What changed in this filing

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Item 9A. Controls and Procedures

2025-03-24 compared with 2024-03-14 · 200 added, 99 removed, 648 unchanged (32% of the section changed)

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The information required by Item 10 of Form 10-K is incorporated by reference to the information contained in our definitive proxy statement for the 2025 annual meeting of stockholders.

We have adopted insider trading policies and procedures governing the purchase, sale, and other dispositions of our securities by directors, officers, and employees that we believe are reasonably designed to promote compliance with insider trading laws, rules and regulations, and applicable Nasdaq listing standards.

Our insider trading policy states, among other things, that our directors, officers, and employees are prohibited from trading in such securities while in possession of material, nonpublic information.

The foregoing summary of our insider trading policies and procedures does not purport to be complete and is qualified by reference to our Insider Trading Policy filed as an exhibit to this Annual Report on Form 10-K.

In addition, with regard to trading in our own securities, it is our policy to comply with the federal securities laws and the applicable exchange listing requirements.

EXECUTIVE COMPENSATION

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+ Certain confidential portions (indicated by brackets and asterisks) have been omitted from this exhibit

# Certain information in this document has been excluded pursuant to Regulation S-K, Item 601(b)(10).

Certain schedules, annexes or exhibits have been omitted pursuant to Item 601(a)(5) of Regulation S-K, but will be furnished supplementally to the SEC upon request.

** Furnished herewith.

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related to the Name Change, dated May 28, 2020 (incorporated by reference to Exhibit 3.1 of the Company’s Current Report on Form 8-K filed on June 2, 2020).

Certificate of Amendment of Ninth Amended and Restated Certificate of Incorporation of Larimar Therapeutics, Inc., dated May 31, 2024 (incorporated by reference to Exhibit 3.1 of the Company’s Quarterly Report on Form 10-Q filed on August 8, 2024).

Amended and Restated By-laws of Larimar Therapeutics, Inc.

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Restricted Stock Award Agreement for Company Employees under the Larimar Therapeutics, Inc.

2020 Equity Incentive Plan.

Non-Qualified Stock Option Grant Notice and Award Agreement.

2020 Equity Incentive Plan (incorporated by reference to Exhibit 10.3 to the Company’s Annual Report on Form 10-K filed on March 14, 2024).

Non-Qualified Stock Option Grant Notice and Award Agreement (incorporated by reference to Exhibit 10.4 to the Company’s Annual Report on Form 10-K filed on March 14, 2024).

Form of Performance-Based Restricted Stock Unit Award Agreement under the

Larimar Therapeutics, Inc.

2020 Equity Incentive Plan (incorporated by reference to

Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on January 27, 2025).

Registration Rights Agreement, dated as of June 1, 2020, by and among the Company and certain Investors (incorporated by reference to Exhibit 10.2 of the Company’s Current Report on Form 8-K filed on June 2, 2020).

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and Bala Plaza Property, Inc.

(incorporated by reference to Exhibit 10.20 to the Company’s Form 10-K filed on March 14, 2024).

First Amendment to Lease, dated as of March 9, 2023, by and between the Company and Bala Plaza Property, Inc.

(incorporated by reference to Exhibit 10.21 to the Company’s Form 10-K filed on March 14, 2024).

Commercial Lease by and between the Company and Shigo Center Plaza Owner, LLC dated as of February 12, 2019 (incorporated herein by reference to Exhibit 10.4 of the Registrant’s Form 10-Q filed on May 9, 2019) .

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(incorporated by reference to Exhibit 10.23 to the Company’s Form 10-K filed on March 14, 2023)

Sales Agreement, dated as of May 9, 2024, by and between the Company and Guggenheim Securities, LLC (incorporated by reference to Exhibit 10.1 to the Company's Quarterly Report on Form 10-Q filed on May 9, 2024).

Insider Trading Policy.

Subsidiaries of Larimar Therapeutics, Inc.

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Larimar Therapeutics.

Inc.’s Compensation Recovery Policy

Inc.’s Compensation Recovery Policy (incorporated by reference to Exhibit 97.1 to the Company's Form 10-K filed on March 14, 2024.

Inline XBRL Instance Document

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

Emphasis of Matter

As discussed in Note 1 to the consolidated financial statements, the Company will require additional financing to fund future operations.

Management’s evaluation of the events and conditions and management’s plans to mitigate this matter are also described in Note 1.

Critical Audit Matters

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Within accrued expenses, total accrued research and development expenses amounted to $17.1 million as of December 31, 2024.

Management’s process involves reviewing open contracts and purchase orders, communicating with personnel and outside vendors to identify services that have been performed, and estimating the level of service performed and the associated costs incurred for the services when invoices or other notification of actual costs have not been received.

related to management’s estimates of the level of service performed and the associated costs incurred for the services when invoices or other notification of actual costs have not yet been received.

Management’s process involves reviewing open contracts and purchase orders, communicating with personnel and outside vendors to identify

services that have been performed, and estimating the level of service performed and the associated costs incurred for the services when invoices or other notification of actual costs have not been received.

The principal considerations for our determination that performing procedures relating to accrued research and development expenses is a critical audit matter are (i) the significant judgment by management in developing the estimates of accrued research and development expenses and (ii) a high degree of auditor judgment, subjectivity and effort in performing procedures and evaluating audit evidence for these accrued research and development expenses related to management’s estimates of the level of service performed and the associated costs incurred for the services when invoices or other notification of actual costs have not yet been received.

Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the financial statements.

