What changed in this filing

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Item 8. Financial Statements and Supplementary Data

2025-02-28 compared with 2024-03-05 · 282 added, 229 removed, 719 unchanged (42% of the section changed)

17 unchanged sentences

generally accepted accounting principles.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company's internal control over financial reporting as of December 31, 2024, based on criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) and our report dated February 28, 2025 expressed an unqualified opinion thereon.

Basis for Opinion

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Our responsibility is to express an opinion on the Company’s financial statements based on our audits.

We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S.

We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S.

federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

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Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud.

The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting.

As part of our audits, we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting.

Accordingly, we express no such opinion.

Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks.

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Cerebrum Platform Accrued and Prepaid Research and Development Costs

Description of the Matter

The Company’s accrued costs for research and development expenses totaled $3.0 million at December 31, 2023, including accruals related to the Company’s Cerebrum Platform research and development costs.

Description of the Matter The Company’s accrued costs for research and development expenses totaled $13.4 million at December 31, 2024, including accruals related to the Company’s Cerebrum Platform research and development costs.

In addition, the Company’s prepaid expenses and other current assets were $11.8 million which included amounts that were paid in advance of services incurred pursuant to the Cerebrum Platform research and development costs.

As discussed in Note 2 to the consolidated financial statements, the Company analyzes the progress of the clinical trials, including the phase or completion of events, invoices received and contracted costs.

As discussed in Note 2 to the consolidated financial statements, the Company analyzes the progress of the studies or clinical trials, including the phase or completion of events, invoices received and contracted costs.

Significant judgments and estimates are made in determining the accrued and prepaid balances at the end of any reporting period for the Company’s Cerebrum Platform research and development costs.

The Company is required to estimate such accruals and prepaids using judgment based on certain information, including actual costs incurred or level of effort expended, as provided by its vendors.

Payments for such activities are based on the terms of the individual arrangements, which may differ from the pattern of costs incurred, and are reflected on the consolidated balance sheet within accrued expenses or prepaid expenses and other current assets.

Auditing the Company’s accrued and prepaid research and development costs for the Cerebrum Platform was complex, as accounting for the costs associated with these clinical trials required subjective estimates of the level of services performed and the associated costs incurred by service providers.

Furthermore, due to the duration of the Company’s Cerebrum Platform research and development activities, and the timing of information received from third parties, the actual amounts incurred are not typically known at the time the consolidated financial statements are issued.

How We Addressed the Matter in Our Audit

To evaluate the accrued and prepaid research and development costs for the Cerebrum Platform, our audit procedures included, among others, testing the accuracy and completeness of the underlying data used in the estimates and evaluating the significant judgments and estimates made by management to determine the recorded accruals and prepayments.

To test the significant judgments and estimates, we discussed the progress of research and development activities with the Company’s research and development personnel that oversee the research and development projects and inspected the Company’s contracts with third parties and pending change orders to assess the impact on amounts recorded.

In addition, we reviewed estimates of costs incurred to date provided to the Company from third parties.

We also analyzed fluctuations in accruals by vendor and by trial throughout the period subject to audit, evaluated the costs incurred per trial, site and/or patient for reasonableness and tested subsequent invoices received from third parties.

Auditing the Company’s accrued and prepaid research and development costs for the Cerebrum Platform costs was complex, as accounting for the costs associated with these studies or clinical trials required subjective estimates of the level of services performed and the associated costs incurred by vendors.

Furthermore, due to the duration of the Company’s Cerebrum Platform research and development costs, and the timing of information received from third parties, the actual amounts incurred are not typically known at the time the consolidated financial statements are issued.

How We Addressed the Matter in Our Audit We obtained an understanding, evaluated the design, and tested the operating effectiveness of internal controls over accrued and prepaid research and development costs for the Cerebrum Platform, including assessing management’s controls over the significant judgments and estimates regarding costs incurred or level of effort expended by vendors.

To evaluate the accrued and prepaid research and development costs for the Cerebrum Platform research and development costs, our audit procedures included, among others, testing the accuracy and completeness of the underlying data used in the estimates and evaluating the significant judgments and estimates made by management to determine the recorded accruals and prepayments.

To test the significant judgments and estimates, we discussed the progress of research and development activities with the Company’s research and development personnel that oversee the research and development projects and inspected the Company’s contracts with vendors and pending change orders to assess the impact on amounts recorded.

In addition, we inspected information obtained by the Company from vendors, which included the vendors’ estimate of costs incurred to date.

We also obtained vendor confirmations, analyzed fluctuations in accruals by vendor and by trial throughout the period subject to audit, evaluated the costs incurred per trial, site and/or patient for reasonableness and tested subsequent invoices received from vendors.

/s/ Ernst & Young LLP

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Boston, Massachusetts

March 5, 2024

February 28, 2025

PRAXIS PRECISION MEDICINES, INC.

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Total current assets 404,372 84,880

Long-term marketable securities 76,961 —

Property and equipment, net 230 588

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Additional paid-in capital 1,281,522 723,577

Accumulated other comprehensive loss — ( 173 )

Accumulated other comprehensive gain 654 —

Accumulated deficit ( 836,740 ) ( 653,921 )

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Total liabilities and stockholders’ equity $ 483,110 $ 87,948

1 Results have been retroactively adjusted to reflect the 1-for-15 reverse stock split effected on November 28, 2023.

See Note 2 for details.

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

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Net loss per share attributable to common stockholders, basic and diluted $ ( 10.21 ) $ ( 18.69 )

$ ( 18.69 ) $ ( 69.65 )

Weighted average common shares outstanding, basic and diluted 17,906,794 6,594,316

6,594,316 3,073,100

1 Results have been retroactively adjusted to reflect the 1-for-15 reverse stock split effected on November 28, 2023.

See Note 2 for details.

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

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Net loss $ ( 182,819 ) $ ( 123,277 )

Change in unrealized losses on marketable securities, net of tax 173 3

Change in unrealized gain (loss) on marketable securities, net of tax 654 173

Comprehensive loss $ ( 182,165 ) $ ( 123,104 )

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(Amounts in thousands, except share data)

Common Stock 1

Common Stock Additional

Capital Accumulated

Deficit Accumulated Other

Comprehensive Loss Total

Comprehensive Gain (Loss) Total

Stockholders’

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Stock-based compensation expense — — 14,475 — — 14,475

Issuance of common stock from at-the-market public offerings, net of issuance costs 560,253 1 18,095 — — 18,096

Issuance of common stock from follow-on public offering and accompanying pre-funded warrants, net of underwriting discounts, commissions and offering costs of $ 10,836

3,802,025 — 161,649 — — 161,649

Issuance of common stock from at-the-market public offerings, net of issuance and commission costs of $ 376

209,852 — 6,169 — — 6,169

Issuance of common stock from a collaboration and license agreement 443,253 — 17,265 — — 17,265

Vesting of restricted stock units 11,095 — — — — —

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Issuance of common stock upon exercise of stock options 3,634 — 143 — — 143

Change in unrealized loss on marketable securities, net of tax — — — — 154 154

Change in unrealized gain (loss) on marketable securities, net of tax — — — — 3 3

Net loss — — — ( 39,553 ) — ( 39,553 )

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3,849,558 1 215,987 — — 215,988

Issuance of common stock from at-the-market public offerings, net of issuance costs 392,541 1 6,031 — — 6,032

Issuance of common stock from exercise of pre-funded warrants 622,123 — — — — —

Issuance of common stock under employee stock purchase plan 25,146 — 311 — — 311

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Shares withheld for taxes for vesting of restricted stock units ( 242 ) — ( 13 ) — — ( 13 )

Change in unrealized loss on marketable securities, net of tax — — — — 19 19

Issuance of common stock upon exercise of stock options 148 — 4 — — 4

Change in unrealized gain (loss) on marketable securities, net of tax — — — — ( 74 ) ( 74 )

Net loss — — — ( 32,677 ) — ( 32,677 )

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Stock-based compensation expense — — 12,432 — — 12,432

