale securities

Unrealized loss on available-for-sale securities

Total comprehensive loss

8 unchanged sentences

Balance as of December 31, 2023

Issuance of common stock, net of offering costs

Exercise of stock options

Stock-based compensation

Other comprehensive income

Balance as of March 31, 2023

Exercise of stock options and vesting of restricted stock

Purchase of common stock under employee stock purchase plan

Stock-based compensation

Other comprehensive loss

Balance as of June 30, 2023

Exercise of stock options

Stock-based compensation

Other comprehensive income

Balance as of September 30, 2023

Balance as of March 31, 2024

Other Comprehensive

1 unchanged sentence

Balance as of December 31, 2024

Issuance of common stock, net of offering costs

Exercise of stock options

2 unchanged sentences

Balance as of March 31, 2025

Exercise of stock options and vesting of restricted stock

Purchase of common stock under employee stock purchase plan

Stock-based compensation

Other comprehensive loss

Balance as of June 30, 2024

Exercise of stock options

Stock-based compensation

Other comprehensive income

Balance as of September 30, 2024

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

2 unchanged sentences

(In thousands)

Nine months ended September 30,

Three months ended March 31,

Cash flows from operating activities

1 unchanged sentence

Stock-based compensation

Amortization (accretion) of (discount) on marketable securities, net

Accretion of discount on marketable securities, net

Amortization of right-of-use asset

11 unchanged sentences

Purchases of property and equipment

Net cash (used in) provided by investing activities

Net cash provided by (used in) investing activities

Cash flows from financing activities

2 unchanged sentences

Payment of deferred offering costs

Proceeds from Employee Stock Purchase Plan

Net cash provided by financing activities

3 unchanged sentences

Supplemental disclosures of non-cash investing and financing activities:

Right-of-use asset obtained in exchange for new operating lease liability, net of tenant improvement receivable

Reduction to right-of-use due to tenant improvement receivable

Property and equipment purchases included in accounts payable and accrued other expenses

Deferred offering costs included in accounts payable and accrued other expenses

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

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The Company is a clinical stage biopharmaceutical company focused on the discovery, development and commercialization of innovative treatments for severe muscle diseases for which there is significant unmet medical need.

The Company’s lead product candidate, sevasemten (EDG-5506), is an orally administered small molecule designed to address the root cause of dystrophinopathies including Duchenne muscular dystrophy (Duchenne) and Becker muscular dystrophy (Becker).

The Company’s lead product candidates are sevasemten and EDG-7500.

Sevasemten is an orally administered small molecule designed to address the root cause of dystrophinopathies including Duchenne muscular dystrophy (Duchenne) and Becker muscular dystrophy (Becker).

The Company is currently studying sevasemten in Phase 2 trials, which are being held in the U.S.

and Israel and in certain countries in Europe and Australasia.

In addition, the Company is enrolling a multipart Phase 2 trial with EDG-7500, for the potential treatment of hypertrophic cardiomyopathy (HCM).

The Company is enrolling a multipart Phase 2 trial with EDG-7500, for the potential treatment of hypertrophic cardiomyopathy (HCM).

The Company is using its proprietary drug discovery platform to develop a pipeline of precision medicine product candidates that target key muscle proteins and modulators to address a broad array of serious muscle disorders.

Risks and Uncertainties

The board of directors of the Company discusses with management macroeconomic and geopolitical developments, including inflation, instability in the banking and financial services sector, tightening of the credit markets, the impact of the upcoming change in the U.S.

presidential administration, international conflicts, public health pandemics, cybersecurity and sanctions so that the Company can be prepared to react to new developments as they arise.

government administration and policy positions, international conflicts, public health pandemics, cybersecurity and sanctions so that the Company can be prepared to react to new developments as they arise.

The board of directors and the management of the Company are carefully monitoring these developments and the resulting economic impact on its financial condition and results of operations.

Liquidity and Capital Resources

The Company has an accumulated deficit of $ 338.9 million and cash, cash equivalents and marketable securities of $ 492.5 million as of September 30, 2024.

The Company has an accumulated deficit of $ 419.4 million and cash, cash equivalents and marketable securities of $ 436.4 million as of March 31, 2025.

