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Item 8. Financial Statements and Supplementary Data

2025-02-27 compared with 2024-02-29 · 453 added, 338 removed, 861 unchanged (48% of the section changed)

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To the Board of Directors and Stockholders of Spyre Therapeutics, Inc.

Opinion on the Financial Statements

Opinions on the Financial Statements and Internal Control over Financial Reporting

We have audited the accompanying consolidated balance sheets of Spyre Therapeutics, Inc.

and its subsidiaries (the "Company") as of December 31, 2024 and 2023, and the related consolidated statements of operations, of comprehensive loss, of changes in convertible preferred stock and stockholders’ equity and of cash flows for each of the three years in the period ended December 31, 2024, including the related notes (collectively referred to as the "consolidated financial statements").

In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2023 and 2022, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2023 in conformity with accounting principles generally accepted in the United States of America.

Basis for Opinion

These consolidated financial statements are the responsibility of the Company’s management.

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

We also have audited the Company's internal control over financial reporting as of December 31, 2024, based on criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of the Company as of December 31, 2024 and 2023, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2024 in conformity with accounting principles generally accepted in the United States of America.

Also in our opinion, the Company did not maintain, in all material respects, effective internal control over financial reporting as of December 31, 2024, based on criteria established in Internal Control - Integrated Framework (2013) issued by the COSO because a material weakness in internal control over financial reporting existed as of that date related to the Company not designing and maintaining effective controls to evaluate the treatment of the Series A Preferred Stock and the Series B Preferred Stock for the purpose of calculating earnings per share under the two-class method.

A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the annual or interim financial statements will not be prevented or detected on a timely basis.

The material weakness referred to above is described in Management’s Annual Report on Internal Control Over Financial Reporting appearing under Item 9A.

We considered this material weakness in determining the nature, timing, and extent of audit tests applied in our audit of the 2024 consolidated financial statements, and our opinion regarding the effectiveness of the Company’s internal control over financial reporting does not affect our opinion on those consolidated financial statements.

Basis for Opinions

The Company's management is responsible for these consolidated financial statements, for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting, included in management's report referred to above.

Our responsibility is to express opinions on the Company’s consolidated financial statements and on the Company's internal control over financial reporting 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.

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

We conducted our audits of these consolidated financial statements in accordance with the standards of the PCAOB.

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 consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks.

We conducted our audits in accordance with the standards of the PCAOB.

Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud, and whether effective internal control over financial reporting was maintained in all material respects.

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

Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements.

Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements.

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

Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that

a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk.

Our audits also included performing such other procedures as we considered necessary in the circumstances.

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

Definition and Limitations of Internal Control over Financial Reporting

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles.

A company’s internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company;

(ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company;

and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements.

Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Critical Audit Matters

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The fair value of the CVR liability was determined using the probability weighted discounted cash flow method to estimate future cash flows associated with the sale of the legacy assets.

The CVR liability value is based on significant inputs not observable in the market such as estimated cash flows, estimated probabilities of regulatory success,

estimated reimbursement rates compared to the reimbursement target, and risk-adjusted discount rates.

The CVR liability as of December 31, 2023 was $42.7 million and the Company recognized an increase in the CVR liability of $19.0 million for the year ended December 31, 2023 related to the change in fair value between the issuance of the CVR and December 31, 2023.

The CVR liability value is based on significant inputs not observable in the market such as estimated cash flows, estimated probabilities of regulatory success, estimated reimbursement rates compared to the reimbursement target, and risk-adjusted discount rates.

The CVR liability as of December 31, 2024 was $61.7 million and the Company recognized an increase in the CVR liability of $19.0 million for the year ended December 31, 2024 related to the change in fair value between December 31, 2023 and December 31, 2024 of $20.4 million offset by payments of $1.4 million.

The principal considerations for our determination that performing procedures relating to the valuation of the CVR liability is a critical audit matter are (i) the significant judgment by management when developing the fair value estimate of the CVR liability;

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

These procedures included, among others (i) reading and evaluating the terms of the CVR Agreement;

These procedures included testing the effectiveness of controls relating to the valuation of the contingent value rights liability, including controls over the significant assumptions and underlying data.

These procedures also included, among others (i) evaluating the terms of the CVR agreement;

(ii) testing management’s process for developing the fair value estimate of the CVR liability;

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Marketable securities 513,665 150,384

Development receivables — 375

Prepaid expenses and other current assets 5,386 2,251

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Restricted cash — 322

Property and equipment, net — 3,220

Operating lease right-of-use assets — 3,430

Other non-current assets 10 9

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CVR liability 25,080 1,390

Operating lease liabilities — 625

Deferred revenue — 517

Accrued and other current liabilities 27,711 13,108

Related party accounts payable and other current liabilities 16,584 —

Related party accounts payable 603 16,584

Total current liabilities 54,060 31,978

Non-current CVR liability 36,620 41,310

Non-current operating lease liabilities — 4,004

Deferred revenue, net of current portion — 2,179

TOTAL LIABILITIES 90,680 73,288

Commitments and Contingencies (Note 9)

Commitments and Contingencies (Note 8, Note 9)

Series B non-voting convertible preferred stock, $ 0.0001 par value;

150,000 and no shares authorized as of December 31, 2023 and December 31, 2022, respectively;

150,000 and no shares issued and outstanding as of December 31, 2023 and December 31, 2022, respectively.

150,000 shares authorized, issued, and outstanding as of December 31, 2023.

STOCKHOLDERS’ EQUITY

Series A non-voting convertible preferred stock, $ 0.0001 par value;

1,086,341 and no shares authorized as of December 31, 2023 and December 31, 2022, respectively;

437,037 and no shares issued and outstanding as of December 31, 2023 and December 31, 2022, respectively.

1,086,341 shares authorized as of December 31, 2024 and December 31, 2023;

346,045 and 437,037 shares issued and outstanding as of December 31, 2024 and December 31, 2023, respectively.

146,425 184,927

Series B non-voting convertible preferred stock, $ 0.0001 par value;

271,625 shares authorized and 16,667 shares issued and outstanding as of December 31, 2024.

Preferred stock, $ 0.0001 par value;

8,763,659 shares and 10,000,000 authorized as of December 31, 2023 and December 31, 2022, respectively;

8,642,034 shares and 8,763,659 shares authorized as of December 31, 2024 and December 31, 2023, respectively;

no shares issued and outstanding as of December 31, 2024 and December 31, 2023.

Common stock, $ 0.0001 par value;

400,000,000 and 20,000,000 shares authorized as of December 31, 2023 and December 31, 2022, respectively;

400,000,000 shares authorized as of December 31, 2024 and December 31, 2023;

60,257,023 shares and 36,057,109 shares issued and outstanding as of December 31, 2024 and December 31, 2023, respectively.

Additional paid-in capital 1,334,223 763,191

Accumulated other comprehensive income (loss) 302 ( 48 )

Accumulated other comprehensive income 180 302

Accumulated deficit ( 972,432 ) ( 764,414 )

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2024 2023 2022

License $ — $ — $ 12,000

Development fee and royalty — 886 2,329

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Loss from operations ( 208,566 ) ( 242,303 ) ( 84,781 )

Other (expense) income:

Other income (expense):

Interest income 21,312 6,147 837

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Other expense, net ( 20,713 ) ( 19,130 ) ( 7 )

Total other (expense) income ( 96,513 ) 830 ( 11 )

Total other income (expense) 599 ( 96,513 ) 830

Loss before income tax expense ( 207,967 ) ( 338,816 ) ( 83,951 )

Income tax benefit (expense) 26 136 ( 141 )

Income tax (expense) benefit ( 51 ) 26 136

Net loss $ ( 208,018 ) $ ( 338,790 ) $ ( 83,815 )

Net loss per share, basic and diluted $ ( 49.12 ) $ ( 24.86 ) $ ( 25.02 )

Net loss per share, basic and diluted, Series A Preferred Stock $ ( 127.21 ) $ ( 550.28 ) $ —

Weighted-average Series A non-voting convertible preferred stock outstanding, basic and diluted 374,387 434,612 —

Net loss per share, basic and diluted, Series B Preferred Stock $ ( 127.21 ) $ ( 550.29 ) $ —

Weighted-average Series B non-voting convertible preferred stock outstanding, basic and diluted 85,208 8,630 —

Net loss per share, basic and diluted, common $ ( 3.18 ) $ ( 13.76 ) $ ( 24.86 )

Weighted-average common shares outstanding, basic and diluted 47,027,638 6,897,065 3,371,231

(1) Includes $ 48.5 million in related party expenses for the year ended December 31, 2023 and no related party expenses for the year ended months ended December 31, 2022 and 2021.

(1) Includes $ 41.2 million and $ 48.5 million in related party expenses for the years ended December 31, 2024 and December 31, 2023, respectively, and no related party expenses for the year ended December 31, 2022.

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

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Foreign currency translation adjustment 4 37 ( 35 )

Unrealized gain (loss) on marketable securities 313 7 ( 30 )

Unrealized (loss) gain on marketable securities ( 126 ) 313 7

Total comprehensive loss $ ( 208,140 ) $ ( 338,440 ) $ ( 83,843 )

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Convertible Preferred Stock

Non-Voting Convertible

Preferred Stock Common

Comprehensive

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Stockholders’

Shares Amount Shares Amount Shares Amount

Balances—December 31, 2020 — $ — — $ — 1,918 $ 5 $ 415,824 $ 11 $ ( 276,008 ) $ 139,832

Issuance of common stock in connection with exercise of pre-funded warrants — — — — 40 — — — — —

Issuance of common stock in connection with exercise of stock options and employee stock purchase plan — — — — 16 — 1,903 — — 1,903

Stock-based compensation expense — — — — — — 8,038 — — 8,038

Foreign currency translation adjustment — — — — — — — ( 1 ) — ( 1 )

Unrealized loss on marketable securities — — — — — — — ( 30 ) — ( 30 )

Net loss — — — — — — — — ( 65,801 ) ( 65,801 )

Shares Amount Shares Amount Shares Amount Shares Amount

Balances—December 31, 2021 — $ — — $ — — $ — 1,974 $ 5 $ 425,765 $ ( 20 ) $ ( 341,809 ) $ 83,941

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Balances—December 31, 2023 150 $ 84,555 437 $ 184,927 — $ — 36,057 $ 10 $ 763,191 $ 302 $ ( 764,414 ) $ 184,016

Issuance of Series B non-voting convertible preferred stock in connection with private placement, net of financing costs 122 168,850 — — — — — — — — — —

Stockholder approval of the issuance of common stock upon conversion of Series B convertible non-voting preferred stock ( 272 ) ( 253,405 ) — — 272 253,405 — — — — — 253,405

