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Item 9A. Controls and Procedures

2024-03-21 compared with 2023-03-15 · 53 added, 680 removed, 106 unchanged (87% of the section changed)

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Management’s Annual Report on Internal Control Over Financial Reporting

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

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

Management assessed our internal control over financial reporting as of December 31, 2023, based on criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework).

Management’s assessment included evaluation of elements such as the design and operating effectiveness of key financial reporting controls, process documentation, accounting policies, and our overall control environment.

Based on this assessment, management has concluded that our internal control over financial reporting was effective as of the end of the fiscal year to provide reasonable assurance regarding the reliability of financial reporting and the preparation of consolidated financial statements for external reporting purposes in accordance with U.S.

We reviewed the results of management’s assessment with the audit committee of our board of directors.

Our auditors will not be required to formally opine on the effectiveness of our internal control over financial reporting pursuant to Section 404 until we are no longer an “emerging growth company” as defined in the JOBS Act.

Changes in Internal Control Over Financial Reporting

There have been no changes in our internal control over financial reporting during the year ended December 31, 2022 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

There have been no changes in our internal control over financial reporting during the three months ended December 31, 2023 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Other Information

Not Applicable.

During the three months ended December 31, 2023, two of our officers (as defined in Rule 16a-1(f) of the Exchange Act) adopted or terminated a contract, instruction, or written plan for the purchase or sale of our securities that was intended to satisfy the affirmative defense conditions of Rule 10b5-1(c) of the Exchange Act or any non-Rule 10b5-1 trading arrangement (as defined in the SEC’s rules).

The material terms of these Rule 10b5-1 trading arrangements are described below:

Name and Title

Type of Trading Arrangement

Nature of Trading Arrangement

Duration of Trading Arrangement

Number of Securities

David Rodman, M.D.

, Chief Medical Officer

Adoption 11/14/2023

Trading plan intended to satisfy the affirmative defense conditions of Exchange Act Rule 10b5-1(c)

Sale of the Company’s common stock pursuant to the terms of the plan 2/8/24 - 12/31/2024

Adam Levy , Chief Financial Officer

Adoption 11/14/2023

Trading plan intended to satisfy the affirmative defense conditions of Exchange Act Rule 10b5-1(c)

Sale of the Company’s common stock pursuant to the terms of the plan 6/11/2024 - 1/30/2026

(1) The executive’s Rule 10b5-1 trading arrangement provides for the sale of up to (i) 10,034 shares of common stock and (ii) 45,436 shares of common stock subject to a stock option award granted to Dr.

Rodman that vests ratably over time.

(2) The executive’s Rule 10b5-1 trading arrangement provides for the sale of up to 172,117 shares of common stock subject to a restricted stock award granted to Mr.

Levy that vests ratably over time.

Disclosure Regarding Foreign Jurisdiction that Prevent Inspections

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Directors, Executive Officers and Corporate Governance

Management and Board of Directors

The following table sets forth the name, age and position of each of our executive officers and directors as of March 15, 2023:

Name Age Position

Executive Officers

Jon Congleton 59 Chief Executive Officer & Director

Adam Levy 44 Chief Financial Officer, Chief Business Officer & Secretary

David Rodman, M.D.

67 Chief Medical Officer

Brian Taylor Slingsby, M.D., Ph.D., M.P.H.(3)

46 Executive Chairman & Founder

Srinivas Akkaraju, M.D., Ph.D.(1)(3)

Alexander Asam, Ph.D.(2)(3)

Derek DiRocco, Ph.D.(1)(2)

Olivier Litzka, Ph.D.(2)

Takeshi Takahashi, M.B.A.(1)

__________________

(1) Member of the Compensation Committee

(2) Member of the Audit Committee

(3) Member of the Nominating and Governance Committee

Executive Officers

Jon Congleton has served as our Chief Executive Officer and as a member of our Board since November 2020.

Prior to joining us, Mr.

Congleton was the Chief Executive Officer of Impel NeuroPharma, Inc.

from September 2017 to May 2020.

Prior to that, he served as the Chief Executive Officer and as a director of Nivalis Therapeutics, Inc.

from January 2015 to February 2017.

Congleton was previously at Teva Pharmaceutical Industries, Ltd.

(Teva) where over 18 years he held positions in general management and global strategic marketing, including Senior Vice President of Teva’s Global Central Nervous System Disorders from April 2013 to December 2014, Senior Vice President of the Global Medicine Group from November 2011 to April 2013, and General Manager of Teva Neuroscience, Inc.

in the United States.

Prior to joining Teva, Mr.

Congleton spent ten years in a variety of commercial roles with predecessor companies of Sanofi.

Congleton earned a B.S.

in marketing from Kansas State University.

Congleton’s knowledge of our business and his extensive executive experience at multiple biopharmaceutical companies contributed to our board of directors’ conclusion that he should serve as a director of our company.

Adam Levy has served as our Chief Financial Officer and Chief Business Officer since March 2022 and Secretary since January 2023.

Prior to joining Mineralys, he was the Chief Financial Officer at Sanifit Therapeutics until the company was acquired by Vifor Pharma in 2022.

Previously, Adam served as the Chief Business Officer at Brickell Biotech from 2019 to 2020 and led the organization’s financial operations transition as it became a publicly listed company on Nasdaq.

Prior to that, he served as the Chief Business Officer at miRagen Therapeutics from 2016 to 2019, where he was responsible for a variety of functions including financial strategy, investor relations, business development, legal affairs, intellectual property, project and program management, and human resources.

Between 2000 and 2016, Mr.

Levy held multiple investment banking positions at Merrill Lynch, Jefferies Group and Wedbush Securities.

Levy received a B.S.

in Business Management and Marketing from Cornell University.

David Rodman, M.D.

has served as our Chief Medical Officer since January 2021.

Previously, Dr.

Rodman served in various roles at miRagen, Vertex Pharmaceuticals Inc., and Novartis Institutes for BioMedical Research.

Rodman was elected to the American Society for Clinical Investigation and named an Established Investigator and Fellow of the American Heart Association.

Rodman received his medical degree from the University of Pennsylvania and was subsequently Board Certified in Internal Medicine, Pulmonary Medicine and Critical Care Medicine at the University of Colorado.

Non-Employee Directors

Brian Taylor “BT” Slingsby, M.D., Ph.D., M.P.H.

founded Mineralys on May 31, 2019 and has served on our board of directors since that time and as Executive Chairman.

Slingsby is Founder & Managing Partner at Catalys Pacific, a venture capital firm focused on life sciences.

In addition to serving as founding CEO of Mineralys during its inception and incubation, Dr.

Slingsby has served as founding CEO of Pathalys Pharma, Inc., Kirilys Therapeutics, Inc.

and Aculys Pharma, KK.

Previous to Catalys Pacific, he founded the Global Health Innovative Technology Fund, the world’s first public-private fund focused on the development of new medicines for low- and middle-income countries.

Slingsby graduated from Brown University with honors, earned his M.P.H.

from Kyoto University and the University of Tokyo, and received his M.D.

with honors from the George Washington University.

Slingsby’s investment experience in the biopharmaceutical industry, as well as his academic background and experience on numerous public and private company boards of directors, contributed to our board of directors’ conclusion that he should serve as a director of our company.

Srinivas Akkaraju, M.D., Ph.D.

has served on our board of directors since February 2021 .

Akkaraju has served as Managing General Partner of Samsara BioCapital, a venture capital firm, since he founded the firm in 2017.

From April 2013 to March 2017, Dr.

Akkaraju was a General Partner and then a Senior Advisor of Sofinnova Ventures, a venture capital firm focused on the life sciences industry.

From January 2009 until April 2013, Dr.

Akkaraju was a Managing Director of New Leaf Venture Partners, an investment firm focused on the healthcare technology sector.

From 2006 to 2008, Dr.

Akkaraju served as a Managing Director of Panorama Capital, a venture capital firm that he co-founded along with other members of the former venture capital investment team of J.P.

Morgan Partners, a private equity division of JPMorgan Chase & Co.

Prior to co-founding Panorama Capital, Dr.

Akkaraju was with J.P.

Morgan Partners, which he joined in 2001 and of which he became a partner in 2005.

From 1998 to 2001, Dr.

Akkaraju worked in business and corporate development at Genentech, Inc.

(now a member of the Roche Group), a biotechnology company.