The Company’s ability to fund ongoing operations is highly dependent upon raising additional capital through the issuance of equity securities and issuing debt or other financing vehicles.

On June 16, 2023, the Company entered into a Sales Agreement (Sales Agreement) with BofA Securities, Inc.

(BofA Securities) under which the Company could offer and sell shares of common stock, having aggregate sales proceeds of up to $ 125,000,000 from time to time, through an “at the market offering” program (ATM Program) under which BofA Securities acted as sales agent.

Effective January 19, 2024, the Company suspended and terminated the prospectus related to the Company’s common stock (the ATM Prospectus) issuable pursuant to the terms of the Sales Agreement.

(BofA Securities) under which the Company could offer and sell shares of common stock, having aggregate sales proceeds of up to $ 125.0 million from time to time, through an “at the market offering” program (ATM Program) under which BofA Securities acted as sales agent.

Effective January 19, 2024, the Company suspended and terminated the prospectus related to the Company’s common stock issuable pursuant to the terms of the Sales Agreement (the ATM Prospectus).

As of the date of the suspension of the ATM Prospectus, the Company had sold 7,560,068 shares of our common stock at a weighted average price of $ 7.93 per share.

The gross proceeds were $ 59.9 million, and the net proceeds were $ 59.4 million, after deducting underwriting discounts and commissions of $ 0.2 million and offering expenses of $ 0.3 million.

On January 23, 2024, the Company closed an underwritten registered direct offering of 21,818,182 shares of common stock at a public offering price of $ 11.00 per share (the January 2024 Offering).

On January 23, 2024, the Company closed an underwritten registered direct offering of 21,818,182 shares of common stock at a public offering price of $ 11.00 per share (January 2024 Offering).

The aggregate gross proceeds from the January 2024 Offering were $ 240.0 million, and the net proceeds were $ 231.9 million, after deducting underwriting discounts and commissions of $ 7.5 million and offering expenses of $ 0.6 million.

On May 10, 2024, the Company entered into a sales agreement with Leerink Partners LLC (Leerink Sales Agreement) under which the Company may offer and sell shares of common stock, having aggregate sales proceeds of up to $ 175,000,000 from time to time, through an “at the market offering” program (Leerink ATM) under which Leerink Partners LLC will act as sales agent.

On May 10, 2024, the Company filed an automatic shelf registration statement on Form S-3ASR that allows the Company to undertake various equity and debt offerings.

Additionally, on May 10, 2024, the Company filed a prospectus supplement to the shelf registration statement and entered into a sales agreement with Leerink Partners LLC (Leerink Sales Agreement) under which the Company may offer and sell shares of common stock, having aggregate sales proceeds of up to $ 175.0 million from time to time, through an “at the market offering” program (Leerink ATM) under which Leerink Partners LLC will act as sales agent.

As a subsequent event, on April 3, 2025, the Company

closed an underwritten registered direct offering of 9,935,419 shares of common stock at a public offering price of $ 20.13 per share (April 2025 Offering).

The aggregate gross proceeds from the April 2025 Offering were $ 200.0 million, and the net proceeds after deducting underwriting discounts and commissions but before offering expenses were $ 188.0 million.

The Company has not yet offered or sold any shares of common stock related to the Leerink ATM.

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The financial statements do not reflect any adjustments relating to the recoverability and reclassification of assets and liabilities that might be necessary if the Company is unable to continue as a going concern.

The Company believes that the $ 492.5 million of cash, cash equivalents and marketable securities on hand as of September 30, 2024 will be sufficient to fund its operations in the normal course of business and meet its liquidity needs through at least the next 12 months from the issuance of these financial statements.

The Company believes that the $ 436.4 million of cash, cash equivalents and marketable securities on hand as of March 31, 2025 will be sufficient to fund its operations in the normal course of business and meet its liquidity needs through at least the next 12 months from the issuance of these financial statements.

NOTE 2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation

The accompanying financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (U.S.

Segment Information

The Company operates in one operating segment and, accordingly, no segment disclosures have been presented herein.

All equipment and other fixed assets are physically located within the United States.

Use of Estimates

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

GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of expenses during the reporting period.

Actual results could differ from those estimates.