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Accumulated deficit

Accumulated other comprehensive gain (loss)

Accumulated other comprehensive gain

Total stockholders’ equity

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Loss from operations

Other income (expense), net

Other income, net

Net loss per share, basic and diluted

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Other comprehensive loss:

Unrealized gain (loss) on marketable securities

Total other comprehensive gain (loss)

Unrealized gain on marketable securities

Total other comprehensive gain

Total comprehensive loss

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Balances as of December 31, 2023

Stock-based compensation expense

Issuance of common stock, net

Vesting of restricted stock units

Exercise of stock options

Exercise of warrants

Unrealized gain on marketable securities

Stock-based compensation expense

Unrealized gain on marketable debt securities

Balances as of December 31, 2024

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Balances as of December 31, 2022

Issuance of Common Stock, net

Stock-based compensation expense

Unrealized loss on marketable securities

Exercise of stock options

Exercise of warrants

Unrealized gain on marketable securities

Balances as of December 31, 2023

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Depreciation expense

Amortization of discount on marketable securities

Net accretion of discount on marketable securities

Changes in operating assets and liabilities:

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Net cash provided by financing activities

Net decrease in cash, cash equivalents and restricted cash

Net increase (decrease) in cash, cash equivalents and restricted cash

Cash, cash equivalents and restricted cash at beginning of period

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Leased assets obtained in exchange for new operating lease liabilities

Offering costs included in accounts payable and accrued expense

Proceeds from exercise of stock options included in other current assets

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Larimar Therapeutics, Inc., together with its subsidiary (the “Company” or “Larimar”), is a clinical-stage biotechnology company focused on developing treatments for patients suffering from complex rare diseases using its novel cell penetrating peptide technology platform.

Larimar's lead product candidate, nomlabofusp (nomlabofusp is the International Nonproprietary Name ("INN") and the United States Adopted Name ("USAN") for CTI-1601), is a subcutaneously administered, recombinant fusion protein intended to deliver human frataxin ("FXN"), an essential protein, to the mitochondria of patients with Friedreich’s ataxia ("FA").

Larimar's lead product candidate, nomlabofusp (nomlabofusp is the International Nonproprietary Name and the United States Adopted Name for CTI-1601), is a subcutaneously administered, recombinant fusion protein intended to deliver human frataxin ("FXN"), an essential protein, to the mitochondria of patients with Friedreich’s ataxia ("FA").

FA is a rare, progressive and fatal disease in which patients are unable to produce sufficient FXN due to a genetic abnormality.

The Company has completed two phase 1 studies of nomlabofusp and a Phase 2 dose exploration study in patients with FA.

In May 2021, after reporting positive top-line data from the Company’s Phase 1 FA program, the U.S.

Food and Drug Administration (“FDA”) placed a clinical hold on the Company’s nomlabofusp clinical program after the Company notified the FDA of mortalities at the highest dose levels of a 26-week non-human primate toxicology study that was designed to support extended dosing of patients with nomlabofusp.

In August 2022, the Company submitted a complete response to the clinical hold following a Type C Meeting with the FDA, and proposed as nomlabofusp's next clinical trial a Phase 2, four-week, dose exploration study in FA patients starting at the lower dose levels tested in the Company’s Phase 1 multiple-ascending dose clinical trial.

In September 2022, the FDA lifted its full clinical hold on the nomlabofusp program and imposed a partial clinical hold.

In May 2023, the Company announced top-line data from its completed 25 mg cohort of a Phase 2, four-week, dose exploration trial of nomlabofusp in patients with FA and provided a complete response to the FDA in June 2023, which included unblinded safety, pharmacokinetic ("PK"), and pharmacodynamic ("PD") data from the Phase 2 trial’s completed 25 mg cohort.

Data from the completed 25 mg cohort (n = 13) indicated that nomlabofusp was generally well tolerated and showed increases in FXN levels from baseline compared to placebo in all evaluated tissues (skin and buccal cells) at day 14 (the final day of daily dosing in the trial).

In June 2023, the Company met with the FDA.

Following that meeting, the Company submitted a complete response to the FDA’s partial clinical hold that included unblinded safety, PK and frataxin data from the Phase 2 trial’s completed 25 mg cohort.

In July 2023, following the FDA’s review of the Company's complete response to the partial clinical hold, the FDA cleared initiation of a second cohort at 50 mg of our four-week, placebo-controlled, Phase 2 dose exploration trial and initiation of the OLE trial with daily dosing of 25 mg.

In February 2024, the Company reported positive top-line data and successful completion of their four-week, placebo-controlled Phase 2 dose exploration study of nomlabofusp in participants with FA.

Nomlabofusp was generally well tolerated and demonstrated dose dependent increases in FXN levels in all evaluated tissues (skin and buccal cells) after daily dosing of 14 days followed by every other day dosing until day 28 in the 25 mg and 50 mg cohorts.

Larimar has completed two Phase 1 clinical trials and a Phase 2 dose exploration trial, and has an ongoing Phase 2 OLE trial in patients with FA and an ongoing run-in study in adolescent patients with FA.

In May 2021, the Company reported positive top-line data from its Phase 1 FA program after completing dosing of the single ascending dose ("SAD") trial in December 2020 and of the multiple ascending dose ("MAD") trial in March 2021.

Data from these trials demonstrated proof-of-concept by showing that daily subcutaneous injections of nomlabofusp for up to 13 days resulted in dose-dependent increases in FXN levels from baseline compared to placebo in all evaluated tissues (buccal cells, skin, and platelets).

There were no serious adverse events associated with either the MAD or SAD trials.

In May 2023, the Company reported preliminary unblinded top-line data from the 25 mg cohort of the Phase 2 four-week, placebo-controlled, dose exploration trial of nomlabofusp in FA patients.

Data from the cohort indicated nomlabofusp was generally well tolerated and showed increases in FXN levels from baseline compared to placebo in all evaluated tissues (skin and buccal cells) at day 14.