Issuance of common stock from at-the-market public offerings, net of issuance and commission costs of $ 70

25,189 — 1,442 — — 1,442

Issuance of common stock from exercise of stock options 4,971 — 201 — — 201

Vesting of restricted stock units 51 — — — — —

Shares withheld for taxes for vesting of restricted stock units ( 20 ) — ( 1 ) — — ( 1 )

Issuance of common stock upon exercise of stock options 311 — 1 — — 1

Change in unrealized gain (loss) on marketable securities, net of tax — — — — 1,402 1,402

Net loss — — — ( 51,910 ) — ( 51,910 )

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Stock-based compensation expense — — 8,575 — — 8,575

Issuance of common stock under employee stock purchase plan 9,027 — 106 — — 106

Issuance of common stock from at-the-market public offerings, net of issuance costs of $ 123

Issuance of common stock from at-the-market public offerings, net of issuance and commission costs of $ 2,812

1,588,611 — 111,748 — — 111,748

Issuance of common stock under employee stock purchase plan 6,235 — 233 — — 233

Issuance of common stock from exercise of stock options 36,424 — 1,741 — — 1,741

Vesting of restricted stock units 7,603 — — — — —

Shares withheld for taxes for vesting of restricted stock units ( 2,212 ) — ( 157 ) — — ( 157 )

Change in unrealized gain (loss) on marketable securities, net of tax — — — — ( 677 ) ( 677 )

Net loss — — — ( 58,679 ) — ( 58,679 )

Balance at December 31, 2024 19,422,358 $ 14 $ 1,281,522 $ ( 836,740 ) $ 654 $ 445,450

1 Results have been retroactively adjusted to reflect the 1-for-15 reverse stock split effected on November 28, 2023.

See Note 2 for details.

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

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(Amounts in thousands, except share data)

Common Stock 1

Common Stock Additional

Capital Accumulated

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Stock-based compensation expense — — 7,593 — — 7,593

Issuance of common stock from at-the-market public offerings 4,694 — 1,368 — — 1,368

Issuance of common stock from at-the-market public offerings net of commission costs of $ 560

560,253 1 18,095 — — 18,096

Vesting of restricted stock units 11,516 — — — — —

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Issuance of common stock upon exercise of stock options 2,970 — 101 — — 101

Change in unrealized loss on marketable securities, net of tax — — — — ( 430 ) ( 430 )

Change in unrealized gain (loss) on marketable securities, net of tax — — — — 154 154

Net loss — — — ( 37,455 ) — ( 37,455 )

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Stock-based compensation expense — — 5,775 — — 5,775

Issuance of common stock from follow-on public offering and accompanying pre-funded warrants, net of underwriting discounts, commissions and offering costs of $ 4,484

4,296,646 6 63,433 — — 63,439

Issuance of common stock from at-the-market public offerings, net of issuance costs 392,541 1 6,031 — — 6,032

Issuance of common stock under employee stock purchase plan 15,663 — 208 — — 208

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Shares withheld for taxes for vesting of restricted stock units ( 249 ) — ( 4 ) — — ( 4 )

Issuance of common stock upon exercise of stock options 876 — 67 — — 67

Change in unrealized loss on marketable securities, net of tax — — — — ( 74 ) ( 74 )

Change in unrealized gain (loss) on marketable securities, net of tax — — — — 19 19

Net loss — — — ( 34,312 ) — ( 34,312 )

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Stock-based compensation expense — — 5,763 — — 5,763

Issuance of common stock from at-the-market public offerings, net of issuance costs of $ 109

73,667 — 2,962 — — 2,962

Vesting of restricted stock units 233 — — — — —

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Issuance of common stock upon exercise of stock options 311 — 1 — — 1

Change in unrealized loss on marketable securities, net of tax — — — — 144 144

Net loss — — — ( 24,632 ) — ( 24,632 )

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Issuance of common stock under employee stock purchase plan 9,027 — 106 — — 106

Issuance of common stock from at-the-market public offerings 161,323 — 5,231 — — 5,231

Issuance of common stock from at-the-market public offerings, net of issuance costs of $ 123

212,453 — 3,964 — — 3,964

Vesting of restricted stock units 824 — — — — —

Shares withheld for taxes for vesting of restricted stock units ( 249 ) — ( 5 ) — — ( 5 )

Issuance of common stock upon exercise of stock options — — — — — —

Change in unrealized loss on marketable securities, net of tax — — — — 363 363

Net loss — — — ( 26,878 ) — ( 26,878 )

Balance at December 31, 2023 8,791,877 $ 13 $ 723,577 $ ( 653,921 ) $ — $ 69,669

1 Results have been retroactively adjusted to reflect the 1-for-15 reverse stock split effected on November 28, 2023.

See Note 2 for details.

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

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Amortization of premiums and discounts on marketable securities, net ( 5,010 ) 47

Non-cash collaboration and license agreement expense 2,500 —

Changes in operating assets and liabilities:

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Maturities of marketable securities 123,025 39,000

Net cash provided by investing activities 38,950 96,889

Net cash (used in) provided by investing activities ( 248,494 ) 38,950

Cash flows from financing activities:

Proceeds from at-the-market offerings, net of issuance costs 28,153 9,561

Issuance of common stock from follow-on public offering and accompanying pre-funded warrants, net of underwriting discounts, commissions and offering costs 377,636 63,439

Payment of issuance costs for at-the-market offerings — ( 262 )

Issuance of common stock from collaboration and license agreement 14,765 —

Proceeds from at-the-market offerings, net of issuance and commission costs 119,597 28,153

Payments of tax withholdings related to vesting of restricted stock units ( 308 ) ( 137 )

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Net cash provided by financing activities 514,323 91,871

Increase (decrease) in cash, cash equivalents and restricted cash 19,685 ( 77,689 )

Increase in cash, cash equivalents and restricted cash 134,072 19,685

Cash, cash equivalents and restricted cash, beginning of period 81,716 62,031

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Supplemental disclosures of non-cash activities:

Offering costs from follow-on public offering included in accounts payable $ 184 $ —

Issuance costs from at-the-market offerings included in accrued expenses $ 238 $ 63

Offering costs from follow-on public offering included in accounts payable $ — $ 184

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

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Through this approach, the Company has established a diversified, multimodal CNS portfolio with four clinical-stage product candidates across movement disorders and epilepsy.

For the Company's most advanced product candidate under the Cerebrum™ platform, ulixacaltamide (formerly known as PRAX-944), it expects to announce topline results from the Phase 3 Essential3 clinical trial in essential tremor in the second half of 2024.

Within the Company's PRAX-628 program, it initiated a Phase 2a Photo-Paroxysmal Response ("PPR") study in 2023 and expects to report topline results in the first quarter of 2024.

The Company also plans to initiate a Phase 2 study of PRAX-628 in focal epilepsy in the second half of 2024.

The Company's PRAX-562 Phase 2 EMBOLD study was initiated in the first quarter of 2023, with initial cohorts in SCN2A-DEE and SCN8A-DEE, and it expects to announce topline results for both cohorts in mid- 2024.

For the Company's most advanced product candidate under the Solidus™ platform, PRAX-222, it initiated the EMBRAVE study in the second quarter of 2023, which completed in the fourth quarter of 2023.

Praxis was incorporated in 2015 and commenced operations in 2016.

The Company has funded its operations primarily with proceeds from the issuance of redeemable convertible preferred stock, and from the sale of common stock through an initial public offering ("IPO"), follow-on public offerings and at-the-market offerings under its shelf registration statement.

From inception through December 31, 2023, the Company raised $ 617.5 million in aggregate cash proceeds from these transactions, net of issuance costs.

In January 2024, the Company raised net proceeds of $ 161.7 million from a follow-on public offering and $ 5.3 million from at-the-market offerings.

The Company is subject to risks and uncertainties common to early-stage companies in the biotechnology industry, including but not limited to, risks associated with completing preclinical studies and clinical trials, receiving regulatory approvals for product candidates, development by competitors of new biopharmaceutical products, dependence on key personnel, protection of proprietary technology, compliance with government regulations and the ability to secure additional capital to fund operations.