Exchange of Series A non-voting convertible preferred stock for common stock — — ( 91 ) ( 38,502 ) — — 3,640 1 38,501 — — —

Conversion of Series B non-voting convertible preferred stock into common stock — — — — ( 255 ) ( 244,010 ) 10,198 1 244,009 — — —

Issuance of common stock in connection with at-the-market offering program, net of financing costs — — — — — — 777 — 20,504 — — 20,504

Issuance of common stock in connection with follow-on offering, net of financing costs — — — — — — 8,366 1 215,673 215,674

Issuance of common stock in connection with exercise of pre-funded warrants — — — — — — 250 — 1 — — 1

Issuance of common stock in connection with exercise of stock options and employee stock purchase plan — — — — — — 931 — 7,511 — — 7,511

Stock-based compensation expense — — — — — — — — 30,374 — — 30,374

Issuance of Parapyre Option Obligation warrants — — — — — — — — — 14,459 — — 14,459

Vesting of restricted stock units — — — — — — — 38 — — — — — — —

Foreign currency translation adjustment — — — — — — — — — 4 — 4

Unrealized gain on marketable securities — — — — — — — — — ( 126 ) — ( 126 )

Net loss — — — — — — — — — — ( 208,018 ) ( 208,018 )

Balances—December 31, 2024 — $ — 346 $ 146,425 17 $ 9,395 60,257 $ 13 $ 1,334,223 $ 180 $ ( 972,432 ) $ 517,804

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

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Net (accretion of discount) amortization of premium on marketable securities ( 11,404 ) ( 2,318 ) ( 327 )

Interest proceeds from maturities of zero coupon debt securities 1,283 — —

Amortization of operating lease assets — 220 397

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Accrued and other liabilities 14,609 ( 4,891 ) ( 843 )

Related party payable ( 2,402 ) — —

Related party accounts payable

( 15,981 ) ( 2,402 ) —

Net cash used in operating activities ( 157,410 ) ( 99,910 ) ( 80,144 )

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CASH FLOWS FROM FINANCING ACTIVITIES

Proceeds from issuance of Series A non-voting convertible preferred stock in connection with private placement, net of placement and other offering costs 197,364 — —

Proceeds from issuance of Series B non-voting convertible preferred stock in connection with private placement, net of placement and other offering costs 168,850 84,555 —

Proceeds from issuance of common stock in connection with at-the-market offering program, net of issuance costs 20,521 — —

Proceeds from issuance of common stock in connection with follow-on offering, net of issuance costs 215,860 — —

Payment of deferred offering costs in connection with shelf registration ( 407 ) — —

Proceeds from issuance of Series A non-voting convertible preferred stock in connection with private placement, net of placement and other offering costs — 197,364 —

Proceeds from issuance of common stock in connection with private placement, net of placement and other offering costs — 84,555 —

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Proceeds from issuance of common stock and pre-funded warrants in registered direct offering, net of offering costs 1 — 42,874

Proceeds from employee stock plan purchases and stock option exercises

405 222 1,903

Proceeds from employee stock option exercises and employee stock plan purchases 7,511 405 222

Principal payments on finance lease obligation — ( 16 ) ( 418 )

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Supplemental Disclosure of Non-Cash Investing and Financing Information:

Allocation of deferred offering costs against proceeds of issuance of common stock $ 204 $ — $ —

Exchange of Series A non-voting convertible preferred stock for common stock $ 38,502 $ — $ —

Conversion of Series B non-voting convertible preferred stock into common stock $ 244,010 $ — $ —

Settlement of forward contract liability and issuance of Series A non-voting convertible preferred stock in connection with the asset acquisition of Spyre $ — $ 189,741 $ —

Conversion of Series A non-voting convertible preferred stock into common stock

$ — $ 202,178 $ —

Leased assets obtained in exchange for lease obligations $ — $ — $ 21

Reconciliation of Cash, Cash Equivalents, and Restricted Cash Reported in the Statement of Financial Position

Cash and cash equivalents 89,423 188,893 $ 34,863

Restricted cash $ — $ 322 $ 1,553

Total cash, cash equivalents, and restricted cash shown in the statement of cash flows $ 89,423 $ 189,215 $ 36,416

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

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The Company and Basis of Presentation

Spyre Therapeutics, Inc., formerly Aeglea BioTherapeutics, Inc., (“Spyre” or the “Company”) is a preclinical stage biotechnology company focused on developing next generation therapeutics for patients living with inflammatory bowel disease.

Spyre Therapeutics, Inc., formerly Aeglea BioTherapeutics, Inc., (“Spyre” or the “Company”) is a clinical stage biotechnology company focused on developing next generation therapeutics for patients living with inflammatory bowel disease and other immune-mediated diseases.

The Company was formed as a Limited Liability Company ("LLC") in Delaware on December 16, 2013 under the name Aeglea BioTherapeutics Holdings, LLC and was converted from a Delaware LLC to a Delaware corporation on March 10, 2015.

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(“Pre-Merger Spyre”) as disclosed in Note 7 and 8, a privately held biotechnology company advancing a pipeline of antibody therapeutics with the potential to transform the treatment of inflammatory bowel disease through a research and development option agreement ("Paragon Agreement") with Paragon Therapeutics ("Paragon").

The asset acquisition was accomplished through a two-step reverse triangular merger whereby a wholly owned subsidiary of the Company merged with and into Pre-Merger Spyre, which existed at the time the Acquisition Agreement was entered into, became a wholly owned subsidiary of the Company in accordance with the terms of the Acquisition Agreement.

Immediately following this merger, Pre-Merger Spyre merged with an into a second wholly subsidiary of the Company (“Merger Sub”) in accordance with the terms of the Acquisition Agreement and Pre-Merger Spyre ceased to exist.

The asset acquisition was accomplished through a two-step reverse triangular merger whereby Aspen Merger Sub I, Inc., a Delaware corporation and a wholly owned subsidiary of the Company ("First Merger Sub"), merged with and into Pre-Merger Spyre, which existed at the time the Acquisition Agreement was entered into, became a wholly owned subsidiary of the Company in accordance with the terms of the Acquisition Agreement.

Immediately following this merger, Pre-Merger Spyre merged with and into Sequoia Merger Sub II, LLC, a Delaware limited liability company and a wholly subsidiary of the Company (“Second Merger Sub”), in accordance with the terms of the Acquisition Agreement and Pre-Merger Spyre ceased to exist.

Subsequently, Aeglea BioTherapeutics, Inc.

was renamed Spyre Therapeutics, Inc.

and is a different entity than Pre-Merger Spyre, which ceased to exist upon merging with Merger Sub.

and is a different entity than Pre-Merger Spyre, which ceased to exist upon merging with Second Merger Sub.

The transaction was structured as a stock-for-stock transaction pursuant to which all of Pre-Merger Spyre's outstanding equity interests were exchanged based on a fixed exchange ratio of 0.5494488 to 1 for consideration from the Company of 517,809 shares of common stock and 364,887 shares of Series A non-voting convertible preferred stock, par value of $ 0.0001 per share ("Series A Preferred Stock") (convertible on a 40 to 1 basis), in addition to the assumption of outstanding and unexercised stock options to purchase 2,734 shares of common stock from the Amended and Restated Spyre 2023 Equity Incentive Plan (the "Asset Acquisition").

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For additional information, see Note 7.

In connection with the Asset Acquisition, on June 26, 2023, the Company completed a private placement of shares of Series A Preferred Stock (the “Series A PIPE”) to a group of investors (the “Series A Investors”).

The Company sold an aggregate of 721,452 shares of Series A Preferred Stock (the “Series A PIPE Securities”) for an aggregate purchase price of approximately $ 210.0 million before deducting approximately $ 12.7 million of placement agent and other offering expenses.

In connection with the Asset Acquisition, on June 26, 2023, the Company completed a private placement of shares of Series A Preferred Stock (the “June 2023 PIPE” and, together with the Asset Acquisition, the "June 2023 Transactions") to a group of investors (the “June 2023 Investors”).

The Company sold an aggregate of 721,452 shares of Series A Preferred Stock (the “June 2023 PIPE Securities”) at $ 291.08 per share for net proceeds of $ 197.3 million after deducting approximately $ 12.7 million of placement agent and other offering expenses.

For additional information, see Note 12.

In connection with the Asset Acquisition, a non-transferable contingent value right ("CVR") was distributed to stockholders of record of the Company as of the close of business on July 3, 2023 (the "Legacy Stockholders"), but was not distributed to the holders of shares of common stock or Series A Preferred Stock issued to the former stockholders of Pre-Merger Spyre or Investors in the Transactions.

Holders of the CVRs will be entitled to receive cash payments from proceeds received by the Company for a 3 -year period related to the disposition or monetization of its legacy assets for a period of one-year following the closing of the Asset Acquisition.

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On December 11, 2023, the Company completed a private placement of shares of common stock and Series B non-voting convertible preferred stock, par value of $ 0.0001 per share ("Series B Preferred Stock") (convertible on a 40 to 1 basis) (collectively, the “December 2023 PIPE”) to a group of investors (the “December 2023 PIPE Investors”).

The Company sold an aggregate of 6,000,000 shares of Common Stock and 150,000 shares of Series B Preferred Stock (the “December 2023 PIPE Securities”) for an aggregate purchase price of approximately $ 180.0 million before deducting approximately $ 10.9 million of placement agent and other offering expenses.

The Company sold an aggregate of 6,000,000 shares of its common stock at an offering price of $ 15.00 per share and 150,000 shares of Series B Preferred Stock (the “December 2023 PIPE Securities”) at $ 600.00 per share for net proceeds of approximately $ 169.1 million after deducting approximately $ 10.9 million of placement agent and other offering expenses.

For additional information, see Note 12.

The Company is a preclinical stage biotechnology company with a limited operating history, and due to its significant research and development expenditures, the Company has generated operating losses since its inception and has not generated any revenue from the commercial sale of any products.

On March 20, 2024, the Company completed a private placement of Series B Preferred Stock (convertible on a 40 to 1 basis) (the “March 2024 PIPE”) to a group of investors.

The Company sold 121,625 shares of Series B Preferred Stock at $ 1,480 per share.

The net proceeds from this offering were approximately $ 168.9 million after deducting placement and offering costs of $ 11.2 million.

On April 23, 2024, the Company entered into an exchange agreement with Fairmount Healthcare Fund II L.P.

(the “Stockholder”), pursuant to which the Stockholder agreed to exchange an aggregate of 90,992 shares of Series A Preferred Stock for an aggregate of 3,639,680 shares of the Company's common stock (the “April 2024 Exchange”).

