What changed in this filing

/stocks — the workspaceLOADING

Item 9A. Controls and Procedures

2026-03-19 compared with 2025-03-24 · 201 added, 208 removed, 640 unchanged (39% of the section changed)

61 unchanged sentences

(formerly known as Zafgen, Inc.) (incorporated by reference to Exhibit 3.2 of the Company’s Current Report on Form 8-K filed on June 24, 2014).

Certificate of Designation of Preferences, Rights and Limitations of Series A Convertible Preferred Stock (incorporated herein by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K (File No.

001-36510) filed on December 17, 2025).

Certificate of Amendment to Certificate of Designation of Preferences, Rights and Limitations of Series A Convertible Preferred Stock (incorporated herein by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K (File No.

001-36510) filed on January 22, 2026).

Description of the Company’s Securities Registered Pursuant to Section 12 of the Securities Exchange Act of 1934 (incorporated by reference to Exhibit 4.2 of the Company’s Annual Report on Form 10-K filed March 4, 2021).

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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).

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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Employment Agreement dated May 23, 2023, by and between the Company and Russell Clayton (incorporated by reference to Exhibit 10.1 of the Company’s Quarterly Report on Form 10-Q filed on August 10, 2023).

License Agreement, by and between the Company and Wake Forest University Health Sciences, effective as of November 30, 2016.

(incorporated by reference to Exhibit 10.6 of the Company’s Quarterly Report on Form 10-Q filed on August 14, 2020).

Amendment 1 to License Agreement, by and between the Company and Wake Forest University Health Sciences, effective as of November 28, 2017 (incorporated by reference to Exhibit 10.7 of the Company’s Quarterly Report on Form 10-Q filed on August 14, 2020).

Amendment 2 to License Agreement, by and between the Company and Wake Forest University Health Sciences, effective as of March 29, 2019 (incorporated by reference to Exhibit 10.8 of the Company’s Quarterly Report on Form 10-Q filed on August 14, 2020).

License Agreement, by and between the Company and Indiana University Research and Technology Corporation, effective as of November 30, 2016 (incorporated by reference to Exhibit 10.9 of the Company’s Quarterly Report on Form 10-Q filed on August 14, 2020).

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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.

Exchange Agreement, dated December 16, 2025, by and between Larimar Therapeutics, Inc.

the Stockholder named therein (incorporated by reference to Exhibit 10.1 to the Company’s

Current Report on Form 8-K filed on December 17, 2025).

Exchange Agreement, dated January 21, 2026, by and between Larimar Therapeutics, Inc.

the Stockholder named therein (incorporated by reference to Exhibit 10.1 to the Company’s

Current Report on Form 8-K filed on January 22, 2026).

Insider Trading Policy (incorporated by reference to Exhibit 19.1 to the Company’s Form 10-K filed on March 24, 2025).

Subsidiaries of Larimar Therapeutics, Inc.

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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.

As discussed in Note 1 to the consolidated financial statements, the Company has incurred recurring operating losses and negative cash flows from operations.

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

Critical Audit Matters

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Accrued Research and Development Expenses

As described in Notes 2 and 6 to the consolidated financial statements, 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.

provided to the Company by its key service providers.

Within accrued expenses, total accrued research and development expenses amounted to $53.9 million as of December 31, 2025.

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.

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.

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(ii) evaluating the appropriateness of the method used by management to develop the estimate;

(iii) testing the completeness and accuracy of the data used by management to develop the estimates related to 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;

(iv) evaluating the reasonableness of the estimated costs incurred for the services which have not been invoiced or other notification of actual costs have not yet been received, on a sample basis, by tracing to underlying supporting documentation, such as underlying contracts, invoices and information received from certain third party service vendors, where applicable, and;

(v) testing a selection of invoices received by the Company subsequent to December 31, 2024.

(iv) evaluating the reasonableness of the estimated costs incurred for the services which have not been invoiced or other notification of actual costs have not yet been received, on a sample basis, by tracing to underlying supporting documentation, such as underlying contracts, invoices, and confirmations received from certain third party service vendors, where applicable;

and (v) testing a selection of invoices received by the Company subsequent to December 31, 2025.