The Company has funded its operations primarily with proceeds from the issuance of redeemable convertible preferred stock, from the sale of common stock through an initial public offering ("IPO"), at-the-market offerings under its shelf registration statement, and follow-on public offerings of common stock and pre-funded warrants to purchase common stock.

From inception through December 31, 2024, the Company raised $ 1.1 billion in aggregate cash proceeds from these transactions, net of issuance costs.

The Company is subject to risks and uncertainties common to clinical-stage companies in the biotechnology industry, including but not limited to, risks associated with completing preclinical studies and clinical trials, receiving regulatory approvals for product candidates, development by competitors of new biopharmaceutical products, dependence on key personnel, protection of proprietary technology, compliance with government regulations and the ability to secure additional capital to fund operations.

Programs currently under development will require significant additional research and development efforts, including preclinical and clinical testing and regulatory approval, prior to commercialization.

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

PRAXIS PRECISION MEDICINES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

the Company has evaluated whether there are conditions and events, considered in the aggregate, that raise substantial doubt about the Company’s ability to continue as a going concern within one year after the date that the consolidated financial statements are issued.

In accordance with the Financial Accounting Standards Board ("FASB") Accounting Standards Update ("ASU") 2014-15, Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern (Subtopic 205-40) , the Company has evaluated whether there are conditions and events, considered in the aggregate, that raise substantial doubt about the Company’s ability to continue as a going concern within one year after the date that the consolidated financial statements are issued.

The Company has incurred recurring losses since its inception, including a net loss of $ 182.8 million for the year ended December 31, 2024.

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The Company expects to continue to generate operating losses for the foreseeable future.

The Company expects that its cash and cash equivalents as of December 31, 2023 of $ 81.3 million, together with cash inflows from its financing activities in January 2024, will be sufficient to fund its operating expenditures and capital expenditure requirements necessary to advance its research efforts and clinical trials for at least one year from the date of issuance of these consolidated financial statements.

PRAXIS PRECISION MEDICINES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The Company expects that its cash, cash equivalents and marketable securities as of December 31, 2024 of $ 469.5 million will be sufficient to fund its operating expenditures and capital expenditure requirements necessary to advance its research efforts and clinical trials for at least one year from the date of the issuance of these consolidated financial statements.

The future viability of the Company is dependent on its ability to raise additional capital to finance its operations.

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Any reference in these notes to applicable guidance is meant to refer to the authoritative GAAP as found in the Accounting Standards Codification (“ASC”) and ASUs of the FASB.

On November 28, 2023, the Company filed a Certificate of Amendment to the Company's Amended and Restated Certificate of Incorporation with the Secretary of State of the State of Delaware to effect a 1-for-15 reverse stock split of its common stock (the "Reverse Stock Split").

The Reverse Stock Split became effective at 5:00 p.m., Eastern Time, on November 28, 2023.

As a result of the Reverse Stock Split, every 15 shares of the Company's issued and outstanding common stock were automatically reclassified into one validly issued, fully-paid and non-assessable share of common stock.

Any fractional post-split shares as a result of the Reverse Stock Split were rounded down to the nearest whole post-split share.

The Reverse Stock Split did not affect the number of authorized shares of common stock or the par value of the common stock.

All share amounts and per share amounts disclosed in this Annual Report on Form 10-K have been restated to reflect the Reverse Stock Split on a retroactive basis in all periods presented.

Principles of Consolidation

The consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries, Praxis Security Corporation and Praxis Precision Medicines Australia Pty Ltd.

The consolidated financial statements include the accounts of the Company and its wholly owned subsidiary, Praxis Security Corporation.

All intercompany transactions have been eliminated in consolidation.

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The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of expenses during the reporting periods.

Significant estimates and assumptions reflected in these consolidated financial statements include, but are not limited to, accrued and prepaid research and development expense, stock-based compensation expense and the recoverability of the Company’s net deferred tax assets and related valuation allowance.

Significant estimates and assumptions reflected in these consolidated financial statements include, but are not limited to, accrued and prepaid research and development expense, collaboration revenue, stock-based compensation expense and the recoverability of the Company’s net deferred tax assets and related valuation allowance.

Estimates are periodically reviewed in light of changes in circumstances, facts and experience.

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Actual results could differ materially from those estimates.

PRAXIS PRECISION MEDICINES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The Company has one operating segment.

The Company’s chief operating decision maker, its Chief Executive Officer, manages the Company’s operations on a consolidated basis for the purposes of assessing performance and allocating resources.

The majority of the Company’s long-lived assets are held in the United States.

Cash, Cash Equivalents and Restricted Cash

The Company considers all highly liquid investments purchased with original maturities of 90 days or less at acquisition to be cash equivalents.

Cash and cash equivalents include cash held in banks and amounts held in interest-bearing insured liquid deposit funds.

Cash and cash equivalents include cash held in banks and amounts held in interest-bearing insured liquid deposit funds and interest-bearing money market funds.

Cash equivalents are carried at cost, which approximates their fair market value.

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Marketable Securities

PRAXIS PRECISION MEDICINES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The Company may invest its excess cash in money market funds and debt instruments of the U.S.

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All of the Company's available-for-sale securities are available for use in its current operations.

As a result, the Company has categorized all of these securities as current assets even though the stated maturity of some individual securities may be one year or more beyond the balance sheet date.

The Company did not hold any marketable securities as of December 31, 2023, and held $ 38.9 million of marketable securities as of December 31, 2022.

The Company classifies marketable securities as either cash equivalents, short-term or long-term based on their stated maturity dates as it is more-likely-than-not that the Company will hold these assets through to their maturity dates.

The Company held $ 254.2 million of marketable securities as of December 31, 2024.

The Company did not hold any marketable securities as of December 31, 2023.

The Company evaluates securities for impairment at the end of each reporting period.

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government agencies and corporations, and commercial paper.

The Company investments are limited to investment-grade securities with

PRAXIS PRECISION MEDICINES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

strong credit ratings with the objective of maintaining safety and liquidity.

The Company's investments are limited to investment-grade securities with strong credit ratings with the objective of maintaining safety and liquidity.

The Company also maintains deposits in accredited financial institutions in excess of federally insured limits.

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As of December 31, 2024 and 2023, the Company had no off-balance sheet risk such as foreign exchange contracts, option contracts or other hedging arrangements.

PRAXIS PRECISION MEDICINES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Fair Value Measurements

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Items measured at fair value on a recurring basis include cash equivalents and marketable securities (Note 4 and Note 5).

The carrying amounts reflected in the consolidated balance sheets for cash, prepaid expenses and

PRAXIS PRECISION MEDICINES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

other current assets, accounts payable and accrued expenses approximate their fair values due to the short-term nature of these assets and liabilities.

The carrying amounts reflected in the consolidated balance sheets for cash, prepaid expenses and other current assets, accounts payable and accrued expenses approximate their fair values due to the short-term nature of these assets and liabilities.

Property and Equipment

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Long-lived assets to be held and used are tested for recoverability whenever events or changes in business circumstances indicate that the carrying amount of the assets may not be fully recoverable.

Factors that the Company considers in deciding when to perform an impairment review include significant underperformance of the business in relation to expectations, significant negative industry or economic trends and significant changes or planned changes in the use of the assets.

Factors that the Company considers in deciding when to perform an impairment review include significant underperformance of the business in relation to expectations, significant

PRAXIS PRECISION MEDICINES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

negative industry or economic trends and significant changes or planned changes in the use of the assets.

If an impairment review is performed to evaluate a long-lived asset group for recoverability, the Company compares forecasts of undiscounted cash flows expected to result from the use and eventual disposition of the long-lived asset group to its carrying value.

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The Company’s operating leases are reflected in operating lease right-of-use assets and in current operating lease liabilities and long-term operating lease liabilities in its consolidated balance sheets.

The Company’s operating

PRAXIS PRECISION MEDICINES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

lease right-of-use asset as of December 31, 2023 and 2022 did not include any lease incentives.