The common stock issued in connection with the April 2024 Exchange was issued without registration under the Securities Act of 1933, as amended (the “Securities Act”) in reliance on the exemption from registration contained in Section 3(a)(9) of the Securities Act.

The April 2024 Exchange closed on April 25, 2024, with 346,045 shares of Series A Preferred Stock remaining outstanding following the April 2024 Exchange.

On May 14, 2024, the Company's stockholders approved the issuance of its common stock upon conversion of the Company's Series B Preferred Stock to common stock.

A total of 254,958 shares of Series B Preferred Stock automatically converted to 10,198,320 shares of common stock;

16,667 shares of Series B Preferred Stock did not automatically convert and remained outstanding as of December 31, 2024.

On September 6, 2024, the Company filed a new shelf registration statement on Form S-3 that was declared effective by the SEC for the potential offering, issuance and sale by the Company of up to $ 500.0 million of our common stock, preferred stock, debt securities, warrants and/or units consisting of all or some of these securities.

Concurrent with the filing of the shelf-registration statement, the Company entered into a sales agreement with TD Securities (USA) LLC (“TD Cowen”), as its sales agent, pursuant to which the Company may issue and sell shares of its common stock for an aggregate offering price of up to $ 200.0 million under an at-the-market (“ATM") offering program included in the shelf registration.

During the year ended December 31, 2024, the Company sold an aggregate of 777,432 shares of common stock under the ATM at an average price per share of $ 26.935 , resulting in aggregate net proceeds of approximately $ 20.5 million after deducting $ 0.4 million in commissions paid to TD Cowen as sales agent and other offering costs.

On November 18, 2024, the Company entered into an underwriting agreement (the "Underwriting Agreement") with Jefferies LLC, Goldman Sachs & Co.

LLC, Evercore Group L.L.C.

and Guggenheim Securities, LLC as representatives of the several underwriters (collectively, the "Underwriters"), pursuant to which the Company sold an aggregate of 8,366,250 shares of its common stock, inclusive of 1,091,250 shares pursuant to the full exercise of an over-allotment option, at a public offering price per share of $ 27.50 , resulting in net proceeds of approximately $ 215.9 million after deducting approximately $ 14.2 million of underwriting discounts and other offering costs (the "November 2024 Offering").

The November 2024 Offering closed on

November 20, 2024 and the over-allotment option was exercised in full on November 26, 2024 and closed on November 29, 2024.

The Company is a clinical stage biotechnology company with a limited operating history, and due to its significant research and development expenditures, the Company has generated operating losses since its inception and has not generated any revenue from the commercial sale of any products.

There can be no assurance that profitable operations will ever be achieved, and, if achieved, whether profitability can be sustained on a continuing basis.

Since its inception and through December 31, 2023, the Company has funded our operations by raising an aggregate of approximately $ 896.2 million of gross proceeds from the sale and issuance of convertible preferred stock and common stock, pre-funded warrants, the collection of grant proceeds, and the licensing of its product rights for commercialization of pegzilarginase in Europe and certain countries in the Middle East.

Since its inception and through December 31, 2024, the Company has funded our operations by raising an aggregate of approximately $ 1.3 billion of gross proceeds from the sale and issuance of convertible preferred stock and common stock, pre-funded warrants, the collection of grant proceeds, and the licensing of its product rights for commercialization of pegzilarginase in Europe and certain countries in the Middle East.

As of December 31, 2024, Spyre had an accumulated deficit of $ 972.4 million, and cash, cash equivalents, and marketable securities of $ 603.1 million.

Based on current operating plans, the Company has sufficient resources to fund operations for at least one year from the issuance date of these financial statements with existing cash, cash equivalents, and marketable securities.

Spyre will need to secure additional financing in the future to fund additional research and development, and before a commercial drug can be produced, marketed and sold.

The Company will need to secure additional financing in the future to fund additional research and development, and before a commercial drug can be produced, marketed and sold.

If the Company is unable to obtain additional financing or generate license or product revenue, the lack of liquidity could have a material adverse effect on the Company.

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The consideration transferred in acquiring IPR&D in connection with the acquisition of Pre-Merger Spyre was comprised of shares of the Company’s common stock and shares of Series A Preferred Stock.

To determine the fair value of the equity transferred, the Company considered the per share value of the Series A PIPE securities, which was a financing event involving a group of accredited investors.

To determine the fair value of the equity transferred, the Company considered the per share value of securities sold in the June 2023 PIPE, which was a financing event involving a group of accredited investors.

Cash and Cash Equivalents

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Restricted Cash

Restricted cash consisted of money market accounts held by financial institutions as collateral for the Company’s obligations under a credit agreement and a facility lease for the Company’s corporate headquarters in Austin, Texas.

The lease was terminated in August 2023 and the cash was subsequently unrestricted.

Remaining restricted cash balances relate to the Company's operations in the United Kingdom.

Restricted cash consisted of cash balances related to the Company's operations in the United Kingdom for the period ended December 31, 2023.

There were no restricted cash balances as of December 31, 2024.

Concentration of Credit Risk

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government-sponsored agencies, highly rated banks, and corporate issuers, subject to certain concentration limits and restrictions on maturities.

The Company’s cash, cash equivalents, marketable securities, and restricted cash are held by financial institutions that management believes are of high credit quality.

The financial instruments that potentially subject the Company to a concentration of credit risk consist principally of cash deposits.

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An impairment loss is recognized to the extent an asset group is not recoverable, and the carrying amount exceeds the fair value.

The Company recognized a $ 2.6 million impairment loss for the year ended December 31, 2023 related to its leased office space in Austin, Texas (see Note 17 for additional information).

The Company recognized a $ 2.6 million impairment loss for the year ended December 31, 2023 related to its leased office space in Austin, Texas (see Note 11 and Note 17 for additional information).

There were no impairments of long-lived assets for the years ended December 31, 2024 and 2022.

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Historically, the Company has not experienced any material deviations between accrued and actual research and development expenses.

License Agreements Contingent Milestone Payments

The Company’s license agreements include specific development, regulatory, and clinical milestone payments that are payable upon the resolution of a contingency, such as upon the selection of a development candidate, first dosing of a human patient in clinical trials or receipt of the Food Drug and Administration’s (“FDA”) approval of a Spyre drug.

The achievement of these milestone payments involves many factors outside of the Company’s control and therefore the associated likelihood cannot be considered probable until the related contingency is resolved.

Based on the preceding, the Company accrues each milestone payment upon the achievement of the applicable milestone event.

The Company determines if an arrangement is a lease at inception.

Right-of-use ("ROU") assets represent the Company's right to use an underlying asset for the lease term and lease liabilities represent the Company's obligation to make lease payments arising from the lease.

The classification of the Company's leases as operating or finance leases along with the initial measurement and recognition of the associated ROU assets and lease liabilities is performed at the lease commencement date.

The measurement of lease liabilities

is based on the present value of future lease payments over the lease term.

The classification of the Company's

leases as operating or finance leases along with the initial measurement and recognition of the associated ROU assets and lease liabilities is performed at the lease commencement date.

The measurement of lease liabilities is based on the present value of future lease payments over the lease term.

As the Company's leases do not provide an implicit rate, the Company uses its incremental borrowing rate based on the information available at the lease commencement date in determining the present value of future lease payments.

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Amortization expense for the ROU asset associated with its finance leases is recognized on a straight-line basis over the term of the lease and interest expense associated with its finance leases is recognized on the balance of the lease liability using the effective interest method based on the estimated incremental borrowing rate.

Prior to the Company's restructuring, as described in Note 17, the Company had lease agreements with lease and non-lease components.

As described in Note 11, the Company had lease agreements with lease and non-lease components prior to its restructuring.

As allowed under Topic 842, the Company elected to not separate lease and non-lease components for any leases involving real estate and office equipment classes of assets and, as a result, accounted for the lease and non-lease components as a single lease component.

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In determining the transaction price, the Company adjusts consideration for the effects of the time value of money if the timing of payments provides the Company with a significant benefit of financing.

does not assess whether a contract has a significant financing component if the expectation at contract inception is such that the period between payment by the licensee and the transfer of the promised goods or services to the licensees will be one year or less.

The Company does not assess whether a contract has a significant financing component if the expectation at contract inception is such that the period between payment by the licensee and the transfer of the promised goods or services to the licensees will be one year or less.

For arrangements with licenses of intellectual property that include sales-based royalties, including milestone payments based on the level of sales, and if the license is deemed to be the predominant item to which the royalties relate, the Company recognizes royalty revenue and sales-based milestones at the later of (i) when the related sales occur, or (ii) when the performance obligation to which the royalty has been allocated has been satisfied.

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The fair values of restricted stock units (“RSUs”) are based on the fair value of the Company’s common stock on the date of the grant.

The value of the award is

recognized as compensation expense on a straight-line basis over the requisite service period.

The value of the award is recognized as compensation expense on a straight-line basis over the requisite service period.

Forfeitures are recognized when they occur, which may result in the reversal of compensation costs in subsequent periods as the forfeitures arise.

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The Company records shares of convertible preferred stock at their respective fair values on the dates of issuance, net of issuance costs.

The Company classified the Series B Preferred Stock outside of stockholders’ equity because, if conversion to Common Stock is not approved by the stockholders, the Series B Preferred Stock will be redeemable at the option of the holders for cash equal to the closing price of the Common Stock on the last trading day prior to the holder’s redemption request.

The Company has determined that the conversion and redemption are outside of the Company’s control.

The Company classified the Series B Preferred Stock outside of stockholders’ equity at issuance because if conversion to common stock was not approved by the stockholders, the Series B Preferred Stock was redeemable at the option of the holders for cash equal to the closing price of the Company's common stock on the last trading day prior to the holder’s redemption request.

The Company determined that the conversion and redemption was outside of the Company’s control.

Additionally, the Company determined the Series B Preferred Stock did not contain any embedded derivatives and therefore the conversion and redemption features did not require bifurcation.

Since the Series B Preferred Stock is no longer redeemable, the associated balances of the Series B Preferred Stock were reclassified from mezzanine equity to permanent equity during the second quarter of 2024.

Contingent Milestone Proceeds

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This value is then remeasured for future expected payout as well as the increase in fair value due to the time value of money.

These gains or

losses, if any, are recognized in the consolidated statements of operations and comprehensive loss within Other (expense) income, net.

These gains or losses, if any, are recognized in the consolidated statements of operations and comprehensive loss within Other (expense) income, net.

The Company applies a scenario-based method and weighs them based on the possible achievement of certain milestones.