In July 2023, the FDA cleared initiation of a second cohort (50 mg) of the four-week, placebo-controlled, Phase 2 dose exploration trial of nomlabofusp in patients with FA and the initiation of the OLE trial with daily dosing of 25 mg.

In February 2024, the Company reported positive top-line data and successful completion of the Phase 2 dose exploration study.

Nomlabofusp was generally well tolerated throughout the four-week treatment periods, had a predictable pharmacokinetic profile and led to dose dependent increases in FXN levels in all evaluated tissues (skin and buccal cells) after daily dosing of 14 days followed by every other day dosing until day 28 in the 25 mg and 50 mg cohorts.

Participants in the 25 mg (n=13) and 50 mg (n=15) cohorts were randomized 2:1 to receive subcutaneous injections of nomlabofusp or placebo.

The initiation of additional U.S.

clinical trials evaluating nomlabofusp are contingent on FDA review of data under the partial clinical hold.

In January 2024, the Company initiated an OLE trial evaluating daily subcutaneous injections of 25 mg of nomlabofusp self-administered or administered by a caregiver, with the first patient dosed in March 2024.

Participants who complete treatment in the Phase 2 dose exploration trial, or who previously completed a prior clinical trial of nomlabofusp are potentially eligible to screen for the OLE.

The OLE will evaluate the safety, tolerability and PK and measures of frataxin levels in peripheral tissues as well as other exploratory PD (lipid profiles and gene expression data) following long-term subcutaneous administration of nomlabofusp.

Clinical measures collected during the trial will be compared to data from a synthetic control arm derived from participants in the Friedreich’s Ataxia Clinical Outcome Measures Study (FACOMS) database.

Dose escalation in the OLE trial will be considered based on safety, tolerability, PK, and tissue FXN levels from the Phase 2 trial’s 50 mg cohort as well as available data from the 25 mg dose of nomlabofusp in the OLE trial and is contingent on FDA review as part of the partial clinical hold.

Initial data from the OLE trial is expected in the fourth quarter of 2024.

regulations, failure to secure regulatory approval for its drug candidates or any other product candidates and the ability to secure additional capital to fund its operations.

Patients who completed treatment in the Phase 2 dose exploration study or who previously completed a prior clinical trial of nomlabofusp are eligible to screen and possibly participate in the OLE study.

In March 2024, Larimar dosed the first patient in the OLE trial, evaluating daily subcutaneous injections of 25 mg of nomlabofusp self-administered or administered by a caregiver.

The OLE study will evaluate the safety and tolerability, pharmacokinetics, and frataxin levels in peripheral tissues as well as other exploratory pharmacodynamic markers (lipid profiles and gene expression data) following long-term subcutaneous administration of nomlabofusp.

In addition, following the completion of enrollment, as well as at least one participant completing one year of dosing, clinical assessments collected during the study will be compared to data from a matched control arm derived from participants in the Friedreich’s Ataxia Clinical Outcome Measures Study ("FACOMS") database.

On May 30, 2024, Larimar announced that the FDA's Center for Drug Evaluation and Research ("CDER") had selected nomlabofusp as one of a few programs for participation in the Support for Clinical Trials Advancing Rare Disease Therapeutics ("START") Pilot Program.

The objective of the program is to accelerate the development of drugs for rare diseases that lead to significant disability or death by facilitating frequent advice and regular communication with the FDA staff to expedite the review process of biologics and drugs.

In September 2024, the Company received access to the Medicines and Healthcare Regulatory Agency ("MHRA”) Innovative Licensing and Access Pathway (“ILAP”) for the treatment of adults and children with FA.

The ILAP is facilitating patient access to novel treatments by accelerating time to market through opportunities for enhanced engagements with UK regulatory authorities and other stakeholders.

Along with the receipt of the ILAP designation, nomlabofusp has already been granted orphan drug designations in the U.S.

and the European Union (the “EU”), and access to the PRIME scheme in the EU.

In December 2024, the Company reported positive initial data from the ongoing OLE study.

This data included safety, FXN levels, clinical, pharmacokinetic data and dose escalation:

• Nomlabofusp was generally well tolerated for up to 260 days in subjects.

The most common adverse events were injection site reactions, with most being mild, brief in duration, and self-limited.

Two participants had serious adverse events (one seizure and one anaphylactic reaction) that resolved within 24 hours and withdrew from the study;

• Long-term 25 mg tissue FXN levels showed positive mean change from baseline of 1.32 pg/μg in buccal cells and 9.28 pg/μg in skin cells at Day 90 and that 25 mg of nomlabofusp increased and maintained tissue FXN levels over time, increasing from a mean level of 15 % of HV at baseline to 30 % in buccal cells and from 16 % to 72 % in skin cells at Day 90;

• Tissue FXN levels appear to reach steady-state levels by Day 30 in buccal cells;

• Early clinical data showed trends toward improvement across a number of clinical outcomes for long-term 25 mg daily nomlabofusp including:

(1) decreased values indicating early trends towards improvement in the Modified Friedreich Ataxia Rating Scale (mFARS) and the FARS-Activities of Daily Living ("ADL"), Modified Fatigue Impact Scale and 9 hole peg test at 90 days relative to baseline;

• Key pharmacokinetic data showed rapid absorption after subcutaneous administration with exposure appearing to reach steady state in plasma by day 30 with no further accumulation, which is consistent with data from our Phase 1 and Phase 2 studies.

Also in December 2024, Larimar announced that it was increasing the dose in the OLE to 50 mg of nomlabofusp daily for then currently enrolled and all future OLE study participants.

