What changed in this filing

/stocks — the workspaceLOADING

Item 8. Financial Statements and Supplementary Data

2025-02-12 compared with 2024-03-21 · 134 added, 92 removed, 434 unchanged (34% of the section changed)

30 unchanged sentences

/s/ Ernst & Young LLP

March 21, 2024

We have served as the Company’s auditor since 2022.

Denver, Colorado

February 12, 2025

Mineralys Therapeutics, Inc.

7 unchanged sentences

Investments, noncurrent — 2,482

Property and equipment, net 53 —

Other assets 499 51

Total assets $ 205,903 $ 251,636

Liabilities, convertible preferred stock, and stockholders’ equity (deficit)

Liabilities and stockholders’ equity

Current liabilities:

3 unchanged sentences

Commitments and contingencies (Note 4)

Series A convertible preferred stock, $ 0.0001 par value, 0 and 86,332,216 shares authorized and 0 and 86,332,216 shares issued and outstanding as of December 31, 2023 and 2022, respectively, $ 0 and $ 41,180 aggregate liquidation preference as of December 31, 2023 and 2022, respectively

Series B convertible preferred stock, $ 0.0001 par value, 0 and 136,510,868 shares authorized and 0 and 136,510,868 shares issued and outstanding as of December 31, 2023 and 2022, respectively, $ 0 and $ 118,000 aggregate liquidation preference as of December 31, 2023 and 2022, respectively

Stockholders’ equity (deficit):

Common stock, $ 0.0001 par value, 500,000,000 and 319,000,000 shares authorized and 41,133,916 and 6,419,238 shares issued and outstanding as of December 31, 2023 and 2022, respectively

Stockholders’ equity:

Common stock, $ 0.0001 par value;

500,000,000 shares authorized as of December 31, 2024 and 2023;

49,821,915 and 41,133,916 shares issued and outstanding as of December 31, 2024 and 2023, respectively

Additional paid-in capital 493,770 365,858

Accumulated deficit ( 302,518 ) ( 124,708 )

Total stockholders’ equity (deficit) 241,154 ( 52,269 )

Total liabilities, convertible preferred stock, and stockholders’ equity (deficit) $ 251,636 $ 114,442

Total stockholders’ equity 191,257 241,154

Total liabilities and stockholders’ equity $ 205,903 $ 251,636

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

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Balance as of December 31, 2022 86,332,216 $ 40,987 136,510,868 $ 117,657 6,419,238 $ 1 $ 540 $ ( 52,810 ) $ ( 52,269 )

Issuance of Series A convertible preferred stock, net of issuance costs of $ 7

25,151,957 11,991 — — — — — — —

Issuance of Series B convertible preferred stock, net of issuance costs of $ 343

Conversion of preferred stock to common stock upon closing of initial public offering ( 86,332,216 ) ( 40,987 ) ( 136,510,868 ) ( 117,657 ) 20,637,415 2 158,642 — 158,644

Issuance of common stock from initial public offering, net of issuance costs of $ 19,441

— — — — 13,800,000 1 201,358 — 201,359

Issuance of restricted stock awards — — — — 977,258 — — — —

Issuance of common stock from stock option exercises — — — — 268,534 — 194 — 194

Issuance of common stock for cash under employee stock purchase plan — — — — 8,729 — 64 — 64

Stock-based compensation — — — — — — 5,060 — 5,060

1 unchanged sentence

Balance as of December 31, 2023 — — — — 41,133,916 4 365,858 ( 124,708 ) 241,154

Conversion of preferred stock to common stock upon closing of initial public offering ( 86,332,216 ) ( 40,987 ) ( 136,510,868 ) ( 117,657 ) 20,637,415 2 158,642 — 158,644

Issuance of common stock from initial public offering, net of issuance costs of $ 19,441

Issuance of common stock and pre-funded warrants in a private placement offering, net of offering costs of $ 3,941

— — — — 8,339,169 1 116,058 — 116,059

13 unchanged sentences

Stock-based compensation 11,336 5,060

Depreciation and amortization 43 —

Changes in operating assets and liabilities:

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Maturity of marketable securities 488,500 187,500

Net cash used in investing activities ( 160,472 ) ( 21,759 )

Purchases of property and equipment ( 96 ) —

Net cash provided by (used in) investing activities 114,959 ( 160,472 )

CASH FLOWS FROM FINANCING ACTIVITIES:

Issuance of common stock in initial public offering, net of offering costs 202,990 ( 1,629 )