Cash Equivalents

The Company considers all liquid investments with a maturity of three months or less when purchased to be cash equivalents.

Cash equivalents as of September 30, 2024 and December 31, 2023 primarily consist of money market funds and cash.

Concentrations of Credit Risk

Financial instruments that potentially subject the Company to significant concentration of credit risk consist primarily of cash, cash equivalents and marketable securities.

Periodically, the Company may maintain deposits in financial institutions in excess of government insured limits.

The Company believes that it is not exposed to significant credit risk as its deposits are held at financial institutions that management believes to be of high credit quality.

The Company has not experienced any losses on deposits since inception.

The Company regularly invests excess cash with major financial institutions in money market funds, corporate debt securities, and commercial paper, all of which can be readily purchased and sold using established markets.

The Company believes that the market risk arising from our holdings of these financial instruments is mitigated based on the fact that many of these securities are of high credit rating.

Deferred 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.

After consummation of the equity issuance, these costs are recorded as a reduction in the capitalized amount associated with

the equity issuance.

Should the equity issuance be abandoned, the deferred offering costs are expensed immediately as a charge to operating expenses in the statement of operations.

Deferred offering costs were $ 0.3 million as of September 30, 2024 and December 31, 2023.

Such costs are classified in other non-current assets in the accompanying balance sheets.

Property and Equipment

Property and equipment is stated at cost less accumulated depreciation and amortization.

Depreciation of property and equipment is computed using the straight-line method over the estimated useful life of the related asset, which is generally three to seven years , and in the case of leasehold improvements, the shorter of the estimated useful lives of the assets or the term of the lease.

The Company accounts for its leases under Accounting Standards Codification (ASC) Topic 842, Leases (ASC 842).

At the inception of an arrangement, the Company determines whether the arrangement is or contains a lease based on the unique facts and circumstances present in the arrangement.

Leases with a term greater than 12 months are recognized on the balance sheet as Right-of-Use (ROU) assets and current and non-current lease liabilities, as applicable.

The Company has elected not to recognize on the balance sheet leases with terms of 12 months or less.

The Company typically only includes an initial lease term in its assessment of a lease arrangement.

Options to renew a lease are not included in the Company’s assessment unless there is reasonable certainty that the Company will renew.

The Company monitors its material leases on a quarterly basis.

Operating lease liabilities and their corresponding ROU assets are recorded based on the present value of future lease payments over the expected remaining lease term.

Lease cost for operating leases is recognized on a straight-line basis over the lease term as an operating expense.

Certain adjustments to the ROU asset may be required for items such as lease prepayments or incentives received.

The interest rate implicit in lease contracts is typically not readily determinable.

As a result, the Company utilizes its incremental borrowing rate, which reflects the fixed rate at which the Company could borrow on a collateralized basis the amount of the lease payments in the same currency, for a similar term, in a similar economic environment.

For all asset classes of its leases, the Company has elected to account for the lease and non-lease components together for existing classes of underlying asset.

Costs determined to be variable and not based on an index or rate are not include in the measurement of the lease liability.

Impairment of Long-Lived Assets

The Company reviews long-lived assets for impairment whenever events or circumstances indicate that the carrying value of such assets may not be fully recoverable.

Impairment is evaluated based on the sum of undiscounted estimated future cash flows expected to result from use of the related asset compared to its carrying value.

If impairment is recognized, the carrying value of the impaired asset is reduced to its fair value.

There were no impairment charges or long-lived assets disposed of during three and nine months ended September 30, 2024 and 2023.

Deferred income taxes are provided on temporary differences between financial statement and income tax reporting.

Temporary differences are differences between the amounts of assets and liabilities reported for financial statement purposes and their tax bases.

Deferred tax assets are recognized for temporary differences that will be deductible in future years’ tax returns and for operating loss and tax credit carryforwards.

Deferred tax assets are reduced by a valuation allowance if such deferred tax assets are deemed more likely than not that some or all of the deferred tax assets will not be realized.

Historically, the Company has not recognized these potential benefits in its financial statements and has fully reserved for such net deferred tax assets, as it believes it is more likely than not that the full benefit of these net deferred tax assets will not be realized.

Deferred tax liabilities are recognized for temporary differences that will be taxable in future years.