In March 2025, the Company announced that its Safety Monitoring Team has deemed anaphylaxis as an adverse drug reaction likely associated with nomlabofusp and therefore, Larimar expects to see additional reactions.

To reduce the risk of allergic reactions, including anaphylaxis, Larimar amended the OLE protocol to administer premedication for the first month of dosing.

The OLE study is ongoing with seven sites activated and participants continuing to enroll.

All study participants are currently receiving the 50 mg dose of nomlabofusp.

The Company plans to provide an update on OLE data on at least 30 to 40 study participants, some of whom have been receiving nomlabofusp for more than a year, in September 2025.

In January 2025, Larimar initiated dosing of adolescents (12-17 years old) in a PK run-in study for pediatric patients with FA.

Study participants in the PK run-in study are randomized 2:1 to receive either nomlabofusp at a weight-base dose expected to match the PK of adults receiving the 50 mg dose, or placebo, daily for seven days.

Following assessment of safety and PK data, participants will be eligible to screen for the OLE study.

The data from this cohort is expected to be presented during the nomlabofusp program update in September 2025.

In March 2025, Larimar announced that FDA stated in written correspondence associated with a meeting through the START pilot program that they are open to considering the use of FXN concentration as a reasonably likely surrogate endpoint (“RLSE”) and the acceptability of FXN’s use as an RLSE would ultimately be a matter of review of the data in a future marketing application.

FDA recommended focusing on assessments of skin FXN concentrations rather than buccal FXN concentrations due to more consistent sampling and less variability.

FDA acknowledged that data the Company recently submitted appear to support a relationship between increased FXN concentrations in skin cells and relevant tissues such as the heart, dorsal root ganglion and skeletal muscle.

FDA also acknowledged that the nonclinical studies Larimar submitted were performed at relevant human doses.

FDA also suggested that Larimar consider exploring the relationship between increases in FXN in skin and changes in pharmacodynamic (PD) markers such as lipid profiles and/or clinical measures to provide additional support for the use of FXN as an RLSE.

Larimar plans to continue discussions with FDA regarding the adequacy of the safety data set for a BLA submission seeking accelerated approval targeted for year-end 2025.

Additionally, the Company has obtained feedback from both FDA and EMA on the global Phase 3 study protocol and is on track to initiate the study by mid-2025 with potential sites in the U.S., E.U., U.K, Canada, and Australia.

The Company is subject to risks and uncertainties common to pre-commercial companies in the biotechnology industry, including, but not limited to, development and commercialization by competitors of new technological innovations, dependence on key personnel, protection of proprietary technology, compliance with governmental regulations, failure to secure regulatory approval for its drug candidates or any other product candidates and the ability to secure additional capital to fund its operations.

Product candidates under development will require extensive non-clinical and clinical testing and regulatory approval prior to commercialization.

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

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

capabilities.

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

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All intercompany balances and transactions have been eliminated.

The accompanying consolidated financial statements have been prepared in conformity with GAAP.

The accompanying consolidated financial statements have been prepared in conformity with U.

Generally Accepted Accounting Principles ("GAAP") .

Liquidity and Capital Resources

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Since its inception, the Company has incurred significant recurring operating losses and negative cash flows from operations.

The Company has incurred net losses of $ 36.9 million and $ 35.4 million for the years ended December 31, 2023, and 2022, respectively.

The Company has incurred net losses of $ 80.6 million and $ 36.9 million for the years ended December 31, 2024, and 2023, respectively, and cash flow used in operations of $ 70.8 million and $ 33.5 million for the years ended December 31, 2024 and 2023, respectively.

In addition, as of December 31, 2024, the Company had an accumulated deficit of $ 269.2 million .

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In February 2024, the Company sold 19,736,842 shares of its common stock in an underwritten public offering at a price of $ 8.74 per share and received net proceeds of approximately $ 161.8 million.

In accordance with Accounting Standards Update (“ASU”) No.

2014-15, "Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern", the Company has evaluated whether there are certain conditions and events, considered in the aggregate, that raise substantial doubt about the Company’s ability to continue as a going concern within one year after the date that these consolidated financial statements are issued.

As of the issuance date of these consolidated financial statements, the Company expects its cash, cash equivalents and marketable securities, including its net proceeds from the February 2024 public offering, will be sufficient to fund its forecasted operating expenses and capital expenditure requirements into 2026.

If the timing of the Company's clinical assumptions are delayed or if there are other forecasted assumption changes that negatively impact its operating plan, the Company would reduce expenditures in order to further extend cash resources.

In accordance with Accounting Standards Codification (“ASC”) 205, "Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern", the Company has evaluated whether there are certain conditions and events, considered in the aggregate, that raise substantial doubt about the Company’s ability to continue as a going concern within one year after the date that these consolidated financial statements are issued.

As of the issuance date of these consolidated financial statements, the Company expects its cash, cash equivalents and marketable securities will be sufficient to fund its forecasted operating expenses and capital expenditure requirements into the second quarter of 2026.

The Company has not yet commercialized any products and does not expect to generate revenue from the commercial sale of any products for several years, if at all.

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These strategies include seeking additional funding through a combination of public or private equity offerings, debt or royalty financings, collaborations and licensing arrangements, strategic partnerships with pharmaceutical and/or larger biotechnology companies, or other sources.

The incurrence of indebtedness would result in increased fixed payment obligations and the Company may be required to agree to certain restrictive covenants, such as limitations on its ability to incur additional debt, limitations on its ability to acquire, sell or license intellectual property rights, minimum required cash balances and other operating restrictions that could adversely impact the Company's ability to conduct its business.