Proceeds from issuance of common stock and pre-funded warrants in a private placement offering, net of paid offering costs 116,059 —

Proceeds from stock option exercises 297 194

Proceeds from the issuance of common stock for cash under employee stock purchase plan 221 64

Proceeds from the issuance of Series A convertible preferred stock, net of offering costs — 11,991

Proceeds from the issuance of Series B convertible preferred stock, net of offering costs — 117,657

Offering costs paid ( 435 ) —

Proceeds from issuance of common stock in initial public offering, net of offering costs

Net cash provided by financing activities 116,142 203,248

Net increase (decrease) in cash and cash equivalents 64,787 ( 38,397 )

Cash, cash equivalents, and restricted cash - beginning 87,701 10,662

Cash and cash equivalents - beginning 49,304 87,701

Cash and cash equivalents - ending (1)

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Conversion of convertible preferred stock to common stock upon closing of initial public offering $ — $ 159,180

Deferred offering costs included in accounts payable and accrued liabilities $ — $ 360

(1) Cash and cash equivalents as of December 31, 2024 exclude investments of $ 84.1 million.

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Mineralys Therapeutics, Inc.

(the Company) is a clinical-stage biopharmaceutical company focused on developing medicines to target diseases driven by abnormally elevated aldosterone.

The Company’s clinical-stage product candidate, lorundrostat, is a proprietary, orally administered, aldosterone synthase inhibitor that the Company is initially developing for the treatment of cardiorenal conditions affected by abnormally elevated aldosterone, including hypertension and chronic kidney disease.

The Company has initiated a pivotal clinical program of lorundrostat for the treatment of uncontrolled or resistant hypertension and initiated a Phase 2 trial for lorundrostat in hypertensive patients with Stage 2 to 3b chronic kidney disease.

(the Company) is a clinical-stage biopharmaceutical company focused on developing medicines to target diseases driven by dysregulated aldosterone.

The Company’s clinical-stage product candidate, lorundrostat, is a proprietary, orally administered, aldosterone synthase inhibitor that the Company is developing for the treatment of cardiorenal conditions affected by dysregulated aldosterone, including hypertension, chronic kidney disease, and obstructive sleep apnea.

The Company has initiated a pivotal clinical program of lorundrostat for the treatment of uncontrolled or resistant hypertension and a Phase 2 trial for lorundrostat in hypertensive patients with Stage 2 to 3b chronic kidney disease.

Additionally, the Company is investigating the benefits of lorundrostat in subjects with hypotension and obstructive sleep apnea.

The Company was incorporated as a Delaware corporation in May 2019, and it is headquartered in Radnor, Pennsylvania.

The Company’s operations to date have been limited to business planning, raising capital, in-licensing lorundrostat, conducting preclinical and clinical trials, and other research and development.

The Company’s operations to date have been limited to business planning, raising capital, in-licensing, conducting preclinical and clinical trials, and other research and development.

Initial Public Offering

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On February 1, 2023, the Company effected a one-for-10.798 reverse stock split of its issued and outstanding shares of common stock, par value $ 0.0001 per share, and a proportional adjustment to the existing conversion ratio of the Company’s preferred stock (the Reverse Stock Split).

Accordingly, all share and per-share amounts for all periods presented in the accompanying financial statements and notes thereto have been adjusted to reflect this Reverse Stock Split.

Accordingly, all share and per-share amounts for all years presented in the accompanying financial statements and notes thereto have been adjusted to reflect this Reverse Stock Split.

Liquidity and Capital Resources

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For the year ended December 31, 2024, the Company had a net loss of $ 177.8 million and net cash used in operating activities of $ 166.3 million.

From inception to December 31, 2023, the Company has funded its operations by raising aggregate gross proceeds of approximately $ 378.8 million from the sale of the Company’s common stock, convertible preferred stock, and convertible notes.

From inception to December 31, 2024, the Company has funded its operations by raising aggregate gross proceeds of approximately $ 498.8 million from the sale of the Company’s common stock, convertible preferred stock, convertible notes, and pre-funded warrants.

The Company has a limited operating history, and the sales and income potential of its business is unproven.

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The financial statements have been prepared in accordance with accounting principles generally accepted in the United States (U.S.

GAAP), which include all adjustments necessary for the fair presentation of the Company’s financial position, results of operations, and cash flows for the periods presented.

GAAP), which include all adjustments necessary for the fair presentation of the Company’s financial position, results of operations, and cash flows for the years presented.