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The Company’s other comprehensive income (loss) is currently comprised of changes in unrealized losses and gains on available-for-sale securities and foreign currency translation adjustments reflecting the cumulative effect of changes in exchange rates between the foreign entity’s functional currency and the reporting currency.

Recently Adopted Accounting Pronouncement

The Company early adopted the Financial Accounting Standards Board’s Accounting Standards Update 2020-06, Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity (“ASU 2020-06”), effective as of January 1, 2023 using the modified retrospective method.

Among other amendments, ASU 2020-06 eliminates the cash conversion and beneficial conversion feature models in ASC 470-20 that required an issuer of certain convertible debt and preferred stock to separately account for embedded conversion features as a component of equity, as well as changes the accounting for diluted earnings‑per‑share for convertible instruments and contracts that may be settled in cash or stock.

Recently Adopted Accounting Pronouncements

The Company early adopted the Financial Accounting Standards Board’s ("FASB") Accounting Standards Update 2020-06, Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity (“ASU 2020-06”), effective as of January 1, 2023 using the modified retrospective method.

amendments, ASU 2020-06 eliminates the cash conversion and beneficial conversion feature models in ASC 470-20 that required an issuer of certain convertible debt and preferred stock to separately account for embedded conversion features as a component of equity, as well as changes the accounting for diluted earnings‑per‑share for convertible instruments and contracts that may be settled in cash or stock.

Additionally, ASU 2020-06 requires the if‑converted method, which is more dilutive than the treasury stock method, be used for all convertible instruments.

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The adoption of ASU 2020-06 did not have a material impact on the Company's consolidated financial statements.

Recently Issued Accounting Pronouncements

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

Improvements to Reportable Segment Disclosures to update reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expenses and information used to assess segment performance and requires companies to disclose all annual disclosures about segments in interim periods.

The ASU also requires companies with a single reportable segment to provide all disclosures required by Topic 280 – Segment Reporting.

This update is effective beginning with the Company’s 2024 fiscal year annual reporting period and interim periods beginning thereafter.

The Company is currently evaluating the impact that the adoption of this standard will have on its consolidated financial statements.

In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740):

The Company adopted the FASB Standards Update 2023-07, Segment Reporting (Topic 280):

Improvements to Reportable Segment Disclosures ("ASU 2023-07") effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024, with early adoption permitted.

Among other amendments, ASU 2023-07 requires issuers to provide enhanced disclosures about significant segment expenses and information used to assess segment performance on an annual and interim basis.

The ASU also requires companies with a single reportable segment, such as the Company, to provide all disclosures required by Topic 280 - Segment Reporting.

The Company adopted this ASU with the fiscal year ending December 31, 2024, and applied the amendments retrospectively to all prior periods presented in the consolidated financial statements.

See Note 19, Segment Reporting.

Not Yet Adopted Accounting Pronouncements

I n December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740):

Improvements to Income Tax Disclosures.

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and foreign jurisdictions.

This update is effective beginning with the Company’s 2025 fiscal year annual reporting period.

This update is effective for fiscal years beginning after December 15, 2024.

This ASU will have no impact on the Company’s consolidated financial condition or results of operations.

The Company is currently evaluating the impact to its income tax disclosures.

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

Disaggregation of Income Statement Expenses to improve disclosures about public business entities’ expenses and to provide more detailed information around the types of expenses included in commonly presented expense captions.

ASU 2024-03 is effective for fiscal years beginning after December 15, 2026, and interim periods for fiscal years beginning after December 15, 2027, and can be applied on a prospective basis or on a retrospective basis to all periods presented.

Early adoption is permitted.

This ASU will have no impact on the Company’s consolidated financial condition or results of operations.

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

Fair Value Measurements

The Company measures and reports certain financial instruments as assets and liabilities at fair value on a recurring basis.

The following tables sets forth the fair value of the Company’s financial assets and liabilities at fair value on a recurring basis based on the three-tier fair value hierarchy (in thousands):

The following tables set forth the fair value of the Company’s financial assets and liabilities at fair value on a recurring basis based on the three-tier fair value hierarchy (in thousands):

December 31, 2024

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Money market funds $ 150,648 $ — $ — $ 150,648

Commercial paper — 23,641 — 23,641

government treasury securities 32,843 — — 32,843

government agency securities — 16,257 16,257

Commercial paper — 104,141 — 104,141

Corporate bonds — 33,064 — 33,064

Total financial assets $ 183,491 $ 153,462 $ — $ 336,953

CVR liability $ — $ — $ 42,700 $ 42,700

Total liabilities $ — $ — $ 42,700 $ 42,700

The Company measures the fair value of money market funds on quoted prices in active markets for identical asset or liabilities.

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government agency securities, commercial paper and corporate bonds, and are valued based on quoted prices for similar assets in active markets and inputs other than quoted prices that are derived from observable market data.

The Company evaluates transfers between levels at the end of each reporting period.

There were no transfers between Level 1 and Level 2 during the periods presented.

As of December 31, 2022, the Company had no financial liabilities outstanding measured at fair value.

The Company evaluates transfers in and out of Level 3 at the end of each reporting period.

There were no transfers in or out of Level 3 during the periods presented.

As of December 31, 2024 and 2023, the Company had $ 61.7 million and $ 42.7 million, respectively, of financial liabilities outstanding measured at fair value.

Forward Contract Liability

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This forward contract was classified as a liability because the underlying preferred shares were contingently redeemable.

Further, the forward contract liability was considered a Level 2 liability based on observable market data for substantially the full term of the liability and was initially measured at its estimated fair value on the transaction date based on the underlying price per share on an as-converted basis of the Series A PIPE Securities issued in the Series A PIPE.

underlying price per share on an as-converted basis of the June 2023 PIPE Securities issued in the June 2023 PIPE.

Subsequent remeasurement of the fair value of the forward contract liability through its settlement date was based on the market price of the Company's common stock, which represents the redemption value of the Series A Preferred Stock.

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The liability was settled with the issuance of the Series A Preferred Stock on July 7, 2023 for $ 189.7 million.

For the year ended December 31, 2023, $ 83.5 million was recorded as Other (expense) income in the consolidated statements of operations in connection with the change in fair value of the forward contract liability.

For the year ended December 31, 2023, $ 83.5 million was recorded as Other income (expense) in the consolidated statements of operations in connection with the change in fair value of the forward contract liability.

There was no similar expense for the year ended December 31, 2024 and 2022.

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CVR Liability

In connection with the Asset Acquisition, a non-transferable contingent value right was distributed to the Legacy Stockholders, but was not distributed to holders of shares of Common Stock or Series A Preferred Stock issued to the Investors or former stockholders of Pre-Merger Spyre in connection with the Transactions.

In connection with the Asset Acquisition, a non-transferable contingent value right was distributed to the Legacy Stockholders, but was not distributed to holders of shares of the Company's common stock or Series A Preferred Stock issued to the June 2023 Investors or former stockholders of Pre-Merger Spyre in connection with the June 2023 Transactions.

Holders of the CVR will be entitled to receive certain cash payments from proceeds received by the Company for a three-year period, if any, related to the disposition or monetization of the Company’s legacy assets for a period of one year following the closing of the Asset Acquisition.

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Changes in fair value of the liability will be recognized as a component of Other income (expense) in the consolidated statement of operations and comprehensive loss in each reporting period.

The liability value is based on significant inputs not observable in the market such as estimated cash flows, estimated probabilities of regulatory success, and

discount rates, which represent a Level 3 measurement within the fair value hierarchy.

The liability value is based on significant inputs not observable in the market such as estimated cash flows, estimated probabilities of regulatory success, and discount rates, which represent a Level 3 measurement within the fair value hierarchy.

The significant inputs used to estimate the fair value of the CVR liability were as follows:

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Risk-adjusted discount rates 7.29 % - 7.50 %

The change in fair value between the issuance of the CVR and December 31, 2023 was a $ 19.0 million increase, and was primarily driven by changes in the expected timing of achievement of certain milestones, changes in the likelihood of certain milestones related to the approval received from the European Medicines Agency by Immedica Pharma AB ("Immedica"), partially offset by a change in the likelihood of a successful disposition of pegtarviliase and updates to expenses and deductions.

The change in fair value between December 31, 2023 and December 31, 2024 was a $ 20.4 million increase, and was primarily driven by changes in the expected timing of achievement of certain milestones, changes in the likelihood of certain milestones related to the approval received from the European Medicines Agency by Immedica Pharma AB ("Immedica"), partially offset by a change in the likelihood of a successful disposition of pegtarviliase and updates to expenses and deductions.

The following table presents changes in the CVR liability for the periods presented (in thousands):

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Beginning balance as of December 31, 2023 $ 42,700

Fair value at CVR issuance 29,500

Changes in the fair value of the CVR liability since issuance 18,986

Changes in the fair value of the CVR liability 20,430

Payments ( 1,430 )

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Commercial paper 24,950 5 — 24,955

government agency securities 3,736 — ( 1 ) 3,735

government treasury securities 10,965 1 — 10,966

Total cash equivalents $ 186,563 $ 6 $ — $ 186,569

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Corporate bonds 32,984 81 ( 1 ) 33,064

government treasury securities 21,846 31 — 21,877

government agency securities 16,147 110 — 16,257

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government treasury securities 126,588 ( 296 ) — — 126,588 ( 296 )

government agency securities 12,560 ( 72 ) — — 12,560 ( 72 )

Total marketable securities $ 249,264 $ ( 493 ) $ — $ — $ 249,264 $ ( 493 )

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Fair Value Unrealized

Commercial paper $ 17,699 $ ( 27 ) $ — $ — $ 17,699 $ ( 27 )

Corporate bonds $ 9,907 $ ( 1 ) $ — $ — $ 9,907 $ ( 1 )

government agency securities 3,735 ( 1 ) — — 3,735 ( 1 )

government treasury securities 4,831 — — — 4,831 —

Total marketable securities $ 14,738 $ ( 1 ) $ — $ — $ 14,738 $ ( 1 )

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Given the Company's intent and ability to hold such securities until recovery, and the lack of significant change in credit risk of these investments, the Company does not consider these marketable securities to be impaired as of December 31, 2024 and 2023.

There were $ 0.3 million unrealized gains on marketable securities for the year ended December 31, 2023.

There were no realized gains on marketable securities for the year ended December 31, 2023, 2022 and

There were $ 0.1 million net unrealized losses on marketable securities for the year ended December 31, 2024.

For the years ended December 31, 2023 and 2022, there were $ 0.3 million and de minimis, respectively, net unrealized gains.

There were no realized gains on marketable securities for the years ended December 31, 2024, 2023 and 2022.