Akkaraju has been a director of publicly-traded biopharmaceutical companies Intercept Pharmaceuticals since October 2012, Jiya Acquisition Corp.

(where he also serves as Chairman) since November 2020, and Syros Pharmaceuticals, Inc.

since June 2017.

Akkaraju also serves on the board of directors of a number of private companies.

During the past five years, Dr.

Akkaraju previously served as a director of Aravive, Inc.

(formerly Versartis, Inc.), aTyr Pharma, Inc., Principia Biopharma Inc., and Seattle Genetics, Inc.

(now Seagen Inc.).

Akkaraju received his M.D.

in Immunology from Stanford University and holds undergraduate degrees in Biochemistry and Computer Science from Rice University.

Akkaraju’s extensive investment experience in the biopharmaceutical industry, as well as his scientific background and experience on numerous public and private company boards of directors, contributed to our board of directors’ conclusion that he should serve as a director of our company.

Alexander Asam, Ph.D.

has served on our board of directors since February 2021 .

Since 2007, Dr.

Asam has been an Investment Advisor of HBM Partners and brings more than 20 years of experience in the life sciences and private equity businesses.

He was a former managing director and partner of Deutsche Venture Capital / Deutsche Bank from 2001 to 2007 and held various positions at Hoechst AG, Aventis S.A.

Sanofi) and LION Bioscience AG, among others, as well as a member of the IPO Core Team (dual listing Germany and USA).

He is a board member of 1000Farmacia Research, as well as a board observer at Swixx Biopharma and Aculys.

Asam served on the board of directors of publicly-traded Arcutis Biotherapeutics from October 2019 until October 2020.

Asam holds an M.B.A.

degree from Aston Business School, Birmingham and a M.Sc.

in chemistry from University of Heidelberg.

Asam’s extensive experience in the life sciences industry, including as an investor and board member, contributed to our board of directors’ conclusion that he should serve as a director of our company.

Derek DiRocco, Ph.D.

has served on our board of directors since June 2022 .

DiRocco has been a partner at RA Capital Management, L.P., a multi-stage investment manager dedicated to evidence-based investing in healthcare and life science companies that are developing drugs, medical devices and diagnostics, since December 2020 and was previously a principal from December 2017 until December 2020, an analyst from June 2015 to December 2017 and an associate from July 2013 to June 2015.

DiRocco has served on the board of directors of iTeos Therapeutics, Inc.

since March 2020 and 89bio, Inc.

since April 2018, each of which is a publicly-traded biotechnology company.

DiRocco also serves on the board of directors of several privately held biotechnology companies.

DiRocco holds a B.A.

in biology from College of the Holy Cross and a Ph.D.

in pharmacology from the University of Washington.

He conducted his postdoctoral research at Brigham and Women’s Hospital/Harvard Medical School.

DiRocco’s extensive investment experience in biopharmaceutical companies, as well as his academic background and public company board experience, contributed to our board of directors’ conclusion that he should serve as a director of our company.

Olivier Litzka, Ph.D.

has served on our board of directors since June 2022 .

Litzka has served as a partner at Andera Partners, a venture capital firm, since 2006 and started his business career in 1998 with Mercer Management

In 2000, he joined 3i Group plc with a focus on biopharma and medtech investments.

Litzka currently serves on the boards of MMI Microsystems, T-Knife, Allecra Therapeutics, HighLife Medical, MedLumics, Tricares and JenaValve.

He was also a board member of Corvidia, Sapiens, Endosense, Novexel, Supersonic Imagine and Arvelle Therapeutics, up until their respective acquisitions.

Litzka has a Ph.D.

in molecular microbiology from the Institut für Genetik und Mikrobiologie in Munich.

Litzka’s extensive investment experience in the biopharmaceutical industry contributed to our board of directors’ conclusion that he should serve as a director of our company.

Takeshi Takahashi, M.B.A.

has served on our board of directors since May 2020 .

Takahashi is the Managing Partner at Catalys Pacific, a position he has held since 2019 .

Prior to Catalys Pacific, he was an investment banker with Morgan Stanley for 12 years.

Prior to working for Morgan Stanley, he worked at Merrill Lynch’s asset management division.

Takahashi graduated from Waseda University with a degree in Political Science and Economics and holds an M.B.A.

from Kellogg School of Management at Northwestern University.

Takahashi’s extensive investment experience in the biopharmaceutical industry contributed to our board of directors’ conclusion that he should serve as a director of our company.

Family Relationships

There are no family relationships among any of our executive officers or directors.

Board Composition and Election of Directors

Director Independence

Our board of directors currently consists of seven members.

Our board of directors has determined that all of our directors, other than Mr.

Congleton, are independent directors in accordance with the listing requirements of the Nasdaq.

The Nasdaq independence definition includes a series of objective tests, including that the director is not, and has not been for at least three years, one of our employees and that neither the director nor any of his or her family members has engaged in various types of business dealings with us.

In addition, as required by Nasdaq rules, our board of directors has made a subjective determination as to each independent director that no relationships exist, which, in the opinion of our board of directors, would interfere with the exercise of independent judgment in carrying out the responsibilities of the director.

In making these determinations, our board of directors reviewed and discussed information provided by the directors and us with regard to each director’s business and personal activities and relationships as they may relate to us and our management.

There are no family relationships among any of our directors or executive officers.

Classified Board of Directors

In accordance with the terms of our amended and restated certificate of incorporation, our board of directors are divided into three classes with staggered, three-year terms.

At each annual meeting of stockholders, the directors whose terms then expire will be eligible for reelection until the third annual meeting following reelection.

Our directors are divided among the three classes as follows:

• the Class I directors are Mr.

Congleton and Mr.

Takahashi, and their terms will expire at our first annual meeting of stockholders to be held in 2024;

• the Class II directors are Mr.

DiRocco and Mr.

Litzka, and their terms will expire at our annual meeting of stockholders to be held in 2025;

• the Class III directors are Dr.

Akkaraju and Dr.

Slingsby, and their terms will expire at our annual meeting of stockholders to be held in 2026.

Our amended and restated certificate of incorporation provides that the authorized number of directors may be changed only by resolution of the board of directors.

Any additional directorships resulting from an increase in the number of directors will be distributed among the three classes so that, as nearly as possible, each class will consist of one-third of the directors.

The division of our board of directors into three classes with staggered three-year terms may delay or prevent a change of our board of directors or a change in control of our company.

Our directors may be removed only for cause by the affirmative vote of the holders of at least two-thirds of our outstanding voting stock then entitled to vote in an election of directors.

Board Leadership Structure

Our board of directors is currently chaired by Dr.

Our board of directors recognizes that it is important to determine an optimal board leadership structure to ensure the independent oversight of management as the company

continues to grow.

We separate the roles of chief executive officer and chairman of the board of directors in recognition of the differences between the two roles.

The chief executive officer is responsible for setting the strategic direction for our company and the day-to-day leadership and performance of our company, while the chairman of the board of directors provides guidance to the chief executive officer and presides over meetings of the full board of directors.

We believe that this separation of responsibilities provides a balanced approach to managing the board of directors and overseeing our company.

Our board of directors has concluded that our current leadership structure is appropriate at this time.

However, our board of directors will continue to periodically review our leadership structure and may make such changes in the future as it deems appropriate.

Role of Board in Risk Oversight Process

Our board of directors has responsibility for the oversight of our risk management processes and, either as a whole or through its committees, regularly discusses with management our major risk exposures, their potential impact on our business and the steps we take to manage them.

The risk oversight process includes receiving regular reports from board committees and members of senior management to enable our board of directors to understand our risk identification, risk management and risk mitigation strategies with respect to areas of potential material risk, including operations, finance, legal, regulatory, strategic and reputational risk.

The audit committee reviews information regarding liquidity and operations and oversees our management of financial risks.

Periodically, the audit committee reviews our policies with respect to risk assessment, risk management, loss prevention and regulatory compliance.

Oversight by the audit committee includes direct communication with our external auditors, and discussions with management regarding significant risk exposures and the actions management has taken to limit, monitor or control such exposures.

The compensation committee is responsible for assessing whether any of our compensation policies or programs has the potential to encourage excessive risk-taking.

The nominating and corporate governance committee manages risks associated with the independence of the board of directors, corporate disclosure practices and potential conflicts of interest.

While each committee is responsible for evaluating certain risks and overseeing the management of such risks, the entire board of directors is regularly informed through committee reports about such risks.

Matters of significant strategic risk are considered by our board of directors as a whole.