Any reference in these notes to applicable guidance is meant to refer to the authoritative U.S.

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Segment Information

The Company operates in one operating segment for the purposes of assessing performance and making operating decisions and, accordingly, no segment disclosures have been presented herein.

The Company operates in one operating segment for the purposes of assessing performance, making operating decisions, and allocating Company resources.

The Company’s chief operating decision maker (CODM) is its chief executive officer, who considers net loss to evaluate overall expenses associated with conducting research and development activities, which includes evaluating the progress of ongoing clinical trials and the planning and execution of current and future research and development activities.

Further, the CODM reviews and utilizes functional expenses (research and development and general and administrative) as reported in the statements of operations to manage the Company’s operations.

Other segment items included in net loss are interest income, net and other income.

The measure of performance, significant expenses, and other items are each reflected in the statements of operations.

The accounting policies of the segment are the same as those described below.

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

All assets are held in the United States.

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research and development accruals, fair value of the Company’s common stock prior to the closing of the Company’s IPO, and income taxes.

Cash, Cash Equivalents, and Restricted Cash

Cash and Cash Equivalents

All highly liquid investments that have maturities of 90 days or less at the date of purchase are classified as cash equivalents.

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cash balances.

The following table provides a reconciliation of cash and cash equivalents as reported in the statement of cash flows to the balance sheets (in thousands):

The Company’s cash and cash equivalents balances as of December 31, 2024 include cash balances and amounts held primarily in interest-bearing money market accounts and U.S.

Treasury bills with original maturities of less than three months.

The Company’s cash and cash equivalents balances as of December 31, 2023 include cash balances and amounts held primarily in interest-bearing money market accounts.

The following table provides a reconciliation of cash and cash equivalents as reported in the statements of cash flows to the balance sheets (in thousands):

Cash $ 664 $ 643

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Total cash and cash equivalents $ 114,091 $ 49,304

The Company’s cash and cash equivalents balances as of December 31, 2023 include cash balances and amounts held primarily in interest-bearing money market accounts.

As of December 31, 2021, the Company had $ 50 thousand classified as restricted cash, which is reported in the 2022 opening cash, cash equivalents, and restricted cash balance reported in the statements of cash flows.

Concentration of Credit Risk

The Company has no significant off-balance sheet concentrations of credit risk, such as foreign currency exchange contracts, option contracts, or other hedging arrangements.

Financial instruments that potentially subject the Company to concentrations of credit risk primarily consist of cash balances in several accounts with two financial institutions which, from time to time, are in excess of federally insured limits.

Financial instruments that potentially subject the Company to concentrations of credit risk primarily consist of cash balances in several accounts with three financial institutions which, from time to time, are in excess of federally insured limits.

Risks and Uncertainties

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

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

Deferred offering costs as of December 31, 2023 and 2022 were $ 0 and $ 1.6 million, respectively.

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

Deferred offering costs as of December 31, 2024 and 2023 were $ 0.4 million and $ 0 , respectively.

Such costs are classified in other assets on the balance sheets.

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The Company believes that the companies in the group were most representative of the Company and had characteristics similar to its own, including stage of product development, a focus on the life sciences industry, and other economic and industry characteristics.

Expected Term — The Company uses the simplified method to calculate the expected term, as it does not have sufficient historical exercise data to provide a reasonable basis upon which to estimate the expected term for options granted, and utilized the contractual term for options granted.

Risk-Free Interest Rate — The risk-free interest rate is based on a treasury instrument whose term is consistent with the expected life of the stock options.

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Notes to Financial Statements

Defined Contribution Plan

The Company sponsors a qualified 401(k) plan that allows eligible employees to make contributions, subject to certain limitations.

The Company provides a matching contribution of up to 4 % of an employee’s compensation.

For the years ended December 31, 2024 and 2023, the Company made matching contributions of $ 0.4 million and $ 0.2 million, respectively.

Net Loss Per Share

The Company’s basic net loss per share attributable to common stockholders is calculated by dividing the net loss attributable to common stockholders by the weighted-average number of shares of common stock outstanding for the period.

The diluted net loss per share attributable to common stockholders is computed by giving effect to all potential common stock equivalents outstanding for the period determined using the treasury stock method.

For purposes of this calculation, convertible preferred stock and stock options to purchase common stock are considered to be common stock equivalents but have been excluded from the calculation of diluted net loss per share attributable to common stockholders as their effect is anti-dilutive.