/s/ PricewaterhouseCoopers LLP

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Cash and cash equivalents

Marketable securities

Short-term marketable securities

Prepaid expenses and other current assets

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$ 0.001 par value per share;

5,000,000 shares authorized

as of December 31, 2024 and December 31, 2023;

no shares issued and

outstanding as of December 31, 2024 and December 31, 2023

5,000,000 shares

authorized as of December 31, 2025 and December 31, 2024;

250,000 and no shares issued and outstanding as of

December 31, 2025 and December 31, 2024, respectively

Common stock, $ 0.001 par value per share;

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Other income, net

Net loss per share, basic and diluted

Weighted average common shares outstanding, basic and diluted

Comprehensive loss:

Other comprehensive loss:

Unrealized gain on marketable securities

Total other comprehensive gain

Unrealized gain (loss) on marketable securities

Total other comprehensive gain (loss)

Total comprehensive loss

Basic and diluted net loss per share

Preferred stock

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

Preferred stock

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

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(In thousands, except share data)

Preferred Stock

Comprehensive

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Issuance of common stock, net

Vesting of restricted stock units

Exercise of stock options

Issuance of Series A preferred stock in exchange for common stock

Vesting of restricted stock units, net of employee tax obligations

Stock-based compensation expense

Unrealized gain on marketable debt securities

Unrealized loss on marketable debt securities

Balances as of December 31, 2025

LARIMAR THERAPEUTICS, INC.

CONSOLIDATED STATEMENTS OF CHANGES IN

STOCKHOLDERS’ EQUITY (CONT.)

(In thousands, except share data)

Preferred Stock

Comprehensive

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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

Stock-based compensation expense

Unrealized gain on marketable securities

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Year Ended December 31,

Cash flows from operating activities:

Operating activities:

Adjustments to reconcile net loss to net cash used in operating activities:

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Depreciation expense

Net accretion of discount on marketable securities

Amortization of premium on marketable securities

Changes in operating assets and liabilities:

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Net cash used in operating activities

Cash flows from investing activities:

Purchase of property and equipment

Purchase of marketable securities

Maturities and sales of marketable securities

Investing activities:

Purchases of property and equipment

Purchases of marketable securities

Maturities of marketable securities

Net cash provided by (used in) investing activities

Cash flows from financing activities:

Proceeds from sale of common stock, net of issuance costs

Financing activities:

Proceeds from issuance of common stock, net of issuance costs

Proceeds from exercise of stock options and warrants

Net cash provided by financing activities

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

Net increase in cash, cash equivalents and restricted cash

Cash, cash equivalents and restricted cash at beginning of period

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Supplemental disclosure of non-cash investing and financing activities:

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

Leased assets obtained in exchange for new operating lease liabilities

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

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NOTES TO CONSOLID ATED FINANCIAL STATEMENTS

Description of Business and Basis of Presentation

Description of Business, Basis of Presentation and Liquidity and Capital Resources

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 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").

Larimar's lead product candidate, nomlabofusp 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.

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.

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.

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

Basis of Presentation

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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 July 2025, the Company sold 21,562,500 shares of its common stock in an underwritten public offering at a price of $ 3.20 per share and received net proceeds of approximately $ 65.0 million.

In February 2026, the Company sold 23,000,000 shares of its common stock in an underwritten public offering at a price of $ 5.00 per share.

and received net proceeds of approximately $ 107.6 million.

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.

The Company expects that its research and development and general and administrative expenses will continue to increase and, as a result, that it will need additional capital to fund its future operating and capital requirements.

As of the issuance date of these consolidated financial statements, the Company expects its cash, cash equivalents and marketable securities together with the net proceeds of its February 2026 underwritten public offering will be sufficient to fund its forecasted operating expenses and capital expenditure requirements into the second quarter of 2027.

The Company has not yet commercialized any products and its ability to commercialize nomlabofusp is dependent on receiving regulatory approval in the United States and/or other countries.

The Company expects that its research and development, general and administrative and commercial expenses will continue to increase and, as a result, that it may need additional capital to fund its future operating and capital requirements.

Unless and until the Company can generate substantial revenue, management continuously evaluates different strategies to obtain the required funding for future operations.

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.

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 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.

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

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.

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.