Board Committees and Independence

Our board of directors has established three standing committees – audit, compensation and nominating and corporate governance – each of which operates under a charter that has been approved by our board of directors.

Audit Committee

The audit committee’s main function is to oversee our accounting and financial reporting processes and the audits of our financial statements.

This committee’s responsibilities include, among other things:

• appointing our independent registered public accounting firm;

• evaluating the qualifications, independence and performance of our independent registered public accounting firm;

• approving the audit and non-audit services to be performed by our independent registered public accounting firm;

• reviewing the design, implementation, adequacy and effectiveness of our internal accounting controls and our critical accounting policies;

• discussing with management and the independent registered public accounting firm the results of our annual audit and the review of our quarterly unaudited financial statements;

• reviewing, overseeing and monitoring the integrity of our financial statements and our compliance with legal and regulatory requirements as they relate to financial statements or accounting matters;

• reviewing on a periodic basis, or as appropriate, any investment policy and recommending to our board of directors any changes to such investment policy;

• reviewing with management and our auditors any earnings announcements and other public announcements regarding our results of operations;

• preparing the report that the SEC requires in our annual proxy statement;

• reviewing and approving any related party transactions and reviewing and monitoring compliance with our code of conduct and ethics;

• reviewing and evaluating, at least annually, the performance of the audit committee and its members including compliance of the audit committee with its charter.

The members of our audit committee are Mr.

Litzka and Dr.

DiRocco serves as the chairperson of the committee.

All members of our audit committee meet the requirements for financial literacy under the applicable rules and regulations of the SEC and Nasdaq.

Our board of directors has determined that Mr.

Litzka is an “audit committee financial expert” as defined by applicable SEC rules and has the requisite financial sophistication as defined under the applicable Nasdaq listing standards.

Our board of directors has determined each of Mr.

Litzka and Dr.

Asam is independent under the applicable rules of the SEC and Nasdaq.

The audit committee operates under a written charter that satisfies the applicable standards of the SEC and Nasdaq.

Compensation Committee

Our compensation committee approves policies relating to compensation and benefits of our officers and employees.

The compensation committee approves corporate goals and objectives relevant to the compensation of our Chief Executive Officer and other executive officers, evaluates the performance of these officers in light of those goals and objectives and approves the compensation of these officers based on such evaluations.

The compensation committee also approves the issuance of stock options and other awards under our equity plans.

The compensation committee will review and evaluate, at least annually, the performance of the compensation committee and its members, including compliance by the compensation committee with its charter.

The members of our compensation committee are Dr.

Akkaraju, Mr.

Takahashi and Mr.

Akkaraju serves as the chairperson of the committee.

Our board of directors has determined that each of Dr.

Akkaraju, Mr.

Takahashi and Mr.

DiRocco is independent under the applicable Nasdaq listing standards and is a “non-employee director” as defined in Rule 16b-3 promulgated under the Exchange Act.

The compensation committee operates under a written charter, which the compensation committee will review and evaluate at least annually.

Nominating and Corporate Governance Committee

The nominating and corporate governance committee is responsible for assisting our board of directors in discharging the board of directors’ responsibilities regarding the identification of qualified candidates to become board members, the selection of nominees for election as directors at our annual meetings of stockholders (or special meetings of stockholders at which directors are to be elected), and the selection of candidates to fill any vacancies on our board of directors and any committees thereof.

In addition, the nominating and corporate governance committee is responsible for overseeing our corporate governance policies, reporting and making recommendations to our board of directors concerning governance matters, reviewing and assisting the Board with oversight of matters relating to environmental, social and governance matters affecting the Company and oversight of the evaluation of our board of directors.

The members of our nominating and corporate governance committee are Dr.

Slingsby, Mr.

Slingsby serves as the chairperson of the committee.

Our board of directors has determined that each of Dr.

Slingsby, Mr.

Akkaraju is independent under the applicable Nasdaq listing standards.

The nominating and corporate governance committee operates under a written charter, which the nominating and corporate governance committee will review and evaluate at least annually.

Compensation Committee Interlocks and Insider Participation

None of the members of our compensation committee has ever been one of our officers or employees.

None of our executive officers currently serves, or has served, as a member of the board of directors or compensation committee of any entity that has one or more executive officers serving as a member of our board of directors or compensation committee.

Board Diversity

Our nominating and corporate governance committee is responsible for reviewing with the board of directors, on an annual basis, the appropriate characteristics, skills and experience required for the board of directors as a whole and its individual members.

In evaluating the suitability of individual candidates (both new candidates and current members) for election or appointment, the nominating and corporate governance committee and the board of directors will take into account many factors, including the following:

• personal and professional integrity, ethics and values;

• experience in corporate management, such as serving as an officer or former officer of a publicly-held company;

• experience as a board member or executive officer of another publicly-held company;

• strong finance experience;

• diversity of expertise and experience in substantive matters pertaining to our business relative to other board members;

• diversity of background and perspective, including, but not limited to, with respect to age, gender, race, place of residence and specialized experience;

• experience relevant to our business industry and with relevant social policy concerns;

• relevant academic expertise or other proficiency in an area of our business operations.

Our board of directors evaluates each individual in the context of the board of directors as a whole, with the objective of assembling a group that can best maximize the success of the business and represent stockholder interests through the exercise of sound judgment using its diversity of experience in these various areas.

Code of Business Conduct and Ethics

We adopted a written code of business conduct and ethics that applies to our directors, officers and employees, including our principal executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions.

The information required by this item is incorporated by reference to our 2024 Proxy Statement.

Our Board has adopted a written code of business conduct and ethics that applies to our directors, officers, and employees, including our principal executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions.

Our code of business conduct and ethics is available under the Corporate Governance section of our website at www.mineralystx.com .

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Executive Compensation

This section discusses the material components of the executive compensation program for our executive officers who are named in the “Summary Compensation Table” below.

In 2022, our “named executive officers,” which consist of each person who served as our principal executive officer during 2022 and our two next most highly compensated executive officers during 2022, and their positions were as follows:

• Jon Congleton, Chief Executive Officer;

• Adam Levy, Chief Financial Officer, Chief Business Officer and Secretary;

• David Rodman, MD, Chief Medical Officer.

Summary Compensation Table

The following table presents summary information regarding the total compensation that was awarded to, earned by or paid to the named executive officers for services rendered during the years ended December 31, 2022 and December 31, 2021.

Name and Principal Position Year Salary

Incentive Plan

Jon Congleton

2022 416,667 — — 1,118,118 (6) 12,200 1,546,985

Chief Executive Officer (7)

2021 346,484 175,342 9,536 — 133,000 10,267 674,629

Adam Levy 2022 334,926 — — 483,500 (6) 7,262 825,688

Chief Financial Officer, Chief Business Officer and Secretary (8)

David Rodman, MD

2022 411,458 — 492,064 — (6) 12,200 915,722

Chief Medical Officer (9)

2021 342,153 240,041 95,359 — 131,338 10,533 819,424

__________________

(1) Amounts for fiscal year 2021 reflect one-time bonuses awarded to our named executive officers per the terms of their offer letters with the Company.

(2) The amounts reported in the “Option Awards” column represent the aggregate grant date fair value of the stock options granted during the applicable year, calculated in accordance with Financial Accounting Standards Board, or FASB, Accounting Standards Codification, or ASC, Topic 718.

The assumptions used in calculating the grant date fair value of the awards reported in this column are set forth in Notes 2 and 7 to our audited financial statements in this Annual Report for the year ended December 31, 2022.

The amounts reported in this column reflect the accounting cost for the stock options and do not reflect the actual economic value that will be realized by the executive upon the vesting of the stock options, the exercise of the stock options or the sale of the common stock underlying such awards.

See “—Narrative to Summary Compensation Table—Equity-Based Incentive Awards.”

(3) The amounts reported in the “Stock Awards” column represent the aggregate grant date fair value of restricted stock awards granted during the applicable year, calculated in accordance with FASB ASC Topic 718.

Assumptions used in the calculation of these amounts are included in Notes 2 and 7 to our combined financial statements in this Annual Report for the year ended December 31, 2022.

The amounts reported in this column reflect the accounting cost for the restricted stock awards and do not reflect the actual economic value that will be realized by the executive upon the vesting of the restricted stock awards or the sale of the common stock underlying such awards.

See “—Narrative to Summary Compensation Table—Equity-Based Incentive Awards.”