Interest on marketable securities is included in interest income.

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Property and Equipment, Net

Property and equipment, net consist of the following (in thousands):

Laboratory equipment $ — $ 2,257

Furniture and office equipment — 520

Computer equipment — 73

Software — 121

Leasehold improvements — 4,393

Property and equipment, gross — 7,364

Accumulated depreciation and amortization — ( 4,144 )

Property and equipment, net $ — $ 3,220

Depreciation and amortization expense for the years ended December 31, 2023, 2022, and 2021 was $ 0.7 million, $ 1.4 million, and $ 1.4 million, respectively.

The Company did not have any property, plant, and equipment assets as of December 31, 2024 and 2023.

Depreciation and amortization expense for the years ended December 31, 2023 and 2022 was $ 0.7 million, and $ 1.4 million, respectively.

There was no depreciation and amortization expense for the year ended December 31, 2024.

All of the Company’s long-lived assets were located in the United States.

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Total accrued and other current liabilities $ 27,711 $ 13,108

Related Party Transactions

Paragon and Parapyre Holding LLC ("Parapyre") each beneficially own less than 5 % of the Company's capital stock through their respective holdings of the Company's common stock.

Fairmount Funds Management LLC ("Fairmount") beneficially owns more than 5 % of the Company's capital stock on an as-converted basis, has two seats on the Board and beneficially owns more than 5 % of Paragon, which is a joint venture between Fairmount and Fair Journey Biologics.

Fairmount appointed Paragon's board of directors and has the contractual right to approve the appointment of any executive officers.

Parapyre is an entity formed by Paragon as a vehicle to hold equity in Spyre in order to share profits with certain employees of Paragon.

In connection with the Asset Acquisition, the Company assumed the rights and obligations of Pre-Merger Spyre under the Paragon Agreement.

Under the Paragon Agreement, Spyre is obligated to compensate Paragon for its services performed under each research program based on the actual costs incurred with mark-up costs pursuant to the terms of the Paragon Agreement.

As of the date of the Asset Acquisition, Pre-Merger Spyre had incurred total expenses of $ 19.0 million under the Paragon Agreement since inception, which included the $ 3.0 million research initiation fee and $ 16.0 million of reimbursable expenses under the Paragon Agreement for historical costs owed to Paragon.

As of the acquisition date, $ 19.0 million was unpaid and was assumed by the Company through the Asset Acquisition.

For the year ended December 31, 2023, the Company recognized expenses related to services provided by Paragon subsequent to the Asset Acquisition totaling $ 48.5 million, which included $ 11.4 million of stock-based compensation expense, and were recorded as Research and development expenses in the consolidated statements of operations.

As of December 31, 2023, $ 16.6 million was unpaid and was included in Related party accounts payable and other current liabilities on the Company's consolidated balance sheets.

For the year ended December 31, 2023, the Company made payments totaling $ 39.5 million to Paragon .

On July 12, 2023 and December 14, 2023, the Company exercised the Option available under the Paragon Agreement with respect to the SPY001 and SPY002 research programs, respectively, and expects to enter into the SPY001 License Agreement and the SPY002 License Agreement.

Following the execution of each of the SPY001 License Agreement and SPY002 License Agreement, the Company will be obligated to pay Paragon up to $ 22.0 million upon the achievement of specific development, regulatory and clinical milestones for the first product under each agreement, respectively, that achieves such specified milestones.

Upon execution of each of the SPY001 License Agreement and the SPY002 License Agreement, we expect to pay Paragon a $ 1.5 million fee for nomination of a development candidate, as applicable, and the Company expects to be obligated to make a further milestone payment of $ 2.5 million upon the first dosing of a human patient in a Phase 1 trial.

The following is the summary of expenses related to the Paragon Agreement recognized within research and development expenses, which were ultimately settled in cash (in millions):

2023 2022 2021

Reimbursable costs under the Paragon Agreement $ 37.1 $ — $ —

Parapyre Option Obligation

As part of the Paragon Agreement, the Company is obligated to issue Parapyre a stock option grant on the last business day of 2023 and 2024 (the "Parapyre Option Obligation").

See Note 15 for additional information.

The following is the summary of Related party accounts payable and other current liabilities (in millions):

2023 December 31,

Reimbursable costs under the Paragon Agreement $ 16.6 $ —

Related party accounts payable and other current liabilities $ 16.6 $ —

December 2023 PIPE

The December 2023 Investors included Fairmount, a related party.

Fairmount's participation in the December 2023 PIPE was approved by the Company's board of directors.

Fairmount's investment accounted for $ 10.0 million of the $ 180.0 million gross proceeds raised in the December 2023 PIPE.

Mark McKenna Option Grant

On February 1, 2024, the Board appointed Mark McKenna as a Class I director.

McKenna and the Company are parties to a consulting agreement, pursuant to which Mr.

McKenna agreed to continue to provide consulting services as an independent contractor to the Company, with an effective date of August 1, 2023 (the “Vesting Commencement Date”).

As compensation for Mr.

McKenna’s consulting services, on November 22, 2023, he was granted non-qualified stock options to purchase 477,000 shares of the Company’s common stock under the Company's equity incentive plan with an exercise price of $ 10.39 per share, which vest as to 25 % on the one year anniversary of the Vesting Commencement Date and thereafter vest and become exercisable in 48 th equal monthly installments, subject to Mr.

McKenna’s continued service to the Company through each applicable vesting date.

For the twelve months ended December 31, 2023, the Company recognized $ 0.1 million in stock-based compensation expense related to Mr.

McKenna's consulting agreement.

There was no such expense for the twelve months ended December 31, 2022 and 2021.

Asset Acquisition

On June 22, 2023, the Company acquired Pre-Merger Spyre pursuant to the Acquisition Agreement, by and among the Company, Aspen Merger Sub I, Inc., a Delaware corporation and a wholly owned subsidiary of the Company (“First Merger Sub”), Sequoia Merger Sub II, LLC, a Delaware limited liability company and a wholly owned subsidiary of the Company (“Second Merger Sub”), and Pre-Merger Spyre.

On June 22, 2023, the Company acquired Pre-Merger Spyre pursuant to the Acquisition Agreement, by and among the Company, First Merger Sub, Second Merger Sub and Pre-Merger Spyre.

Pursuant to the Acquisition Agreement, First Merger Sub merged with and into Pre-Merger Spyre, pursuant to which Pre-Merger Spyre was the surviving corporation and became the Company's wholly owned subsidiary (the “First Merger”).

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With respect to the Asset Acquisition, the Company determined that Aeglea was the acquirer for accounting purposes under ASC 805.

The primary factors considered were a) the relative voting rights in the combined entity not resulting in a change of control, b) legacy members of the Company's Board of Directors maintained control of the Board of Directors, and c) the only change in the composition of senior management was the appointment of a new Chief Operating Officer.

was the appointment of a new Chief Operating Officer.

Next, the Company considered whether the Asset Acquisition should be defined as a business under ASC 805.

ASC 805-10-55-5A through 55-5C describe a screen test to determine whether an acquired set of assets and activities is not a business.

We determined that substantially all (greater than 90%) of the fair value of the assets acquired were concentrated in a single asset, Spyre’s Option to license intellectual property rights related to SPY001, SPY002, SPY003 and SPY004

pursuant to the Paragon Agreement.

Accordingly, the Company treated the Asset Acquisition as an asset acquisition for accounting purposes.

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Paragon Agreement

In May 2023, Pre-Merger Spyre entered into the Paragon Agreement with Paragon and Parapyre.

In May 2023, Pre-Merger Spyre entered into the original Paragon Agreement with Paragon and Parapyre Holding LLC ("Parapyre"), which was subsequently amended and restated on September 29, 2023 and May 14, 2024.

Pursuant to the Paragon Agreement, the Option provided for the right to acquire the intellectual property rights related to four research programs from Paragon in accordance with a license agreement to be entered into following each exercise of the Option.

Under the Paragon Agreement, the terms of such license agreement

would be consistent with the economics and other terms set out in the Paragon Agreement and, in the event of failure to reach an agreement on the definitive terms, the matter would be resolved via arbitration.

Under the Paragon Agreement, the terms of such license agreement would be consistent with the economics and other terms set out in the Paragon Agreement and, in the event of failure to reach an agreement on the definitive terms, the matter would be resolved via arbitration.

In consideration for the Option granted under the Paragon Agreement, Pre-Merger Spyre was obligated to pay Paragon an upfront cash amount of $ 3.0 million in research initiation fees.

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As of June 22, 2023, $ 19.0 million was unpaid and was assumed by the Company through the Asset Acquisition.

Furthermore, the Paragon Agreement provided for an annual equity grant of options to purchase 1 % of the then outstanding shares of Spyre’s common stock, on a fully diluted basis, on the last business day of each calendar year, during the term of the Paragon Agreement, at the fair market value determined by the board of directors of Spyre.

As a result of the Asset Acquisition, the Company assumed the rights and obligations of Pre-Merger Spyre under the Paragon Agreement, including the Parapyre Option Obligation.

Pursuant to the Paragon Agreement, on a research program-by-research program basis following the finalization of the research plan for each respective research program, the Company is required to pay Paragon a nonrefundable fee in cash of $ 0.8 million.

For the year ended December 31, 2023, the Company incurred $ 48.5 million, in costs reimbursable to Paragon, which were recorded as Research and development expenses in the consolidated statements of operations.

For the year ended December 31, 2023, the Company made payments totaling $ 39.5 million to Paragon.

Our Option available under the Paragon Agreement with respect to the SPY003 and SPY004 programs remains unexercised.

Upon execution of each of the SPY001 License Agreement and the SPY002 License Agreement, the Company expects to pay Paragon a $ 1.5 million fee for nomination of a development candidate, as applicable, and the Company expects to be obligated to make a further milestone payment of $ 2.5 million upon the first dosing of a human patient in a Phase 1 trial.

Subject to the execution of the Option with respect to the SPY003 or SPY004 research programs, the Company expects to be obligated to make similar payments upon and following the execution of license agreements with respect to these research programs, respectively.

In September 2023, the Company amended the Paragon Agreement to amend and restate certain terms of the option grant pertaining to the Parapyre Option Obligation, including but not limited to (i) defining that the annual equity grant of warrants is based on the outstanding shares of the Company’s common stock on a fully-diluted basis, (ii) establishing the grant date as the last business day of 2023 and 2024, and (iii) defining the term of the warrants granted as ten years .