The Company’s operating lease right-of-use asset as of December 31, 2024 and 2023 did not include any lease incentives.

Lease expense for future lease payments is recognized on a straight-line basis over the lease term.

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Revenue Recognition

The Company enters into collaboration agreements which are within the scope of ASC 606 under which the Company may license or provide options to license certain development or product candidates and, in certain cases, may perform research and development services.

PRAXIS PRECISION MEDICINES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

cases, may perform research and development services.

The terms of these agreements may include payment of non-refundable, upfront fees, option exercise fees, development and commercial milestone payments and royalties on net sales of licensed products.

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The Company recognizes as revenue the amount of the transaction price that it allocated to the respective performance obligation when or as each performance obligation is satisfied, either at a point in time or over time.

PRAXIS PRECISION MEDICINES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

the performance obligation is satisfied over time, the Company recognizes revenue based on the use of an output or input method.

If the performance obligation is satisfied over time, the Company recognizes revenue based on the use of an output or input method.

The Company evaluates the measure of progress each reporting period and, if necessary, adjusts the measure of performance and related revenue recognition.

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Amounts are recorded as accounts receivable when the Company’s right to consideration is unconditional.

As of December 31, 2023, the Company had one collaboration, option and license agreement with UCB Biopharma SRL ("UCB"), which it entered into in December 2022.

The accounting related to the collaboration agreement is outlined in Note 9, UCB Option and License Agreement.

As of December 31, 2024, the Company had an option and license agreement with UCB Biopharma SRL ("UCB"), which it entered into in December 2022.

Additionally, it had a collaboration and license agreement with Tenacia Biotechnology (Shanghai) Co., Ltd ("Tenacia"), which it entered into in January 2024.

The accounting related to these agreements is outlined in Note 9, Collaboration and License Agreements.

Research and Development Costs

Research and development costs are expensed as incurred.

Research and development expenses consist of costs incurred in performing research and development activities, including salaries, stock-based compensation and benefits, facilities costs, depreciation, third-party license fees, and external costs of outside vendors engaged to conduct preclinical development activities and clinical trials as well as to manufacture research and development materials.

Research and development expenses consist of costs incurred in performing research and development activities, including salaries, stock-based compensation and benefits, facilities costs, depreciation, third-party license fees and external costs of outside vendors engaged to conduct preclinical development activities and clinical trials as well as to manufacture research and development

PRAXIS PRECISION MEDICINES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Non-refundable prepayments for goods or services that will be used or rendered for future research and development activities are deferred and capitalized.

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The Company issues stock-based awards with service-based vesting conditions and records the expense for these awards on a straight-line basis over the vesting period.

PRAXIS PRECISION MEDICINES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

To date, the Company has not issued any stock-based awards with performance or market-based vesting conditions.

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Treasury yield curve in effect at the time of grant of the award for instruments with a term commensurate with the expected term assumption.

The expected dividend yield is assumed to be zero as the Company has never paid dividends, and does not have current plans to pay any dividends on its common stock.

The expected dividend yield is assumed to be zero

PRAXIS PRECISION MEDICINES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

as the Company has never paid dividends, and does not have current plans to pay any dividends on its common stock.

Subsequent to the IPO, the fair value of the common stock underlying the Company's stock-based awards is the closing price of the Company's common stock on the date of grant.

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Foreign Currency

The functional currency of the Company’s wholly owned foreign subsidiary in Australia is the U.S.

Monetary assets and liabilities resulting from transactions denominated in currencies other than the functional currency are remeasured into the functional currency at exchange rates prevailing at the balance sheet date.

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The provision for income taxes includes the effects of any resulting tax reserves, or unrecognized tax benefits, that are considered appropriate as well as the related net interest and penalties.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Comprehensive Loss

Comprehensive loss includes net loss and certain changes in stockholders’ equity that are excluded from net loss.

For the years ended December 31, 2023 and 2022, comprehensive loss consists of net loss and changes in unrealized losses on marketable securities.

For the years ended December 31, 2024 and 2023, comprehensive loss consists of net loss and changes in unrealized gains and losses on marketable securities.

Common Stock Warrants

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The calculation of weighted average number of common shares outstanding excludes shares of restricted common stock that are not vested but includes shares of common stock underlying pre-funded warrants.

Diluted net loss per share is computed by dividing net loss by the weighted average number of common shares outstanding for the period, after giving consideration to the dilutive effect of potentially dilutive common shares.

Diluted net loss per share is computed by dividing net loss by the weighted average number of common

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

shares outstanding for the period, after giving consideration to the dilutive effect of potentially dilutive common shares.

For purposes of this calculation, outstanding options to purchase shares of common stock, unvested shares of restricted common stock and potential shares issuable under the 2020 ESPP are considered potentially dilutive common shares.

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Recently Adopted Accounting Pronouncements

On August 5, 2020, the FASB issued ASU No.

2020-06, Debt – Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging – Contracts in Entity’s Own Equity (Subtopic 815-40):

Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity (ASU 2020-06).

ASU 2020-06 simplifies the accounting for certain financial instruments with characteristics of liabilities and equity, including convertible instruments and contracts on an entity’s own equity.

ASU 2020-06 eliminates the separation models for convertible debt with cash conversion features and convertible instruments with beneficial conversion features and simplifies the derivative scope exception guidance pertaining to equity classification of contracts in an entity’s own equity.

Additionally, ASU 2020-06 amends the diluted earnings per share guidance, including the requirement to use the if-converted method for all convertible instruments.

The new standard also introduces additional disclosures for convertible instruments.

ASU 2020-06 was effective for public companies that are not smaller reporting companies for fiscal years beginning after December 15, 2021.

For all other entities, ASU 2020-06 is effective for fiscal years beginning after December 15, 2023.

Early adoption is permitted, but no earlier than fiscal years beginning after December 15, 2020.

ASU 2020-06 is required to be adopted as of the beginning of a fiscal year.

ASU 2020-06 may be applied using either a full or modified retrospective method of transition.

The Company adopted ASU 2020-06 effective as of January 1, 2023.

The adoption of ASU 2020-06 did not have an impact on the Company’s financial statements.

Recently Issued Accounting Pronouncements

On November 27, 2023, the FASB issued ASU No.

2023-07, Segment Reporting (Topic 280) - Improvements to Reportable Segment Disclosures .

2023-07 improves reportable segment disclosure requirements,

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

primarily through enhanced disclosures about significant segment expenses.

In November 2023, the FASB issued ASU No.

2023-07, Segment Reporting (Topic 280) - Improvements to Reportable Segment Disclosures ("ASU 2023-07").

ASU 2023-07 improves reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expenses.

The amendments included in this ASU apply to all public entities that are required to report segment information in accordance with Topic 280, including those with a single reportable segment.

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

Early adoption is permitted and should be applied retrospectively to all prior periods presented in the financial statements.

Upon transition, the segment expenses categories and amounts disclosed in the prior periods should be based on the significant segment expense categories identified and disclosed in the period of adoption.

The Company only has one reportable segment and this ASU impacts disclosures only.

The Company has determined that the effects of adopting the amendments in ASU 2023-07 will only impact its disclosures and not have a material impact on its consolidated financial position and the results of its operations when such amendment is adopted.

On December 14, 2023, the FASB issued ASU No.

2023-09, Income Taxes (Topic 740) - Improvements to Income Tax Disclosures .

2023-09 provides more transparency about income tax information through improvements to income tax disclosures primarily related to the rate reconciliation and incomes taxes paid information.

The Company adopted ASU 2023-07 as of December 31, 2024.

The amendments were applied retroactively to all prior periods presented in the consolidated financial statements and are reflected within Note 17.

Recently Issued Accounting Pronouncements

In December 2023, the FASB issued ASU No.

2023-09, Income Taxes (Topic 740) - Improvements to Income Tax Disclosures ("ASU 2023-09").

ASU 2023-09 provides more transparency about income tax information through improvements to income tax disclosures primarily related to the rate reconciliation and incomes taxes paid information.

For public companies, the amendments are effective for annual periods beginning after December 15, 2024 and should be applied prospectively.

