What changed in this filing

/stocks — the workspaceLOADING

Item 9A. Controls and Procedures

2025-03-13 compared with 2024-03-05 · 321 added, 160 removed, 813 unchanged (37% of the section changed)

16 unchanged sentences

Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Our management assessed the effectiveness of our internal control over financial reporting as of December 31, 2023 based on the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission in its 2013 Internal Control — Integrated Framework.

Our management assessed the effectiveness of our internal control over financial reporting as of December 31, 2024 based on the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission

in its 2013 Internal Control — Integrated Framework.

Based on this assessment, our management has concluded that our internal control over financial reporting was effective as of December 31, 2024.

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Information contained in our website does not constitute a part of this report or our other filings with the SEC.

We have adopted a policy on insider trading and procedures that govern the purchase, sale, and/or other dispositions of our securities by our directors, officers, employees and other covered persons that are designed to promote compliance with insider trading laws, rules and regulations, and the NASDAQ listing rules, as applicable.

A copy of our policy on insider trading is filed as Exhibit 19.1 to this annual report on Form 10-K.

It is our policy to comply with U.S.

insider trading laws and regulations, including with respect to transactions in our own securities.

Executive Compensation.

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Index to Consolidated Financial Statements

Report of Independent Registered Public Accounting Firm (PCAOB ID:

Report of Independent Registered Public Accounting Firm ;

Ernst & Young LLP, San Diego, CA (PCAOB ID:

Consolidated Balance Sheets

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We have audited the accompanying consolidated balance sheets of Gossamer Bio, Inc.

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

(the Company) as of December 31, 2024 and 2023, the related consolidated statements of operations and comprehensive loss, stockholders' equity and cash flows for each of the three years in the period ended December 31, 2024, 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, 2024 and 2023, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2024, in conformity with U.S.

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

Critical Audit Matter

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

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

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

Critical Audit Matters

The critical audit matters communicated below are matters arising from the current period audit of the financial statements that were communicated or required to be communicated to the audit committee and that:

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

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

Accrued Research and Development Expenses

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As described in Note 2 of the consolidated financial statements, the Company records accruals for estimated research and development costs, comprising payments due for work performed by third party contractors, laboratories, participating clinical trial sites, and others.

Some of these contractor’s bill monthly based on actual services performed, while others bill periodically based upon achieving certain contractual milestones.

Some of these contractors bill monthly based on actual services performed, while others bill periodically based upon achieving certain contractual milestones.

For the latter, the Company accrues the expenses as goods or services are used or rendered.

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We also examined a sample of subsequent payments to evaluate the completeness of the accrued research and development expenses.

Initial accounting for the Chiesi Collaboration Agreement

Description of the Matter As more fully described in Note 12 to the consolidated financial statements, the Company entered into a global collaboration agreement with Chiesi Farmaceutici S.P.A and Chiesi USA, Inc.

(collectively, “Chiesi”), which granted exclusive licenses to develop and commercialize products that contain or incorporate seralutinib for the treatment of pulmonary hypertension.

The Company determined the transaction price was equal to the up-front fee reduced by the fair value of the Equity Option and the transaction price was allocated to the performance obligations based on the relative stand-alone selling price estimated for each performance obligation.

Auditing the Company’s initial accounting for the Chiesi collaboration agreement was complex and required the Company to apply significant judgement related to the estimation of the standalone selling price of each identified performance obligation.

The estimates of the standalone selling price for the performance obligations relating to the licenses reflect management’s assumptions, which included forecasted revenues, expected development timelines, discount rates and probabilities of technical and regulatory success.

How We Addressed the Matter in Our Audit To test the standalone selling price of each identified performance obligation, our audit procedures included, among others, evaluating the projected discounted cash flow assumptions used by the Company in developing the estimates of standalone selling price of the licenses by comparing the significant assumptions described above to current industry trends using available information from other similar companies within the same industry and other relevant factors.

We involved our valuation professionals to assist in the assessment of the estimation methodology and the significant assumptions used in determining the estimated standalone selling price of these performance obligations.

We also performed a sensitivity analysis of the significant assumptions to evaluate the change in the estimated standalone selling price of these performance obligations resulting from the changes in the assumptions.

Further, we assessed the resulting impact from the sensitivity analysis on the allocation of transaction price to each performance obligation as well as revenue recognized during the period.

/s/ Ernst & Young LLP

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Marketable securities 248,444 264,316

Receivable from contracts with collaborators 5,338 —

Prepaid expenses and other current assets 10,032 10,094

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Current portion of long-term debt — 11,613

Current contract liabilities 17,050 —

Accrued expenses and other current liabilities 15,186 26,680

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Operating lease liabilities - long-term 4,398 144

Long-term contract liabilities 38,869 —

Total liabilities 285,800 249,147

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700,000,000 shares authorized as of December 31, 2024 and December 31, 2023;

225,409,315 shares issued and outstanding as of December 31, 2023, and 94,478,405 shares issued and 94,423,181 shares outstanding as of December 31, 2022

226,604,138 shares issued and outstanding as of December 31, 2024, and 225,409,315 shares issued and outstanding as of December 31, 2023

Additional paid-in capital 1,296,848 1,275,136

Accumulated deficit ( 1,268,568 ) ( 1,212,040 )

Accumulated other comprehensive loss ( 350 ) ( 574 )

Accumulated other comprehensive income (loss) 1,189 ( 350 )

Total stockholders' equity 29,492 62,769

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2024 2023 2022

Revenue from sale of licenses $ 90,682 $ — $ —

Revenue from contracts with collaborators 24,019 — —

Total revenue 114,701 — —

Operating expenses:

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Total other income (expense), net 4,284 3,942 ( 10,785 )

Loss before provision for income taxes ( 55,635 ) ( 179,817 ) ( 229,378 )

Provision for income taxes 893 — —

Net loss $ ( 56,528 ) $ ( 179,817 ) $ ( 229,378 )

Other comprehensive (loss) income:

Other comprehensive income (loss):

Foreign currency translation 1,450 33 ( 544 )

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Balance as of December 31, 2021 75,752,664 $ 8 $ 932,944 $ ( 811,534 ) $ 45 $ 121,463

Cumulative-effect adjustment from change in accounting principle (See Note 2) — — ( 53,527 ) 8,689 — ( 44,838 )

Issuance of common stock in connection with a private offering, net of offering costs of $ 184

16,649,365 2 119,944 — — 119,946

Vesting of restricted stock 662,700 — — — — —

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Balance as of December 31, 2022 94,423,181 $ 10 $ 1,044,864 $ ( 1,032,223 ) $ ( 574 ) $ 12,077

Cumulative-effect adjustment from change in accounting principle (See Note 2) — — ( 53,527 ) 8,689 — ( 44,838 )

Issuance of common stock in connection with a private offering, net of offering costs of $ 184

Issuance of common stock and warrants in connection with a private offering, net of offering costs of $ 10,779

129,869,440 13 201,310 — — 201,323

Vesting of restricted stock 55,225 — — — — —

Exercise of stock options 270,707 — 1,736 — — 1,736

Stock-based compensation — — 28,518 — — 28,518

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Net loss — — — ( 179,817 ) — ( 179,817 )

Other comprehensive loss — — — — ( 619 ) ( 619 )

Other comprehensive income — — — — 224 224

Balance as of December 31, 2023 225,409,315 $ 23 $ 1,275,136 $ ( 1,212,040 ) $ ( 350 ) $ 62,769

Issuance of common stock and warrants in connection with a private offering, net of offering costs of $ 10,779

129,869,440 13 201,310 — — 201,323

Vesting of restricted stock 55,225 — — — — —

Stock-based compensation — — 20,619 — — 20,619

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Issuance of common stock for restricted stock units vested 427,698 — — — — —

Grant of equity option pursuant to Chiesi Collaboration Agreement — — 464 — — 464

Net loss — — — ( 56,528 ) — ( 56,528 )

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Amortization of long-term debt discount and issuance costs 1,086 1,321 1,163

Amortization of discount (premium) on investments, net of accretion of discounts ( 9,450 ) ( 1,405 ) 339

Amortization of premium on investments, net of accretion of discounts ( 13,062 ) ( 9,450 ) ( 1,405 )

Loss on disposal of property and equipment 806 726 —

Changes in operating assets and liabilities:

Receivable from contracts with collaborators ( 5,338 ) — —

Prepaid expenses and other current assets 62 ( 3,892 ) 296

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Accrued compensation and benefits 1,701 ( 3,240 ) 1,618

Contract liabilities 55,919 — —

Accrued interest expense ( 135 ) ( 97 ) ( 1 )

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Purchase of property and equipment — — ( 410 )