The incurrence of indebtedness would result in increased payment obligations and the Company may be required to agree to certain restrictive covenants, such as limitations on its ability to incur additional debt, limitations on its ability to acquire, sell or license intellectual property rights, minimum required cash balances and other operating restrictions that could adversely impact the Company's ability to conduct its business.

Any additional fundraising efforts may divert the Company's management from their day-to-day activities, which may adversely affect its ability to develop and commercialize its product candidates.

There can be no assurance that the Company will be able to raise sufficient additional capital on acceptable terms, if at all.

limit, or eliminate the development of business opportunities and its ability to achieve its business objectives, its competitiveness, and its business, financial condition, and results of operations will be materially adversely affected.

The Company could also be required to seek funds through arrangements with collaborative partners or otherwise at an earlier stage than otherwise would be desirable and it may be required to relinquish rights to some of its technologies or product candidates or otherwise agree to terms unfavorable to it, any of which may have a material adverse effect on the Company's business, operating results and prospects.

If such additional financing is not available on satisfactory terms, or is not available in sufficient amounts, or if the Company does not have sufficient authorized shares, the Company may be required to delay, limit, or eliminate the development of business opportunities and its ability to achieve its business objectives, its competitiveness, and its business, financial condition, and results of operations will be materially adversely affected.

adverse effect on the Company's business, operating results and prospects.

In addition, geopolitical tensions, volatility of capital markets, and other adverse macroeconomic events, including those due to inflationary pressures, rising interest rates, bank instability and the ability of the U.S.

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If the Company is unable to obtain sufficient funding when needed and/or on acceptable terms, the Company may be required to significantly curtail, delay or discontinue one or more of its research and development programs, the manufacture of clinical and commercial supplies, product portfolio expansion, pre commercialization efforts and/or commercial operations, which could adversely affect its business prospects, or the Company may be unable to continue operations.

Summary of Significant Accounting Policies

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When the fair value is below the amortized cost the amount of the expected credit loss is estimated.

The credit-related impairment amount, if any, would be recognized in net income;

The credit-related impairment amount, if any, would be recognized in net

the remaining impairment amount and unrealized gains are reported as a component of accumulated other comprehensive income in stockholders’ equity.

Credit losses, if any, are recognized through the use of an allowance for credit losses account and subsequent improvements in expected credit losses are recognized as a reversal of the allowance account.

If the Company has the intent to sell the security or if it is more likely than not that the Company would be required to sell the security prior to recovery of its amortized cost basis, the allowance for credit loss would be written off and the excess of the amortized cost basis of the asset over its fair value is recorded in net income.

Property and Equipment

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Any impairment loss, if indicated, is measured as the amount by which the carrying amount of the asset exceeds the estimated fair value of the asset.

Segment Information

The Company manages its operations as a single operating segment for the purposes of assessing performance and making operating decisions.

The Company’s focus is on the research, development and commercialization of novel therapeutics for the treatment of rare diseases.

Research and Development Costs

Costs associated with internal research and development and external research and development services, including drug development, clinical studies and non-clinical studies, are expensed as incurred.

Research and development expenses include costs for salaries, employee benefits, subcontractors, facility-related expenses, depreciation, stock-based compensation, third-party license fees, laboratory supplies, and external costs of outside vendors engaged to conduct discovery, non-clinical and clinical development activities and clinical trials as well as to manufacture clinical trial materials, and other costs.

Costs associated with internal research and development and external research and development services, including drug manufacturing and scale- up, other drug development and testing costs, clinical studies and non-clinical studies, are expensed as incurred.

The Company recognizes external research and development costs based on an evaluation of the progress to completion of specific tasks using information provided to the Company by its key service providers.

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The expected dividend yield considers the fact that the Company has never paid cash dividends on common stock and does not expect to pay any cash dividends in the foreseeable future.

Segment Information

Operating segments are defined as components of an enterprise for which separate discrete information is available for evaluation by the chief operating decision maker, or decision making group, in deciding how to allocate resources in assessing performance.

The Company is managed on a consolidated basis and has one operating and reportable segment related to the development of clinical and preclinical product candidates for the development of the Company’s proprietary new therapies, primarily nomlabofusp, the Company's life science segment.

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

The accounting policies of the life science segment are the same as those described in the summary of significant accounting policies.

The CODM assesses performance for the Company and its reportable segment based on net loss, which is reported on the consolidated Statements of Operations.

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

All long-lived assets are located in the U.S.

To date, the Company has not generated any product revenue.

The Company expects to continue to incur significant expenses and operating losses for the foreseeable future as it advances product candidates through all stages of development and clinical trials and regulatory approval.

The CODM uses consolidated financial information, including consolidated net loss, to evaluate performance, forecast future period financial results, allocate resources for the company by, among other things, comparing budgeted to actual results.

The table below summarizes the significant expense categories regularly reviewed by the CODM for the twelve months ended December 31, 2024 and 2023:

Operating expenses:

Technical operations

Nomlabofusp support

General and administrative

Total operating expenses

Other income, net

The Company accounts for income taxes using the asset and liability method, which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been recognized in the consolidated financial statements or in the Company’s tax returns.

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Comprehensive gain (loss) includes net loss as well as other changes in stockholders’ equity that result from transactions and economic events other than those with stockholders.

For the years ended December 31, 2023 and 2022 , the Company’s only element of other comprehensive loss was unrealized loss on marketable securities.

For the years ended December 31, 2024 and 2023 , the Company’s only element of other comprehensive gain (loss) was unrealized gain (loss) on marketable securities.

Net Loss Per Share

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Diluted net loss per share attributable to common stockholders is computed by dividing the diluted net loss attributable to common stockholders by the weighted average number of common shares, including potentially dilutive common stock equivalents assuming the dilutive effect of outstanding stock options, outstanding restricted stock units, and unvested restricted common shares, as determined using the treasury stock method.