The diluted net loss per share attributable to common stockholders is computed by giving effect to all potential common stock equivalents outstanding for the year determined using the treasury stock method.

For purposes of this calculation, unvested restricted stock awards and stock options to purchase common stock are considered to be common stock equivalents but have been excluded from the calculation of diluted net loss per share attributable to common stockholders as their effect is anti-dilutive.

The weighted-average number of common shares used in the basic and diluted net loss per common stockholders calculations includes the weighted-average pre-funded warrants outstanding during the period as they are exercisable at any time for nominal cash consideration.

The following table sets forth the potential common shares excluded from the calculation of net loss per common share because their inclusion would be anti-dilutive:

1 unchanged sentence

Unvested restricted stock awards 370,106 1,007,930

Convertible preferred stock (as converted into common stock) — 20,637,415

Total 4,930,398 3,548,209

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Notes to Financial Statements

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

Improvements to Reportable Segment Disclosures, which expands annual and interim disclosure requirements for reportable segments, including public entities with a single reportable segment, primarily through enhanced disclosures about significant segment expenses.

The Company adopted this standard for the Company’s fiscal year 2024 annual reporting period.

In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740) - Improvements to Income Tax Disclosures.

The new standard requires a company to expand its existing income tax disclosures, specifically related to the rate reconciliation and income taxes paid.

The standard is effective for the Company beginning in fiscal year 2026, with early adoption permitted.

The Company does not expect to early adopt the new standard.

The new standard is expected to be applied prospectively, but retrospective application is permitted.

The Company is currently evaluating the impact of ASU 2023-09 on its financial statements and related disclosures.

Fair Value of Financial Instruments

2 unchanged sentences

Money market funds $ 83,602 $ 48,661

There were no transfers within the fair value hierarchy during the periods presented.

There were no transfers within the fair value hierarchy during the years presented.

The following methods and assumptions were used by the Company in estimating the fair values of each class of financial instrument disclosed herein:

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The fair values of money market funds are determined by Level 1 inputs utilizing quoted prices (unadjusted) in active markets for identical assets.

Treasury Bills—As of December 31, 2023 and 2022, the Company had short- and/or long-term U.S.

Treasury Bills—As of December 31, 2024 and 2023, the Company had short- and long-term U.S.

Treasury bills.

Fair values of these securities are determined by Level 2 inputs utilizing quoted prices (unadjusted) in active markets for similar assets .

The following table presents held-to-maturity U.S.

Treasury bills information as of each reported date (in thousands):

The following table presents information about the Company’s investments in held-to-maturity U.S.

Treasury bills as of each reported date (in thousands):

As of December 31, 2024

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Cost Estimated

Cash and cash equivalents less than 3 months $ 29,825 $ 29,829

Investments between 3 and 12 months 84,096 84,123

Investments, noncurrent greater than 1 year 2,482 2,486

Total $ 113,921 $ 113,952

Mineralys Therapeutics, Inc.

Notes to Financial Statements

As of December 31, 2023

2 unchanged sentences

Investments between 3 and 12 months $ 187,263 $ 187,293

Investments, noncurrent greater than 1 year 2,482 2,486

Total $ 189,745 $ 189,779

Commitments and Contingencies

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Pursuant to the Mitsubishi License, the Company paid Mitsubishi Tanabe a $ 1.0 million upfront fee and development milestone payments of $ 9.0 million in the aggregate.

The Company has remaining obligations to pay Mitsubishi Tanabe commercial milestone payments of up to $ 155.0 million in the aggregate upon first commercial sale and upon meeting certain annual sales targets, as well as additional commercial milestone payments of up to $ 10.0 million for a

Mineralys Therapeutics, Inc.

Notes to Financial Statements

second indication.

Additionally, the Company is obligated to pay Mitsubishi Tanabe tiered royalties at percentages ranging from the mid-single-digits to ten percent ( 10 %) of aggregate net sales of each Lorundrostat Product on a Lorundrostat Product-by-Lorundrostat Product and country-by-country basis, until the later of (i) the expiration of the last-to-expire valid Mitsubishi Tanabe patent claim covering a Lorundrostat Product, (ii) ten years from the first commercial sale of a Lorundrostat Product, or (iii) the expiration of regulatory exclusivity in such country.

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In addition, either party may terminate the Mitsubishi License in the event of an uncured material breach by or bankruptcy of the other party, subject to certain notice and cure periods, or upon the other party’s bankruptcy or insolvency.