Net cash used in investing activities ( 110,970 ) ( 1,035 ) ( 117,427 )

Net cash provided by (used in) investing activities 29,023 ( 110,970 ) ( 1,035 )

Cash flows from financing activities

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Proceeds from the exercise of stock options — — 1,736

Proceeds from issuance of equity option pursuant to stock purchase agreement 464 — —

Principal repayments of long-term debt ( 12,581 ) ( 11,613 ) ( 5,806 )

Net cash provided by financing activities 190,154 117,090 3,329

Effect of exchange rate changes on cash, cash equivalents and restricted cash 110 ( 517 ) ( 165 )

Net decrease in cash, cash equivalents and restricted cash ( 79,864 ) ( 71,494 ) ( 303,153 )

Cash, cash equivalents and restricted cash, at the beginning of the period 111,973 183,467 486,620

Cash, cash equivalents and restricted cash, at the end of the period $ 32,109 $ 111,973 $ 183,467

Net cash provided by (used in) financing activities ( 11,488 ) 190,154 117,090

Effect of exchange rate changes on cash and cash equivalents ( 102 ) 110 ( 517 )

Net increase (decrease) in cash and cash equivalents 13,965 ( 79,864 ) ( 71,494 )

Cash and cash equivalents, at the beginning of the period 32,109 111,973 183,467

Cash and cash equivalents, at the end of the period $ 46,074 $ 32,109 $ 111,973

Supplemental disclosure of cash flow information:

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Right-of-use assets obtained in exchange for lease liabilities $ 5,298 $ — $ 3,029

Derecognition ROU lease assets obtained in exchange for operating lease liabilities — $ — $ 1,650

Change in unrealized loss on marketable securities, net $ 191 $ ( 75 ) $ ( 225 )

Change in unrealized gain (loss) on marketable securities, net $ 89 $ 191 $ ( 75 )

Purchases of property and equipment included in accounts payable and accrued expenses and other current liabilities $ — $ — $ 83

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Gossamer Bio, Inc.

(including its subsidiaries, referred to as "we," "us," "our,", or the “Company”) is a clinical-stage biopharmaceutical company focused on the development and commercialization of seralutinib for the treatment of pulmonary arterial hypertension, or PAH.

The Company was incorporated in the state of Delaware on October 25, 2015 (originally as FSG Bio, Inc.) and is based in San Diego, California.

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The Company has incurred significant operating losses since its inception.

As of December 31, 2023 and 2022, the Company had an accumulated deficit of $ 1,212.0 million and $ 1,032.2 million, respectively.

From the Company’s inception through the year ended December 31, 2023, the Company has funded its operations primarily through equity and debt financings.

The Company raised $ 1,263.2 million from October 2017 through December 31, 2023 through the sale of Series A and Series B convertible preferred stock, issuance of convertible notes, its initial public offering ("IPO"), the Credit Facility and 2027 Notes (as defined in Note 5 below), issuance of common stock in May 2020 and July 2022 and issuance of common stock and accompanying warrants in July 2023.

See Note 5 for additional information regarding the Credit Facility and the 2027 Notes.

On July 24, 2023, the Company completed a private placement of 129,869,440 shares of the Company’s common stock and accompanying warrants to purchase up to 32,467,360 shares of the Company's common stock at a combined purchase price of $ 1.63125 per share and accompanying warrant, or with respect to any purchaser that was an officer, director, employee or consultant of the Company, $ 1.85125 per share and accompanying warrant.

Each warrant will have an exercise price per share of $ 2.04 , will be immediately exercisable on the date of issuance and will expire five years from the closing of the private placement.

The aggregate gross proceeds for the private placement were approximately $ 212.1 million, before deducting offering expenses, which equaled approximately $ 10.7 million.

As of December 31, 2024, the Company had an accumulated deficit of $ 1,268.6 million.

From the Company’s inception through the year ended December 31, 2024, the Company has funded its operations primarily through equity financings, convertible senior notes and the Chiesi Collaboration Agreement (as defined in Note 12 below).

The Company expects to continue to incur significant operating losses for the foreseeable future and may never become profitable.

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

Certain prior period amounts have been reclassified to conform to the current period presentation.

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 and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of expenses during the reporting period.

The most significant estimates in the Company’s consolidated financial statements relate to accrued research and development expenses.

The most significant estimates in the Company’s consolidated financial statements relate to accrued research and development expenses, stand-alone selling price of performance obligations and estimated collaboration expenses associated with the Company’s collaboration and license agreement.

These estimates and assumptions are based on current facts, historical experience and various other factors believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities and the recording of expenses that are not readily apparent from other sources.

Actual results could differ from those estimates.

Operating segments are identified as components of an enterprise about which separate discrete financial information is available for evaluation by the chief operating decision-maker in making decisions regarding resource allocation and assessing performance.

Operating segments are identified as components of an enterprise about which separate discrete financial information is available for evaluation by the chief operating decision-maker ("CODM") in making decisions regarding resource allocation and assessing performance.

The Company views its operations and manages its business in one operating segment.

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The Company has the ability, if necessary, to liquidate any of its marketable securities to meet its liquidity needs in the next 12 months.

Accordingly, those investments with contractual maturities greater than one year from the date of purchase are classified as current assets on the accompanying consolidated balance sheets.

Accordingly, those investments with contractual maturities greater than one year from the date of purchase are classified as current assets on the accompanying consolidated balance sheets which reflects management’s intention to use the proceeds from sales of these securities to fund our operations, as necessary.

The Company’s marketable securities consist of U.S.

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Issuance costs attributable to the liability component were recorded as a reduction to the liability portion of the 2027 Notes and were amortized to interest expense over the term of the 2027 Notes.

Issuance costs

attributable to the equity component, representing the conversion option, were netted with the equity component in stockholders' equity.

Issuance costs attributable to the equity component, representing the conversion option, were netted with the equity component in stockholders' equity.

Effective January 1, 2022 the Company adopted ASU 2020-06.

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These costs are included in general and administrative expenses.

Income taxes are recorded in accordance with Financial Accounting Standards Board (“FASB”) Standards Codification (“ASC”) No.

740, Income Taxes (“ASC 740”), which provides for deferred taxes using an asset and liability approach.

Income taxes are recorded in accordance with Financial Accounting Standards Board (“FASB”) ASC 740, Income Taxes , which provides for deferred taxes using an asset and liability approach.

The Company recognizes deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements or tax returns.

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The determination as to whether the tax benefit will more likely than not be realized is based upon the technical merits of the tax position as well as consideration of the available facts and circumstances.

Deferred tax assets and liabilities reflect the future tax consequences of the differences between the financial reporting and tax bases of assets and liabilities using current enacted tax rates.

Valuation allowances are recorded when the realizability of such deferred tax assets does not meet a more-likely-than-not threshold.

For tax benefits to be recognized, a tax position must be more likely than not to be sustained upon examination by taxing authorities.

The Company is subject to taxation in the United States and California, Ireland and Luxembourg.

The Company's policy is to include interest and penalties related to income taxes within its provision (benefit) for income taxes.

The Company is subject to taxation in the United States, California, Florida, Ireland and Luxembourg.

As of December 31, 2024, the Company’s tax years since inception are subject to examination by taxing authorities due to the Company’s unutilized net operating losses ("NOLs") and tax credits.

Collaborative Arrangements

The Company assesses whether its licensing and other agreements are collaborative arrangements based on whether they involve joint operating activities and whether both parties have active participation in the arrangement and are exposed to significant risks and rewards.

For arrangements that the Company determines are collaborations, it identifies each unit of account, and then determines whether a customer relationship exists for that unit of account.

If the Company determines

a performance obligation within the collaborative arrangement to be with a customer, it applies its revenue recognition accounting policy.

If a portion of a distinct bundle of goods or services within the collaborative arrangement is not with a customer, the Company applies recognition and measurement based on an analogy to authoritative accounting literature or, if there is no appropriate analogy, a reasonable, rational and consistently applied accounting policy election.

To the extent the arrangement is within the scope of ASC 808, the Company assesses whether aspects of the arrangement between the Company and the collaboration partner are within the scope of other accounting literature.

If the Company concludes that some or all aspects of the arrangement represent a transaction with a customer, the Company accounts for those aspects of the arrangement within the scope of ASC Topic 606, Revenue from Contracts with Customers (ASC 606).

See Note 12, "Significant Agreements and Contracts," for more information.

Revenue Recognition

The Company recognizes revenue when a customer obtains control of promised goods or services in a contract for an amount that reflects the consideration the Company expects to receive in exchange for those goods or services.