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.

or other countries, and bank instability and the ability of the U.S.

government to manage federal debt limits as well as the potential impact of other health crises on the global financial markets may reduce the Company's ability to access capital, which could negatively affect its liquidity and ability to continue as a going concern.

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.

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, commercialization efforts and/or commercial operations, which could adversely affect its business prospects, or the Company may be unable to continue operations.

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.

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The Company relies and expects to continue to rely on a small number of manufacturers to supply it with its requirements for drug substance and formulated drugs related to these programs.

The drug substance which is in frozen liquid form for nomlabofusp is currently manufactured for the Company by a third-party manufacturer, and the frozen liquid form of drug product is made at another manufacturer.

The Company is undertaking a program with a third manufacturer to begin to produce a lyophilized version of the drug product from the same drug substance, that, once available, the Company intends to use in certain of its future planned clinical trials.

The Company’s research and development programs could be adversely affected by a significant interruption in these manufacturing services or in the supply of drug substance and formulated drugs.

substance which is in frozen liquid form for nomlabofusp is currently manufactured for the Company by a third-party manufacturer, and the frozen liquid form of drug product is made at another manufacturer.

The Company is utilizing a different third manufacturer to produce a lyophilized version of the drug product from the same drug substance that the company is currently using in its ongoing clinical trial and plans, to use in certain of its future planned clinical trials.

The Company’s research and development programs and planned commercialization activities could be adversely affected by a significant interruption in these manufacturing services or in the supply of drug substance and formulated drugs.

Cash and Cash Equivalents

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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

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

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

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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.

Research and Development Costs

Research and Development Accruals

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.

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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:

The table below summarizes the significant expense categories regularly provided to the CODM for the twelve months ended December 31, 2025 and 2024:

For the Year Ended December 31,

Operating expenses:

Technical operations

Development (a)

Nomlabofusp support

General and administrative

General and administrative (b)

Commercial (c)

Total operating expenses

Other income, net

(a) Development expenses include research and development related stock compensation expense of approximately $ 3.5 million and $ 4.1 million for the twelve months ended December 31, 2025 and 2024, respectively.

(b) General and administrative expenses include general and administrative related stock compensation expense of approximately $ 3.5 million and $ 4.7 million for the twelve months ended December 31, 2025 and 2024, respectively.

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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For the years ended December 31, 2025 and 2024 , the Company’s only element of other comprehensive gain (loss) was unrealized gain (loss) on marketable securities.

Net Loss Per Share

Basic net loss per share is computed by dividing the net loss attributable to common stockholders by the weighted average number of common shares outstanding for the period.

Prior to August 11, 2023, basic shares outstanding includes the weighted average effect of the Company’s prefunded warrants issued in June 2020, the exercise of which requires little or no consideration for the delivery of shares of common stock.

These prefunded warrants were exercised on August 11, 2023 and the Company received cash proceeds of less than $ 0.1 million.

Accordingly, the 628,403 shares were issued upon the exercise of these warrants and are included in issued and outstanding common stock.

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.

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.

Recently Issued and Adopted Accounting Pronouncements

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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.

2023-09, “Income Taxes (Topic 740):

Improvements to Income Tax Disclosures.” This standard enhances disclosures related to income taxes, including the rate reconciliation and information on income taxes paid.

The Company adopted ASU No.

2023-09 effective December 31, 2025 , on a prospective basis, the impact of which is limited to additional income tax disclosures in the notes to the Company’s consolidated financial statements.

Recently Issued Accounting Pronouncements Not Yet Adopted

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

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Cash equivalents:

Money market funds invested in government

Money market funds invested in government securities

Total cash equivalents

Marketable securities:

Treasury Bills

Government securities

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Cash equivalents:

Money market funds invested in government

Money market funds invested in government securities

Total cash equivalents

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Government securities

Corporate bonds

Total marketable securities

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December 31, 2025

Treasury Bills

Government securities

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Government securities

Corporate bonds

Total marketable securities

Prepaid Expenses and Other Current Assets

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Other prepaid expenses and other assets

Total prepaid expenses and other assets

Total prepaid expense and other assets

Fixed assets, net consisted of the following:

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Leasehold improvements

Total property, plant and equipment

Total fixed assets

Accumulated depreciation

Property, plant and equipment, net

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.