The Company incurred $ 9.0 million and $ 0 of research and development expenses related to the Mitsubishi License during the years ended December 31, 2023 and 2022, respectively.

The development milestones of $ 4.0 million and $ 5.0 million were achieved in March 2023 and December 2023, respectively, and related to the Company’s initiation of its pivotal clinical program of lorundrostat.

These payments satisfied in full the aggregate development milestone payments described above.

The Company incurred $ 0 and $ 9.0 million of research and development expenses pursuant to the Mitsubishi License during the years ended December 31, 2024 and 2023, respectively, that related to the Company’s initiation of its pivotal clinical program of lorundrostat in 2023.

As of December 31, 2024, the

Mineralys Therapeutics, Inc.

Notes to Financial Statements

Company has paid an aggregate of $ 9.0 million in development milestone payments and has no remaining development milestone obligations under the Mitsubishi License.

Liabilities for loss contingencies arising from claims, assessments, litigation, fines, penalties, and other sources are recorded when it is probable that a liability has been incurred and the amount can be reasonably estimated.

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

The Company is not aware of any claims under indemnification

Mineralys Therapeutics, Inc.

Notes to Financial Statements

arrangements, and it has not accrued any liabilities related to such obligations in its financial statements as of December 31, 2023 and 2022.

The Company is not aware of any claims under indemnification arrangements, and it has not accrued any liabilities related to such obligations in its financial statements as of December 31, 2024 and 2023.

Accrued Liabilities

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As of December 31, 2024, the Company had reserved authorized shares of common stock for future issuance as follows:

Shares available for grant under the 2023 Plan 3,206,629

Common stock options outstanding 4,560,292

Shares available for grant under the 2023 Plan 2,510,030

Shares available for grant under the ESPP 775,722

Pre-funded warrants issued and outstanding 549,755

Total 8,395,799

In connection with the closing of the IPO in February 2023, the Company’s board of directors approved an amendment to the Company’s amended and restated certificate of incorporation (the Restated Certificate).

The Restated Certificate amended and restated the Company’s amended and restated certificate of incorporation, in its entirety to, among other things, increase the authorized number of shares of common stock to 500,000,000 shares and authorize 50,000,000 shares of undesignated preferred stock that may be issued from time to time by the Company’s board of directors in one or more series.

Mineralys Therapeutics, Inc.

Notes to Financial Statements

to 500,000,000 shares and authorize 50,000,000 shares of undesignated preferred stock that may be issued from time to time by the Company’s board of directors in one or more series.

Preferred Stock Offerings

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In January 2022, the Company achieved the Milestone under the Series A Purchase Agreement and sold an aggregate of 25,151,957 shares of Series A Preferred Stock under the Series A Purchase Agreement to certain existing investors, members of the Company’s board of directors, and affiliates of members of its board of directors, at a purchase price of $ 0.477 per share for aggregate net proceeds of approximately $ 12.0 million.

In June 2022, the Company entered into a Series B convertible preferred stock agreement with certain investors, including members of the Company’s board of directors and affiliates of members of its board of directors, pursuant to which the Company issued and sold to such investors an aggregate of 136,510,868 shares

Mineralys Therapeutics, Inc.

Notes to Financial Statements

of Series B Preferred Stock at a purchase price of $ 0.8644 per share for aggregate net proceeds of approximately $ 117.7 million.

Immediately prior to the closing of the IPO, 86,332,216 shares of Series A Preferred Stock and 136,510,868 shares of Series B Preferred Stock converted into 20,637,415 shares of the Company’s common stock, and the carrying value of Series A Preferred Stock and Series B Preferred Stock was converted to permanent equity.

Private Placement Offering

On February 7, 2024, the Company entered into a securities purchase agreement (the Purchase Agreement) with the purchasers named therein (the Purchasers), for the private placement (the Private Placement) of (i) 8,339,169 shares (the Shares) of the Company’s common stock at a price of $ 13.50 per Share, and (ii) with respect to certain Purchasers, pre-funded warrants to purchase an aggregate of 549,755 shares of common stock (the Pre-Funded Warrants) in lieu of shares of common stock, at a purchase price of $ 13.499 per Pre-Funded Warrants (the shares of common stock issuable upon exercise of the Pre-Funded Warrants, the Warrant Shares).

The aggregate gross proceeds for the Private Placement were approximately $ 120.0 million, before deducting offering expenses.