(4) Amounts for fiscal year 2021 reflect performance bonuses earned by each executive in 2021, which were paid in early 2022.

(5) Amounts reflect company matching contributions to a 401(k) savings plan.

(6) Bonus amounts for 2022 are not calculable as of the date of this Annual Report.

It is anticipated that 2022 bonus amounts will be determined in the first quarter of 2023, at which time the Company will disclose the amounts of such bonuses.

(7) On March 1, 2022, Mr.

Congleton’s annual base salary rate was increased from $400,000 to $420,000.

Levy joined as Chief Financial Officer and Chief Business Officer in March 2022, and therefore the base salary amount set forth in the table above reflects the amount earned for the portion of 2022 in which he was employed by us.

Levy had an annual base salary rate of $415,000 in 2022.

(9) On March 1, 2022, Dr.

Rodman’s annual base salary rate was increased from $395,000 to $414,750.

Narrative to Summary Compensation Table

Annual Base Salary

The compensation of our named executive officers is generally determined and approved by our board of directors.

Congleton’s annual base salary for service as our Chief Executive Officer and Dr.

Rodman’s annual base salary for service as our Chief Medical Officer was $400,000 and $395,000, respectively, which was increased to $420,000 and $414,750, respectively, effective March 1, 2022.

Levy’s annual base salary for service as our Chief Financial Officer and Chief Business Officer was $415,000.

In addition to base salaries, our named executive officers are eligible to receive annual performance-based cash bonuses, which are designed to provide appropriate incentives to our executives to achieve defined annual corporate goals and to reward our executives for individual achievement towards these goals.

The annual performance-based bonus each named executive officer is eligible to receive is generally based on the extent to which we achieve the corporate goals that our board of directors establishes each year.

At the end of the year, our board of directors reviews our performance against each corporate goal and determines the extent to which we achieved each of our corporate goals.

Our board of directors will generally consider each named executive officer’s individual contributions towards reaching our annual corporate goals.

For 2022, Mr.

Congleton and Dr.

Rodman were each eligible to receive a target annual bonus for 2022 equal to 25% of their respective annual base salaries.

For 2022, Mr.

Levy was eligible to receive a target annual bonus for 2022 equal to 40% of his annual base salary.

The corporate goals the board of directors established for 2022 related to clinical, nonclinical, regulatory, drug and product manufacturing, business development and financing milestones.

Bonuses for any one year are usually determined and paid in the first quarter of the following year.

Accordingly, bonus compensation for our executive officers for 2022 has not yet been determined as of the date of filing of this Annual Report.

Equity-Based Incentive Awards

Our equity-based incentive awards are designed to align our interests and those of our stockholders with those of our employees, including our executive officers.

The board of directors or an authorized committee thereof is responsible for approving equity grants.

Prior to our IPO, we have granted stock options and issued restricted stock pursuant to our Amended and Restated 2020 Equity Incentive Plan (the 2020 Plan).

Following our IPO, we will grant equity awards under the terms of our 2023 Incentive Award Plan (the 2023 Plan).

The terms of our equity plans are described below under the subsection titled “Equity Incentive Plans.”

In March 2022, our board of directors granted 172,444 shares of restricted stock under our 2020 Plan to Mr.

The restricted stock vests with respect to 25% of the shares on the one-year anniversary of the March 10, 2022 vesting commencement date, and the remaining shares vest in substantially equal monthly installments thereafter for 36 months, subject to Mr.

Levy’s continuous service with us as of each such vesting date.

In July 2022, our board of directors granted 575,270 and 172,117 shares of restricted stock under our 2020 Plan to Mr.

Congleton and Mr.

Levy, respectively.

The restricted stock was originally scheduled to vest with respect to 25% of the shares on the one-year anniversary of the July 12, 2022 and March 10, 2022 vesting commencement dates, respectively, and the remaining shares were originally scheduled to vest in substantially equal installments thereafter for 36 months, subject to the respective named executive offer’s continuous service with us as of each such vesting date.

In July 2022, our board of directors also granted an option under our 2020 Plan to purchase 304,730 shares to Dr.

The option has an exercise price of $1.08 per share, the fair market value on the date of grant as determined by our board of directors.

The option granted to Dr.

Rodman may be early exercised.

The option vests with respect to 25% of the shares on the one-year anniversary of the July 12, 2022 vesting commencement date, and the remaining shares vest in substantially equal monthly installments thereafter for 36 months, subject to Dr.

Rodman’s continuous service with us as of each such vesting date.

In connection with our IPO, our board of directors approved the grant of stock options pursuant to the 2023 Plan to our executive officers as follows, effective as of the pricing date of our IPO:

Congleton, 250,046 options;

Rodman, 104,186 options;

Levy, 97,518 options.

Such stock options have an exercise price equal to the IPO price in our IPO and will vest with respect to 25% of the shares on the one-year anniversary of the grant date, and the remaining shares vest in substantially equal monthly installments thereafter for 36 months, subject to the executive’s continuous service with us as of each such vesting date.

As a condition to the receipt of the foregoing option awards, each of Mr.

Congleton and Mr.

Levy agreed to an amendment to his July 2022 restricted stock to amend the vesting of such award such that the portion of such award that would have vested on or prior to June 10, 2024 will vest on June 10, 2024, and 3/48 th of the shares (or any lesser number of shares then remaining available to vest as of any applicable vesting date) subject to such award shall vest in quarterly installments on each July 10, October 10, January 10 and April 10 thereafter until such restricted shares are fully vested, subject to the executive’s continuous service with us as of each such vesting date.

Both of the restricted stock awards granted to Mr.

Levy will vest upon a change in control (as defined in the 2020 Plan).

Each of the awards granted to our named executive officers is also subject to potential acceleration of vesting in connection with a qualifying termination of employment, including in connection with a change in control, as described below under the subsection titled “Employment Arrangements with our Executive Officers.”

Outstanding Equity Awards at Fiscal Year-End

The following table presents information regarding the outstanding stock options and shares of restricted stock held by each of our named executive officers as of December 31, 2022.

Option Awards Stock Awards

Unexercisable

Jon Congleton 10/09/20 — — $— — 221,877 (2)(3)

03/12/21 24,082 (3)(4)

— $0.54 03/11/31 — —

07/12/22 — — $— — 575,270 (3)(5)

Adam Levy 03/10/22 — — $— — 172,444 (3)

07/12/22 — — $— — 172,117 (3)(5)

David Rodman, MD 03/12/21 115,396 (4)

125,430 (3)(4)

$0.54 03/11/31 — —

07/12/22 304,730 (3)(6)

— $1.08 07/11/32 — —

__________________

(1) The market value is calculated by multiplying the number of unvested restricted stock outstanding under the award by $3.03, which was the fair market value of our common stock as of November 30, 2022 based on an independent third-party valuation.

(2) On October 9, 2020, our board of directors granted Mr.

Congleton 463,048 shares of restricted stock under our 2020 Plan, with 25% of such shares vesting on the first anniversary of the date on which Mr.

Congleton commenced full-time employment with us (November 1, 2020), and the

remaining shares vesting in equal monthly installments over the 36 months thereafter, subject to Mr.

Congleton’s continued status as a service provider through each such vesting date.

(3) These awards are subject to potential acceleration of vesting in connection with a qualifying termination of employment, including in connection with a change in control, as described below under the subsection titled “Employment Arrangements with our Executive Officers.” Dr.

Rodman’s stock option granted on March 12, 2021, as well as Mr.

Levy’s restricted stock awards granted on March 10, 2022 and July 10, 2022, are subject to accelerated vesting in connection with a change in control, as described above under the subsection titled “Equity-Based Incentive Awards.”

(4) On March 12, 2021, our board of directors granted Mr.

Congleton and Dr.

Rodman options under our 2020 Plan to purchase 24,082 shares and 240,827 shares, respectively, with 25% of such shares vesting on the first anniversary of the March 1, 2021 and January 11, 2021 vesting commencement dates, respectively, and the remaining shares vesting in equal monthly installments over the 36 months thereafter, subject to the respective named executive officer’s continued status as a service provider through each such vesting date.

The stock option granted to Mr.

Congleton has an early exercise feature that allows Mr.

Congleton to exercise the option while unvested and receive restricted shares of our common stock that are subject to forfeiture until the vesting requirement is met.