Total fixed assets, net

Depreciation expense was $ 0.3 million for the years ended December 31, 2025 and 2024, respectively.

In addition, for the years ended December 31, 2025 and 2024 , respectively, there was less than $ 0.1 million and $ 0.1 million of depreciation related to sublet assets recorded as other expense.

Accrued Expenses

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Accrued other

Total accrued expenses and other current liabilities

Total accrued expense

Stockholders’ Equity and Stock Options

Common Stock and Prefunded warrants

On May 28, 2020, the Company entered into a securities purchase agreement with certain accredited investors (the “Purchasers”) for the sale by the Company in a private placement of 6,105,359 shares of the Company’s common stock and prefunded warrants to purchase an aggregate of 628,403 shares of the Company’s common stock, for a price of $ 11.88 per share of the common stock and $ 11.87 per prefunded warrant.

The prefunded warrants were exercisable at an exercise price of $ 0.01 and were exercisable indefinitely.

In August 2023, the 628,403 shares of prefunded warrants were exercised and the Company received cash proceeds of six thousand two hundred and eighty-four dollars .

The private placement closed on June 1, 2020.

The aggregate gross proceeds for the issuance and sale of the common stock and prefunded warrants were $ 80.0 million, transaction costs totaled $ 4.6 million and resulted in net proceeds of $ 75.4 million.

The Company’s Registration Statement on Form S-3, filed with the SEC on June 26, 2020, registered the resale of 6,105,359 shares of common stock sold and the 628,403 shares of common stock underlying the prefunded warrants.

MTS Health Partners served as placement agent to the Company in connection with the private placement.

As partial compensation for these services, the Company issued MTS Health Partners 35,260 shares of common stock.

As of December 31, 2024 , the Company’s Amended and Restated Certificate of Incorporation, authorized the Company to issue up to 115,000,000 shares of $ 0.001 par value common stock, of which 63,815,065 shares were issued and outstanding, and up to 5,000,000 shares of $ 0.001 par value undesignated preferred stock, of which no shares were issued or outstanding.

As of December 31, 2025 , the Company’s Amended and Restated Certificate of Incorporation, authorized the Company to issue up to 115,000,000 shares of $ 0.001 par value common stock, of which 83,090,392 shares were issued and outstanding, and up to 5,000,000 shares of $ 0.001 par value undesignated preferred stock, of which 250,000 shares were issued and outstanding.

The voting, dividend and liquidation rights of the holders of the Company’s common stock are subject to and qualified by the rights, powers and preferences of the holders of the preferred stock.

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No cash dividends have been declared or paid to date.

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.

In July 2025, the Company sold 21,562,500 shares of its common stock in an underwritten public offering at a price of $ 3.20 per share and received net proceeds of approximately $ 65.0 million.

In February 2026, the Company sold 115,000,000 shares of its common stock in an underwritten public offering at a price of $ 5.00 per share and received net proceeds of approximately $ 107.6 million.

ATM Agreement

In November 2022, the Company entered into a sales agreement (the "2022 ATM Agreement") with a 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 $ 50.0 million of shares of common stock (the “ATM Shares”) from time to time.

In February 2024, in connection with the underwritten public offering described above, the Company terminated the 2022 ATM Agreement.

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.

Preferred Stock

In December 2025, the Company entered into an exchange agreement (the “Exchange Agreement”) with Blue Owl Healthcare Opportunities IV Public Investments LP (the “Stockholder”) pursuant to which the Stockholder exchanged 2,500,000 shares of the Company’s common stock for 250,000 shares of newly designated Series A convertible preferred stock of par value $ 0.001 per share ( the “Series A Preferred Stock”).

In January 2026, the Stockholder exchanged an additional 2,500,000 shares of the Company’s common stock for an additional 250,000 shares of Series A convertible preferred stock.

Each share of the Series A Preferred Stock will be convertible into ten shares of common stock at the option of the holder at any time, subject to certain limitations, including that the holder will be prohibited from converting preferred stock into common stock if, as a result of such conversion, the holder, together with its affiliates, would beneficially own a number of shares of common stock more than 9.99 % of the total common stock then issued and outstanding immediately following the conversion of such shares of Series A Preferred Stock.