In May 2024, the Company, Paragon and Parapyre entered into a second amended and restated antibody discovery and option agreement that amends and restates that certain amended and restated antibody discovery and option agreement, dated September 29, 2023, by and between Paragon, Parapyre and Spyre Therapeutics, LLC, in order to, among other things, (i) replace the Company’s subsidiary with the Company as a party to the agreement and (ii) amend certain terms related to the SPY003 research program, including without limitation, (a) establishing an SPY003 antibody selection process pursuant to which the Company and Paragon shall alternate in turn to select a project antibody to be included and excluded, respectively, from the Company’s rights under its option to license certain intellectual property rights related to SPY003 from Paragon until all project antibodies under the SPY003 research program have been selected;

(b) reducing the development costs invoiced to the Company for the SPY003 research program incurred from and after April 1, 2024 through completion of the SPY003 antibody selection process by 50 %;

(c) requiring Paragon to reimburse the Company for 50 % of the development costs for the SPY003 research program incurred prior to April 1, 2024;

provided, that Paragon receives rights to at least one SPY003 project antibody following completion of the SPY003 antibody selection process;

(d) obligating the Company to exercise its option to license the intellectual property rights to SPY003 project antibodies and technology following the completion of the SPY003 antibody selection process;

and (e) establishing a license agreement term sheet for the SPY003 research program with substantially similar milestone payment terms and royalty payment terms as the SPY001 License Agreement.

See Note 9 for disclosures related to the License Agreements entered into with Paragon.

Licensing Agreements

On July 12, 2023, December 14, 2023, and June 5, 2024, the Company exercised the Option available under the Paragon Agreement with respect to the SPY001, SPY002, and SPY003 research programs, respectively.

On May 14, 2024, the Company and Paragon entered into (i) a license agreement (the “SPY001 License Agreement”), pursuant to which Paragon granted the Company a royalty-bearing, world-wide, exclusive license to develop, manufacture, commercialize or otherwise exploit certain antibodies and products targeting α4ß7 integrin and (ii) a license agreement (the “SPY002 License Agreement”), pursuant to which Paragon granted the Company a royalty-bearing, world-wide, exclusive license to develop, manufacture, commercialize or otherwise exploit certain antibodies and products targeting TL1A, respectively.

On October 11, 2024, the Company and Paragon entered into a license agreement (the "SPY003 License Agreement" and, together with the SPY001 License Agreement and the SPY002 License Agreement, the "License Agreements"), pursuant to which Paragon granted the Company a royalty-bearing, world-wide, exclusive license to develop, manufacture, commercialize or otherwise exploit certain antibodies and products targeting IL-23 in the field of IBD.

On February 24, 2025, the SPY003 License Agreement was amended and restated to, among other things, clarify each party's rights and obligations with respect to license exclusivity and patent prosecution and correct certain clerical errors.

Under the terms of each License Agreement, the Company is obligated to pay Paragon up to $ 22.0 million based on specific development, regulatory and clinical milestones for the first product under each agreement, respectively, that achieves such specified milestones, including a milestone payment of $ 3.0 million upon the first dosing of a human patient in a Phase 2 trial.

In addition, the following summarizes other key terms of each License Agreement:

• Paragon will provide the Company with an exclusive license (such license, with respect to the SPY003 License Agreement only, being limited to the field of IBD) to its patents covering the related antibody, the method of use and its method of manufacture.

• Paragon will not conduct any new campaigns that generate anti-α4ß7 or anti-TL1A monospecific antibodies in any field or anti-IL-23 monospecific antibodies in the field of IBD, in each case for at least 5 years.

• The Company will pay Paragon a low single-digit percentage royalty for single antibody products and a mid single-digit percentage royalty for products containing more than one antibody from Paragon.

• There is a royalty step-down of 1/3rd if there is no Paragon patent in effect during the royalty term.

• The royalty term ends on the later of (i) the last-to-expire licensed patent or Company patent directed to the manufacture, use or sale of a licensed antibody in the country at issue or (ii) 12 years from the date of first sale of a Company product.

• Agreement may be terminated on 60 days’ notice by the Company;

on material breach without cure;

and to the extent permitted by law, on a party’s insolvency or bankruptcy.

• With respect to the SPY002 License Agreement only, on a product by product basis, the Company will pay sublicensing fees of up to approximately $ 20.0 million upon the achievement of mostly commercial milestones.

The Company recognizes the expense associated with each milestone when the achievement of the milestone is deemed probable.

During the years ended December 31, 2024, the Company recognized expense of $ 9.5 million related to Paragon license milestone payments recorded within Research and development expenses in the accompanying condensed statement of operations.

There was no such expense for the years ended December 31, 2023 and 2022.

For the year ended December 31, 2024, the Company made cash milestone payments to Paragon totaling $ 9.5 million.

There were no such payments for the years ended December 31, 2023 and 2022.

As of December 31, 2024, there were no Paragon license milestone payments outstanding and payable to Paragon.

Additionally, the Company recognized $ 0.7 million related to sublicensing fees and which was recorded as Research and development expenses in the accompanying statement of operations for the year ended December 31, 2024.

For the year ended December 31, 2024, the Company made sublicensing fees payments to Paragon totaling $ 0.2 million.

There were no such payments for the years ended December 31, 2023 and 2022.

As of December 31, 2024, $ 0.5 million in sublicensing fees were outstanding and payable to Paragon.

Related Party Transactions

Paragon and Parapyre each beneficially own less than 5 % of a class of the Company's voting securities through their respective holdings of the Company's common stock.

Fairmount Funds Management LLC ("Fairmount") beneficially owns more than 5 % of a class of the Company's voting securities, has two seats on the Board (held by Peter Harwin and Tomas Kiselak) and beneficially owns more than 5 % of Paragon.

Fairmount appointed Paragon's board of directors and has the contractual right to approve the appointment of any executive officers of Paragon.

Parapyre is an entity formed by Paragon as a vehicle to hold equity in Spyre in order to share profits with certain employees of Paragon and will not perform any substantive role under the Paragon Agreement other than to receive warrants granted to Parapyre under the Paragon Agreement.

The following is the summary of expenses related to the Paragon Agreement and License Agreements, which are ultimately settled in cash (in millions) and recorded within Research and development in the consolidated statement of operations for the periods presented:

Year Ended December 31,

2024 2023 2022

Reimbursable costs under the Paragon Agreement $ 15.3 $ 37.1 $ —

License Agreements milestone and sublicensing fees 10.2 — —

Total related party expense (excludes stock comp) $ 25.5 $ 37.1 $ —

The following is the summary of Related party accounts payable and other current liabilities (in millions):

Reimbursable costs under the Paragon Agreement $ 0.1 $ 16.6

License Agreements development milestone liability (see Note 9)

Total related party accounts payable $ 0.6 $ 16.6

Paragon Agreement

In connection with the Asset Acquisition, the Company assumed the rights and obligations of Pre-Merger Spyre under the Paragon Agreement.

As of the acquisition date, $ 19.0 million was unpaid and was assumed by the Company through the Asset Acquisition.

The Paragon Agreement was amended and restated on September 29, 2023 and May 14, 2024.

Please refer to Note 8 for additional information on the Paragon Agreement.

On July 12, 2023, December 14, 2023, and June 5, 2024, the Company exercised the Option available under the Paragon Agreement with respect to the SPY001, SPY002 and SPY003 research programs,

respectively.

Our Option available under the Paragon Agreement with respect to the SPY004 program remains unexercised.

Please refer to Note 9 for additional information on the License Agreements related to the exercised options.

On May 14, 2024, the Company, Paragon and Parapyre entered into a second amended and restated antibody discovery and option agreement that amends and restates that certain amended and restated antibody discovery and option agreement, dated September 29, 2023, by and between Paragon, Parapyre and Spyre Therapeutics, LLC, in order to, among other things, (i) replace the Company’s subsidiary with the Company as a party to the agreement and (ii) amend certain terms related to the SPY003 research program, including without limitation, (a) establishing an SPY003 antibody selection process pursuant to which the Company and Paragon shall alternate in turn to select a project antibody to be included and excluded, respectively, from the Company’s rights under its option to license certain intellectual property rights related to SPY003 from Paragon until all project antibodies under the SPY003 research program have been selected;

(b) reducing the development costs invoiced to the Company for the SPY003 research program incurred from and after April 1, 2024 through completion of the SPY003 antibody selection process by 50 %;

(c) requiring Paragon to reimburse the Company for 50 % of the development costs for the SPY003 research program incurred prior to April 1, 2024;

provided, that Paragon receives rights to at least one SPY003 project antibody following completion of the SPY003 antibody selection process;

and (e) establishing a license agreement term sheet for the SPY003 research program with substantially similar milestone payment terms and royalty payment terms as the SPY001 License Agreement.

Please refer to Note 9 for additional disclosures.

For the years ended December 31, 2024 and 2023, the Company recognized expenses related to services provided by Paragon subsequent to the Asset Acquisition totaling $ 29.8 million and $ 48.5 million, which included $ 14.5 million and $ 11.4 million of stock-based compensation expense, respectively, and were recorded as Research and development expenses in the consolidated statements of operations.

I ncluded within the expenses recognized for services provided by Paragon for the year ended December 31, 2024, is a $ 5.9 million reduction in Research and development expenses related to the reimbursement of 50 % of the development costs for the SPY003 research program by Paragon.

For the years ended December 31, 2024 and December 31, 2023, the Company made payments totaling $ 31.8 million and $ 39.5 million, respectively, to Paragon .

There were no such payments for the year ended December 31, 2022.

Parapyre Option Obligation

Pursuant to the Paragon Agreement, the Company agreed to issue Parapyre an annual equity grant of warrants, on the last business day of each of the years ended December 31, 2023 and December 31, 2024, to purchase 1 % of the then outstanding shares of the Company's common stock, on a fully diluted basis, during the term of the Paragon Agreement.

See Note 15 for disclosures related to the Parapyre Option Obligation.

Paragon License Agreements

See Note 9 for disclosures related to the License Agreements entered into with Paragon.

December 2023 PIPE

The December 2023 PIPE Investors included Fairmount, a related party.

Fairmount's participation in the December 2023 PIPE was approved by the Company's board of directors.

Fairmount's investment accounted for $ 10.0 million of the $ 180.0 million gross proceeds raised in the December 2023 PIPE.

See Note 1 for disclosures related to the December 2023 PIPE.

Mark McKenna Option Grant

On February 1, 2024, the Board appointed Mark McKenna as a Class I director.

McKenna and the Company are parties to a consulting agreement, pursuant to which Mr.

McKenna agreed to continue to provide consulting services as an independent contractor to the Company, with an effective date of August 1, 2023 (the

“Vesting Commencement Date”).

As compensation for Mr.

McKenna’s continued service to the Company through each applicable vesting date.