The Company has determined that the effects of adopting the amendments in ASU 2023-09 will only impact its disclosures and not have a material impact on its consolidated financial position and the results of its operations when such amendment is adopted.

In November 2024, the FASB issued ASU No.

2024-03, Income Statement-Reporting Comprehensive Income-Expense Disaggregation Disclosures (Subtopic 220-40):

Disaggregation of Income Statement Expenses ("ASU 2024-03"), requiring public entities to disclose additional information about specific expense categories in the notes to the financial statements on an interim and annual basis.

ASU 2024-03 is effective for fiscal years beginning after December 15, 2026, and for interim periods beginning after December 15, 2027, with early adoption permitted.

The amendments in this update should be applied either prospectively to financial statements issued for reporting periods after the effective date of this update, or retrospectively to any or all prior periods presented in the financial statements.

The Company is currently evaluating the impact of adopting ASU 2024-03 on its consolidated financial statements.

Restricted Cash

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The Company's Boston, Massachusetts sublease expires on January 31, 2026, and the related letter of credit of $ 0.4 million was classified within other non-current assets on the consolidated balance sheet as of December 31, 2024 and 2023.

Marketable Securities

The Company did not hold any marketable securities as of December 31, 2023.

Cash Equivalents and Marketable Securities

The following is a summary of the Company's investment portfolio as of December 31, 2024 (in thousands).

The Company did not hold any cash equivalents or marketable securities as of December 31, 2023.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

As of December 31, 2024

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Cost Gains Losses Fair Value

Cash equivalents:

Money market funds $ 128,652 $ — $ — $ 128,652

Debt securities issued by U.S.

government agencies 15,953 2 — 15,955

Available-for-sale securities:

Corporate debt securities $ 35,042 $ — $ ( 163 ) $ 34,879

Debt securities issued by U.S.

government agencies 128,215 475 — 128,690

Total securities with a maturity of one year or less $ 39,047 $ — $ ( 173 ) $ 38,874

Total available-for-sale securities $ 39,047 $ — $ ( 173 ) $ 38,874

Corporate debt securities 107,695 157 — 107,852

Commercial paper 8,775 19 — 8,794

Other debt securities 8,819 1 — 8,820

Total cash equivalents and marketable securities $ 398,109 $ 654 $ — $ 398,763

Contractual maturities of the marketable securities at each balance sheet are as follows (in thousands):

December 31, 2024 December 31, 2023

Within one year $ 177,195 $ —

After one year through five years 76,961 —

Total $ 254,156 $ —

Securities are evaluated for impairment at the end of each reporting period.

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Fair Value of Financial Assets

The Company did not hold any financial assets measured at fair value on a recurring basis as of December 31, 2023.

The following table presents information about the Company's financial assets measured at fair value on a recurring basis and indicates the level of the fair value hierarchy utilized to determine such fair values as of December 31, 2024 (in thousands).

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The Company did not hold any financial assets measured at fair value on a recurring basis as of December 31, 2023.

As of December 31, 2024

Level 1 Level 2 Level 3 Total

Cash equivalents:

Money market funds $ 128,652 $ — $ — $ 128,652

Marketable securities:

Corporate debt securities — 34,879 — 34,879

Debt securities issued by U.S.

government agencies 144,644 — — 144,644

Corporate debt securities — 107,852 — 107,852

Commercial paper — 8,794 — 8,794

Other debt securities — 8,821 — 8,821

$ 273,296 $ 125,467 $ — $ 398,763

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The Company validates the prices provided by its third-party pricing sources by understanding the models used, obtaining market values from other pricing sources and analyzing pricing data in certain instances.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Property and Equipment, Net

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Accrued expenses consisted of the following (in thousands):

Accrued personnel-related expenses $ 3,716 $ 2,803

Accrued external research and development expenses $ 13,363 $ 2,957

Accrued personnel-related expenses 9,365 3,716

Accrued other expenses 1,035 743

Total accrued expenses $ 23,763 $ 7,416

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Commitments and Contingencies

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Total lease liabilities $ 1,369 $ 2,495

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The following table summarizes total lease costs recognized in the Company’s consolidated statements of operations (in thousands):

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Present value of operating lease liabilities $ 1,369

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The weighted average remaining lease term and weighted average incremental borrowing rate of the Company’s operating lease were as follows:

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The Company enters into indemnification agreements and agreements containing indemnification provisions in the ordinary course of business.

Pursuant to these agreements, the Company agrees to indemnify, hold harmless, and to reimburse the indemnified party for losses suffered or incurred by the indemnified party, generally the Company’s business partners, in connection with any U.S.

Pursuant to these agreements, the Company agrees to indemnify, hold

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

harmless, and to reimburse the indemnified party for losses suffered or incurred by the indemnified party, generally the Company’s business partners, in connection with any U.S.

patent or any copyright or other intellectual property infringement claim by any third party with respect to the Company’s products.

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When the achievement of these milestones or sales have not occurred, such contingencies are not recorded in the Company's financial statements.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Collaboration and License Agreements

UCB Option and License Agreement

In December 2022, the Company entered into an Option and License Agreement (“the Collaboration Agreement”) with UCB Biopharma SRL (“UCB”) for the discovery of small molecule therapeutics as potential treatments of KCNT1-related epilepsies.

In December 2022, the Company entered into an Option and License Agreement (“the Collaboration Agreement”) with UCB for the discovery of small molecule therapeutics as potential treatments of KCNT1-related epilepsies.

Under the terms of the Collaboration Agreement, the Company has agreed to perform general biology-related research services as part of a mutually agreed upon research plan in exchange for a $ 5.0 million upfront payment.

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The option provided to UCB was determined not to be a material right.

The Company recognizes revenue for its research services performance obligation using an input method over the duration of the research services.

During the year ended December 31, 2023, the Company recognized $ 2.4 million in collaboration revenue related to the Collaboration Agreement in the consolidated statement of operations.

As of December 31, 2023, $ 2.6 million was included in deferred revenue in the consolidated balance sheet, of which $ 1.4 million was classified as current.

The Company recognizes revenue for its research services performance obligation over time using an input method over the duration of the research services.

In December 2024, UCB exercised its option to in-license global development and commercialization rights for a KCNT1 development candidate as part of the Collaboration Agreement.

Upon notice of the exercise, the Company recognized the $ 6.0 million option exercise fee as collaboration revenue within the consolidated statement of operations.

The Company also recognized the $ 2.6 million of remaining collaboration revenue associated with the $ 5.0 million up front payment, as the Company will have no further research service obligations under the terms of the Collaboration Agreement.

During the years ended December 31, 2024 and 2023, the Company recognized $ 8.6 million and $ 2.4 million respectively, in collaboration revenue related to the Collaboration Agreement in the consolidated statement of operations.

As of December 31, 2024, there was no deferred revenue included in the consolidated balance sheet.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Tenacia Collaboration and License Agreement

On January 4, 2024, the Company entered into an exclusive collaboration and license Agreement (“the License Agreement”) with Tenacia, a China-based portfolio company of Bain Capital, which provides Tenacia an exclusive license to use certain intellectual property for the development and commercialization of ulixacaltamide and products containing ulixacaltamide in China, Hong Kong, Macau and Taiwan.

Tenacia is solely responsible for the development and commercialization under the arrangement, with the exception of the associated manufacturing.

The Company also entered into a Stock Purchase Agreement (“the Stock Purchase Agreement”) with BCPE Tenet Holdings Cayman, Ltd.

(“BCPE”), a related party of Tenacia.

Pursuant to the terms of the License Agreement, the Company was entitled to an up-front, non-refundable and non-creditable cash payment of $ 5.0 million, net of certain tax withholdings.

In addition, the Company is eligible to receive $ 264.0 million in success-based development and commercialization milestone payments as well as tiered royalties on net sales.

Pursuant to the terms of the Stock Purchase Agreement, the Company issued and sold 443,253 shares of its common stock to BCPE at a price per share of $ 22.5605 for aggregate gross proceeds of $ 10.0 million.