Our 2020 Plan specifically authorizes this early exercise concept and states that employees who exercise unvested options will receive shares of restricted stock with a vesting period that corresponds to the vesting period that remained in the exercised option.

Due to this early exercise feature, these options are reflected in the “Exercisable” column as of December 31, 2022.

(5) As a condition to the receipt of the stock options to be granted to each of Mr.

Congleton and Mr.

Levy in connection with our IPO as described above, each executive agreed to an amendment to his July 2022 restricted stock award to amend the vesting of such award such that the portion of such award that would have vested on or prior to June 10, 2024 will vest on June 10, 2024, and 3/48th of the shares (or any lesser number of shares then remaining available to vest as of any applicable vesting date) subject to such award shall vest in quarterly installments on each July 10, October 10, January 10 and April 10 thereafter until such restricted shares are fully vested, subject to the executive’s continuous service with us as of each such vesting date.

(6) On July 12, 2022 our board of directors granted Dr.

Rodman an option under our 2020 Plan to purchase 304,730 shares, with 25% of such shares vesting on the first anniversary of the July 12, 2022 vesting commencement date, and the remaining shares vesting in equal monthly installments over the 36 months thereafter, subject to Dr.

Rodman’s continued status as a service provider through each such vesting date.

This stock option granted to Dr.

Rodman has an early exercise feature that allows Dr.

Rodman to exercise the option while unvested and receive restricted shares of our common stock that are subject to forfeiture until the vesting requirement is met.

Due to this early exercise feature, these options are reflected in the “Exercisable” column as of December 31, 2022.

Employment Arrangements with our Executive Officers

We have entered into amended employment letters with each of Mr.

Congleton, Dr.

Rodman and Mr.

Pursuant to the employment letters, each of Mr.

Congleton, Dr.

Rodman and Mr.

Levy is entitled to an annual base salary of $420,000, $414,750 and $415,000, respectively, and an annual bonus at a target amount of 25%, 25% and 40%, respectively, based on the achievement of performance objectives as determined by our board of directors.

Regardless of the manner in which the executive’s employment terminates, he is entitled to receive amounts previously earned during his employment, including unpaid salary, reimbursement of expenses owed, and accrued but unpaid paid time off and any continuation of benefits required by applicable law.

In addition, each executive is entitled to certain severance benefits under his employment letter (as described below), subject to his execution of a release of claims and compliance with the post-termination obligations set forth in his proprietary information and inventions assignment agreement.

The employment letters provide for severance benefits for certain terminations that arise during and outside a change in control period.

Upon a termination without cause or a resignation for good reason outside of a change in control period (as defined below), each executive is entitled to (i) his base salary for 12 months (for Mr.

Congleton) or 9 months (for Dr.

Rodman and Mr.

Levy) following the date of termination, which amount will be paid in a lump sum (for Mr.

Levy) or in accordance with our standard payroll practices over the applicable severance period (for Mr.

Congleton and Dr.

Rodman), (ii) a cash lump sum payment amount equal to the executive’s then target annual bonus, pro-rated based on the total number of days elapsed in the calendar year as of such executive’s date of termination, (iii) accelerated vesting of such number of the executive’s unvested equity awards that vest based on the passage of time as would have vested had the executive remained employed by us during the severance period specified in clause (i) above, and (iv) payment or reimbursement of the COBRA premiums for the executive and his eligible dependents, or if COBRA is not available under our group health plan, a cash amount equal to such payments or reimbursements, until the earliest of (a) the last day of the severance period specified in clause (i) above, or (b) the date the executive becomes eligible for comparable health insurance coverage under a subsequent employer’s group health plan.

Upon a termination without cause or a resignation for good reason within three months prior to or 12 months after a change in control (such period, the change in control period), each executive is entitled to (i) his base salary for 18 months (for Mr.

Congleton) or 12 months (for Dr.

Rodman and Mr.

Levy) following the date of termination, which amount will be paid in a lump sum (for Mr.

Levy) or in accordance with our standard payroll practices over the applicable severance period (for Mr.

Congleton and Dr.

Rodman), (ii) a cash lump sum payment amount equal to the executive’s then target annual bonus (which amount is 150% of his then target annual bonus for Mr.

Congleton), (iii) accelerated vesting of any unvested equity awards that vest based on the passage of time (provided that, for any equity awards granted to Mr.

Congleton and Dr.

Rodman prior to our IPO, such accelerated vesting shall only occur upon a termination within 12 months after a change in control), and (iv) payment or reimbursement of the COBRA premiums for the executive and his eligible dependents, or if coverage under COBRA is not

available under our group health plan, a cash amount equal to such payments or reimbursements, until the earliest of (a) the last day of the severance period specified in clause (i) above, or (b) the date the executive becomes eligible for comparable health insurance coverage under a subsequent employer’s group health plan.

The vesting of any equity awards the vesting of which is performance-based will be governed by the applicable award agreement.

Additionally, to the extent that any payment or benefit received in connection with a change in control would be subject to an excise tax under Section 4999 of the Internal Revenue Code, such payments and/or benefits will be subject to a “best pay cap” reduction if such reduction would result in a greater net after-tax benefit to the executive than receiving the full amount of such payments.

Each executive officer has entered into our standard proprietary information and inventions assignment agreement which contains a one-year post-termination non-solicitation covenant.

For purposes of the amended employment letters with our executive officers:

“cause” means (i) a commission of an act of fraud, embezzlement or dishonesty, or the commission of some other illegal act, that has a demonstrable adverse impact on us or any successor or affiliate;

(ii) a conviction of, or plea of “guilty” or “no contest” to, a felony or any crime involving fraud, dishonesty or moral turpitude under the laws of the United States or any state thereof;

(iii) any intentional, unauthorized use or disclosure by the executive of confidential information or trade secrets of us or any successor or affiliate;

(iv) gross negligence, insubordination or material violation of any duty of loyalty to us or any successor or affiliate, or any other demonstrable material misconduct on the executive’s part;

(v) ongoing and repeated failure or refusal to perform or neglect of the executive’s duties as required by his offer letter or ongoing and repeated failure or refusal to comply with the instructions given to him by our board of directors, which failure, refusal or neglect continues for 15 days following his receipt of written notice from our board of directors stating with specificity the nature of such failure, refusal or neglect;

or (vi) willful, material breach of any of our material policies or any material provision of the executive’s offer letter or his proprietary information and inventions assignment agreement.

“change in control” will have the meaning given to such term in the 2023 Plan.

“good reason” means any of the following without the executive’s written consent:

(i) a material diminution in authority, duties or responsibilities;

(ii) a material diminution (that is, a diminution of 10% or more) in base compensation or target bonus opportunity, regardless of whether such diminution occurs due to a single reduction or a series of reductions in base compensation, unless such a reduction is imposed across-the-board to our senior management;

(iii) a material change in the geographic location at which the executive must perform his duties;

or (iv) any other action or inaction by us or a successor or affiliate that constitutes a material breach of the obligations to the executive under his employment letter, provided, that, in each case, an executive will not be deemed to have good reason unless:

(a) the executive provides written notice of the occurrence of any of the foregoing events or conditions without his written consent within 60 days of the occurrence of such event;

(b) we or any successor or affiliate fails to cure such condition within 30 days after receipt of written notice of such event from the executive;

and (c) the executive’s resignation based on such good reason is effective within 30 days after expiration of our 30-day cure period.

Other Elements of Compensation

Health and Welfare and Retirement Benefits;

All of our current named executive officers are eligible to participate in our employee benefit plans, including our medical, dental, vision, disability and life insurance plans, in each case on the same basis as all of our other employees.

We generally do not provide perquisites or personal benefits to our named executive officers, except in limited circumstances.

Our board of directors may elect to adopt qualified or non-qualified benefit plans in the future if it determines that doing so is in our best interests.

Our named executive officers are eligible to participate in a defined contribution retirement plan that provides eligible employees with an opportunity to save for retirement on a tax advantaged basis.

Eligible employees may defer eligible compensation on a pre-tax or after-tax (Roth) basis, up to the statutorily prescribed annual limits on contributions under the Code.

Contributions are allocated to each participant’s individual account and are then invested in selected investment alternatives according to the participants’ directions.

The 401(k) plan is intended to be qualified under Section 401(a) of the Code with the 401(k) plan’s related trust intended to be tax exempt under Section 501(a) of the Code.

As a tax-qualified retirement plan, contributions to the 401(k) plan (except for Roth contributions) and earnings on those

contributions are not taxable to the employees until distributed from the 401(k) plan.