For the years ended December 31, 2024 and December 31, 2023, the Company recognized $ 1.1 million and $ 0.1 million, respectively, in stock-based compensation expense related to Mr.

McKenna's consulting agreement.

There was no such expense for the year ended December 31, 2022.

Prior to the Company's restructuring, as described in Note 17, the Company leased certain office space, laboratory facilities, and equipment.

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The negotiated termination agreement obligated the Company to pay the lessor a $ 2.0 million termination fee in exchange for releasing the Company of all further obligations under the lease including terminating the associated letter of credit.

The following table summarizes the Company’s recognition of its operating and finance leases (in thousands):

Classification 2023 2022

Operating Operating lease right-of-use assets $ — $ 3,430

Finance Other non-current assets — 597

Total leased assets — 4,027

Operating Operating lease liabilities — 625

Finance Accrued and other current liabilities — 16

Operating Non-current operating lease liabilities — 4,004

Total lease liabilities $ — $ 4,645

The following table summarizes the weighted-average remaining lease term and discount rates for the Company’s operating and finance leases:

Lease term (years)

Operating leases 0.0 5.3

Finance leases 0.0 0.6

Discount rate

Operating leases — % 10.6 %

Finance leases — % 10.2 %

The following table summarizes the lease costs pertaining to the Company’s operating leases (in thousands):

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Cash paid for amounts included in the measurement of operating lease liabilities during the years ended December 31, 2023 and 2022 was $ 0.5 million and $ 0.9 million, respectively, and was included within net cash used in operating activities in the cash flows.

As of December 31, 2023, the Company had no operating or finance lease obligations.

As of December 31, 2024 and December 31, 2023, the Company had no operating or finance lease obligations.

Convertible Preferred Stock and Stockholders’ Equity

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The common stock is not entitled to preemptive rights, and is not subject to conversion, redemption or sinking fund provisions.

Subject to preferences that may apply to any shares of preferred stock outstanding at the time, the holders of Common Stock are entitled to receive dividends out of funds legally available if the board of directors, in its discretion, determines to issue dividends and then only at the times and in the amounts that the board of directors may determine.

Subject to preferences that may apply to any shares of preferred stock outstanding at the time, the holders of common stock are entitled to receive dividends out of funds legally available if the board

of directors, in its discretion, determines to issue dividends and then only at the times and in the amounts that the board of directors may determine.

As of December 31, 2024 and 2023, no common stock dividends had been declared by the board of directors.

As of December 31, 2023 there were 437,037 shares of Series A preferred stock and 150,000 shares of Series B preferred stock outstanding.

There were no shares of Series A preferred stock or shares of Series B preferred stock outstanding as of December 31, 2022.

Registered Direct Offering

In May 2022, the Company issued and sold 430,107 shares of Common Stock at an offering price of $ 40.00 per share and pre-funded warrants to purchase up to 694,892 shares of Common Stock at an offering price of $ 39.9975 per warrant (representing the price per share of Common Stock sold in the offering minus the $ 0.0025 exercise price per warrant) in a registered direct offering pursuant to a shelf registration statement on Form S-3.

In May 2022, the Company issued and sold 430,107 shares of common stock at an offering price of $ 40.00 per share and pre-funded warrants to purchase up to 694,892 shares of common ctock at an offering price of $ 39.9975 per warrant (representing the price per share of common stock sold in the offering minus the $ 0.0025 exercise price per warrant) in a registered direct offering pursuant to a shelf registration statement on Form S-3.

The net proceeds to the Company from this offering were approximately $ 42.9 million, after deducting placement agent fees and offering costs of $ 2.1 million.

June 2023 PIPE

In June 2023, in connection with the Asset Acquisition, the Company issued and sold 721,452 shares of Series A Preferred Stock at approximately $ 291.08 per share through a private placement to a group of accredited investors.

In June 2023, in connection with the Asset Acquisition, the Company issued and sold 721,452 shares of Series A Preferred Stock at $ 291.08 per share through a private placement to a group of accredited investors.

The net proceeds from this offering were approximately $ 197.3 million, after deducting placement agent fees and offering costs of $ 12.7 million.

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The net proceeds from this offering were approximately $ 169.1 million, after deducting placement agent fees and offering costs of $ 10.9 million.

March 2024 PIPE

On March 18, 2024, in connection with the March 2024 PIPE, the Company filed a certificate of amendment to its Series B Certificate of Designation to increase the number of authorized shares of Series B Preferred Stock from 150,000 to 271,625 .

On March 20, 2024, as part of the March 2024 PIPE, the Company completed a private placement of 121,625 shares of Series B Preferred Stock at an offering price of $ 1,480 per share.

The net proceeds from this offering were approximately $ 168.9 million, after deducting placement agent fees and offering costs of $ 11.2 million.

September 2024 ATM Facility

On September 6, 2024, the Company filed a new shelf registration statement on Form S-3 that was declared effective by the SEC for the potential offering, issuance and sale by the Company of up to $ 500.0 million of the Company's common stock, preferred stock, debt securities, warrants and/or units consisting of all or some of these securities.

Concurrent with the filing of the shelf-registration statement, the Company entered into a sales agreement (the "Sales Agreement") with TD Cowen, as its sales agent, pursuant to which the Company may issue and sell shares of its common stock for an aggregate offering price of up to $ 200.0 million under an ATM offering program included in the shelf registration.

During the twelve months ended December 31, 2024, the Company sold an aggregate of 777,432 shares of common stock under the ATM at an average price per share of $ 26.935 resulting in net proceeds of $ 20.5 million, after deducting sales agent commissions and other offering costs of $ 0.4 million.

As of February 27, 2025, $ 179.1 million remained available for sale under the Sales Agreement.

November 2024 Underwritten Offering

On November 18, 2024, the Company entered into the Underwriting Agreement with the Underwriters, pursuant to which the Company sold an aggregate of 8,366,250 shares of common stock, at a public offering

price per share of $ 27.50 , resulting in net proceeds of approximately $ 215.9 million, after deducting approximately $ 14.2 million of underwriting discounts and other offering costs.

The November 2024 Offering closed on November 20, 2024 and the over-allotment option was exercised in full on November 26, 2024 and closed on November 29, 2024.

Parapyre Warrants

The Company settled its 2023 obligations under the Parapyre Option Obligation by issuing Parapyre 684,407 warrants to purchase the Company's common stock, less the $ 21.52 per share exercise price of each warrant.

The Company settled its 2024 and 2023 obligations under the Parapyre Option Obligation by issuing Parapyre 848,184 and 684,407 warrants, respectively, to purchase the Company's common stock, at an exercise price per share per warrant of $ 23.28 and $ 21.52 , respectively.

As of December 31, 2024, none of the warrants issued under the Parapyre Option Obligation have been exercised.

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Pre-Funded Warrants

In May 2022, the Company issued pre-funded warrants to purchase shares of Common Stock in underwritten public offerings at the offering price of the Common Stock, less the $ 0.0025 per share exercise price of each warrant.

In May 2022, the Company issued pre-funded warrants to purchase shares of its common stock in underwritten public offerings at the offering price of the common stock, less the $ 0.0025 per share exercise price of each warrant.

The warrants were recorded as a component of stockholders’ equity within additional paid-in capital and have no expiration date.

Per the terms of the warrant agreements, the outstanding warrants to purchase shares of Common Stock may not be exercised if the holder’s ownership of the Common Stock would exceed 4.99 % (“Maximum Ownership Percentage”) or 9.99 % for certain holders.

Per the terms of the warrant agreements, the outstanding warrants to purchase shares of the Company's common stock may not be exercised if the holder’s ownership of the Company's common stock would exceed 4.99 % (“Maximum Ownership Percentage”) or 9.99 % for certain holders.

By written notice to the Company, each holder may increase or decrease the Maximum Ownership Percentage to any other percentage (not in excess of 19.90 % for the majority of such warrants).

The revised Maximum Ownership Percentage would be effective 61 days after the notice is received by the Company.

As of December 31, 2023, the following pre-funded warrants to purchase Common Stock were issued and outstanding:

Issue Date Expiration Date Exercise Price Number of Warrants Outstanding

May 2022 None $ 0.0025 250,000

Total pre-funded warrants 250,000

As of December 31, 2024, all pre-funded warrants have been exercised and none remain outstanding.

Series A Non-Voting Convertible Preferred Stock

On June 22, 2023, the Company filed a Certificate of Designation of Preferences, Rights and Limitations of the Series A Preferred Stock with the Secretary of State of the State of Delaware (the “Certificate of Designation”) in connection with the Asset Acquisition and the PIPE.

Pursuant to the Certificate of Designation, holders of Series A Preferred Stock are entitled to receive dividends on shares of Series A Preferred Stock equal to, on an as-if-converted-to-Common Stock basis, and in the same form as, dividends actually paid on shares of Common Stock.

Except as provided in the Certificate of Designation or as otherwise required by law, the Series A Preferred Stock does not have voting rights.

On June 22, 2023, the Company filed a Certificate of Designation of Preferences, Rights and Limitations of the Series A Preferred Stock with the Secretary of State of the State of Delaware (the “Series A Certificate of Designation”) in connection with the Asset Acquisition and the June 2023 PIPE.

Pursuant to the Series A Certificate of Designation, holders of Series A Preferred Stock are entitled to receive dividends on shares of Series A Preferred Stock equal to, on an as-if-converted-to-common stock basis, and in the same form as, dividends actually paid on shares of the Company's common stock.

Except as provided in the Series A Certificate of Designation or as otherwise required by law, the Series A Preferred Stock does not have voting rights.

However, as long as any shares of Series A Preferred Stock are outstanding, the Company will not, without the affirmative vote of the holders of a majority of the then outstanding shares of the Series A Preferred Stock:

(a) alter or change adversely the powers, preferences or rights given to the Series A Preferred Stock, or alter or amend the Certificate of Designation, amend or repeal any provision of, or add any provision to, the Company’s Certificate of Incorporation or its Bylaws, or file any articles of amendment, certificate of designations, preferences, limitations and relative rights of any series of Preferred Stock, if such action would adversely alter or change the preferences, rights, privileges or powers of, or restrictions provided for the benefit of the Series A Preferred Stock, regardless of whether any of the foregoing actions will be by means of amendment to the Certificate of Incorporation or by merger, consolidation, recapitalization, reclassification, conversion or otherwise, (b) issue further shares of Series A Preferred Stock or increase or decrease (other than by conversion) the number of authorized shares of Series A Preferred Stock, (c) prior to the stockholder approval of the conversion of the Series A Preferred Stock into shares of Common Stock in accordance with Nasdaq Stock Market Rules (the “Conversion Proposal”) or at any time while at least 30 % of the originally issued Series A Preferred Stock remains issued and outstanding, consummate (x) any Fundamental Transaction (as defined in the Certificate of Designation) or (y) any merger or consolidation of the Company with or into another entity or any stock sale to, or other business combination in which our stockholders immediately before such transaction do not hold at least a majority of our capital stock immediately after such transaction or (d) enter into any agreement with respect to any of the foregoing.