For periods in which the Company has reported net losses (all periods since inception), diluted net loss per common share attributable to common stockholders is the same as basic net loss per common share attributable to common stockholders, since dilutive common stock equivalents are not assumed to have been issued if their effect is antidilutive.

For periods in

which the Company has reported net losses (all periods since inception), diluted net loss per common share attributable to common stockholders is the same as basic net loss per common share attributable to common stockholders, since dilutive common stock equivalents are not assumed to have been issued if their effect is antidilutive.

The Company excluded 7,135,390 and 4,888,502 options to purchase common stock, outstanding as of December 31, 2024 and 2023 respectively, from the computation of diluted net loss per share for the twelve months ended December 31, 2024 and 2023 , respectively, because they had an anti-dilutive impact due to the net loss incurred for the periods.

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We have assessed the recently issued guidance that is not yet effective and believe the new guidance will not have a material impact on the consolidated results of operations, cash flows or financial position.

In November 2023, the Financial Accounting Standards Board (“FASB”) issued ASU 2023-07, Segment Reporting (Topic 280):

Improvements to Reportable Segment Disclosures (“ASU 2023-07”).

ASU 2023-07 requires disclosure of incremental segment information on an annual and interim basis.

The amendments also require companies with a single reportable segment to provide all disclosures required by this amendment and all existing segment disclosures in ASC 280, Segment Reporting.

The amendments are effective for fiscal years beginning after December 15, 2023, and interim periods beginning after December 15, 2024.

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

ASU 2023-07 only impacted the disclosures and did not impact the consolidated financial statements.

See Note 2, Segment Information, for disclosures related to the adoption of ASU 2023-07.

Recently Issued Accounting Pronouncements Not Yet Adopted

In December 2023, the FASB issued ASU No.

2023-09, “Improvements to Income Tax Disclosures (Topic 740),” which requires entities to disclose in their rate reconciliation table additional categories of information about federal, state and foreign income taxes as well as additional information about reconciling items if certain quantitative thresholds are met.

This ASU will require all entities to disclose income taxes paid, net of refunds, disaggregated by federal (national), state and foreign taxes for annual periods and to disaggregate the information by jurisdiction based on a quantitative threshold.

All entities are required to apply the guidance prospectively, with the option to apply it retrospectively.

The ASU is effective for fiscal years beginning after December 15, 2024, with early adoption permitted.

The Company has determined it will adopt this ASU on January 1, 2025, the adoption of which is not expected to have a material impact on the Company’s consolidated results of operations or cash flows.

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”, which requires disaggregated disclosures in the notes of the financial statements of certain categories of expenses that are included in expense line items on the face of the income statement.

This ASU is effective for annual periods beginning after December 15, 2026, and interim periods within annual reporting periods beginning after December 15, 2027.

Early adoption is permitted.

The Company will evaluate the impact adopting ASU 2024-03 will have on the Company's consolidated financial statements and disclosures.

Fair Value Measurements and Cash Equivalents/Marketable Securities

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Cash equivalents:

Money market funds invested in government securities

Money market funds invested in government

Total cash equivalents

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Government securities

Corporate bonds

Total marketable securities

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Cash equivalents:

Money market funds invested in government securities

Money market funds invested in government

Total cash equivalents

Marketable securities:

Treasury Bills

Government securities

Corporate bonds

Total marketable securities

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During the twelve months ended December 31, 2024 and 2023 , the Company did no t recognize any impairment losses related to investments.

As of December 31, 2023, the Company's cash equivalents and marketable securities consisted of a U.S.

As of December 31, 2024 and 2023, the Company's cash equivalents and marketable securities consisted of a U.S.

government money market fund, U.S.

Treasury Bills, U.S.

government and agency securities and corporate bonds, all held in our name in a separate custody account with U.S.

Treasury Bills and U.S.

government and agency securities, all held in our name in a separate custody account with U.S.

government money market fund has same-day liquidity access and the U.S.

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Treasury Bills

Government securities (due within 1 year)

Commercial paper (due within 1 year)

Government securities

Total marketable securities

December 31, 2023

Government securities (due within 1 year)

Treasury Bills

Government securities

Corporate bonds

Prepaid Expenses and Other Current Assets

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Prepaid research and development expenses

Interest receivable

Prepaid insurance

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Property, plant and equipment, net

Depreciation expense was $ 0.2 million for the years ended December 31, 2023 and 2022, respectively.

Depreciation expense was $ 0.3 million and $ 0.2 million for the years ended December 31, 2024 and 2023, respectively.

In addition, for the years ended December 31, 2024 and 2023 , there was $ 0.1 million of depreciation related to sublet assets recorded as other expense.

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No cash dividends have been declared or paid to date.

In September 2022, the Company sold 25,558,750 shares of common stock in an underwritten public offering price of $ 3.15 per share and received net proceeds, net of underwriting discounts and commissions and offering costs of $ 75.2 million.

In February 2024, the Company sold 19,736,842 shares of its common stock in an underwritten public offering price of $ 8.74 per share and received net proceeds of approximately $ 161.8 million.

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No ATM Shares were ever sold pursuant to the 2022 ATM Agreement.

In May 2024, the Company entered into a sales agreement (the "ATM Agreement") with Guggenheim Securities, LLC in connection with the establishment of an “at-the-market” offering program under which the Company could sell up to an aggregate of $ 100 million of shares of common stock (the “ATM Shares”) from time to time.

To date, no sales of common stock have been made under this ATM Agreement.

2020 Equity Incentive Plan

The Board adopted the 2020 Equity Incentive Plan (the "2020 Plan") on July 16, 2020 and the stockholders of the Company approved the 2020 Plan on September 29, 2020.