For contracts with customers, the Company performs the following five steps:

(i) identify the contract(s) with a customer;

(ii) identify the performance obligations in the contract;

(iii) determine the transaction price;

(iv) allocate the transaction price to the performance obligations in the contract;

and (v) recognize revenue when (or as) the Company satisfies each performance obligation.

The Company only applies the five-step model to contracts when it is probable that the Company will collect the consideration it is entitled to in exchange for the goods or services it transfers to the customer.

As part of the accounting for contracts with customers, the Company develops assumptions that require judgment to determine the standalone selling price of each distinct performance obligation identified in the contract.

In addition, variable consideration such as milestone payments are evaluated to determine if they are constrained and, therefore, excluded from the transaction price.

The Company then allocates the total transaction price proportionally to each distinct performance obligation based on their estimated standalone selling prices, unless an allocation exception applies.

The Company then recognizes as revenue the amount of the transaction price that is allocated to the respective distinct performance obligation when (or as) the performance obligation is satisfied.

In a contract with multiple performance obligations, the Company must develop estimates and assumptions that require judgment to determine the underlying standalone selling price for each distinct performance obligation, which determines how the transaction price is allocated among the distinct performance obligations.

The estimation of the stand-alone selling price(s) may include estimates regarding forecasted revenues or costs, development timelines, discount rates, and probabilities of technical and regulatory success.

The Company evaluates each distinct performance obligation to determine if it can be satisfied at a point in time or over time.

Any change made to estimated progress towards completion of a distinct performance obligation and, therefore, revenue recognized will be recorded as a change in estimate.

In addition, variable consideration must be evaluated to determine if it is constrained and, therefore, excluded from the transaction price.

If a license to the Company’s intellectual property is determined to be distinct from the other performance obligations identified in a contract, the Company recognizes revenues from the transaction price allocated to the license when the license is transferred to the licensee and the licensee is able to use and benefit from the license.

For licenses that are bundled with other promises, the Company utilizes judgment to assess the nature of the combined performance obligation to determine whether the combined performance obligation is satisfied over time or at a point in time and, if over time, the appropriate method of measuring progress for purposes of recognizing revenue from the allocated transaction price.

The Company evaluates the measure of progress at each reporting period and, if necessary, adjusts the measure of performance and related revenue or expense recognition as a change in estimate.

At the inception of each arrangement that includes milestone payments, the Company evaluates whether the milestones are considered probable of being reached.

If it is probable that a significant revenue reversal would not occur, the associated milestone value is included in the transaction price.

Milestone payments that are not within the Company’s or a collaboration partner’s control, such as regulatory approvals, are generally not considered probable of being achieved until those approvals are received.

At the end of each reporting period, the Company re-evaluates the probability of achievement of milestones that are within its or a collaboration partner’s control, such as operational developmental milestones and any related constraint, and, if necessary, adjusts its estimate of the overall transaction price.

Any such adjustments are recorded on a cumulative catch-up basis, which will affect revenue from sale of licenses and revenue from contracts with collaborators in the period of adjustment.

Revisions to the Company’s estimate of the transaction price may also result in negative revenue from sale of licenses and revenue from contracts with collaborators in the period of adjustment.

For arrangements that include sales-based royalties, including commercial milestone payments based on the level of sales, and a license is deemed to be the predominant item to which the royalties relate, the Company will recognize revenue at the later of (i) when the related sales occur, or (ii) when the performance obligation to which some or all of the royalty has been allocated has been satisfied, or partially satisfied.

To date, the Company has not recognized any royalty revenue from collaborative arrangements.

For arrangements that include cost-share reimbursements, we will recognize such payments when control of the related goods or services are transferred to the customer.

Cost-sharing reimbursements are presented as revenue from contracts with collaborators.

Stock-Based Compensation

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Income and expense accounts are translated at average exchange rates during the year which approximate the rates in effect at the transaction dates.

The resulting translation adjustments are recorded in accumulated other comprehensive loss in the Company's consolidated balance sheets.

The resulting translation adjustments are recorded in accumulated other comprehensive income (loss) in the Company's consolidated balance sheets.

Foreign exchange transaction gains and losses are included in other income, net in the Company’s consolidated statement of operations and comprehensive loss.

Recent Accounting Pronouncements - Announced

Recent Accounting Pronouncements - Adopted

In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280) Improvements to Reportable Segment Disclosures (“Topic 280”), which modifies the disclosure and presentation requirements of reportable segments.

The amendments in the update require the disclosure of significant segment expenses that are regularly provided to the Chief Operating Decision Maker ("CODM") and included within each reported measure of segment profit and loss.

The amendments also require disclosure of all other segment items by reportable segment and a description of its composition.

Additionally, the amendments require disclosure of the title and position of the CODM and an explanation of how the CODM uses the reported measure(s) of segment profit or loss in assessing segment performance and deciding how to allocate resources.

Lastly, the amendment requires that a public entity that has a single reportable segment provide all the disclosures required by ASU 2023-07 and all existing segment disclosures in Topic 280.

This update is effective for annual periods beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024.

Early adoption is permitted.

We have adopted this standard for our fiscal year ended December 31, 2024.

We have applied this standard retrospectively for all prior periods presented in the financial statements.

There was no impact on our reportable segments identified and additional required disclosures have been included in Note 13, Segment Reporting.

Recent Accounting Pronouncements - Not Yet Adopted

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

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ASU 2023-09 is effective for our annual periods beginning January 1, 2025, with early adoption permitted.

We are currently evaluating the potential effect that the updated standard will have on our financial statement disclosures.

The Company is currently evaluating the potential effect that the updated standard will have on our consolidated financial statement disclosures.

Net Loss Per Share

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Diluted net loss per share excludes the potential impact of the Company’s common stock options, warrants for the purchase of common stock, unvested shares of restricted stock and the potential shares issuable upon conversion of the 2027 Notes because their effect would be anti-dilutive due to the Company’s net loss.

Since the Company had a net loss in each of the periods presented, basic and diluted net loss per common share are the same.

The table below provides potentially dilutive securities not included in the calculation of the diluted net loss per share because to do so would be anti-dilutive:

Company had a net loss in each of the periods presented, basic and diluted net loss per common share are the same because the otherwise dilutive potential common shares become anti-dilutive and are therefore excluded.

The table below provides potentially dilutive securities not included in the calculation of the diluted net loss per share because to do so would be anti-dilutive (in common stock equivalent shares):

2024 2023 2022

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Shares issuable upon exercise of stock options 34,416,337 23,626,115 17,487,165

Shares issuable upon exercise of Chiesi Equity Option 22,433,809 — —

Shares issuable upon exercise of warrants 32,467,360 32,467,360 —

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The Company classifies its cash equivalents and available-for-sale investments within Level 1 or Level 2.

The fair value of the Company’s investment grade corporate debt securities and commercial paper is determined using proprietary valuation models and analytical tools, which utilize market pricing or prices for similar instruments that are both objective and publicly available, such as matrix pricing or reported trades, benchmark yields, broker/dealer quotes, issuer spreads, two-sided markets, benchmark securities, bids, and offers.

The fair value of the Company’s investment grade corporate debt securities and commercial paper classified as Level 2 is determined using proprietary valuation models and analytical tools, which utilize market pricing or prices for similar instruments that are both objective and publicly available, such as matrix pricing or reported trades, benchmark yields, broker/dealer quotes, issuer spreads, two-sided markets, benchmark securities, bids, and offers.

Assets and Liabilities Measured at Fair Value on a Recurring Basis

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As of December 31, 2024 and 2023, the carrying amounts of the Company’s financial instruments, which include cash, prepaid and other current assets, interest receivable, accrued research and development expenses, accounts payable and accrued expenses and other current liabilities, approximate fair values because of their short-term maturities.

There was no significant interest receivable as of December 31, 2023 and 2022, and is recorded as a component of prepaid expenses and other current assets on the consolidated balance sheets.

The Company believes that its Credit Facility bears interest at a rate that approximates prevailing market rates for instruments with similar characteristics and, accordingly, the carrying value of the Credit Facility approximates fair value.

The Company estimates the fair value of long-term debt utilizing an income approach.

The Company uses a present value calculation to discount principal and interest payments and the final maturity payment on these liabilities using a discounted cash flow model based on observable inputs.

The debt instrument is then discounted based on what the current market rates would be as of the reporting date.

Based on the assumptions used to value these liabilities at fair value, the debt instrument is categorized as Level 2 in the fair value hierarchy.

There was $ 0.2 million interest receivable as of December 31, 2024.

There was no significant interest receivable as of December 31, 2023.

Interest receivable is recorded as a component of prepaid expenses and other current assets on the consolidated balance sheets.

As of December 31, 2024 and 2023 the fair value of the Company's 2027 Notes was $ 110.0 million and $ 74.9 million, respectively.