The Company evaluated its tax positions and determined it has no uncertain tax positions as of September 30, 2024.

Fair Value of Financial Instruments

The Company is required to disclose information on all assets and liabilities reported at fair value that enables an assessment of the inputs used in determining the reported fair values.

The Financial Accounting Standards Board (FASB) ASC Topic 820, Fair Value Measurements and Disclosures (ASC 820), establishes a hierarchy of inputs used when available.

Observable inputs are inputs that market participants would use in pricing the asset or liability based on market data obtained from sources independent of the Company.

Unobservable inputs are those that reflect the Company’s assumptions about the inputs that market participants would use in pricing the asset or liability and are developed based on the best information available in the circumstances.

The fair value hierarchy applies only to the valuation inputs used in determining the reported fair value of financial instruments and is not a measure of the investment credit quality.

The three levels of the fair value hierarchy are described below:

Level 1—quoted prices in active markets for identical assets and liabilities.

Level 2—other significant observable inputs (including quoted prices for similar assets and liabilities, interest rates, credit risk, etc.).

Level 3—significant unobservable inputs (including the Company’s own assumptions in determining the fair value of assets and liabilities).

The accompanying condensed financial statements and related notes to the condensed financial statements should be read in conjunction with the audited financial statements and the related notes thereto for the year ended December 31, 2024 included in the Company’s Annual Report on Form 10-K filed with the Securities and Exchange Commission on March 3, 2025.

There have been no material changes to the summary of significant accounting policies as disclosed in that filing.

These interim financial statements have been prepared in accordance with U.S.

generally accepted accounting principles for interim financial information and include all adjustments consisting of normal recurring adjustments that management believes are necessary for a fair presentation of the periods presented and are not necessarily indicative of results expected for the full fiscal year or for any subsequent interim period.

Marketable Securities, Available for Sale

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The amortized cost of securities is adjusted for amortization of premiums and accretion of discounts to maturity.

In accordance with the Company’s investment policy, management invests in money market funds, corporate bonds, commercial paper, asset-backed securities and government securities.

In accordance with the Company’s investment policy, management invests in money market funds, corporate debt securities, commercial paper, asset-backed securities and government securities.

The Company has not experienced any realized losses on its deposits of cash, cash equivalents, and marketable securities since inception.

The following tables summarize the Company’s financial assets measured at fair value on a recurring basis by level within the fair value hierarchy (in thousands):

As of September 30, 2024

As of March 31, 2025

Cash equivalents:

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government treasury and agency securities

Supranational and sovereign government securities

The Company’s money market funds are classified as Level 1 because they are valued using quoted market prices.

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There were no transfers of financial assets between Level 1, Level 2, or Level 3, during the periods presented.

As of September 30, 2024, the remaining contractual maturities of $ 409.0 million of marketable securities were less than one year and $ 37.7 million of marketable securities were between 1 and 2 years .

As of March 31, 2025, the remaining contractual maturities of $ 329.8 million of marketable securities were less than one year and $ 56.3 million of marketable securities were between 1 and 2 years .

The Company periodically reviews its portfolio of debt securities to determine if any investment is impaired due to credit loss or other potential valuation concerns.

For debt securities where the fair value of the investment is less than the amortized cost basis, the Company has assessed at the individual security level for various quantitative factors including, but not limited to, the nature of the investments, changes in credit ratings, interest rate fluctuations, industry analyst reports, and the severity of impairment.

Unrealized losses on marketable securities at September 30, 2024 were primarily due to changes in interest rates, including market credit spreads, and not due to increased credit risks associated with specific securities.

Comprehensive Income (Loss)

Comprehensive income (loss) is defined as the change in equity during a period from transactions and other events and/or circumstances from non-owner sources.

The Company’s only element of other comprehensive income was net unrealized gain on marketable securities.

Stock-Based Compensation

In accordance with ASC Topic 718, Compensation—Stock Compensation , the Company recognizes compensation expense for all stock-based awards issued to employees based on the estimated grant-date fair value, which is recognized as expense on a straight-line basis over the requisite service period.

The Company has elected to recognize forfeitures as they occur.

For restricted stock unit awards, the fair value is based on the closing price of the Company's common stock on the date of grant.