The 2020 Plan replaced the predecessor plans (the

"Prior Plans") that the Company assumed following its merger with Zafgen in May 2020.

The 2020 Plan replaced the predecessor plans (the "Prior Plans") that the Company assumed following its merger with Zafgen in May 2020.

Options outstanding under the Prior Plans will remain outstanding, unchanged, and subject to the terms of the Prior Plans and the respective award agreements, and no further awards will be made under the Prior Plans.

However, if any award previously granted under the Prior Plans, expires, terminates, is canceled, or is forfeited for any reason after the approval of the 2020 Plan, the shares subject to that award will be added to the 2020 Plan share pool so that they can be utilized for new grants under the 2020 Plan.

The 2020 Plan provides for the grant of incentive stock options (“ISOs”), nonstatutory stock options (“NSOs”), stock appreciation rights, restricted stock awards, restricted stock unit awards, and cash or other stock-based awards.

ISOs may be granted only to the Company’s employees, including the Company’s officers, and the employees of the Company’s affiliates.

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2024 Option Grants

During the twelve months ended December 31, 2023 , the Company granted options to purchase 1,388,200 shares of common stock to employees under the 2020 Plan.

The options have an exercise price equal to the closing stock price as of the grant date, and vest over four years , with 25 % vesting on the first anniversary of the grant and the remainder vesting in equal monthly installments thereafter.

The weighted-average grant date fair value of options granted under the 2020 Plan during the twelve months ended December 31, 2023 and 2022 was $ 3.70 and $ 5.21 , respectively.

During the twelve months ended December 31, 2024 , the Company granted options to purchase 2,235,377 shares of common stock to employees and directors under the 2020 Plan.

The options have an exercise price equal to the closing stock price as of the grant date.

Of the 2,235,377 options granted, 2,140,377 were granted to employees and vest over four years , with 25 % vesting on the first anniversary of the grant and the remainder vesting in equal monthly installments thereafter.

The remaining 95,000 options were annual grants to the Company's directors and vest one year from the grant date.

The weighted-average grant date fair value of options granted under the 2020 Plan during the twelve months ended December 31, 2024 was $ 4.25 .

As of December 31, 2024 , total unrecognized compensation expense related to unvested stock options granted under the 2020 Plan was $ 10.7 million, which is expected to be recognized over a weighted average period of 2.63 years.

Inducement Stock Option Grant

During the twelve months ended December 31, 2023, the Company granted options to purchase 360,000 shares of common stock granted outside of the 2020 Plan.

These grants were made pursuant to the Nasdaq inducement grant exception in accordance with Nasdaq listing rule 5635(c)(4).

The options issued under this inducement grant have an exercise price equal to the closing stock price as of the grant date, and vest over four years , with 25 % vesting on the first anniversary of the grant and the remainder vesting in equal monthly installments thereafter.

The weighted-average grant date fair value of options granted under this inducement grant during the twelve months ended December 31, 2023 was $ 3.59 .

There were no inducement grants in twelve months ended December 31, 2022.

There were no inducement awards granted in the twelve months ended December 31, 2024.

As of December 31, 2024 , total unrecognized compensation expense related to unvested inducement options granted under the 2020 Plan was $ 0.7 million, which is expected to be recognized over a weighted average period of 2.28 years.

Restricted Stock Units

In January 2023, RSUs were granted under the 2020 Plan to the Company's employees in order to maintain retention of key employees.

RSUs were granted under the 2020 Plan to the Company's employees in order to maintain retention of key employees.

The value of an RSU award is based on the Company's stock price on the date of the grant.

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Restricted stock units granted

Restricted stock units vested

Restricted stock units forfeited

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Restricted Stock Unit Grants

The RSUs vest annually over four years and have a weighted-average grant date fair value of $ 4.94 per unit.

During the twelve months ended December 31, 2024 , the Company granted 245,372 shares of RSUs to employees under the 2020 Plan.

The RSUs vest annually over four years and have a weighted-average grant date fair value during the twelve months ended December 31, 2024 of $ 4.21 .

As of December 31, 2024 , total unrecognized compensation expense for RSUs was $ 2.3 million, which is expected to be recognized over a weighted-average period of 2.4 years.

January 2024 Option and Restricted Stock Unit Grants

On January 17, 2024, the Company granted options to purchase 1,472,175 shares of common stock and 245,363 shares of restricted stock to employees under the 2020 Plan.

The options have an exercise price equal to the closing stock price as of the grant date, and vest over four years , with 25 % vesting on the first anniversary of the

grant and the remainder vesting in equal monthly installments thereafter.

January 2025 Option, Restricted Stock Unit Grants and Performance-Based Restricted Stock Units

On January 22, 2025, the Company granted options to purchase 2,084,162 shares of common stock, 347,360 shares of restricted stock units and 200,000 Performance-based restricted stock units to employees under the 2020 Plan.

The shares of restricted stock will vest annually over four years .

The performance-based restricted stock units were granted to the Company's named executive officers.

The grants included two performance milestones.

The fist milestone, which relates to 20 % of each grant, will vest if the FDA accepts the filing of a biologic license application for accelerated approval of nomlabofusp by December 31, 2026.

The second milestone, representing 80 % of each grant will vest if the FDA approves the Company nomlabofusp BLA within 12 months of the BLA acceptance (no later than December 31, 2027.) If the first milestone is not achieved by December 31, 2026, the full grant will be forfeited.

Stock-Based Compensation

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Bala Cynwyd Office Space

On August 8, 2019, the Company entered into an operating lease for office space in Bala Cynwyd, Pennsylvania, effective as of December 15, 2019, for a period of three years and six months with an option to extend the lease for three additional years.