The per share price was based on a 20 % premium over the 30-day volume-weighted average price.

Under the terms of the License Agreement, the Company granted to Tenacia an exclusive license to use certain intellectual property for the development and commercialization of ulixacaltamide and products containing ulixacaltamide in China, Hong Kong, Macau and Taiwan.

Tenacia is solely responsible for the development and commercialization under the arrangement, with the exception of the associated manufacturing.

The Company concluded that the License Agreement and the Stock Purchase Agreement is a combined arrangement since they were executed at the same time and in contemplation of each other with the same counterparty or a related party thereof and the combined arrangement falls within the scope of Topic 606.

The Company’s obligations under the arrangement comprise a single promise, or one performance obligation, related to the exclusive development and commercialization license granted to Tenacia.

Total proceeds associated with the combined arrangement at inception were $ 14.8 million consisting of the following:

(i) $ 10.0 million gross proceeds from the sale of common stock under the Stock Purchase Agreement and (ii) $ 4.8 million, net of tax, related to the up-front payment under the License Agreement, both of which were received in January 2024.

During the year ended December 31, 2024, the Company had not achieved any development or sales milestones or earned any royalties under the License Agreement.

The Company recorded the common stock sold to BCPE at its issuance date fair value of $ 38.95 per share, or $ 17.3 million in the aggregate, which exceeded the proceeds received which were calculated based on the 20 % premium over the prior 30-day volume-weighted average price.

Accordingly, there is no transaction price allocable to the performance obligation.

The Company accounted for the excess of the fair value of the equity securities issued over the total proceeds received as consideration paid to a customer for which no distinct good or service was transferred in exchange.

As a result, the transaction gives rise to negative revenue on a cumulative basis in the amount of $ 2.5 million, which was recorded at the inception of the collaboration and license agreement in research and development expense in the accompanying consolidated statement of operations.

For agreements where the licenses are considered separate performance obligations or represent the only performance obligation, the Company recognizes revenue at the point in time that the Company effectively grants the license, as the licenses or assignments represent functional intellectual property.

As of December 31, 2024, the Company did not have any receivables or deferred revenue related to the arrangement with Tenacia.

The Company did not recognize any contract assets related to costs to obtain a contract with a customer or costs to fulfill a contract with a customer through December 31, 2024 because no qualifying costs were incurred.

During the year ended December 31, 2024, the Company did not recognize any revenue associated with the combined arrangement.

Common Stock and Preferred Stock

Reverse Stock Split

The Reverse Stock Split became effective at 5:00 p.m., Eastern Time, on November 28, 2023.

Any fractional post-split shares as a result of the Reverse Stock Split were rounded down to the nearest whole post-split share.

The Reverse Stock Split did not affect the number of authorized shares of common stock or the par value of the common stock.

All share amounts and per share amounts disclosed in this Annual Report on Form 10-K have been restated to reflect the Reverse Stock Split on a retroactive basis in all periods presented.

In November 2021, the Company entered into an Open Market Sale Agreement, as amended ("2021 Sales Agreement") with Jefferies LLC ("Jefferies"), to provide for the offering, issuance and sale of up to an aggregate amount of $ 125.0 million of common stock from time to time in at-the-market offerings under its shelf registration and subject to the limitations thereof.

The Company terminated the 2021 Sales Agreement in June 2023.

During the year ended December 31, 2023, the Company issued and sold an aggregate of 952,794 shares under the 2021 Sales Agreement for aggregate net proceeds of $ 24.1 million, after deducting commissions and offering expenses payable by the Company.

During the year ended December 31, 2022, the Company issued and sold an aggregate of 239,684 shares under the 2021 Sales Agreement for aggregate net proceeds of $ 9.6 million, after deducting commissions and offering expenses payable by the Company.

PRAXIS PRECISION MEDICINES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

In November 2021, the Company entered into an Open Market Sale Agreement (the "2021 Sales Agreement") with Jefferies LLC ("Jefferies"), to provide for the offering, issuance and sale of up to an aggregate amount of $ 125.0 million of common stock from time to time in at-the-market offerings for which Jefferies acted as sales agent.

The Company terminated the 2021 Sales Agreement in June 2023.

In December 2023, the Company entered into an Open Market Sale Agreement (the "2023 Sales Agreement"), with Jefferies, to provide for the offering, issuance and sale of up to an aggregate amount of $ 75.0 million of common stock from time to time in at-the-market offerings.

1 unchanged sentence

During the year ended December 31, 2024, the Company issued and sold an aggregate of 192,190 shares under the 2023 Sales Agreement for aggregate net proceeds of $ 5.3 million, after deducting commissions and offering expenses payable by the Company.

In March 2024, the Company entered into an Open Market Sale Agreement (the "March 2024 Sales Agreement"), with Jefferies, to provide for the offering, issuance, and sale of up to an aggregate amount of $ 150.0 million of common stock from time to time in at-the-market offerings.

During the year ended December 31, 2024, the Company issued and sold an aggregate of 1,614,975 shares under the March 2024 Sales Agreement for aggregate net proceeds of $ 113.1 million, after deducting commissions and offering expenses payable by the Company.

In December 2024, the Company entered into an amendment to the March Sales Agreement with Jefferies, to provide for the offering, issuance, and sale of up to an aggregate amount of $ 250.0 million of common stock from time to time in at-the-market offerings.

During the year ended December 31, 2024, the Company issued and sold an aggregate of 16,487 shares under the amended March 2024 Sales Agreement for aggregate net proceeds of $ 1.0 million, after deducting commissions and offering expenses payable by the Company.

As of December 31, 2024 and 2023, the authorized capital stock of the Company included 150,000,000 shares of common stock, $ 0.0001 par value, pursuant to the Amended and Restated Certificate of Incorporation effective upon the completion of the IPO.

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A s of December 31, 2024, the Company did no t hold any treasury shares.

Follow-On Public Offerings

June 2023 Public Offering

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Total net proceeds generated from the offering were approximately $ 63.4 million, after deducting underwriting discounts, commissions and other offering expenses payable by the Company.

During the year ended December 31, 2024, all pre-funded warrants associated with this offering were exercised via a cashless exercise, resulting in 469,981 shares of common stock issued.

No cash proceeds associated with the exercise were received by the Company.

As of December 31, 2024, there were no pre-funded warrants associated with this offering outstanding.

January 2024 Public Offering

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

On January 16, 2024, the Company completed a public offering of:

(i) an aggregate of 3,802,025 shares of its common stock at a public offering price of $ 35.50 per share, including the underwriters' full exercise of their option to purchase 633,750 additional shares of common stock, and (ii) pre-funded warrants to purchase 1,056,725 shares of common stock at a public offering price of $ 35.4999 per share of common stock underlying the warrants.

The purchase price per share of each pre-funded warrant represents the per share offering price for the common stock, less the $ 0.0001 per share exercise price of each underlying share.

Total net proceeds generated from the offering were approximately $ 161.6 million, after deducting underwriting discounts, commissions and other offering expenses payable by the Company.

The pre-funded warrants are exercisable at any time on or after the date of issuance at the option of the holder, subject to a beneficial ownership blocker that may limit exercisability.

No holder may exercise any portion of the warrants that would cause either the aggregate number of shares of common stock beneficially owned by such holder, together with its affiliates, to exceed 9.99 %, or the combined voting power of the securities beneficially owned by such holder, together with its affiliates, to exceed 9.99 %.

No holder may exercise any portion of the warrants that would cause the aggregate number of shares of common stock beneficially owned by such holder, together with its affiliates, to exceed 4.99 % (or 9.99 % ) of the issued and outstanding common stock.

A holder of a pre-funded warrant may increase or decrease this percentage up to 19.99 % by providing at least 61 days’ prior notice to the Company.

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Following the occurrence of certain fundamental transactions, the holders of the pre-funded warrants have the right to receive upon exercise of the warrants the same amount and kind of securities, cash, or property as they would have been entitled to receive if they had been holders of the common shares issuable under the warrants immediately prior to such transaction.