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Number of securities with unrealized losses 12

As of December 31, 2024 and December 31, 2023, the Company classified $ 25.3 million and $ 25.2 million, respectively, of assets with original maturities of 90 days or less as cash and cash equivalents.

At each reporting date, the Company performs an evaluation of impairment to determine if any unrealized losses are due to credit-related factors.

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On May 2, 2019, the Company entered into a credit, guaranty and security agreement, as amended on September 18, 2019, July 2, 2020, December 7, 2022 and February 14, 2023 (the “Credit Facility”), with MidCap Financial Trust (“MidCap”), as agent and lender, and the additional lenders party thereto from time to time (together with MidCap, the “Lenders”), pursuant to which the Lenders, agreed to make term loans available to the Company for working capital and general business purposes, in a principal amount of up to $ 150.0 million in term loan commitments, including a $ 30.0 million term loan that was funded at the closing date, with the ability to access the remaining $ 120.0 million in two additional tranches (each $ 60.0 million), subject to specified availability periods, the achievement of certain clinical development milestones, minimum cash requirements and other customary conditions.

The Company did not achieve the clinical development milestone required to access one of the $ 60.0 million tranches and access to the other $ 60.0 million tranche expired on December 31, 2022.

The Company, GB001, Inc., GB002, Inc., and GB004, Inc., each wholly-owned subsidiaries of the Company, are designated as co-borrowers to the Credit Facility, whereas GB003, Inc., GB005, Inc., GB007, Inc., GB008, Inc.

Bio Services, Inc., each wholly-owned subsidiaries of the Company, are designated as guarantors.

The Credit Facility is secured by substantially all of the Company’s and its domestic subsidiaries’ personal property, including intellectual property.

Each term loan under the Credit Facility bears interest at an annual rate equal to the sum of (i) the secured overnight financing rate (“SOFR”), plus corresponding spread, plus (ii) 7.00 %, subject to a SOFR floor of 2.00 %.

The borrower is required to make interest-only payments on the term loan for all payment dates prior to July 1, 2022.

The term loans under the Credit Facility began amortizing on July 1, 2022, with equal monthly payments of principal plus interest being made by the Company to the Lenders in consecutive monthly installments following such interest-only period until the Credit Facility matures on January 1, 2025.

Upon final repayment of the term loans, the borrower must pay an exit fee of 1.75 % of the amount borrowed under the Credit Facility, less any partial exit fees previously paid.

Upon partial prepayment of a portion of the term loans, the borrower must pay a partial exit fee of 1.75 % of the principal being prepaid.

At the borrower’s option, the borrower may prepay the outstanding principal balance of the term loan in whole or in part, subject to a prepayment fee of 3.00 % of any amount prepaid if the prepayment occurs through and including the first anniversary of the second amendment effective date, 2.00 % of the amount prepaid if the prepayment occurs after the first anniversary of the second amendment effective date through and including the second anniversary of the second amendment effective date, and 1.00 % of any amount prepaid after the second anniversary of the second amendment effective date and prior to January 1, 2025.

On December 7, 2022, the Company entered into the Third Amendment to the Credit Facility, with no change to the principal or repayment terms, except with respect to the interest rate applicable to the Credit Facility, with the implementation of a forward-looking term rate based on SOFR as the replacement of LIBOR as the benchmark interest rate.

The Company accounted for the change in reference rate as a non-substantial modification as allowed under ASU 2020-04.

The Credit Facility includes affirmative and negative covenants applicable to the Company and certain of its subsidiaries.

The affirmative covenants include, among others, covenants requiring such entities to maintain their legal existence and governmental approvals, deliver certain financial reports, maintain insurance coverage, maintain property, pay taxes, satisfy certain requirements regarding accounts and comply with laws and regulations.

The negative covenants include, among others, restrictions on such entities from transferring collateral, incurring additional indebtedness, engaging in mergers or acquisitions, paying dividends or making other distributions, making investments, creating liens, amending material agreements and organizational documents, selling assets and suffering a change in control, in each case subject to certain exceptions.

The Company and certain of its subsidiaries are also subject to an ongoing minimum cash financial covenant in which they must maintain unrestricted cash in an amount not less than 25 % of the outstanding principal amount of the term loans.

As of December 31, 2023, the Company was in compliance with these covenants.

The Credit Facility also includes events of default, the occurrence and continuation of which could cause interest to be charged at the rate that is otherwise applicable plus 3.00 % and would provide MidCap, as agent, with the right to exercise remedies against the Company and/or certain of its subsidiaries, and the collateral securing the Credit Facility, including foreclosure against the properties securing the credit facilities, including cash.

These events of default include, among other things, failure to pay any amounts due under the Credit Facility, a breach of covenants under the Credit Facility, insolvency or the occurrence of insolvency events, the occurrence of a change in control, the occurrence of certain U.S.

Food and Drug Administration ("FDA") and regulatory events, failure to remain registered with the SEC and listed for trading on Nasdaq, the occurrence of a material adverse change, the occurrence of a default under a material agreement reasonably expected to result in a material adverse change, the occurrence of certain defaults under certain other indebtedness in an amount greater than $ 2.5 million and the occurrence of certain defaults under subordinated indebtedness and convertible indebtedness.

Debt consisted of the following (in thousands):

December 31, 2023

Debt, current portion $ 11,613

Debt, non-current portion 968

Total debt 12,581

unamortized debt discount and issuance costs ( 154 )

Debt, net $ 12,427

The scheduled future minimum principal payments as of December 31, 2023 are as follows (in thousands):

2024 $ 11,613

Total $ 12,581

On May 3, 2024, the Credit Facility was terminated and the Company recorded a $ 7.7 million payment of the outstanding debt balance in full and discharged, which released the Company

from the obligations under the Credit Facility, and Lenders’ security interests in the Company’s assets and property were released.

Unamortized debt discount and issuance costs were written off and recorded in interest expense on the consolidated statements of operations and comprehensive loss.

Since the Credit Facility was terminated, there was no debt outstanding as of December 31, 2024.

5.00 % Convertible Senior Notes due 2027

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In addition, following certain corporate events that occur prior to the maturity date or if the Company issues a notice of redemption, the Company will increase the conversion rate for a holder who elects to convert its 2027 Notes in connection with such a corporate event during the related redemption period in certain circumstances.

The 2027 Notes are senior unsecured obligations of the Company, ranking senior in right of payment to any of the Company’s indebtedness that is expressly subordinated in right of payment to the 2027 Notes, and are effectively subordinated to the Company’s existing and future secured indebtedness, to the extent of the value of the collateral securing that indebtedness, including all indebtedness under the Credit Facility.

Holders may convert their notes at their option only in the following circumstances:

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and (5) at any time from, and including, March 1, 2027 until the close of business on the scheduled trading day immediately before the maturity date.

The Company will not have the right to redeem the 2027 Notes prior to June 6, 2024.

The Company did not have the right to redeem the 2027 Notes prior to June 6, 2024.

As of December 31, 2024, the Company has not redeemed the 2027 Notes.

On or after June 6, 2024 and on or before the 50 th scheduled trading day immediately before the maturity date, the Company may redeem the 2027 Notes, in whole or in part, if the last reported sale price of the Company’s common stock has been at least 130 % of the conversion price then in effect on (1) each of at least 20 trading days (whether or not consecutive) during the 30 consecutive trading days ending on, and including, the trading day immediately before the date the Company sends the related redemption notice;

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When the 2027 Notes become convertible within 12 months of the balance sheet date, the carrying value of the 2027 Notes will be reclassified to short-term.

As a result of the adoption of ASU 2020-06, the Company no longer accounts for the 2027 Notes separately as a liability and equity component.

The conversion feature of the 2027 Notes was previously represented by an equity component of $ 53.5 million at issuance, with the excess of the principal amount of the liability component over the carrying amount (“debt discount”) was amortized to interest expense over the term of the 2027 Notes at an effective interest rate of 11.17 %.

The Company accounts for the 2027 Notes as a single liability measured at amortized cost.

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The Company recorded $ 0.4 million of the debt issuance costs related to the 2027 Notes as a reduction to the liability and amortizes these costs to interest expense over the term of the 2027 Notes.

The net carrying amount of the liability component of the 2027 Notes was as follows (in thousands):

The net carrying amount of the 2027 Notes was as follows (in thousands):

Principal amount $ 200,000 $ 200,000

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under which it was granted an exclusive worldwide license and sublicense to certain intellectual property rights owned or controlled by Pulmokine to develop and commercialize seralutinib and certain backup compounds for the treatment, prevention and diagnosis of any and all disease or conditions.

On November 26, 2024, Pulmokine became a wholly-owned subsidiary of XOMA Royalty Corporation.