The Company expects to use the net proceeds from the Private Placement to fund the research and development of lorundrostat and for working capital and general corporate purposes.

On February 7, 2024, the Company entered into a securities purchase agreement (the Purchase Agreement) with the purchasers named therein (the Purchasers), for the private placement (the Private Placement) of (i) 8,339,169 shares (the Shares) of the Company’s common stock at a price of $ 13.50 per Share, and (ii) with respect to certain Purchasers, pre-funded warrants to purchase an aggregate of 549,755 shares of common stock (the Pre-Funded Warrants) in lieu of shares of common stock, at a purchase price of $ 13.499 per Pre-Funded Warrant (the shares of common stock issuable upon exercise of the Pre-Funded Warrants, the Warrant Shares) for aggregate net proceeds of approximately $ 116.1 million.

The Company is using the net proceeds from the Private Placement to fund the research and development of lorundrostat and for working capital and general corporate purposes.

Each Pre-Funded Warrant has an exercise price of $ 0.001 per share of common stock, is immediately exercisable on the date of issuance, and will not expire.

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However, any holder may increase or decrease such percentage to any other percentage not in excess of 19.99 %, provided that any increase in such percentage shall not be effective until 61 days after such notice is delivered to the Company.

Pursuant to the Purchase Agreement, the Company agreed to file a registration statement with the Securities and Exchange Commission (the SEC) within 60 days after the closing of the Private Placement (subject to certain exceptions) for purposes of registering the resale of the Shares and the Warrant Shares, to use its reasonable best efforts to have such registration statement declared effective within the time period set forth in the Purchase Agreement, and to keep such registration statement effective until the earliest of (i) the time as all of the Shares and Warrant Shares purchased by the Purchasers pursuant to the terms of the Purchase Agreement have been sold pursuant to the registration statement, or (ii) such time as the Shares and Warrant Shares become eligible for resale by non-affiliates without any volume limitations or other restrictions pursuant to Rule 144 under the Securities Act of 1933, as amended, or any other rule of similar effect.

Mineralys Therapeutics, Inc.

Notes to Financial Statements

The Company registered the resale of the Shares and the Warrant Shares on a shelf registration statement on Form S-3 (Registration No.

333-278122), which was declared effective by the SEC on April 11, 2024 (the Registration Statement).

Pursuant to the Purchase Agreement, the Company agreed to use its reasonable best efforts to keep the Registration Statement effective until the earliest of (i) the time as all of the Shares and Warrant Shares purchased by the Purchasers pursuant to the terms of the Purchase Agreement have been sold pursuant to the Registration Statement, or (ii) such time as the Shares and Warrant Shares become eligible for resale by non-affiliates without any volume limitations or other restrictions pursuant to Rule 144 under the Securities Act of 1933, as amended, or any other rule of similar effect.

At Market Equity Offering Sales Agreement

On March 21, 2024, the Company entered into an ATM Equity Offering Sales Agreement (the ATM Agreement) with BofA Securities, Inc.

and Evercore Group L.L.C.

as the Company’s sales agents (the Agents) and/or principals.

Pursuant to the terms of the ATM Agreement, the Company may sell from time to time through the Agents shares of the Company’s common stock having an aggregate offering price of up to $ 100,000,000 (the ATM Shares).

Any ATM Shares will be issued pursuant to the Registration Statement.

Sales of the ATM Shares, if any, will be made by means of ordinary brokers’ transactions on the Nasdaq Global Select Market or as otherwise agreed by the Company and the Agents.

Under the terms of the ATM Agreement, the Company may also sell the ATM Shares from time to time to an Agent as principal for its own account at a price to be agreed upon at the time of sale.

Any sale of the ATM Shares to an Agent as principal would be pursuant to the terms of a separate terms agreement between the Company and such Agent.

The Company has not yet sold any ATM Shares as of December 31, 2024.

Stock-Based Compensation

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The number of shares of the Company’s common stock initially available for issuance under awards granted pursuant to the 2023 Plan was the sum of (i) 4,650,000 shares of the Company’s common stock, plus (ii) any shares subject to outstanding awards under the 2020 Plan described below as of the effective date of the 2023 Plan that become available for issuance under the 2023 Plan thereafter in accordance with its terms.

Mineralys Therapeutics, Inc.

Notes to Financial Statements

The number of shares initially available for issuance will be increased on January 1 of each calendar year beginning in 2024 and ending in 2033, by an amount equal to the lesser of (i) 4 % of the shares of the Company’s common stock outstanding on the final day of the immediately preceding calendar year and (ii) such smaller number of shares as determined by the Company’s board of directors.