In the event of certain fundamental transactions where the consideration payable to the holders of shares of common stock consists solely of cash and/or marketable securities, the pre-funded warrants will automatically be deemed to be exercised in full pursuant to a cashless exercise effective immediately prior to and contingent upon the consummation of such transaction.

As of December 31, 2023, none of the pre-funded warrants had been exercised and all remain outstanding.

The Company determined that the pre-funded warrants are freestanding financial instruments because they are both legally detachable and separately exercisable from the common stock sold in the offering.

During the year ended December 31, 2024, 152,145 pre-funded warrants were exercised via a cashless exercise, resulting in 152,142 shares of common stock issued.

No cash proceeds associated with the exercise were received by the Company.

As of December 31, 2024, a total of 904,580 pre-funded warrants associated with this offering remained outstanding.

April 2024 Public Offering

On April 2, 2024 the Company completed a public offering of:

(i) an aggregate of 3,849,558 shares of its common stock at a public offering price of $ 56.50 per share, including the underwriters' full exercise of their option to purchase 530,973 additional shares of common stock, and (ii) pre-funded warrants to purchase 221,238 shares of common stock at a public offering price of $ 56.4999 per share of common stock underlying the warrants.

The purchase price per share for each pre-funded warrant represents the per share offering price for the common stock, less the $ 0.0001 per share exercise price of each underlying share.

Total net proceeds generated from the offering were approximately $ 216.0 million, after deducting underwriting discounts, commissions and other offering expenses payable by the Company.

The pre-funded warrants are exercisable at any time on or after the date of issuance at the option of the holder, subject to a beneficial ownership blocker that may limit exercisability.

A holder of a pre-funded warrant may increase or decrease this percentage up to 19.99 % by providing at least 61 days’ prior notice to the Company.

The pre-funded warrants do not expire.

The pre-funded warrants may be settled through either physical or net share settlement.

As of December 31, 2024, none of the pre-funded warrants had been exercised and all remained outstanding.

The Company determined that the pre-funded warrants related to the June 2023, January 2024, and April 2024 public offerings are freestanding financial instruments because they are both legally detachable and separately exercisable from the common stock sold in the offering.

As such, the Company evaluated the pre-funded warrants to determine whether they represent instruments that require liability classification pursuant to the guidance in ASC 480.

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815-40, Contracts in Entity’s Own Equity , to determine the appropriate treatment.

The Company concluded that the pre-funded warrants are both indexed to its own stock and meet all other conditions for equity classification.

Accordingly, the Company has classified the pre-funded warrants as permanent equity.

The Company concluded that

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

the pre-funded warrants are both indexed to its own stock and meet all other conditions for equity classification.

Accordingly, the Company has classified the pre-funded warrants as permanent equity.

Shares Reserved for Future Issuance

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Shares reserved for exercise of outstanding stock options 1,809,343 666,163

Shares reserved for exercise of pre-funded warrants 470,000 —

Shares reserved for exercise of pre-funded warrants related to the June 2023 Financing — 470,000

Shares reserved for exercise of pre-funded warrants related to the January 2024 Financing 904,580 —

Shares reserved for exercise of pre-funded warrants related to the April 2024 Financing 221,238 —

Shares reserved for future awards under the 2020 Stock Option and Incentive Plan 91,343 148,264

Shares reserved for future awards under the 2020 Employee Stock Purchase Plan 109,648 53,111

Shares reserved for future awards under the 2024 Inducement Plan 112,774 —

Shares reserved for vesting of restricted stock units 224,473 47,145

4 unchanged sentences

Stock-Based Compensation

The total number of shares of common stock authorized for issuance under the 2020 Stock Option and Incentive Plan (the "2020 Plan") as of December 31, 2023 and December 31, 2022 wa s 661,240 sh ares and 496,632 shares, respectively.

Equity Incentive Plans

In January 2024, the Board of Directors ("the Board") adopted the 2024 Inducement Plan (the "Inducement Plan") without stockholder approval pursuant to Rule 5635(c)(4) of the Nasdaq Stock Market LLC listing rules ("Rule 5635(c)(4)").

In accordance with Rule 5635(c)(4), the Inducement Plan allows the Company to grant awards only to a newly hired employee who was not previously an employee or non-employee director or to an employee who is being rehired following a bona fide period of non-employment if such award is a material inducement to such employee entering into employment.

The total shares of common stock initially authorized for issuance under the Inducement Plan was 1,000,000 .

In June 2024, the shares of common stock authorized for issuance under the Inducement Plan was reduced by 870,000 shares following stockholder approval of an amendment and restatement of the 2020 Stock Option and Incentive Plan ("the 2020 Plan").

The total number of shares of common stock authorized for issuance under the Inducement Plan as of December 31, 2024 was 130,000 shares.

The total number of shares of common stock authorized for issuance under the 2020 Plan as of December 31, 2024 and December 31, 2023 wa s 1,970,833 sh ares and 661,240 shares, respectively.

The total number of shares of common stock authorized for issuance under the 2017 Stock Incentive Plan (the "2017 Plan") as of December 31, 2024 and 2023 was 395,850 shares.

Any authorization to issue new options under the 2017 Plan was cancelled upon the effectiveness of the 2020 Plan and no further awards will be granted under the 2017 Plan.

Stock options issued under the 2020 Plan and 2017 Plan expire ten years from the date of grant.

Shares that expire, are terminated, surrendered or canceled under the 2020 Plan and 2017 Plan without having been fully exercised will be available for future awards.

In addition, shares of common stock that are tendered to the Company by a participant to exercise an award are added to the number of shares of common stock available for future awards.

Stock options issued under the 2024 Inducement, 2020 Plan and 2017 Plan expire ten years from the date of grant.

Shares that expire, are terminated, surrendered or canceled under the 2024 Inducement, 2020 Plan and 2017 Plan without having been fully exercised will be available for future awards.

In addition, shares of common stock that are tendered to the Company by a participant to exercise an award are added to the number of shares of

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

common stock available for future awards.

Upon stock option exercise, the Company issues new shares and delivers them to the participant.

2020 Employee Stock Purchase Plan

Th e total s hares authorized for issuance under the 2020 Employee Stock Purchase Plan (the "2020 ESPP") as of December 31, 2024 and 2023 was 175,145 shares and 87,227 shares, respectively.

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Unvested as of December 31, 2024 224,473 $ 71.71

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

As of December 31, 2024, total unrecognized compensation cost related to unvested restricted stock units was $ 10.6 million, which is expected to be recognized over a weighted-average period of 2.72 years.

The total fair value of restricted stock units that vested during the years ended December 31, 2024 and 2023 was $ 1.0 million and $ 0.5 million, respectively.

Stock Options

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The aggregate intrinsic value of stock options exercised is calculated as the difference between the exercise price of the underlying stock options and the estimated fair value of the Company’s common stock on the date of exercise for those stock options that had exercise prices lower than the fair value of the Company’s common stock on the exercise date.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Valuation of Stock Options

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Stock-based compensation expense was allocated as follows (in thousands):

PRAXIS PRECISION MEDICINES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Year Ended December 31,

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Additionally, the Company may pay RogCon a milestone payment of $ 3.0 million and profit share payments.

The $ 3.0 million milestone payment will become due when the first profit share payment has become due and certain contingent payments have become payable to Ionis under the Ionis Collaboration Agreement, which are subject to the Company exercising its option to obtain license rights to a development candidate, as well as other contingent events.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

contingent events.

The profit share payments will be based on a low-double-digit percentage of net profits, depending on sales volume.

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The reimbursement of out-of-pocket costs was recognized as research and development expense as incurred.

The Company expensed a total of $ 0.7 million as research and development expense under the Ionis Collaboration

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Agreement for the year ended December 31, 2022.

Expense for the year ended December 31, 2023 was immaterial .

Expense for the years ended December 31, 2024 and 2023 was immaterial .

Ionis granted the Company an exclusive option to obtain the rights and license to further develop and commercialize a development candidate in the field of epilepsy and neurodevelopmental disorders, other than Dravet Syndrome, following the results of the investigational new drug application-enabling toxicology study.