Holders of the Series A Preferred Stock are permitted to increase this percentage to an amount not to exceed 19.99 % upon 60 days’ notice.

Shares of Series A Preferred Stock will generally have no voting rights , except as required by law and except that the consent of a majority of the holders of the outstanding preferred stock will be required to amend the terms of the preferred stock.

In the event of the Company’s liquidation, dissolution or winding up, holders of series A preferred stock will participate pari passu with any distribution of proceeds to holders of common stock, calculated on an as-converted basis.

Holders of preferred stock are entitled to receive when, as, and if dividends are declared and paid on the common stock, an equivalent dividend, calculated on an as-converted basis.

Shares of series A Preferred Stock are otherwise not entitled to dividends.

The Series A Preferred Stock ranks on parity with the common stock and any class or series of capital stock of the Company created specifically ranking by its terms on parity with the preferred stock.

Additionally, it ranks senior to any class or series of capital stock of the Company hereafter created specifically ranking by its terms junior to the preferred stock and junior to any class or series of capital stock of Larimar created specifically ranking by its terms senior to any preferred stock, in each case, as to distributions of assets upon liquidation, dissolution or winding up of the Company, whether voluntarily or involuntarily.

2020 Equity Incentive Plan

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(i) 1,700,000 shares plus (ii) an annual increase on January 1, 2021 and each anniversary of such date thereafter through January 1, 2030, equal to the lesser of (A) 4 % of the shares issued and outstanding on the last day of the immediately preceding fiscal year, or (B) such smaller number of shares as determined by the Board (collectively, the “Plan Limit”).

The maximum aggregate number of shares that may be issued under the 2020 Plan is 8,000,000 over the ten-year term of the 2020 Plan.

As permitted by the 2020 Plan, the Company added 2,552,603 and 1,756,363 shares available for grant to the 2020 Plan on January 1, 2025 and January 1, 2024, respectively, increasing the maximum number of shares of the Company’s common stock that may be issued under the 2020 Plan as of January 1, 2025 to 3,179,529 shares.

During the twelve months ended December 31, 2024 and 2023 , respectively, options to purchase 1,242 and 224,437 shares issued under the Prior Plans were canceled and became available for grant under the 2020 Plan.

The maximum aggregate number of shares that may be issued in respect of incentive stock options under the 2020 Plan is 8,000,000 .

As permitted by the 2020 Plan, the Company added 3,323,616 and 2,552,603 shares available for grant to the 2020 Plan on January 1, 2026 and January 1, 2025, respectively, which has increased the maximum number of shares of common stock that may be issued under the 2020 Plan to 3,889,418 shares as of January 1, 2026.

During the twelve months ended December 31, 2025 and 2024 , options to purchase 1,333 and 1,242 , respectively, issued under the Prior Plans were canceled and became available for grant under the 2020 Plan.

In addition, as of December 31, 2025 , 565,802 shares of common stock were available for grant under the 2020 Plan.

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Stock Options

The following table summarizes the Company’s stock option activity for the twelve months ended December 31, 2024 (amounts in millions, except for share and per share data):

The following table summarizes the Company's stock option activity under the Company's 2020 Plan as well as inducement grants outside of the 2020 Plan for the twelve months ended December 31, 2025 :

Weighted Average

Term (in years)

(in millions)

Outstanding as of December 31, 2024

Forfeited/Expired

Options granted

Options forfeited/expired

Outstanding as of December 31, 2025

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As of December 31, 2025 , total unrecognized compensation expense related to unvested stock options granted under the 2020 Plan was $ 10.2 million, which is expected to be recognized over a weighted average period of 2.40 years.

Inducement Stock Option Grant

Inducement Stock Options

There were no inducement awards granted in the twelve months ended December 31, 2025.

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.

As of December 31, 2025 , total unrecognized compensation expense related to unvested inducement options granted outside of the under the 2020 Plan was $ 0.4 million, which is expected to be recognized over a weighted average period of 1.29 years.

Restricted Stock Units

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

RSUs are granted under the 2020 Plan to the Company's employees.

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

The shares underlying the RSUs are not issued until the RSUs vest.