The Company also has the right to sublicense its rights under the license agreement, subject to certain conditions.

The assets acquired are in the early stages of the FDA approval process, and the Company intends to further develop the assets acquired through potential FDA approval as evidenced by the milestone arrangement in the contract.

development activities cannot be performed without significant cost and effort by the Company.

The development activities cannot be performed without significant cost and effort by the Company.

The agreement will remain in effect from the effective date, unless terminated earlier, until, on a licensed product-by-licensed product and country-by-country basis, the later of ten years from the date of first commercial sale or when there is no longer a valid patent claim covering such licensed product or specified regulatory exclusivity for the licensed product in such country.

The Company is obligated to make future development and regulatory milestone payments of up to $ 58.0 million, which includes a payment of $ 10.0 million due upon initiation of the first Phase 3 clinical trial, commercial milestone payments of up to $ 45.0 million, and sales milestone payments of up to $ 190.0 million.

The Company is obligated to make future development and regulatory milestone payments of up to $ 48.0 million, which includes a payment of $ 5.0 million due upon initiation of a

Phase 3 clinical trial in a second indication, commercial milestone payments of up to $ 45.0 million, and sales milestone payments of up to $ 190.0 million.

The Company is also obligated to pay tiered royalties on sales for each licensed product, at percentages ranging from the mid-single digits to the high single-digits.

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The Company made an upfront payment of $ 5.5 million in October 2017.

The Company made a milestone payment of $ 5.0 million in connection with the initiation of the first Phase 2 clinical trial of seralutinib in January 2021.

As of December 31, 2023, the Company accrued a milestone payment of $ 10.0 million in connection with the initiation of the Phase 3 clinical trial of seralutinib, which was paid in January 2024.

No other milestones had been accrued as the underlying contingencies had not yet been met.

The Company made a milestone payment of $ 5.0 million in connection with the initiation of the first Phase 2 clinical trial of seralutinib in January 2021 and made a milestone payment of $ 10.0 million, which was accrued in 2023, in connection with the initiation of the Phase 3 clinical trial of seralutinib in January 2024.

The Company recognized these milestone payments as research and development expense on its consolidated statements of operations and comprehensive loss.

As of December 31, 2024, no other milestones had been accrued as the underlying contingencies had not yet been met.

The Company recorded the following IPR&D expense on the consolidated statements of operations and comprehensive loss (in thousands):

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Note 7— Income Taxes

The amount of net loss before taxes for the years ended December 31, 2023, 2022, and 2021 is as follows (in thousands):

The amount of net loss before taxes for the years ended December 31, 2024, 2023, and 2022 is as follows:

2024 2023 2022

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Pre-tax Loss $ 55,635 $ 179,809 $ 229,370

A reconciliation of income tax expense for the years ended December 31, 2024, 2023 and 2022 is as follows:

2024 2023 2022

(in thousands)

Federal $ 886 $ — $ —

Total income tax expense $ 893 $ 8 $ 8

Deferred income taxes reflect the net tax effects of temporary differences between the carrying amount of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes.

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Net operating losses $ 97,940 $ 122,987 $ 128,989

Tax credits, net 45,445 34,193 24,964

Deferred loss 10,575 — —

Capital loss 20,348 — —

Tax credits 44,803 45,445 34,193

Amortization 2,646 6,919 8,487

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Accrued compensation 547 1,887 2,514

Section 174 34,268 21,840 —

Section 174 capitalization 35,715 34,268 21,840

Other 5,076 43 37

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Deferred tax liabilities:

Convertible senior notes — — ( 9,395 )

Other ( 3 ) — —

Right of use asset ( 1,083 ) ( 660 ) ( 1,244 )

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As of December 31, 2024, the Company had federal and state NOL carryforwards of approximately $ 398.1 million and $ 3.3 million, respectively.

The federal NOL carryforwards generated prior to January 1, 2018 begin to expire in 2034, unless previously utilized.

The federal NOLs generated in taxable years beginning after December 31, 2017 of $ 529.1 million can be carried forward indefinitely but may only be used to offset up to 80 % of future taxable income each year.

The federal NOL carryforwards can be carried forward indefinitely and be available to offset up to 80 % of future taxable income each year.

The California NOL carryforwards begin to expire in 2036.

As of December 31, 2023, the Company also has foreign NOL carryforwards of approximately $ 89.1 million.

The foreign NOL can be carried forward indefinitely.

In the current year, the Company determined $ 140.0 million of foreign NOL carryforwards were relinquished due to liquidation and adjusted the carryforward accordingly.

As of December 31, 2024, the Company also has Irish NOL carryforwards of approximately $ 113.0 million, which can be carried forward indefinitely.

In the current year, the Company removed federal and foreign NOL carryforwards of $ 141.0 million and $ 0.4 million, respectively, as a result of mergers and liquidations.

As of December 31, 2024, the Company also had orphan drug credit and federal research tax credit carryforwards of approximately $ 48.2 million and California research tax credits of $ 13.2 million.

The federal research tax credit carryforwards begin to expire in 2038, and the California research tax credit carryforward does not expire and can be carried forward indefinitely until utilized.

In the current year, the Company removed federal and California credit carryforwards of $ 9.7 million and $ 0.4 million, respectively, as a result of mergers.

A reconciliation of the federal statutory income tax rate to the Company’s effective income tax rate is as follows:

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Federal statutory income tax rate 21.00 % 21.00 % 21.00 %

State income taxes, net of federal benefit — % — % — %

Change in valuation allowance ( 12.38 %) ( 8.73 %) ( 20.25 %)

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Foreign rate differential ( 3.75 %) ( 2.13 %) ( 1.88 %)

GILTI ( 4.72 %) — % — %

Stock-based compensation ( 4.61 %) ( 1.44 %) ( 0.90 %)

Nondeductible interest ( 4.13 %) ( 1.27 %) ( 0.99 %)

Foreign Restructuring Impact ( 12.49 %) — % — %

Domestic/Foreign Restructuring Impact 2.52 % ( 12.49 %) — %

Other 1.44 % ( 0.62 %) ( 0.37 %)

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In general, an ownership change as defined by Sections 382 and 383, results from the transactions increasing ownership of certain stockholders or public groups in the stock of the corporation of more than 50 percentage points over a three-year period.

The Company had an ownership change with the IPO in February of 2019 which resulted in no forfeiture of NOL’s or credits.

The Company is completing a review of whether an ownership change occurred for purposes of Sections 382 and 383 Code through 2023.

If ownership changes have occurred, including as a result of the Company's private placements of common stock in 2022 and 2023, or additional ownership changes occur in the future as a result of changes in The Company's stock ownership, many of which are outside the Company's control, the NOL and credit carryforwards could be subject to further annual limitations.

The Company will update their NOL’s and credits once the analysis is completed.

If NOL’s and credits are forfeited, the related asset would be removed from the deferred tax asset schedule with a corresponding reduction in the valuation allowance.

The Company had an ownership change with the IPO in February of 2019 which resulted in no forfeiture of NOLs or credits.

The Company had an additional ownership change in July of 2023, which resulted in a significant limitation on the Company's utilization of its NOLs and is expected to result in forfeiture of some or all of the federal credits.

Due to the existence of the valuation allowance, limitations created by future ownership changes, if any, will not impact the Company's effective tax rate.

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The Company’s policy is to recognize interest expense and penalties related to income tax matters as tax expense.

As of December 31, 2023, 2022, or 2021, there were no accruals for interest related to unrecognized tax benefits or tax penalties.

For the years ended December 31, 2024, 2023 and 2022 and as of December 31, 2024 and 2023, there were no accruals for interest related to unrecognized tax benefits or tax penalties.

A reconciliation of the beginning and ending amount of unrecognized tax benefits for 2024, 2023, and 2022, excluding interest and penalties, is as follows:

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Balance at beginning of the year $ 13,654 $ 10,572 $ 7,551

Decrease related to prior year positions ( 2,028 ) — —

Increase related to current year positions 2,293 3,082 3,021

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On August 9, 2022, the Company filed a registration statement on Form S-3 registering the shares of common stock issued in the private placement, which registration statement became automatically effective on August 9, 2022.

purchase price of $ 1.63125 per share and accompanying warrant, or with respect to any purchaser that was an officer, director, employee or consultant of the Company $ 1.85125 , per share and accompanying warrant.

Each warrant has an exercise price per share of $ 2.04 , was immediately exercisable on the date of issuance and will expire five years from the closing of the private placement.

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In addition, on September 6, 2018, the Company issued 1,795,023 shares of common stock to the founders for services rendered to the Company, valued at $ 9.63 per share, with an additional 1,795,023 shares of restricted stock subject to the same vesting restrictions and vesting period as the founder shares.