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Subsequent to the closing of the IPO, no additional awards will be granted under the 2020 Plan.

However, the 2020 Plan will continue to govern the terms and conditions of the outstanding awards granted under it.

However, the 2020 Plan will continue to govern the terms and conditions of the outstanding awards granted

Mineralys Therapeutics, Inc.

Notes to Financial Statements

Shares of the Company’s common stock subject to awards granted under the 2020 Plan that expire, lapse, or are terminated, exchanged for cash, surrendered, repurchased, or forfeited following the effective date of the 2020 Plan will be available for issuance under the 2023 Plan in accordance with its terms.

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Total 4,560,292 370,106 2,510,030

Mineralys Therapeutics, Inc.

Notes to Financial Statements

Stock Options

4 unchanged sentences

Options granted 2,709,800 $ 12.83

Options outstanding as of December 31, 2022 1,365,442 $ 0.98 $ 15,561 9.1

Options granted 1,588,235 $ 15.19

Options exercised ( 321,942 ) $ 0.92

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For the years ended December 31, 2024 and 2023, the total fair value of options vested was $ 8.9 million and $ 1.5 million, respectively.

The aggregate intrinsic value of options exercised for the years ended December 31, 2023 and 2022 was $ 3.2 million and $ 0 , respectively.

The aggregate intrinsic value of options exercised for the years ended December 31, 2024 and 2023 was $ 4.2 million and $ 3.2 million, respectively.

The weighted-average grant date fair value per share for options granted during the years ended December 31, 2024 and 2023 was $ 9.55 and $ 12.41 , respectively.

The following table presents the weighted-average assumptions used in the Black-Scholes option pricing model to determine the fair value of stock options granted during the following periods:

The following table presents the weighted-

Mineralys Therapeutics, Inc.

Notes to Financial Statements

average assumptions used in the Black-Scholes option pricing model to determine the fair value of stock options granted during the following periods:

Exercise price $ 12.83 $ 15.19

3 unchanged sentences

Expected dividend yield — % — %

On February 14, 2024, the Company’s board of directors approved the grant under the 2023 Plan of stock options to purchase an aggregate of 1,469,600 shares of its common stock to certain of the Company’s employees at an exercise price equal of $ 14.25 .

Restricted Stock Awards

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Upon a participant’s termination of continuous service for any reason, any shares subject to RSAs held by the participant that have not vested as of such termination date may be forfeited to or repurchased by the Company.

Mineralys Therapeutics, Inc.

Notes to Financial Statements

The following is a summary of the Company’s RSA activity under its 2023 Plan and 2020 Plan:

1 unchanged sentence

Unvested as of December 31, 2023 1,007,930 $ 1.6338

977,258 $ 1.7512

( 115,761 ) $ 0.0010

Unvested as of December 31, 2022 1,199,136 $ 1.4290

Vested ( 637,824 ) $ 1.5466

1 unchanged sentence

As of December 31, 2024, the Company had $ 0.6 million of unrecognized share-based compensation expense related to RSAs that is expected to be recognized over a weighted-average period of approximately 0.8 years.

For the years ended December 31, 2023 and 2022, the total fair value of RSAs vested was $ 0.1 million in each year.

For the years ended December 31, 2024 and 2023, the total fair value of RSAs vested was $ 1.0 million and $ 0.1 million, respectively.

2023 Employee Stock Purchase Plan

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In addition, the number of shares available for issuance under the ESPP will be annually increased on January 1 of each calendar year beginning in 2024 and ending in and including 2033, by an amount equal to the lesser of (i) 1 % of the shares outstanding on the final day of the immediately preceding calendar year and (ii) such smaller number of shares as is determined by the Company’s board of directors, provided that no more than 15,000,000 shares of the Company’s common stock may be issued under the ESPP.

Mineralys Therapeutics, Inc.

Notes to Financial Statements

Total stock-based compensation expense reported in the statements of operations was allocated as follows (in thousands):

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$ 11,336 $ 5,060

Mineralys Therapeutics, Inc.

Notes to Financial Statements

There was no current or deferred income tax expense or benefit for the years ended December 31, 2024 and 2023, due to the Company’s net loss and increases in its deferred tax asset valuation allowance.

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Research and development tax credit carryforwards associated with other states begin expiring in 2038.