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After option exercise, the Company is responsible for clinical development and commercialization of the development candidate.

Additionally, in July 2023, the Company paid a milestone payment of $ 6.9 million to Ionis, which was earned in the second quarter of 2023 upon initiation of the Company's PRAX-222 EMBRAVE study, and was recognized in research and development expenses in the consolidated statement of operations during the year ended December 31, 2023.

Additionally, in July 2023, the Company paid a milestone payment of $ 6.9 million to Ionis, which was earned in the second quarter of 2023 upon initiation of the Company's elsunersen EMBRAVE study, and was recognized in research and development expenses in the consolidated statement of operations during the year ended December 31, 2023.

Ionis may be entitled to additional development milestone payments, additional milestone payments, and sales royalties or sublicense fees.

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2,041,131 738,280

Common shares issuable upon exercise of the pre-funded warrants that were sold in connection with the June 2023 underwritten public offering are included in the calculation of weighted average number of common shares outstanding for the year ended December 31, 2023.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Common shares issuable upon exercise of the pre-funded warrants that were sold and remain outstanding in connection with the January 2024 and April 2024 underwritten public offerings are included in the calculation of weighted average number of common shares outstanding for the year ended December 31, 2024.

Consistent with the guidance in ASC 260-10-45-13, the underlying common shares are issuable for little to no consideration and there are no vesting conditions or contingencies associated with the warrants.

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The income tax benefit (provision) recognized for the years ended December 31, 2024 and 2023 was not material.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The reconciliation of the U.S.

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Changes in tax rates ( 3.2 ) % 2.9 %

Non-deductible executive compensation ( 2.6 ) % ( 1.4 ) %

Non-deductible items ( 0.8 ) % — %

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Effective income tax rate — % — %

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Net deferred tax assets consisted of the following (in thousands):

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Capitalized research expenditures 65,836 48,954

Amortization 23,929 24,262

Research and development credits 30,582 23,451

Amortization 20,600 23,929

Stock-based compensation 8,784 7,697

Accrued expenses 2,333 1,147

Deferred revenue 692 —

Leases 344 676

Deferred revenue — 692

Total gross deferred tax assets 218,587 181,074

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This study may result in an adjustment to the Company’s research and development credit carryforwards;

however, until a study is

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

completed, and any adjustment is known, no amounts are being presented as an uncertain tax position.

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

A full valuation allowance has been provided against the Company’s research and development credits and, if an adjustment is required, this adjustment would be offset by an adjustment to the deferred tax asset established for the research and development credit carryforwards and the valuation allowance.

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The Company has not conducted a study to assess whether a change of control has occurred or whether there have been multiple changes of control since inception due to the significant complexity and cost associated with such a study.

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

If the Company has experienced a change of control, as defined by Section 382, at any time since inception, utilization of

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

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

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As of December 31, 2024 and 2023, the Company had no accrued interest or penalties related to uncertain tax positions and no such amounts have been recognized in the Company’s consolidated statement of operations for either year ended December 31, 2024 or 2023.

The statute of limitations for federal and state tax authorities is open for tax years ended December 31, 2020 through December 31, 2023.

The statute of limitations for federal and the majority of state tax authorities is open for tax years ended December 31, 2021 through December 31, 2024.

The statute of limitation for the remaining state tax authorities is open for tax years ended December 31, 2020 through December 31, 2024.

Since the Company is in a net loss carryforward position, the Company is generally subject to examination by the U.S.

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The plan covers substantially all employees who meet a minimum age requirement and allows participants to defer a portion of their annual compensation on a pre-tax basis.

Under the plan, the Company is not

Under the plan, the Company is not obligated to match any participant contributions.

The Company made contributions of $ 1.2 million and $ 1.0 million during the years ended December 31, 2024 and 2023, respectively .

Segment Information

The Company has one operating segment.

The Company's operating segment discovers and develops therapies for CNS disorders.

The Company's chief operating decision maker ("CODM"), its Chief Executive Officer, manages the Company's operations on a consolidated basis for the purposes of assessing performance and allocating resources based on net loss that also is reported on the consolidated statement of operations as consolidated net loss.

Net loss is used by the CODM to make key strategic and operational decisions.

The operating segment's revenue is derived from a single domestic collaboration agreement from which the segment licenses certain development or product candidates and has performed research and development services.

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

The majority of the Company's long-lived assets are held in the United States.

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obligated to match any participant contributions.

The Company made contributions of $ 1.0 million and $ 1.5 million during the years ended December 31, 2023 and 2022, respectively .

Restructuring

In June 2022, the Company began a strategic realignment across the Cerebrum™ and Solidus™ platforms, which resulted in a reduction of the Company's workforce.

The Company incurred $ 1.0 million of costs related to the realignment, of which $ 0.6 million was recognized in research and development expenses and $ 0.4 million was recognized in general and administrative expenses in the consolidated statement of operations during the year ended December 31, 2022.

These costs related to employee severance, benefits and related costs.

As of December 31, 2022, all costs related to the strategic realignment had been paid.

The following table presents selected financial information about the Company's single operating segment for the year ended December 31, 2024 (in thousands):

Collaboration revenue $ 8,553 $ 2,447

Program-specific expenses:

Ulixacaltamide (a)

69,172 19,464

Vormatrigine 18,360 6,275

Relutrigine 6,273 3,996

Elsunersen 2,135 14,595

Other early stage assets 4,634 7,055

Personnel-related expenses 42,853 33,160

Stock-based compensation expense 41,361 24,857

Depreciation expense 358 432

Other segment expenses (b)

23,572 18,986

Interest income 17,346 3,096

Consolidated net loss $ ( 182,819 ) $ ( 123,277 )

(a) Includes non-cash research and development of $ 2.5 million in the year ended December 31, 2024 associated with the Company's collaboration with Tenacia

(b) Other segment expenses includes research and development and general and administrative costs not attributable to a specific program .

Subsequent Events

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The Company has concluded that no subsequent events have occurred that require disclosure other than those noted below.

Collaboration and License Agreement with Tenacia Biotechnology

On January 4, 2024, the Company entered into an exclusive collaboration and license agreement (the "Collaboration Agreement") with Tenacia Biotechnology (Shanghai) Company, Ltd.

("Tenacia"), a China-based portfolio company of Bain Capital focused on central nervous system drug development and commercialization.

Under the Collaboration Agreement, Tenacia will develop and commercialize ulixacaltamide for the treatment of essential tremor in Greater China.

As part of the consideration for the Collaboration Agreement, the Company entered into a Stock Purchase Agreement (the "Stock Purchase Agreement") with BCPE Tenet Holdings Cayman, Ltd.

("BCPE") pursuant to which the Company issued and sold 443,253 shares of the Company's common stock, par value $ 0.0001 per share (the "Shares"), to BCPE at a price per share of $ 22.5605 for an aggregate purchase price of approximately $ 10.0 million.

The per share price was based on a 20 % premium over the 30-day volume-weighted average price.

Additionally, the Company received an upfront payment of $ 5.0 million in cash, and is eligible for an additional $ 264.0 million in development, regulatory and commercialization milestone payments as well as tiered royalties on net sales.

January 2024 Financing

On January 12, 2024, the Company completed a public offering of:

The purchase price per share for each pre-funded warrant represents the per share offering price for the common stock, less the $ 0.0001 per share exercise price of each underlying share.

Total net proceeds generated from the offering were approximately $ 161.7 million, after deducting underwriting discounts, commissions and other offering expenses payable by the Company.

At-the-Market Offerings

Subsequent to December 31, 2023, the Company issued and sold a total of 192,190 shares under the 2023 Sales Agreement for aggregate net proceeds of $ 5.3 million after deducting commissions and offering expenses payable by the Company.

Subsequent to December 31, 2024, the Company issued and sold a total of 694,212 shares under the amended March 2024 Sales Agreement for aggregate net proceeds of $ 54.9 million after deducting commissions and offering expenses payable by the Company.

Changes in and Disagreements With Accountants on Accounting and Financial Disclosures

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