For the year ended December 31, 2023, no shares were forfeited due to termination of employment.

Any shares subject to repurchase by the Company are not deemed, for accounting purposes, to be outstanding until those shares vest.

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The unvested stock liability related to these awards is immaterial to all periods presented.

Chiesi Equity Option

On May 3, 2024, pursuant to the Chiesi Collaboration Agreement (as defined in Note 12 below) the Company granted to Chiesi (as defined in Note 12 below) an option to purchase directly from the Company, on one or more occasions, up to an aggregate number of shares of the Company’s common stock (the "Equity Option") such that immediately following such issuance, Chiesi’s beneficial ownership of the Company’s common stock shall not exceed 9.9 % of the total number of issued and outstanding shares of the Company’s common stock.

The Equity Option shall be exercisable by Chiesi, in whole or in part, at any time prior to the earliest to occur of the date on which (a) the last patient is last dosed in either (i) the PROSERA Phase 3 study for PAH or (ii) a Phase 3 clinical trial for the PH-ILD Indication, (b) any third party commences a tender offer or exchange offer for more than 50 % of the outstanding shares of the Company’s common stock, and (c) the Company publicly announces its intent to consummate a GB002, Inc.

change of control.

The purchase price of each share the Company’s common stock subject to the Equity Option shall be equal to 107.5 % of the daily volume-weighted average per share price of the Company’s common stock on The Nasdaq Stock Market over the 30 -trading day period ending on and including the last trading day prior to the date on which Chiesi delivers an exercise notice to the Company;

provided that such purchase price shall be no less than $ 1.63 per share.

The shares of the Company’s common stock to be issued will be issued in a private placement in reliance on Section 4(a)(2) of the Securities Act of 1933, as amended, for transactions by an issuer not involving any public offering, pursuant to the terms of a stock issuance agreement to be entered into between the Company and Chiesi in connection with each such exercise of the Equity Option.

The Company evaluated the Equity Option granted to Chiesi as consideration payable to a customer and determined it qualified under ASC 718.

Due to the market condition included in the Equity Option, the Company used the Geometric Brownian Motion/Monte Carlo model to determine fair market value.

The value of the Equity Option is $ 0.5 million, which is included in additional paid-in capital on the Company's consolidated balance sheets.

Note 9— Equity Incentive Plans

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The Company has initially reserved 6,762,279 shares of the Company’s common stock for issuance pursuant to awards granted under the 2023 Inducement Plan.

As of December 31, 2023, an aggregate of 5,262,279 shares of common stock were available

for issuance under the 2023 Inducement Plan, and 1,500,000 shares of common stock were subject to outstanding awards under the 2023 Inducement Plan.

As of December 31, 2024, an aggregate of 4,152,779 shares of common stock were available for issuance under the 2023 Inducement Plan, and 2,609,500 shares of common stock were subject to outstanding awards under the 2023 Inducement Plan.

2019 Equity Incentive Plan

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The fair value of each employee and non-employee time-vested stock option grant is estimated on the date of grant using the Black-Scholes option-pricing model.

The Company uses its own volatility to the extent it has sufficient trading history, and for awards in which sufficient trading history is not available, a peer group is used.

The Company uses its own volatility to the extent it has sufficient trading history, and for awards in which sufficient trading history is not available, a peer group is used to calculate the expected volatility.

Due to the lack of historical exercise history, the expected term of the Company’s stock options for employees has been determined utilizing the “simplified” method for awards.

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The market condition becomes satisfied in 50 %, 25 % and 25 % tranches upon achieving the average per-share closing price of the Company's common stock over any 30 consecutive calendar days following the grant date equal to or exceeding $ 5.00 , $ 7.50 and $ 10.00 , respectively.

In the event a

stock price tranche has not vested prior to the fourth anniversary of the grant date, any portion of the option attributable to such tranche will be forfeited.

In the event a stock price tranche has not vested prior to the fourth anniversary of the grant date, any portion of the option attributable to such tranche will be forfeited.

Due to the market condition included in this grant, the Company used the Geometric Brownian Motion/Monte Carlo model to value this award.

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The aggregate intrinsic value in the above table is calculated as the difference between fair value of the Company’s common stock price and the exercise price of the stock options.

The aggregate intrinsic value of stock options exercised during the year ended December 31, 2023, 2022 and 2021 was $ 0.0 million , $ 1.5 million and $ 1.6 million, respectively.

At December 31, 2023, the total unrecognized compensation related to unvested stock option awards granted was $ 25.3 million, which the Company expects to recognize over a weighted-average period of approximately 2.7 years.

There were no options exercised during the years ended December 31, 2024 and 2023.

The aggregate intrinsic value of stock options exercised during the year ended December 31, 2022 was $ 1.5 million.

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Nonvested at December 31, 2022 1,350,035 $ 10.83

Granted 572,901 11.94

Vested ( 779,900 ) 10.67

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Nonvested at December 31, 2024 — $ —

At December 31, 2023, the total unrecognized compensation related to unvested restricted stock awards granted was $ 0.5 million, which the Company expects to recognize over a weighted-average period of approximately 0.1 years.

As of December 31, 2024, there was no unrecognized stock-based compensation expense related to the unvested restricted stock awards.

Stock-Based Compensation Expense

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Total stock-based compensation expense $ 20,619 $ 28,518 $ 42,553

At December 31, 2024, the total unrecognized compensation related to unvested stock option awards granted was $ 14.0 million, which the Company expects to recognize over a weighted-average period of approximately 2.6 years.

As of December 31, 2024, total unrecognized compensation expense related to the ESPP was $ 0.8 million, which the Company expects to recognize over a weighted-average period of approximately 0.8 years.

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Office equipment 3 - 7

$ 1,097 $ 1,097

Computer equipment 5 — 123

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Leasehold improvements 6 - 7

Construction in process N/A — 83

Total property and equipment 193 7,080

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Note 11— Commitments and Contingencies

The Company subleases certain office and laboratory space under a non-cancelable operating lease expiring in January 2025 for the initial leased space and for the expansion space leased pursuant to an amendment to the lease agreement entered into in August 2018.

The lease is subject to charges for common area maintenance and other costs, and base rent is subject to an annual 3 % increase each subsequent year.

Costs determined to be variable and not based on an index or rate were not included in the measurement of the operating lease liabilities.

The Company previously leased certain office and laboratory space under a non-cancelable operating lease which expired in January 2025.

On July 9, 2024, the Company entered into a lease agreement for office space located at 3115 Merryfield Row, Suite 120, San Diego, CA 92121, consisting of approximately 18,421 square feet.

The term of the lease is 63 months commencing on August 1, 2024.

The base rent is $ 109,605 per month effective October 1, 2024, and it is subject to a 3 % annual increase every October.

The lease expires on October 31, 2029 with an option for a one -year extension and an option to terminate on December 1, 2027 with the payment of a termination fee equal to four months of the then-current base rent upon the termination date.

As of December 31, 2024, the Company was not reasonably certain that it would exercise the extension options, and therefore did not include these options in the determination of the total operating lease term for accounting purposes.

Monthly rent expense is recognized on a straight-line basis over the term of the leases.

The operating leases are included in the balance sheet at the present value of the lease payments at a weighted average discount rate of 7 % using the rate of interest that the Company would have to pay to borrow on a collateralized basis over a similar term an amount equal to the lease payments in a similar economic environment as the leases do not provide an implicit rate.

As of December 31, 2023, the weighted average remaining lease term was 1.0 year.

The operating leases are included in the consolidated balance sheets at the present value of the lease payments at an incremental borrowing rate of 7 % for each of the initial leased space and expansion space expiring in January 2025 and 12.4 % for the office lease commenced on August 1, 2024 using the rate of interest that the Company would have to pay to borrow on a collateralized basis over a similar term an amount equal to the lease payments in a similar economic environment as the leases do not provide an implicit rate.

As of December 31, 2024, the weighted average remaining lease term was 4.7 years, and weighted-average discount rate was 12.4 %.

Lease costs were comprised of the following (in thousands):

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Current portion of operating lease liabilities (included as a component of accrued expenses and other current liabilities) 961

Noncurrent operating lease liabilities 144

Operating lease liabilities - long-term 4,398

Total operating lease liability $ 5,359

For the years ended December 31, 2023, 2022 and 2021, the Company recorded approximately $ 3.4 million, $ 3.3 million and $ 4.3 million, respectively, in rent expense.

Rent expense is included in research and development and general and administrative expense on the consolidated statements of operations and comprehensive loss.