Activity with respect to the Company's RSUs during the twelve months ended December 31, 2024 was as follows (in millions, except share, contractual term, and per share data):

Activity with respect to the Company's RSUs during the twelve months ended December 31, 2025 was as follows:

Weighted Average

Term (in years)

(in millions)

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As of December 31, 2025 , total unrecognized compensation expense for RSUs was $ 2.2 million, which is expected to be recognized over a weighted-average period of 2.11 years.

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 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.

Performance-Based Restricted Stock Units

In 2025, the Company's Board of Directors approved the issuance of 200,000 performance-based restricted stock units ( “2025 PSU Awards” ) to its executive officers under the 2020 Plan.

The 2025 PSU Awards include two performance milestones.

The first 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's 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 .

As of December 31, 2025 , the underlying performance criteria of the 2025 PSU Awards were determined to not be probable of achievement for accounting purposes, and no stock-based compensation expense was recognized for either the year ended December 31, 2025 or 2024.

January 2026 Option and Restricted Stock Unit Grants

On January 26, 2026, the Company granted options to purchase 2,107,880 shares of common stock and 532,435 shares of restricted stock units to employees under the 2020 Plan.

The options have an exercise price of $ 3.60 per share 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 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.

No performance-based restricted stock units were granted in 2026 to date.

Stock-Based Compensation

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Year Ended December 31,

(in thousands)

Research and development

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Intellectual Property Licenses

The Company is party to an exclusive License Agreement (the “WFUHS License”), dated November 30, 2016, as amended, with Wake Forest University Health Sciences (“WFUHS”) and an exclusive License Agreement (the “IU License”), dated November 30, 2016, as amended, with Indiana University (“IU”).

Such agreements provide for a transferable, worldwide license to certain patent rights regarding technology used by the Company with respect to the development of nomlabofusp.

Both agreements continue from their effective date through the last to date of expiration of the licensed patents, unless earlier terminated by either party in accordance with their terms.

In partial consideration for the right and license granted under these agreements, the Company will pay each of WFUHS and IU a royalty of a low single digit percentage of net sales of licensed products depending on whether there is a valid patent covering such products.

As additional consideration for these agreements, the Company is obligated to pay each of WFUHS and IU certain milestone payments of up to $ 2.6 million in the aggregate upon the achievement of certain developmental milestones, which commenced with the enrollment of the first patient in a Phase 1 clinical trial.

The Company enrolled the first patient in its SAD trial on December 11, 2019 and paid WFUHS and IU less than $ 0.1 million.

The Company will also pay each of WFUHS and IU sublicensing fees ranging from a high-single digit to a low double-digit percentage of sublicense consideration depending on the Company’s achievement of certain regulatory milestones as of the time of receipt of the sublicense consideration.

The Company is also obligated to reimburse WFUHS and IU for patent-related expenses.

The Company is party to an exclusive License Agreement, dated November 30, 2016, as amended, with Indiana University (“IU”).

Such agreement provides for a transferable, worldwide license to certain patent rights regarding technology used by the Company with respect to the development of nomlabofusp.

In partial consideration for the right and license granted under the agreement, the Company will pay IU a royalty of a low single digit percentage of net sales of licensed products depending on whether there is a valid patent covering such products.

As additional consideration for these agreements, the Company is obligated to pay IU certain milestone payments of up to $ 2.0 million in the aggregate upon the achievement of certain developmental milestones, which commenced with the enrollment of the first patient in a Phase 1 clinical trial.

The Company enrolled the first patient in its SAD trial on December 11, 2019 and paid IU less than $ 0.1 million.

The Company will also pay IU sublicensing fees ranging from a high-single digit to a low double-digit percentage of sublicense consideration depending on the Company’s achievement of certain regulatory milestones as of the time of receipt of the sublicense consideration.

The Company is also obligated to reimburse IU for patent-related expenses.

In the event that the Company disputes the validity of any of the licensed patents, the royalty rate would be tripled during such dispute.

The Company is also obligated to pay to IU a minimum annual royalty of less than $ 0.1 million per annum.

In the event that the Company is required to pay IU consideration, then the Company may deduct 20 % of such IU consideration on a dollar-for-dollar basis from the consideration due to WFUHS.

In the event that the Company is required to pay WFUHS consideration, then the Company may deduct 60 % of such WFUHS consideration on a dollar-for-dollar basis from the consideration due to IU.