The fair value of stock options is determined using the Black-Scholes option-pricing model.

The determination of fair value for stock-based awards on the date of grant using an option-pricing model requires management to make certain assumptions including expected volatility, expected term, risk-free interest rate and expected dividends in addition to the Company’s common stock valuation.

Research and Development Expenses and Accrued Research and Development Expenses

Expenditures made for research and development are charged to expense as incurred.

External costs consist primarily of payments to contract research organizations (CROs), contract development and manufacturing organizations

(CDMOs), sample acquisition costs and laboratory supplies purchased in connection with the Company’s discovery and preclinical activities, and process development and clinical development activities.

Internal costs consist primarily of employee-related costs, facilities, depreciation and costs related to compliance with regulatory requirements.

Non-refundable advance payments for goods and services that will be used in future research and development activities are capitalized and recorded as an expense in the period that the Company receives the goods or when services are performed.

The Company records expenses related to external research and development services based on its estimates of the services received and efforts expended pursuant to quotes and contracts with multiple CROs and CDMOs that supply, conduct and manage preclinical studies and clinical trials on its behalf.

The financial terms of these contracts vary from contract to contract and may result in payment flows that do not match the periods over which materials or services are provided under such contracts.

In accruing service fees, the Company estimates the time period over which services will be performed and the level of effort to be expended in each period.

If the actual timing of the performance of services or the level of effort varies from the estimate, the Company adjusts the accrual or the amount of prepaid expenses accordingly.

Emerging Growth Company Status

The Company is an “emerging growth company”, as defined in the Jumpstart Our Business Startups Act of 2012 (JOBS Act).

Under the JOBS Act, emerging growth companies can take advantage of an extended transition period for complying with new or revised accounting standards, delaying the adoption of these accounting standards until they would apply to private companies.

The Company has elected to use this extended transition period for complying with certain new or revised accounting standards that have different effective dates for public and private companies until the earlier of the date that it is (1) no longer an emerging growth company or (2) affirmatively and irrevocably opt out of the extended transition period provided in the JOBS Act.

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

Unrealized losses on marketable securities at March 31, 2025 were primarily due to changes in interest rates, including market credit spreads, and not due to increased credit risks associated with specific securities.

Accounting Standards Not Yet Adopted

In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280):

Improvements to Reportable Segment Disclosures to update reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expenses and information used to assess segment performance.

This update is effective beginning with the Company’s 2024 fiscal year annual reporting period, with early adoption permitted.

The Company is currently evaluating the impact that the adoption of this standard will have on its financial statements.

In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740):

Improvements to Income Tax Disclosures.

This ASU is expected to enhance the transparency and decision usefulness of income tax disclosures by requiring public business entities on an annual basis to disclose specific categories in the rate reconciliation, additional information for reconciling items that meet a quantitative threshold, and certain information about income taxes paid.

This ASU is expected to enhance the transparency and decision usefulness of income tax disclosures by

requiring public business entities on an annual basis to disclose specific categories in the rate reconciliation, additional information for reconciling items that meet a quantitative threshold, and certain information about income taxes paid.

This ASU is effective beginning with the Company’s 2025 fiscal year annual reporting period, with early adoption permitted.

The Company is currently evaluating the impact that the adoption of this standard will have on its financial statements.

In November 2024, the FASB issued ASU 2024-03, Income Statement–Reporting Comprehensive Income–Expense Disaggregation Disclosures (Subtopic 220-40):

Disaggregation of Income Statement Expenses.

This ASU is expected to improve the disclosures about a public business entity’s expenses and address requests from investors for more detailed information about the types of expenses (including purchases of inventory, employee compensation, depreciation, amortization, and depletion) in commonly presented expense captions (such as cost of sales, selling, general, and administrative, and research and development).

This ASU is effective beginning with the Company’s 2027 fiscal year annual reporting period and interim periods thereafter, with early adoption permitted.

The Company is currently evaluating the impact that the adoption of this standard will have on its financial statements.

NOTE 3 PREFERRED STOCK AND COMMON STOCK

The Company is authorized to issue two classes of stock designated as common stock and preferred stock.

As of September 30, 2024, the total number of shares authorized was 1,200,000,000 .