On August 8, 2019, the Company entered into an operating lease for 4,642 square feet of office space in Bala Cynwyd, Pennsylvania, effective as of December 15, 2019, for a period of three years and six months with an option to extend the lease for three additional years.

Due to required tenant improvements to be completed by the landlord, the Company did not take immediate possession of the leased property and the lease term commenced on February 15, 2020 .

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The new lease on 3,462 additional square footage commenced on October 1, 2023 and the Company recorded a right of use asset and lease liability of $ 0.3 million as of that date.

The right of use assets and lease liabilities with both these leases are reflected in the financial statements for the year ended December 31, 2023 as are the right of use asset and lease liability of the Company's Boston office space discussed below.

The right of use assets and lease liabilities with these leases are reflected in the financial statements for the year ended December 31, 2024 as are the right of use asset and lease liability of the Company's Boston office space and lab space discussed below.

Boston Office Lease

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The lease expires on October 30, 2029 .

As part of the agreement, the Company is required to maintain a letter of credit, which upon signing was $ 1.3 million and is classified as restricted cash within the condensed consolidated financial statements.

As part of the agreement, the Company was initially required to maintain a letter of credit, of $ 1.3 million.

In October of 2024, upon the agreement with the landlord that we had achieved certain clinical development milestones required in the lease, this letter of credit was reduced to $ 0.6 million.

During both periods presented, this cash deposit and is classified as restricted cash within the consolidated financial statements.

In addition to the base rent, the Company is also responsible for its share of operating expenses, electricity and real estate taxes, which costs are not included in the determination of the leases’ right-of-use assets or lease liabilities.

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On August 9, 2021, the Company executed the remaining option to extend the lease for an additional year, expiring on December 31, 2022 .

In January 2023, the Company executed an extension of this lease for an additional year, expiring on December 31, 2023 .

The Company has determined this lease extension qualifies as a short-term lease and have applied the accounting policy election to not record the related right-of-use asset and lease liabilities.

On October 16, 2023, the Company entered into an operating lease for lab space in King of Prussia, Pennsylvania for a period of four years .

Due to required tenant improvements to be completed by the landlord, the Company did not take immediate possession of the leased property and the lease term is expected to commence in the second quarter of 2024, no right of use asset or lease liability will be recorded until the lease commencement date.

In September 2023, the Company extended this lease for an additional year with the option to terminate with four months' notice.

On March 28, 2024, the Company gave the requisite notice and vacated the property in May 2024.

On October 16, 2023, the Company entered into an operating lease for alternate lab space in King of Prussia, Pennsylvania for a period of four years .

Due to required tenant improvements to be completed by the landlord, the Company did not take immediate possession of the leased property.

The actual lease term commenced on May 10, 2024 .

Upon commencement of the lease term, the Company recorded a right of use asset and lease liability of $ 0.5 million which are reflected in these consolidated financial statements.

Lease Expense

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For operating leases, the weighted-average remaining lease term for leases at December 31, 2024 and 2023 was 4.5 and 5.5 years, respectively.

For operating leases, the weighted

average discount rate for leases at December 31, 2023 and 2022 was 11.0 %.

For operating leases, the weighted average discount rate for leases at December 31, 2024 and 2023 was 11.0 %.

The Company has not entered into any financing leases.

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The Company has not conducted a study to assess whether a change of control has occurred or whether there have been multiple changes of control since inception.

If the Company experienced a change of control, as defined by Section 382, at any time since inception, utilization of its net operating loss carryforwards or tax credit carryforwards would be subject to an annual limitation under Section 382, which is determined by first multiplying the value of the Company’s stock at the time of the ownership change by the applicable long-term tax-exempt rate, and then could be subject to additional adjustments, as required.

multiplying the value of the Company’s stock at the time of the ownership change by the applicable long-term tax-exempt rate, and then could be subject to additional adjustments, as required.

Additionally, our July 2021, September 2022 and February 2024 equity transactions could also limit our ability to utilize NOLs in the future.

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The Tax Cuts and Jobs Act ("TCJA") requires taxpayers to capitalize and amortize research and experimental expenditures under IRC Section 174 for tax years beginning after December 31, 2021.

This rule became effective for the Company during the year ended December 31, 2022 and resulted in the capitalization of research and development costs in both 2023 and 2022.

This rule became effective for the Company during the year ended December 31, 2022 and resulted in the capitalization of research and development costs of $ 69.2 million, $ 24.5 million and $ 22.2 million in 2024, 2023 and 2022, respectively.

The Company is amortizing these costs for tax purposes over five years if the research and development was performed in the U.S.

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The Company’s policy is to record interest and penalties related to income taxes as part of its income tax provision.

Related Party

In May 2024, the Company entered into an agreement with the Friedreich’s Ataxia Research Alliance (FARA) to join the TRACK-FA Neuroimaging Consortium that includes pharmaceutical, biotechnology, academic and clinical partners.

The consortium will conduct a natural history study designed to establish disease-specific neuroimaging biomarkers to track disease progression in the brain and spinal cord and provide a basis for utilizing these biomarkers in clinical trials.

As an industry partner, the Company will help fund the study and contribute to the study design, research activities, and analysis.

The Company will have access to all study data for use in its regulatory filings, as appropriate.

During the twelve months ended December 31, 2024 , the Company incurred $ 0.9 million of costs related to the Track-FA program and will fund future costs going forward.

One of the Company’s Directors is also a director of FARA.

Additionally, during the twelve months ended December 31, 2024 , the Company sponsored patient and caregiver awareness events held by FARA for a cumulative $ 0.1 million.

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