Note 12 - Significant Agreements and Contracts

On May 3, 2024, the Company, GB002, Inc., a Delaware corporation and wholly-owned subsidiary of the Company and Gossamer Bio 002 Ltd., a corporation organized and existing under the laws of Ireland and indirect wholly-owned subsidiary of the Company, entered into a global collaboration and license agreement (the “Chiesi Collaboration Agreement”) with Chiesi Farmaceutici S.p.A and Chiesi USA, Inc.

(collectively, “Chiesi”).

The Company concluded that there were four distinct performance obligations under the Chiesi Collaboration Agreement:

Territory license (as defined below), the ROW Territory license (as defined below), and the research and development services of both PAH and PH-ILD clinical development.

Revenue associated with the licenses was recognized upon delivery in May 2024.

In addition, the Company granted to Chiesi an option to purchase the Equity Option, as described in Note 8, "Stockholders Equity."

The collaboration is focused on the development and commercialization of seralutinib and licensed products including seralutinib and related licensed compounds (“Licensed Products”) in the U.S.

Territory”) and the rest of the world (“ROW Territory”), for therapeutic, prophylactic and diagnostic uses in humans and animals, for the treatment of PAH and PH-ILD and other indications, as may be permitted under the Chiesi Collaboration Agreement.

Pursuant to the Chiesi Collaboration Agreement, the Company granted two exclusive, sublicensable (with the Company’s consent required in the U.S.

Territory for third party sublicenses) licenses to Chiesi under intellectual property rights controlled by the Company relating to seralutinib and Licensed Products, for the worldwide development, manufacture and commercialization of seralutinib and Licensed Products.

The licenses granted to Chiesi are subject to retained rights of the Company for the worldwide development and manufacture of seralutinib and Licensed Products, commercialization of Licensed Products in the U.S.

Territory, and performance of its obligations and exercise of its rights that may be set forth in the global development plan and US commercialization plan, in each case in accordance with the Chiesi Collaboration Agreement.

The parties agreed to use commercially reasonable efforts to conduct development and commercialization activities in relation to seralutinib and Licensed Products, under the global development plan and US commercialization plan in accordance with the timelines therein.

The Company will continue to lead global development of seralutinib in PAH and PH-ILD, and the parties will equally share the costs for the activities included in the global development plan for all Licensed Products, with the exception of the PROSERA Phase 3 study, which the Company will be solely responsible for conducting at the Company’s own cost and expense.

With respect to each country in the ROW Territory, such obligation to equally share such development costs shall end when regulatory approval is received for a Licensed Product in such country.

With respect to U.S.

Territory, the development costs incurred following regulatory approval shall continue to be shared equally.

The Company will lead potential commercialization for PAH and PH-ILD in the US, with both parties contributing 50 percent of commercial efforts, including performing 50 percent of the commercialization activities.

Chiesi will lead potential commercialization in the US Territory in any additional indications, and Chiesi will have the exclusive right to commercialize Licensed Products in the ROW Territory.

Chiesi further agreed to use commercially reasonable efforts to commercialize Licensed Products in certain specified countries in the ROW Territory following receipt of regulatory approvals.

Generally, the Company will have the right to lead in manufacturing commercial supply of seralutinib and Licensed Products for the U.S.

Territory for PAH and PH-ILD,

and, subject to any existing obligations of the Company to third party manufacturers, Chiesi will have the right to lead in manufacturing commercial supply of seralutinib and Licensed Products in the ROW Territory, in each case in accordance with the Chiesi Collaboration Agreement.

Pursuant to the Chiesi Collaboration Agreement, neither party nor its affiliates is permitted to develop or commercialize any compound or product throughout the term whose primary mechanism of action is inhibition of a tyrosine kinase for the treatment of PAH or PH-ILD in the U.S.

Territory or ROW Territory, subject to certain restrictions for the EU and UK.

In consideration and as reimbursement for the Company’s development costs, Chiesi agreed to pay the Company an up-front, nonrefundable payment of $ 160 million.

Additionally, the Company will be eligible to receive up to $ 146 million in regulatory milestones and $ 180 million in sales milestones.

Territory, the parties agreed to share commercial profits and losses equally.

In the ROW Territory, Chiesi will pay the Company an escalating mid-to-high teens percentage royalty on net sales of Licensed Product for PAH and additional indications on a Licensed Product-by-Licensed Product and country-by-country basis with such payment obligations beginning on the first commercial sale of Licensed Product in such country and expiring on a country-by-country basis on the latest of (a) the expiration of a valid claim to a the Company patent right in such country, (b) the expiration of regulatory exclusivity, and (c) the date that is 10 years after the first commercial sale of such Licensed Product in such country.

Potential future payments for variable consideration, such as regulatory and commercial milestones, development costs, and profit sharing U.S.

Territory will be recognized when it is probable that, if recorded, a significant reversal will not take place.

Potential future royalty payments will be recorded as revenue when the associated sales occur.

Unless earlier terminated, the Chiesi Collaboration Agreement will remain in force until no Licensed Products are being developed or commercialized in the US Territory and in the ROW Territory, on a country-by-country basis, until no royalty terms are in effect for all countries.

Either party may terminate the Chiesi Collaboration Agreement for the other party’s material breach, subject to a specified notice and cure periods, or due to an insolvency event of the other party.

In lieu of termination upon a party’s material breach due to non-payment of development costs within a specified time the non-breaching party may elect an alternative remedy which may involve modifications to their performance and payment obligations.

The Company has the right to terminate by providing written notice in the event Chiesi or its affiliates or sublicensee brings a patent challenge and Chiesi does not take certain steps to withdraw from or cease supporting such challenge.

Chiesi may terminate the Chiesi Collaboration Agreement without cause upon prior written notice to the Company, subject to a notice period in which all rights to Licensed Products and Licensed Compounds will revert back to the Company.

The Company concluded that progress towards completion of the research and development services performance obligation related to the Chiesi Collaboration Agreement is best measured in an amount proportional to the collaboration expenses incurred and the total estimated collaboration expenses.

The Company periodically reviews and updates the estimated collaboration expenses, when appropriate, which may adjust revenue recognized for the period.

While such changes to the Company’s estimates have no impact on the Company’s reported cash flows, the amount of revenue recorded in the period could be materially impacted.

The transaction price to be recognized as revenue from sale of licenses and revenue from contracts with collaborators under the Chiesi Collaboration Agreement consists of the one-time non-refundable and non-creditable development cost reimbursement payment and research and development costs.

The transaction price was reduced by the fair value of the Equity Option.

Revenue Recognition

The Company determined the transaction price pursuant to the Chiesi Collaboration Agreement is equal to the one-time development cost reimbursement payment of $ 160.0 million less the fair market value of the Equity Option of $ 0.5 million.

The price allocated for the Equity Option was determined to be at fair market value utilizing the Geometric Brownian Motion/Monte Carlo model and was considered a reduction in the transaction price.

The transaction price was allocated to the performance obligations on the basis of the relative stand-alone selling price estimated for each distinct performance obligation.

In estimating the stand-alone selling price for each distinct performance obligation, the Company developed assumptions that require judgment and included forecasted revenues or costs, expected development timelines, discount rates and probabilities of technical and regulatory success.

A description of the distinct performance obligations identified under the Chiesi Collaboration Agreement, as well as the amount of revenue allocated to each distinct significant performance obligation, is as follows:

Licenses of Intellectual Property .

The licenses to the Company’s intellectual properties, bundled with the associated know-how, represents two distinct performance obligations.

The licenses and associated know-how were transferred to Chiesi in June 2024, therefore the Company recognized the full revenue related to these distinct performance obligations in the amount of $ 90.7 million during the year ended December 31, 2024 as revenue from sale of licenses on its consolidated statements of operations and comprehensive loss.

Research and Development Services .

The progress towards completion of the two distinct performance obligations related to PAH and PH-ILD research and development services for the Licensed Products is measured in an amount proportional to the research and development expenses incurred and the total estimated PAH and PH-ILD research and development expenses.

In addition, the Company and Chiesi share equally in the costs of ongoing global seralutinib clinical development, with the exception of the PROSERA Phase 3 study, and the costs of commercialization in the US.

The Company records the revenue from performing research and development services and the cost-sharing payments due from Chiesi as revenue from contracts with collaborators on its consolidated statements of operations and comprehensive loss.

For the year ended December 31, 2024, the Company recognized $ 24.1 million for the PAH and PH-ILD research and development performance obligations and commercialization activities.

Milestone Payments .

The Company determined that as of December 31, 2024, it is not probable that a significant revenue reversal will not occur related to the potential milestone payments as their achievement is highly dependent on factors outside the Company's control or are otherwise constrained under the sales and usage based royalty exception.

Therefore, these payments have been fully constrained and are therefore not included in the transaction price.