The Internal Revenue Code (IRC) Sections 382 and 383 limit annual use of NOL and research and development credit carryforwards in the event a cumulative change in ownership of more than 50% occurs within a three-year period.

The Company has not yet completed an ownership change analysis pursuant to IRC Section 382.

If a requisite ownership change has occurred or occurs, the amount of remaining tax attribute carryforwards available to offset taxable income and income tax expense in future years may be restricted or eliminated.

If eliminated, the related asset would be removed from deferred tax assets with a corresponding reduction in the valuation allowance.

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

The Internal Revenue Code (IRC) Sections 382 and 383 limit annual use of NOL and research and development credit carryforwards in the event a cumulative change in ownership of more than 50% occurs

Mineralys Therapeutics, Inc.

Notes to Financial Statements

within a three-year period.

The Company completed an ownership change analysis pursuant to IRC Section 382 through December 31, 2024 and determined that the Company experienced ownership changes on February 16, 2021 and June 1, 2022.

Since all of the Company’s federal NOLs have an indefinite carryover period, none of the federal NOLs generated prior to the ownership changes will expire prior to utilization, but will be subject to the annual limitations on future utilization.

As a result of the annual limitation, approximately $ 0.2 million of federal research and development credits will expire prior to utilization due to the ownership change occurring on February 16, 2021.

The remaining federal research and development credits are available to offset federal tax liability within their respective federal research and development credit carryover periods (20 years), subject to the annual limitations on future utilization.

State NOLs and state research and development credits may be similarly limited.

The Company’s use of federal and state NOLs and research and development credits could be further limited by ownership changes that occur subsequent to December 31, 2024.

If eliminated, the related asset would be removed from the deferred tax asset with a corresponding reduction in the valuation allowance.

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

The Company’s effective tax rate for the years ended December 31, 2024 and 2023 was 0 %.

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The Company recognizes a tax benefit from an uncertain tax position when it is more-likely-than-not that it will be sustained upon examination by tax authorities.

As of December 31, 2023 and 2022, the Company had $ 1.1 million and $ 0.3 million, respectively, in unrecognized tax benefits, which would not affect the effective tax rate if recognized.

During the year ended December 31, 2023, the Company’s unrecognized tax benefits increased by approximately $ 0.8 million related to current year tax positions.

As of December 31, 2024 and 2023, the Company had $ 4.5 million and $ 1.1 million, respectively, in unrecognized tax benefits, which would not affect the effective tax rate if recognized due to the valuation allowance against deferred tax assets.

The Company does not anticipate any significant changes in its unrecognized tax benefits over the next 12 months.

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As of December 31, 2024 and 2023, the Company had no accrued interest or penalties related to uncertain tax positions.

Mineralys Therapeutics, Inc.

Notes to Financial Statements

The following table summarizes the changes to the Company’s unrecognized tax benefits for the years ended December 31, 2024 and 2023 (in thousands):

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economy and fund a nationwide effort to curtail the effect of COVID-19.

The CARES Act provides sweeping tax changes in response to the COVID-19 pandemic, some of the more significant provisions are removal of certain limitations on utilization of net operating losses, increasing the loss carryback period for certain losses to five years, and increasing the ability to deduct interest expense, as well as amending certain provisions of the previously enacted Tax Cuts and Jobs Act of 2017.

The CARES Act provides sweeping tax changes in response to the COVID-19 pandemic.

Some of the more significant provisions include the removal of certain limitations on the utilization of net operating losses, an increase in the loss carryback period for certain losses to five years, and an increase in the ability to deduct interest expense.

Additionally, the CARES Act amends certain provisions of the previously enacted Tax Cuts and Jobs Act of 2017.

Subsequent Events

On February 10, 2025, the board of directors adopted and approved the Company’s 2025 Employment Inducement Incentive Award Plan (the 2025 Inducement Plan), which became effective on February 10, 2025.

In accordance with Rule 5635(c)(4) of the Nasdaq Stock Market listing rules, equity awards under the 2025 Inducement Plan may only be made to an employee if he or she is granted such awards in connection with the commencement of his or her employment with the Company and such grant is a material inducement to his or her entering into employment with the Company.

The Company has reserved 1,000,000 shares of common stock for issuance pursuant to non-qualified stock options and restricted stock units under the 2025 Inducement Plan.

As of February 12, 2025, no shares had been issued under the 2025 Inducement Plan.

Changes in and Disagreements With Accountants on Accounting and Financial Disclosure

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 8. Financial Statements and Supplementary Data