Our board of directors may elect to adopt qualified or nonqualified benefit plans in the future, if it determines that doing so is in our best interests.

Severance and Change in Control Benefits

Our executive officers may become entitled to certain benefits or enhanced benefits upon a qualifying termination of employment, including in connection with a change in control, pursuant to their offer letters.

In addition, certain stock option agreements with Dr.

Rodman and the restricted stock agreements with Mr.

Levy, each provide for accelerated vesting of all outstanding shares upon a change in control.

For additional discussion, please see “—Equity-Based Incentive Awards” and “—Employment Arrangements with our Executive Officers” above.

Non-Employee Director Compensation

We did not provide any cash, equity or other compensation to our non-employee directors in the year ended December 31, 2022.

We have a policy of reimbursing all of our non-employee directors for their reasonable out-of-pocket expenses in connection with attending board of directors and committee meetings.

Director Compensation Program

In connection with our IPO, our board of directors and our stockholders approved the initial terms of our non-employee director compensation program.

The material terms of the non-employee director compensation program are summarized below.

The non-employee director compensation program provides for annual retainer fees and/or long-term equity awards for our non-employee directors.

Each non-employee director will receive an annual retainer of $40,000.

A non-employee director serving as chairman of the board or lead independent director will receive an additional annual retainer of $30,000.

The non-employee directors serving as the chairs of the audit, compensation and nominating and corporate governance committees will receive additional annual retainers of $15,000, $10,000 and $8,000, respectively.

Non-employee directors serving as members of the audit, compensation and nominating and corporate governance committees will receive additional annual retainers of $7,500, $5,000 and $4,000, respectively.

Each non-employee director serving on the board at the time of our IPO, and each non-employee director initially appointed or elected to the board following the date of our IPO, received an initial grant of options to purchase 44,000 shares of our common stock, vesting monthly over three years.

Non-employee directors will also receive annual grants of options to purchase 22,000 shares of our common stock on the date of each annual meeting of our stockholders following our IPO, vesting in substantially equal monthly installments over the 12 months following the date of grant (or, in the event the next annual meeting of our stockholders occurs prior to the first anniversary of the date of grant, any remaining unvested portion of the annual award will vest on the date of such annual meeting of our stockholders).

All options granted to our non-employee directors will have an exercise price equal to the fair market value of our common stock on the date of grant (as determined under the 2023 Plan), which for the options granted in connection with our IPO was the IPO price in the IPO.

Awards to our non-employee directors will also vest upon a termination of service by reason of death or disability and in the event of a change in control (as defined in the 2023 Plan).

Compensation under our non-employee director compensation program will be subject to the annual limits on non-employee director compensation set forth in the 2023 Plan.

Our board of directors or its authorized committee may modify the non-employee director compensation program from time to time in the exercise of its business judgment, taking into account such factors, circumstances and considerations as it shall deem relevant from time to time, subject to the annual limit on non-employee director compensation set forth in the 2023 Plan (which limits will not apply to any non-employee director that serves in any additional capacity with the company for which he or she receives compensation or any compensation paid to any non-employee director prior to the calendar year following the calendar year of our IPO).

As provided in the 2023 Plan, our board of directors or its authorized committee may make exceptions to this limit for individual non-employee directors in extraordinary circumstances, as the board of directors or its authorized committee may determine in its discretion, provided that the non-employee director receiving such additional compensation may not participate in the decision to award such compensation or in other compensation decisions involving non-employee directors.

The information required by this item is incorporated by reference to our 2024 Proxy Statement.

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

Beneficial Ownership of Securities

The following table sets forth information with respect to the beneficial ownership of our common stock as of February 16, 2023 by:

• our named executive officers;

• each of our directors;

• all of our executive officers and directors as a group;

• each person or group of affiliated persons known by us to beneficially own more than 5% of our common stock.

The number of shares beneficially owned by each stockholder is determined under rules issued by the SEC.

Under these rules, beneficial ownership includes any shares as to which a person has sole or shared voting power or investment power.

Applicable percentage ownership is based on 40,856,653 shares of common stock outstanding as of February 16, 2023.

In computing the number of shares beneficially owned by a person and the percentage ownership of that person, shares of common stock subject to options or other rights held by such person that are currently exercisable or that will become exercisable or otherwise vest within 60 days of February 16, 2023 are considered outstanding, although these shares are not considered outstanding for purposes of computing the percentage ownership of any other person.

Unless otherwise indicated, the address of each beneficial owner listed below is c/o Mineralys Therapeutics, Inc., 150 N.

Radnor Chester Road, Suite F200, Radnor, Pennsylvania 19087.

We believe, based on information provided to us, that each of the stockholders listed below has sole voting and investment power with respect to the shares beneficially owned by the stockholder unless noted otherwise, subject to community property laws where applicable.

Name of Beneficial Owner Number of Shares Beneficially Owned Percentage of Shares Beneficially Owned

5% or Greater Stockholders

Catalys Pacific Fund, LP (1)

9,194,579 22.5 %

Samsara BioCapital, L.P.

4,519,361 11.1 %

HBM Healthcare Investments (Cayman) Ltd.

3,218,106 7.9 %

Entities affiliated with Adams Street Partners, LLC (4)

2,419,497 5.9 %

BioDiscovery 6 FPCI (5)

2,865,976 7.0 %

Entities affiliated with RA Capital Management, L.P.

3,178,476 7.8 %

Named Executive Officers and Directors

Jon Congleton (7)

1,050,860 2.5 %

Adam Levy (8)

David Rodman, M.D.

Brian Taylor Slingsby, M.D., Ph.D., M.P.H (1)

9,194,579 22.5 %

Srinivas Akkaraju, M.D., Ph.D.

4,519,361 11.1 %

Alexander Asam, Ph.D.

Derek DiRocco, Ph.D.

Olivier Litzka, Ph.D.

Takeshi Takahashi, M.B.A.

All executive officers and directors as a group (9 persons) (11)

15,251,076 37.3 %

__________________

* Less than 1%.

(1) The general partner of Catalys Pacific Fund, LP is Catalys Pacific Fund GP, LP.

Brian Taylor Slingsby is the managing member of Catalys Pacific, LLC, the general partner of the General Partner.

Catalys Pacific Fund GP, LP and Brian Taylor Slingsby may be deemed to have voting and investment power over the shares held of record by Catalys Pacific Fund, LP.

Catalys Pacific Fund GP, LP and Brian Taylor Slingsby disclaim beneficial ownership of such shares, except to the extent of any pecuniary interest therein.

The address of the entity listed above is PO Box 309, Ugland House, Grand Cayman, KY1-1104, Cayman Islands.

(2) Samsara BioCapital GP, LLC (Samsara LLC) is the general partner of Samsara BioCapital, L.P.

(Samsara LP) and may be deemed to beneficially own the shares held by Samsara LP.

Akkaraju has voting and investment power over the shares held by Samsara LP and, accordingly, may be

deemed to beneficially own the shares held by Samsara LP.

Each of Samsara LLC and Dr.

Akkaraju disclaims beneficial ownership in these shares except to the extent of his or its respective pecuniary interest therein.

(3) Voting and investment power over the shares held by HBM Healthcare Investments (Cayman) Ltd.

(HBM Healthcare) is exercised by the board of directors of HBM Healthcare.

The board of directors of HBM Healthcare Investments (Cayman) Ltd.

consists of Jean Marc Lesieur, Sophia Harris, Richard Coles, Dr.

Andreas Wicki, Paul Woodhouse and Dr.

Mark Kronenfeld, none of whom has individual voting or investment power with respect to the shares.

(4) Includes 195,140 shares of common stock held by Adams Street 2016 Direct Venture/Growth Fund LP, 252,440 shares of common stock held by Adams Street 2017 Direct Venture/Growth Fund LP, 376,991 shares of common stock held by Adams Street 2018 Direct Venture/Growth Fund LP, 211,777 shares of common stock held by Adams Street 2019 Direct Venture/Growth Fund LP, 225,827 shares of common stock held by Adams Street 2020 Direct Venture/Growth Fund LP, 219,082 shares of common stock held by Adams Street 2021 Direct Venture/Growth Fund LP, and 938,240 shares of common stock held by Adams Street Growth Equity Fund VII LP.

Bremner, Jeffrey T.

Diehl, Elisha P.

Gould III, Robin P.