As of March 31, 2025, the total number of shares authorized was 1,200,000,000 .

The total number of shares of common stock authorized was 1,000,000,000 .

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Equity Incentive Plans

In March 2021, the Company’s board of directors adopted, and its stockholders approved, the Company’s 2021 Equity Incentive Plan (the 2021 Plan), which became effective in March 2021 in connection with the IPO.

Upon adoption of the 2021 Plan, the Company restricted the grant of future equity awards under its 2017 Equity Incentive Plan, as amended and restated (the 2017 Plan).

In March 2021, the Company’s board of directors adopted, and its stockholders approved, the Company’s 2021 Equity Incentive Plan (2021 Plan), which became effective in March 2021 in connection with the IPO.

Upon adoption of the 2021 Plan, the Company restricted the grant of future equity awards under its 2017 Equity Incentive Plan, as amended and restated (2017 Plan).

The 2021 Plan provides for the grant of incentive stock options, within the meaning of Section 422 of the Internal Revenue Code, to the Company’s employees and any of its parent and subsidiary corporations’ employees, and for the grant of nonstatutory stock options, restricted stock, restricted stock units, stock appreciation rights, performance units, and performance shares to its employees, directors, and consultants and its subsidiary corporations’ employees and consultants.

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or (3) such other amount as the Company’s board of directors may determine.

As of September 30, 2024, there were 1,506,606 shares available for future issuance under the 2021 Plan.

During the nine months ended September 30, 2024, the Company issued 2,751,497 stock options with a fair value of $ 34.5 million that vest over a weighted average period of 3.9 years and 557,027 restricted stock units (RSUs) with a fair value of $ 9.5 million that vest over a weighted average period of 4 years .

As of March 31, 2025, there were 5,940,210 shares available for future issuance under the 2021 Plan.

Inducement Equity Incentive Plan

Effective August 10, 2024, the Company’s board of directors adopted the Company’s 2024 Inducement Equity Incentive Plan (the Inducement Plan) and, subject to the adjustment provisions of the Inducement Plan, reserved 2,000,000 shares of the Company’s common stock for issuance pursuant to equity awards granted under the Inducement Plan.

Effective August 10, 2024, the Company’s board of directors adopted the Company’s 2024 Inducement Equity Incentive Plan (Inducement Plan) and, subject to the adjustment provisions of the Inducement Plan, reserved 2,000,000 shares of the Company’s common stock for issuance pursuant to equity awards granted under the Inducement Plan.

The Inducement Plan was adopted without stockholder approval pursuant to the applicable The Nasdaq Stock Market LLC’s (Nasdaq) Listing Rules.

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In accordance with the Nasdaq Listing Rules, awards under the Inducement Plan may only be made to individuals not previously employees or non-employee directors of the Company (or following such individuals’ bona fide period of non-employment with the Company), as an inducement material to the individuals’ entry into employment with the Company, or, to the extent permitted by the Nasdaq Listing Rules, in connection with a merger or acquisition.

As of September 30, 2024, there were 2,000,000 shares available for future issuance under the Inducement Plan.

As of March 31, 2025, there were 2,000,000 shares available for future issuance under the Inducement Plan.

Founder Stock Options

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This grant is separate from the Company’s equity incentive plans discussed above.

As of September 30, 2024, 1,456,780 options were both outstanding and exercisable.

75,000 options were exercised during the three and nine months ended September 30, 2024.

As of March 31, 2025, 1,347,365 options were both outstanding and exercisable.

9,415 options were exercised during the three months ended March 31, 2025.

2021 Employee Stock Purchase Plan

The 2021 Employee Stock Purchase Plan (2021 ESPP) enables eligible employees of the Company to purchase shares of common stock at a discount.

A total of 504,000 shares of the Company’s common stock were initially reserved for issuance pursuant to the 2021 ESPP.

The number of shares available for issuance under the 2021 ESPP increases annually on the first day of each fiscal year beginning with the Company’s 2022 fiscal year, equal to the least of (1) 1,008,000 shares, (2) one percent ( 1 %) of the outstanding shares of common stock as of the last day of the immediately preceding fiscal year;

or (3) such other amount as the Company’s board of directors may determine.