In October 2022, the Company initiated dosing of a Phase 2 study.

Pursuant to the terms of both the WFUHS License and the IU License, the company recognized milestone expense of $ 0.3 million within research and development expenses.

Both agreements continue from their effective date through the last date of expiration of the licensed patents, unless earlier terminated by either party in accordance with their terms.

Pursuant to the terms of the IU License, the company recognized milestone expense of $ 0.1 million within research and development expenses.

The agreement continues from its effective date through the last to date of expiration of the licensed patent, unless earlier terminated by either party in accordance with the terms of the agreement.

We were previously a party to License Agreement dated November 30, 2016, with Wake Forest University Health Sciences (“WFUHS”), which licensed certain patent rights regarding technology used by us with respect to the development of nomlabofusp in consideration for an obligation to pay WFUHS a royalty of a low single digit percentage of net sales of licensed products, certain milestones, and certain sublicensing revenue.

The WFUHS license expired in December 2025 with the last to expire licensed patent.

The right of use assets and lease liabilities with the following leases are reflected in the financial statements for both the years ended December 31, 2025 and 2024.

Bala Cynwyd Office Space

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The lease extension on the original 4,642 square footage commenced on September 1, 2023 and the Company recorded a right of use asset and lease liability of $ 0.5 million as of that date.

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 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.

The lease extension on the 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.

On November 24, 2025, the Company executed the second amendment to the lease on the current 8,104 square footage of office space in Bala Cynwyd, Pennsylvania (which was set to expire in August 2026) and agreed to lease an additional 7,107 square feet of space from the same landlord.

The property was not yet made available for use due to the significant tenant improvement work being performed by the landlord.

Consequently, the Company determined that the lease has not yet commenced for accounting purposes.

No right of use asset or lease liability will be recorded until the lease commencement date.

Boston Office Lease

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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 .

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 possession of the leased property until the actual lease term commencement date of 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.

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Maturities of lease liabilities due under these lease agreements as of December 31, 2025 are as follows:

Year Ending December 31,

(in thousands)

Year ended December 31, 2026

Year ended December 31, 2027

Year ended December 31, 2028

Year ended December 31, 2029

Total lease payments

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The domestic and foreign components of loss before income taxes are as follows.

Years ended December 31,

A reconciliation of the U.S.

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

Year Ended December 31,

A reconciliation of the provision for income taxes to the amount computed by applying the 21 % U.S.

federal statutory income tax rate to income before income taxes after the adoption of ASU 2023-09 is as follows:

Year Ended December 31, 2025

(in thousands, except percentage)

Federal taxes at U.S.

statutory income tax rate

State taxes, net of federal benefit

Research and development tax credits

Change in valuation allowance

Non-taxable or non-deductible items

Other non-deductible items

Effective income tax rate

A reconciliation of the provision for income taxes to the amount computed by applying the 21 % U.S.

federal statutory income tax rate to income before income taxes for years prior to the adoption of ASU 2023-09 is as follows:

Year Ended December 31, 2024

Federal statutory income tax rate

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Nondeductible permanent differences

Stock compensation forfeitures - DTA Write Off

Change in deferred tax asset valuation allowance

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Changes to the valuation allowance were as follows:

Years ended December 31,

Year Ended December 31,

Valuation allowance as of the beginning of the year

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As of December 31, 2025 , the Company had federal net operating loss carryforwards that were generated after December 31, 2017 of $ 343.9 million that do not expire, however these carryforwards are limited to 80 % of the taxable income in any one tax period.

The increase in federal net operating losses carryforward is primarily driven by the pre-tax loss for the period and the current year expensing of domestic R&D costs.

As of December 31, 2025 , the Company also had available tax credit carryforwards for federal and state income tax purposes of $ 42.0 million which begin to expire in 2039 .

Utilization of the pre-Merger net operating loss carryforwards attributable to Zafgen, of approximately $ 33.5 million, are subject to a substantial annual limitation under Section 382 of the Internal Revenue Code of 1986 due to ownership changes occurred during the tax year associated with the Merger.