At the end of each subsequent reporting period, the Company will re-evaluate the probability of achievement of each milestone and any related constraint.

No milestone payments were recognized during the year ended December 31, 2024.

As the licenses are deemed to be the predominant item to which sales-based royalties relate, the Company will recognize revenue when the related sales occur.

No royalty revenue was recognized during the year ended December 31, 2024.

The following table presents a summary of the activity in the Company's contract liabilities related to the Chiesi Collaboration Agreement (recorded as contract liabilities on the balance sheet) during the year ended December 31, 2024 (in thousands):

Balance, December 31, 2023 $ —

Payments received in advance 159,536

Revenue from sale of US license ( 78,947 )

Revenue from sale of ROW license ( 11,721 )

Revenue from PAH research and development service performance obligations satisfied during reporting period ( 9,555 )

Revenue from PH-ILD research and development service performance obligations satisfied during reporting period ( 1,291 )

Effect of exchange rate changes on contract liabilities ( 2,103 )

Balance, December 31, 2024 $ 55,919

As of December 31, 2024, the contract liability amount of $ 55.9 million represents the aggregate transaction price allocated to performance obligations that are unsatisfied under the Chiesi Collaboration Agreement.

This amount is expected to be recognized over 4.0 years, which represents the remaining research period under the Chiesi Collaboration Agreement.

As of December 31, 2024, the current contract liability balance of $ 17.1 million is classified as a current liability since the rights to the research and development service are expected to be satisfied within one year, and the remaining contract liability balance of $ 38.9 million is classified as a long-term liability.

As of December 31, 2024, the Company recorded $ 5.3 million in accounts receivable associated with the Chiesi Collaboration Agreement.

The payments are typically due 30 days after quarterly invoices are issued.

The following table presents our contract revenues from Chiesi Collaboration Agreement disaggregated by timing of revenue recognition and excluding royalty revenue (in thousands):

Year Ended December 31, 2024

Revenue from Chiesi Collaboration Agreement:

Point in Time:

US License $ 78,947

ROW License 11,721

Revenue from PAH research and development service performance obligation satisfied during reporting period 9,555

Revenue from PH-ILD research and development service performance obligation satisfied during reporting period 1,291

Revenue from PAH research and development costs subject to reimbursement 10,246

Revenue from PH-ILD research and development costs subject to reimbursement 2,380

Revenue from PAH commercial costs subject to reimbursement 538

Revenue from PH-ILD commercial costs subject to reimbursement 116

Effect of exchange rate changes on revenue ( 93 )

Total revenue from Chiesi Collaboration Agreement $ 114,701

Note 13 - Segment Information

Operating segments are identified as components of an enterprise for which separate discrete financial information is available for evaluation by the CODM in making decisions regarding the allocation of resources and assessing performance.

The Company's CODM is its chief executive officer.

The Company views its operations and manages its business as one operating segment.

The Company's operating segment derives its revenues from its collaboration agreement with Chiesi and is wholly attributable to the United States.

The CODM assesses performance for the Company's single operating segment and decides how to allocate resources based on research and development expenses incurred, which is a component of the Company's consolidated net loss as reported on the consolidated statement of operations and comprehensive loss.

The measure of segment assets is reported on the balance sheet as total consolidated assets.

Further, segment depreciation expense and segment asset additions are consistent with consolidated amounts reported within the consolidated statement of cash flows given the Company's operations are aggregated within a single reportable segment.

The CODM uses research and development expenses and results of clinical trial activities completed to date to evaluate how to allocate the Company's resources to advance seralutinib.

Significant segment expenses which are regularly reported to the CODM for purposes of making decisions regarding the allocation of resources are included within the table below and are reconciled to consolidated net loss:

Years Ended December 31,

2024 2023 2022

(in thousands)

Total revenue $ 114,701 $ — $ —

Seralutinib 129,247 103,158 63,048

Other segment items (1)

45,373 80,601 155,545

Interest income ( 1,779 ) ( 1,997 ) ( 1,583 )

Interest expense 11,517 13,511 13,880

Other income, net ( 14,022 ) ( 15,456 ) ( 1,512 )

Income tax expense 893 — —

Segment net loss $ ( 56,528 ) $ ( 179,817 ) $ ( 229,378 )

(1) Other segment items include R&D expenses for other terminated programs.

These costs include employee expenses, as well as allocations of consolidated overhead and stock compensation.

Further, general and administrative expenses are also provided to the CODM regularly, but are included within other segment items as they are not utilized as part of the decision making process as it relates to the allocation of resources.

Subsequent events

56 unchanged sentences

10.15# Employment Letter, dated November 25, 2023, by and between Robert Smith and the Registrant.

10/K 3/5/2024 10.15

10.16# Form of Indemnification Agreement.

S-1 12/21/2018 10.14

10.17 Sublease Agreement, dated December 29, 2017, by and between The Medicines Company and the Registrant.

S-1 12/21/2018 10.15

10.18 First Amendment to Sublease Agreement, dated August 24, 2018, by and between The Medicines Company and the Registrant.

S-1 12/21/2018 10.16

10.19 Second Amendment to Sublease Agreement, dated June 1, 2022, by and between the Medicines Company and the Registrant.

10-Q 8/9/2022 10.10

10.17† Exclusive License Agreement, dated October 2, 2017, by and between GB002, Inc., the Registrant and Pulmokine, Inc.

S-1 12/21/2018 10.17

10.21 Credit, Guaranty and Security Agreement, dated May 2, 2019, by and among GB001, Inc., as Borrower, Gossamer Bio, Inc., as Guarantor, MidCap Financial Trust, as Agent and Lender, and the additional lenders from time to time party thereto.

8-K 5/3/2019 10.1

10.22 First Amendment to Credit, Guaranty and Security Agreement, dated September 18, 2019, by and among GB001, Inc., as borrower, the Registrant, as guarantor, the other guarantors from time to time party thereto and MidCap Financial Trust, as Agent and as Lender, and the additional lenders from time to time party thereto.

10-Q 11/12/2019 10.1

Number Exhibit Description Incorporated by Reference Filed

Form Date Number

10.23 Second Amendment to Credit, Guaranty and Security Agreement, dated July 2, 2020, by and among the Registrant, GB001, Inc., GB002, Inc.

and GB004, Inc., as co-borrowers, the other guarantors from time to time party thereto and MidCap Financial Trust, as Agent and as a Lender and the additional lenders from time to time party thereto.

8-K 7/2/2020 10.1

10.24 Third Amendment to Credit, Guaranty and Security Agreement, dated December 7, 2022, by and among the Registrant, GB001, Inc., GB002, Inc.

and GB004, Inc., as co-borrowers, the other guarantors from time to time party thereto and MidCap Financial Trust, as Agent and as a Lender and the additional lenders from time to time party thereto.

10-K 3/17/2023 10.23

10.25 Fourth Amendment to Credit, Guarantee and Security Agreement, dated February 14, 2023, by and among the Registrant, GB001, Inc., GB002, Inc.

and GB004, Inc., as co-borrowers, the other guarantors from time to time party thereto and MidCap Financial Trust, as Agent and as a Lender and the additional lenders from time to time party thereto.

10-K 3/17/2023 10.24

10.18 Stock Purchase Agreement, dated July 12, 2022, by and among the Registrant and the Purchasers named therein.

4 unchanged sentences

10-Q 8/8/2023 10.1

Collaboration and License Agreement dated May 3, 2024 by and among GB002, Inc., Gossamer Bio 002 Ltd.

and Gossamer Bio, Inc.

on the one hand and CHIESI Farmaceutici S.p.A and CHIESI USA, Inc.

on the other hand.

10-Q 8/12/2024 10.1

19.1 Gossamer Bio, Inc.

Insider Trading Compliance Policy and Procedures

21.1 List of Subsidiaries of the Registrant.

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

Number Exhibit Description Incorporated by Reference Filed

Form Date Number

31.1 Certification of Chief Executive Officer of Gossamer Bio, Inc., as required by Rule 13a-14(a) or Rule 15d-14(a) under the Securities Exchange Act of 1934, as amended.

3 unchanged sentences

97 Policy for Recovery of Erroneously Awarded Compensation .

10-K 3/5/2024 97

101.INS XBRL Report Instance Document X

28 unchanged sentences

Thomas Daniel, M.D.

/s/ Renée Galá Director March 5, 2024

/s/ Sky Drynan Director March 13, 2025

/s/ Sandra Milligan, M.D., J.D.

1 unchanged sentence

Sandra Milligan, M.D., J.D.

/s/ Steven Nathan, M.D.

Director March 13, 2025

Steven Nathan, M.D.

/s/ John Quisel, J.D., Ph.D.

2 unchanged sentences

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