Murray and Fred Wang, each of whom is a partner of Adams Street Partners, LLC (or a subsidiary thereof), may be deemed to have shared voting and investment power over the shares.

Adams Street Partners, LLC and Thomas Bremner, Jeffrey Diehl, Elisha P.

Gould III, Robin Murray and Fred Wang disclaim beneficial ownership of the shares except to the extent of their pecuniary interest therein.

The address of Adams Street Partners, LLC is One North Wacker Drive, Suite 2700, Chicago, Illinois 60606.

(5) BioDiscovery 6 FPCI is exercised by its Management Company Andera Partners.

The Managing Partners of Andera Partners consist of Raphaël Wisniewski and Laurent Tourtois, none of whom has individual voting or investment power with respect to the shares.

(6) Includes 1,311,247 shares of common stock held by RA Capital Healthcare Fund, L.P.

(RA Healthcare) and 1,867,229 shares of common stock held by RA Capital Nexus Fund III, L.P.

RA Capital Management, L.P.

is the investment manager for RA Healthcare and Nexus III.

The general partner of RA Capital Management, L.P.

is RA Capital Management GP, LLC, of which Peter Kolchinsky, Ph.D.

and Rajeev Shah are the managing members.

RA Capital Management, L.P., RA Capital Management GP, LLC, Peter Kolchinsky, Ph.D.

and Rajeev Shah may be deemed to have voting and investment power over the shares held of record by RA Healthcare and Nexus III.

RA Capital Management, L.P., RA Capital Management GP, LLC, Peter Kolchinsky, Ph.D.

and Rajeev Shah disclaim beneficial ownership of such shares, except to the extent of any pecuniary interest therein.

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

(7) Includes 1,038,318 shares subject to repurchase by us within 60 days after February 16, 2023 and 12,542 shares of common stock issuable upon the exercise of options within 60 days of February 16, 2023.

(8) Includes 350,811 shares of common stock, 344,561 of which are subject to repurchase within 60 days after February 16, 2023.

(9) Includes 135,465 shares of common stock issuable upon the exercise of options within 60 days after February 16, 2023.

(10) Alexander Asam is an investment advisor to HBM Partners AG.

HBM Partners AG acts as an investment advisor to HBM Healthcare Investments (Cayman) Ltd.

Asam has no voting or investment power over the shares held by HBM Healthcare Investments (Cayman) Ltd.

and disclaims beneficial ownership of such shares is an investment advisor to HBM Partners AG.

HBM Partners AG acts as an investment advisor to HBM Healthcare Investments (Cayman) Ltd.

Asam has no voting or investment power over the shares held by HBM Healthcare Investments (Cayman) Ltd.

and disclaims beneficial ownership of such shares.

(11) Includes the shares described in footnotes 1, 2, and 7 through 10 above.

Equity Compensation Plan Information

The following table summarizes securities available under our equity compensation plans as of December 31, 2022.

Plan Category Number of securities to

be issued upon exercise

of outstanding options,

warrants and rights

Weighted average

exercise price of

outstanding options,

warrants, and rights

Number of securities

remaining available for

future issuance under

equity compensation

plans (excluding

securities reflected in

Equity compensation plans approved by stockholders 1,365,442 (1) $ 0.98 3,445,626 (2)

Equity compensation plans not approved by stockholders — — —

Total 1,365,442 (1) $ 0.98 3,445,626 (2)

______________

(1) Amount includes shares of common stock issuable under our 2020 Plan upon the exercise of 1,365,442 stock options but does not include 1,199,136 shares of unvested restricted stock.

Additionally, amount does not include any shares of common stock issuable under our 2023 Plan and 2023 Employee Stock Purchase Plan, each of which became effective in connection with our IPO and were not in effect as of December 31, 2022.

(2) Includes shares available for future issuance under our 2020 Plan.

The information required by this item is incorporated by reference to our 2024 Proxy Statement.

Certain Relationships and Related Transactions, and Director Independence

The following includes a summary of transactions since our inception in May 2019 to which we have been a party in which the amount involved exceeded or will exceed the lesser of $120,000 and one percent of the average of our total assets as of December 31, 2022, and in which any of our directors, executive officers or, to our knowledge, beneficial owners of more than 5% of our capital stock or any member of the immediate family of any of the foregoing persons had or will have a direct or indirect material interest, other than equity and other compensation, termination, change in control and other arrangements, which are described in Item 11 of Part III of this Annual Report.

We also describe below certain other transactions with our directors, executive officers and stockholders.

Convertible Notes

Between May 2019 and July 2020, we issued and sold in a private placement an aggregate of approximately $4.0 million in Convertible Notes to Catalys Pacific Fund, LP (Catalys Pacific), a beneficial owner of more than 5% of our capital stock.

The Convertible Notes accrued interest at a rate of 6% per annum.

The Convertible Notes were automatically converted into 10,868,432 shares of our Series A preferred stock in the February 2021 Series A preferred stock financing described below.

Preferred Stock Financings

Series A Convertible Preferred Stock Financings.

In February 2021, we entered into a Series A preferred stock purchase agreement, as amended in April 2021, pursuant to which we sold to investors in an initial closing in February 2021 and subsequent closings in April 2021 and January 2022 in private placements an aggregate of 86,332,216 shares of Series A convertible preferred stock, which included conversion of the Convertible Notes described above.

The per-share purchase price was $0.477, and we received gross proceeds of approximately $40.0 million, which included the conversion of the Convertible Notes described above at a discounted price of $0.3816 per share.

Series B Convertible Preferred Stock Financings.

In June 2022, we entered into a Series B preferred stock purchase agreement, pursuant to which in June 2022 we sold to investors, in private placements, an aggregate of 136,510,868 shares of Series B convertible preferred stock.

The per-share purchase price was $0.8644, and we received gross proceeds of approximately $118.0 million.

The following table sets forth the aggregate number of shares acquired by the listed directors, executive officers or holders of more than 5% of our capital stock, or their affiliates.

These shares of convertible preferred stock, including the shares identified in the table below, converted into shares of common stock at a ratio of one-for- 10.798 upon completion of our IPO.

Participants Series A

Convertible Preferred Stock

5% or greater stockholders (1)

Catalys Pacific Fund, LP

23,446,169 23,137,436

Samsara BioCapital, L.P.

23,059,184 15,617,769

HBM Healthcare Investments (Cayman) Ltd.

20,962,895 10,411,846

BioDiscovery 6 FPCI

Entities affiliated with RA Capital Management, L.P.

Entities affiliated with Adams Street Partners (3)

18,654,370 5,784,359

______________

(1) Additional details regarding these stockholders and their equity holdings are provided in “Principal Stockholders.”

(2) Represents securities acquired by RA Capital Healthcare Fund, L.P.

and RA Capital Nexus Fund III, L.P.

(3) Represents securities acquired by Adams Street 2016 Direct Venture/Growth Fund LP, Adams Street 2017 Direct Venture/Growth Fund LP, Adams Street 2018 Direct Venture/Growth Fund LP, Adams Street 2019 Direct Venture/Growth Fund LP, Adams Street 2020 Direct Venture/Growth Fund LP, Adams Street 2021 Direct Venture/Growth Fund LP, and Adams Street Growth Equity Fund VII LP.

Public Offering Participation Rights

We entered into letter agreements in June 2022 with Catalys Pacific, Samsara BioCapital, L.P., HBM Healthcare Investments (Cayman) Ltd., BioDiscovery 6 FPCI, entities affiliated with RA Capital Management, L.P., and entities affiliated with Adams Street Partners, LLC, each a beneficial owner of more than 5% of our capital stock.

The letter agreements granted each of such investors a participation right to purchase a specified, pro rata percentage of shares of common stock in our IPO at the public offering price, subject to compliance with applicable securities laws.

The letter agreement further provided that, under certain circumstances in which any such investor was unable to participate in our IPO, we were required to offer such investors shares of our common stock through a separate private placement to be concurrent with our IPO.

Catalys Pacific, Samsara BioCapital, L.P., HBM Healthcare Investments (Cayman) Ltd., BioDiscovery 6 FPCI, entities affiliated with RA Capital Management, L.P.

and entities affiliated with Adams Street Partners, LLC each purchased approximately $4.0 million, $15.0 million, $5.0 million, $15.0 million, $20.0 million and $2.5 million, respectively, of shares of our common stock in our IPO at the IPO price of $16.00 per share.