In addition to the limitation of the pre-Merger NOL’s of Zafgen, the net capitalized R&D deferred tax assets in the amount of $ 66.9 million is subject to the built-in loss rules under Section 382 and may not be realized if the underlying asset associated with the R&D is disposed within five years of the Merger, or May 28, 2025 .

Utilization of the pre-Merger net operating loss carryforwards attributable to Zafgen, of approximately $ 33.5 million, are subject to a substantial annual limitation

under Section 382 of the Internal Revenue Code of 1986 due to ownership changes occurred during the tax year associated with the Merger.

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

The ownership changes will limit the amount of pre-merger Zafgen carryforwards that can be utilized annually to offset future taxable income with an annual limitation of approximately $ 35 thousand per year.

The ownership changes will limit the amount of pre-merger Zafgen carryforwards that can be utilized annually to offset future taxable income.

The Company has reduced their NOL and R&D tax credit deferred tax assets associated with the pre-Merger Zafgen operations as a result of the 382 analysis.

The Company believes that as a result of its merger with Zafgen, its ability to utilize NOLs acquired in the transaction and our other NOLs is expected to be severely limited by Section 382 of the Code.

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

Additionally, the Company’s July 2021, September 2022, February 2024, July 2025 and February 2026 equity transactions could also limit its ability to utilize NOLs in the future.

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.

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.

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.

Any limitation may result in expiration of a portion of the net operating loss carryforwards or tax credit carryforwards before utilization.

Further, until a study is completed, and any limitation is known, no amounts are being presented as an uncertain tax position.

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.

The Tax Cuts and Jobs Act (“TCJA”) required 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 of $ 69.2 million, $ 24.5 million and $ 22.2 million in 2024, 2023 and 2022, respectively.

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and over 15 years if the research and development was performed outside the U.S.

On July 4, 2025, Public Law 119-21 was enacted and added new IRC Section 174A, which permanently restores the ability to immediately deduct domestic research and experimental expenditures for tax years beginning after December 31, 2024;

the requirement to capitalize and amortize foreign research and experimental expenditures over 15 years was not changed.

As of December 31, 2025 and 2024 , the Company’s net deferred tax asset balance before the valuation allowance was $ 232.8 million and $ 173.0 million, respectively, and was comprised principally of net operating loss carryforwards, capitalized research and development expenses and tax credit carryforwards.

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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.

The consortium is conducting 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 is helping fund the study and contribute to the study design, research activities, and analysis.

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

As of December 31, 2025 and December 31, 2024, the Company incurred $ 0.1 million and $ 0.9 million, respectively, of costs related to the TRACK-FA program.

Additionally, during the twelve months ended December 31, 2025 and 2024 , the Company sponsored patient and caregiver awareness events held by FARA for a cumulative $ 0.1 million in each period presented.

Net Loss Per Share Giving Effect to Conversion of Common Stock to Preferred Stock

The following table sets forth the computation of basic and diluted net loss per share for the year ended December 31, 2025 (in thousands, except share and per share amounts).

For purposes of earnings per share, the Series A preferred shares have the same characteristics as common stock and have no liquidation or other material preferential rights over common stock and accordingly, have been considered as a second class of common stock in the computation of net loss per share regardless of their legal form.

Losses are allocated between the common shares and the Series A preferred stock on a pro rata basis as they share equally in losses and residual net assets on an as-converted basis.

Allocation of net loss to common

Allocation of net loss to Series A Preferred

Weighted average shares of common stock outstanding, basic and diluted

Weighted average shares of Series A Preferred outstanding, basic and diluted

Net loss per share of common stock, basic and diluted

Net loss per share of Series A Preferred, basic and diluted

The weighted average number of Series A Preferred stock reflects only the period of time that this class of securities has been newly designated and issued.

The Company excluded the below options to purchase common stock, unreleased restricted stock units, performance-based restricted stock units outstanding as of December 31, 2025 and 2024 respectively, from the computation of diluted net loss per share for the twelve months ended December 31, 2025 and 2024 , respectively, because they had an anti-dilutive impact due to the net loss incurred for the periods.

Additionally, the as-converted preferred shares have been excluded from diluted earnings per share as the effect would not be dilutive .

As of December 31,

Options to purchase common stock

Unvested restricted common stock

Unvested performance-based restricted common stock

Total excluded shares

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