As of March 31, 2025, the Company has reserved for issuance 2,975,791 shares of common stock pursuant to the 2021 ESPP.

The 2021 ESPP provides for two offering periods of approximately twelve months’ duration, with purchase periods commencing on the first trading day on or after May 15 and November 15 and terminating on the last trading day on or before November 15 of the same year and May 15 of the following year, respectively.

Contributions under the 2021 ESPP are limited to 15 % of an employee’s eligible compensation, IRS limitations, and a maximum of 6,000 shares of common stock during each offering period.

2021 ESPP participants will purchase shares of common stock at a price per share equal to 85 % of the lesser of (1) the fair market value per share of the common stock on the first trading day of the offering period or (2) the fair market value of the common stock on the purchase date.

Total stock-based compensation expense related to all equity plans, including Founder Stock Options was allocated as follows (in thousands):

Three months ended September 30,

Nine months ended September 30,

Three months ended March 31,

Research and development

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From time to time, the Company may become involved in legal proceedings arising in the ordinary course of business.

The Company was not subject to any material legal proceedings during the three and nine months ended September 30, 2024 and no material legal proceedings are currently pending or threatened.

The Company was not subject to any material legal proceedings during the three months ended March 31, 2025 and no material legal proceedings are currently pending or threatened.

Indemnification Agreements

In the ordinary course of business, the Company may provide indemnification of varying scope and terms to vendors, lessors, business partners and other parties with respect to certain matters including, but not limited to, losses arising of breach of such agreements or from intellectual property infringement claims made by third parties.

In the ordinary course of business, the Company may provide indemnification of varying scope and terms to vendors, lessors, business partners and other parties with respect to certain matters including, but not limited to, losses arising from breach of such agreements or from intellectual property infringement claims made by third parties.

In addition, the Company has entered into indemnification agreements with members of its board of directors that will require the Company, among other things, to indemnify them against certain liabilities that may arise by reason of their status or service as directors.

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To date, the Company has not incurred any material costs as a result of such indemnifications.

The Company is not aware of any claims under indemnification arrangements, and it has not accrued any liabilities related to such obligations in its financial statements as of September 30, 2024.

The Company is not aware of any claims under indemnification arrangements, and it has not accrued any liabilities related to such obligations in its financial statements as of March 31, 2025.

NOTE 6 NET LOSS PER SHARE

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

Three months ended September 30,

Nine Months Ended September 30,

Three months ended March 31,

Weighted-average shares outstanding used in computing net loss per share, basic and diluted

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The following weighted average outstanding shares of potentially dilutive securities were excluded from the computation of diluted net loss per share attributable to common stockholders for the periods presented because including them would have been anti-dilutive:

Three months ended September 30,

Nine Months Ended September 30,

Three months ended March 31,

Options to purchase common stock

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Property and equipment consisted of the following amounts (in thousands):

As of September 30,

As of March 31,

As of December 31,

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Furniture and fixtures

Construction in process

Property and equipment, at cost

1 unchanged sentence

Property and equipment, net

Depreciation expense was $ 0.5 million and $ 1.5 million for the three and nine months ended September 30, 2024 and $ 0.4 million and $ 1.1 million for the three and nine months ended September 30, 2023, respectively.

Depreciation expense was $ 0.5 million for both the three months ended March 31, 2025 and 2024.

NOTE 8 ACCRUED OTHER EXPENSES

Accrued other expenses consisted of the following amounts (in thousands):

As of September 30,

As of March 31,

As of December 31,

2 unchanged sentences

Total accrued other expenses

NOTE 9 SEGMENT REPORTING

There have been no changes in the Company’s assessment of the basis of segmentation or in the basis of measurement of segment profit or loss since the Company’s Annual Report on Form 10-K filed with the Securities and Exchange Commission on March 3, 2025.

Three months ended March 31,

Operating expenses:

Contracted research expense

Personnel expense

Stock-based compensation expense

Other segment expense (a)

Segment net loss

Reconciliation of net loss

Interest income

a Other segment expense included in Segment net loss includes contracted administrative expenses, intellectual property fees, software costs, occupancy & equipment costs, and other overhead expenses.

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

What changed 10-Q

Item 1. Financial Statements