Investors’ Rights Agreement

We entered into an investors’ rights agreement in February 2021, as amended and restated in June 2022 (the Investors’ Rights Agreement), with the holders of our convertible preferred stock and certain holders of our common stock, including the holders of more than 5% of our capital stock listed above as well as entities with which certain of our directors are affiliated.

This agreement provides for certain rights relating to the registration of their shares of common stock issuable upon conversion of their convertible preferred stock and certain additional covenants made by us.

Except for the registration rights (including the related provisions pursuant to which we have agreed to indemnify the parties to the Investors’ Rights Agreement), all rights under this agreement terminated upon closing of our IPO.

The registration rights have continued following our IPO and will terminate five years after the closing of our IPO.

Voting Agreement

We entered into a voting agreement in February 2021, as amended and restated in June 2022 (the Voting Agreement), with the holders of our convertible preferred stock and certain holders of our common stock, including the holders of more than 5% of our capital stock listed above as well as entities with which certain of our directors are affiliated, pursuant to which the following directors were each elected to serve as members on our board of directors and, as of the date of this Annual Report, continue to so serve:

Srinivas Akkaraju, M.

D., Ph.D., Alexander Asam, Ph.D., Jon Congleton, Derek DiRocco, Ph.D., Olivier Litzka, Ph.D., Brian Taylor Slingsby, M.D., Ph.D., M.P.H., and Takeshi Takahashi, M.B.A.

Pursuant to the Voting Agreement, Mr.

Congleton, as our Chief Executive Officer, serves on our board of directors as the CEO director.

Takahashi was initially selected to serve on our board of directors as representative of the holders of our common stock, Dr.

Akkaraju, Dr.

Slingsby were initially selected to serve on our board of directors as representatives of the holders of our Series A convertible preferred stock and Dr.

DiRocco and Dr.

Litzka and were initially selected to serve on our board of directors as a representative of the holders of our Series B convertible preferred stock.

The Voting A greement terminated upon the closing of our IPO, and members previously elected to our board of directors pursuant to this agreement continue to serve as directors until they resign, are removed or their successors are duly elected by holders of our common stock.

The composition of our board of directors is described in more detail under the section titled “Board Composition and Election of Directors” within Item 10 of Part III of this Annual Report.

Right of Refusal and Co-Sale Agreement

We entered into a right of first refusal and co-sale agreement in February 2021, as amended and restated in June 2022 (the ROFR Agreement), with holders of our common stock affiliated with our executive officers and Catalys Pacific, which entities are referred to in the ROFR Agreement as key holders, and certain other holders of convertible preferred stock, including the holders of more than 5% of our capital stock listed above.

Pursuant to the ROFR Agreement, we have a right of first refusal on certain transfers of our shares by the key holders, holders of our convertible preferred stock have a secondary right of first refusal on such transfers, and such convertible preferred stockholders have a right of co-sale in respect of such transfers.

The ROFR Agreement has terminated upon the completion of our IPO.

Equity Grants to Executive Officers and Directors

We have granted stock options and restricted stock awards to certain of our executive officers and non-employee directors, as more fully described in Item 11 of Part III of this Annual Report.

Employment Arrangements

We have entered into employment letter agreements with our executive officers.

For more information regarding these letter agreements with our executive officers, see the section titled “Employment Arrangements with our Executive Officers” within Item 11 of Part III of this Annual Report.

Director and Officer Indemnification

We have entered into indemnification agreements with each of our directors and executive officers.

These agreements, among other things, require us or will require us to indemnify each director (and in certain cases their related venture capital funds) and executive officer to the fullest extent permitted by Delaware law, including indemnification of expenses such as attorneys’ fees, judgments, fines and settlement amounts incurred by the director or executive officer in any action or proceeding, including any action or proceeding by or in right of us, arising out of the person’s services as a director or executive officer.

Our amended and restated certificate of incorporation and our amended and restated bylaws provide that we will indemnify each of our directors and officers to the fullest extent permitted by the Delaware General Corporation Law.

Further, we have purchased a policy of directors’ and officers’ liability insurance that insures our directors and officers against the cost of defense, settlement or payment of a judgment under certain circumstances.

Policies and Procedures for Related Person Transactions

Our board of directors adopted a written related person transaction policy, made effective upon the closing of our IPO, setting forth the policies and procedures for the review and approval or ratification of related person transactions.

This policy covers, with certain exceptions set forth in Item 404 of Regulation S-K under the Securities Act, any transaction, arrangement or relationship, or any series of similar transactions, arrangements or relationships in which we were or are to be a participant, where the amount involved exceeds the lesser of $120,000 or one percent of the average of our total assets at year-end for the last two completed fiscal years, and a related person had or will have a direct or indirect material interest, including, without limitation, purchases of goods or services by or from the related person or entities in which the related person has a material interest, indebtedness, guarantees of indebtedness and employment by us of a related person.

In reviewing and approving any such transactions, our audit committee is tasked to consider all relevant facts and circumstances, including, but not limited to, whether the transaction is on terms comparable to those that could be obtained in an arm’s length transaction and the extent of the related person’s interest in the transaction.

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

Director Independence

See Item 10 of Part III of this Annual Report for information about our director independence which is incorporated by reference herein.

Principal Accounting Fees and Services

Independent Registered Public Accounting Firms Fees

Ernst & Young LLP (“E&Y”) has served as the Company’s independent registered public accounting firm since 2022.

The following table sets forth the aggregate fees and expenses billed to us by E&Y for fiscal years 2022 and 2021 (in thousands):

Audit Fees (1) $ 1,061 $ —

Audit-Related Fees — —

All Other Fees — —

Total $ 1,061 $ —

______________

(1) Audit fees consist of fees for professional services rendered for the audit of our year-end consolidated financial statements and services that are normally provided by our independent registered public accounting firm in connection with regulatory filings.

These services include auditing work in connection with the Company’s IPO.

Pre-Approval Policies and Procedures

Our audit committee has established a policy that all audit and permissible non-audit services provided by our independent registered public accounting firm will be pre-approved by the audit committee, and all such services were pre-approved in accordance with this policy during the fiscal year ended December 31, 2022.

These services may include audit services, audit-related services, tax services and other services.

The audit committee considers whether the provision of each non-audit service is compatible with maintaining the independence of our auditors.

Pre-approval is detailed as to the particular service or category of services and is generally subject to a specific budget.

Our independent registered public accounting firm and management are required to periodically report to the audit committee regarding the extent of services provided by the independent registered public accounting firm in accordance with this pre-approval, and the fees for the services performed to date.

Exhibits, Financial Statement Schedules

The information required by this item is incorporated by reference to our 2024 Proxy Statement.

Principal Accountant Fees and Services

The information required by this item is incorporated by reference to our 2024 Proxy Statement.

Exhibit and Financial Statement Schedules

Financial Statements

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EXHIBIT INDEX

Incorporated by Reference

Number Exhibit Description Form Date Number Filed Herewith

Number Incorporated by Reference Filed Herewith

Exhibit Description Form Date Number

3.1 Amended and Restated Certificate of Incorporation

6 unchanged sentences

S-1/A 2/2/23 4.2

Form of Pre-Funded Warrant

Description of Registered Securities

21 unchanged sentences

S-1 1/18/23 10.9

Securities Purchase Agreement, dated February 7, 2024, by and between the Registrant and each of the purchasers party thereto

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

5 unchanged sentences

Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

Mineralys Therapeutics, Inc.

Policy for Recovery of Erroneously Awarded Compensation

101.INS XBRL Instance Document x

101.SCH XBRL Taxonomy Extension Schema Document x

101.CAL XBRL Taxonomy Extension Calculation Linkbase Document x

101.DEF XBRL Taxonomy Extension Definition Linkbase Document x

101.LAB XBRL Taxonomy Extension Label Linkbase Document x

101.PRE XBRL Taxonomy Extension Presentation Linkbase Document x

104 Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101) x

__________________

14 unchanged sentences

Jon Congleton

/s/ Adam Levy Chief Financial Officer,

Chief Business Officer, and Secretary

/s/ Adam Levy Chief Financial Officer and Secretary

(principal financial and accounting officer)

16 unchanged sentences

Olivier Litzka, Ph.D.

/s/ Takeshi Takahashi

/s/ Daphne Karydas

March 21, 2024

Takeshi Takahashi, M.B.A.

Daphne Karydas

/s/ Glenn Sblendorio

March 21, 2024

Glenn Sblendorio

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