(a) alter or change adversely the powers, preferences or rights given to the Series A Preferred Stock, or alter or amend the Series A Certificate of Designation, amend or repeal any provision of, or add any provision to, the Company’s Certificate of Incorporation or its Bylaws, or file any articles of amendment, certificate of designations, preferences, limitations and relative rights of any series of preferred stock, if such action would adversely alter or change the preferences, rights, privileges or powers of, or restrictions provided for the benefit of the Series A Preferred Stock, regardless of whether any of the foregoing actions will be by means of amendment to the Certificate of Incorporation or by merger, consolidation, recapitalization, reclassification, conversion or otherwise, (b) issue further shares of Series A Preferred Stock or increase or decrease (other than by conversion) the number of authorized shares of Series A Preferred Stock, (c) prior to the stockholder approval of the conversion of the Series A Preferred Stock into shares of common stock in accordance with Nasdaq Stock Market Rules (the “Series A Conversion Proposal”) or at any time while at least 30 % of the originally issued Series A Preferred Stock remains issued and outstanding, consummate (x) any Fundamental Transaction (as defined in the Series A Certificate of Designation) or (y) any merger or consolidation of the Company with or into another entity or any stock sale to, or other business combination in which our stockholders immediately before such transaction do not hold at least a majority of our capital stock immediately after such transaction or (d) enter into any agreement with respect to any of the foregoing.

The Series A Preferred Stock does not have a preference upon any liquidation, dissolution or winding-up of the Company.

The Company held a stockholders’ meeting to submit the following matters to its stockholders for their consideration:

(i) the approval of the Conversion Proposal, and (ii) if deemed necessary or appropriate by the Company or as otherwise required by law or contract, the approval of an amendment to the Certificate of Incorporation to authorize sufficient shares of Common Stock for the conversion of the Series A Preferred Stock issued pursuant to the Acquisition Agreement.

(i) the approval of the Series A Conversion Proposal, and (ii) if deemed necessary or appropriate by the Company or as otherwise required by law or contract, the approval of an amendment to the Certificate of Incorporation to authorize sufficient shares of common stock for the conversion of the Series A Preferred Stock issued pursuant to the Acquisition Agreement.

In connection with these matters, the Company filed with the SEC a definitive proxy statement and other relevant materials.

Following stockholder approval of the Conversion Proposal, each share of Series A Preferred Stock automatically converted into 40 shares of Common Stock, subject to certain limitations, including that a holder of Series A Preferred Stock is prohibited from converting shares of Series A Preferred Stock into shares of Common Stock if, as a result of such conversion, such holder, together with its affiliates, would beneficially own more than a specified percentage (established by the holder between 0.0 % and 20.0 %) of the total number of shares of Common Stock issued and outstanding immediately after giving effect to such conversion.

On June 26, 2023, the Company completed a private placement of 721,452 shares of Series A PIPE Securities in exchange for gross proceeds of $ 210.0 million, or net proceeds of $ 197.3 million, after deducting placement agent and other offering costs.

On June 26, 2023, the Company completed a private placement of 721,452 shares of June 2023 PIPE Securities at $ 291.08 per share in exchange for net proceeds of $ 197.3 million after deducting placement agent fees and offering costs of $ 12.7 million.

On July 7, 2023, the Company issued 364,887 shares of Series A Preferred Stock as part of its consideration transferred in connection with the Asset Acquisition that closed on June 22, 2023 which settled the related forward contract liability.

For additional information, see Note 3.

On November 21, 2023, the Company's stockholders approved the Conversion Proposal, among other matters, at a special meeting of stockholders.

As a result of the approval of the Conversion Proposal, all conditions that could have required cash redemption of the Series A Preferred Stock were satisfied.

On November 21, 2023, the Company's stockholders approved the Series A Conversion Proposal, among other matters, at a special meeting of stockholders.

As a result of the approval of the Series A Conversion Proposal, all conditions that could have required cash redemption of the Series A Preferred Stock were satisfied.

Since the Series A Preferred Stock is no longer redeemable, the associated balances of the Series A Preferred Stock were reclassified from mezzanine equity to permanent equity during the fourth quarter of 2023.

In addition, 649,302 shares of Series A Preferred Stock automatically converted to 25,972,080 shares of Common Stock;

437,037 shares of Series A Preferred Stock did not automatically convert and remain outstanding as of December 31, 2023 due to beneficial ownership limitations.

This conversion was recorded as a reclassification between Series A Preferred Stock and Common Stock based on the historical per-share contributed capital amount, inclusive of any forward-contract valuation adjustments, of the Series A Preferred Stock.

Following stockholder approval of the Series A Conversion Proposal, each share of Series A Preferred Stock automatically converted into 40 shares of the Company's common stock, subject to certain limitations, including that a holder of Series A Preferred Stock is prohibited from converting shares of Series A Preferred Stock into shares of common stock if, as a result of such conversion, such holder, together with its affiliates, would beneficially own more than a specified percentage (established by the holder between 0.0 % and 19.9 %) of the total number of shares of common stock issued and outstanding immediately after giving effect to such conversion.

649,302 shares of Series A Preferred Stock automatically converted to 25,972,080 shares of common stock;

437,037 shares of Series A Preferred Stock did not automatically convert and remained outstanding following the conversion.

This conversion was recorded as a reclassification between Series A Preferred Stock and common stock based on the historical per-share contributed capital amount of the Series A Preferred Stock.

On April 23, 2024, in connection with the April 2024 Exchange, the Stockholder agreed to exchange an aggregate of 90,992 shares of Series A Preferred Stock for an aggregate of 3,639,680 shares of the Company's common stock.

This exchange was recorded as a reclassification between Series A Preferred Stock and common stock based on the historical per-share contributed capital amount, inclusive of any forward-contract valuation adjustments, of the Series A Preferred Stock.

Following the April 2024 Exchange, 346,045 shares of Series A Preferred Stock remained outstanding.

Series B Non-Voting Convertible Preferred Stock

On December 8, 2023, the Company filed a Certificate of Designation of Preferences, Rights and Limitations of Series B Non-Voting Convertible Preferred Stock with the Secretary of State of the State of Delaware (the “Series B Certificate of Designation”) in connection with the December 2023 PIPE.

Pursuant to the Series B Certificate of Designation, holders of Series B Preferred Stock are entitled to receive dividends on shares of Series B Preferred Stock equal to, on an as-if-converted-to-Common Stock basis, and in the same form as, dividends actually paid on shares of Common Stock.

Pursuant to the Series B Certificate of Designation, holders of Series B Preferred Stock are entitled to receive dividends on shares of Series B Preferred Stock equal to, on an as-if-converted-to-common stock basis, and in the same form as, dividends actually paid on shares of Company common stock.

Except as provided in the Series B Certificate of Designation or as otherwise required by law, the Series B Preferred Stock does not have voting rights.

However, as long as any shares of Series B Preferred Stock are outstanding, the Company will not, without the affirmative vote of the holders of a majority of the then outstanding shares of the Series B Preferred Stock, alter or change adversely the powers, preferences or rights given to the Series B Preferred Stock, or alter or amend the Series B Certificate of Designation, amend or repeal any provision of, or add any provision to, the Company’s Certificate of Incorporation or its Bylaws, or file any articles of amendment, certificate of designations, preferences, limitations and relative rights of any series of Preferred Stock, if such action would adversely alter or change the preferences, rights, privileges or powers of, or restrictions provided for the benefit of the Series B Preferred Stock, regardless of whether any of the foregoing actions will be by means of amendment to the Certificate of Incorporation or by merger, consolidation, recapitalization, reclassification, conversion or otherwise.

However, as long as any shares of Series B Preferred Stock are outstanding, the Company will not, without the affirmative vote of the holders of a majority of the then outstanding shares of the Series B Preferred Stock, alter or change adversely the powers, preferences or rights given to the Series B Preferred Stock, or alter or amend the Series B Certificate of Designation, amend or repeal any provision of, or add any provision to, the Company’s Certificate of Incorporation or its Bylaws, or file any articles of amendment, certificate of designations, preferences, limitations and relative rights of any series of preferred stock, if such action would adversely alter or change the preferences, rights, privileges or powers of, or restrictions provided

for the benefit of the Series B Preferred Stock, regardless of whether any of the foregoing actions will be by means of amendment to the Certificate of Incorporation or by merger, consolidation, recapitalization, reclassification, conversion or otherwise.

The Series B Preferred Stock does not have a preference upon any liquidation, dissolution or winding-up of the Company.

The Company has agreed to use its best efforts to obtain stockholder approval of the conversion of all issued and outstanding Series B Preferred Stock into shares of Common Stock in accordance with the Nasdaq Stock Market Rules (the "Series B Conversion Proposal") at its 2024 annual meeting of stockholders, which the Company agreed to hold no later than May 15, 2024.

The Series B Preferred Stock is recorded outside of stockholders’ equity because, if conversion to Common Stock is not approved by the stockholders, the Series B Preferred Stock will be redeemable at the option of the holders for cash equal to the closing price of the Common Stock per share of Common Stock underlying the Series B Preferred Stock, on the last trading day prior to the holder’s redemption request.

As of December 31, 2023, the redemption value of the Company's outstanding Series B Preferred Stock was $ 129.1 million based on the closing stock price of the Company's Common Stock on December 31, 2023 of $ 21.52 per share.

The Company has determined that the Series B Preferred Stock did not contain any embedded derivatives and therefore the conversion and redemption features did not require bifurcation.

Following stockholder approval of the Series B Conversion Proposal, each share of Series B Preferred Stock will automatically convert into 40 shares of the Common Stock, subject to certain limitations, including that a holder of Series B Preferred Stock is prohibited from converting shares of Series B Preferred Stock into shares of Common Stock if, as a result of such conversion, such holder, together with its affiliates, would beneficially own more than a specified percentage (established by the holder between 0 % and 19.99 %) of the total number of shares of Common Stock issued and outstanding immediately after giving effect to such conversion.

On December 11, 2023, as part of the December 2023 PIPE, the Company completed a private placement of 150,000 shares of Series B Preferred Stock in exchange for gross proceeds of $ 90.0 million.

On December 11, 2023, as part of the December 2023 PIPE, the Company completed a private placement of 150,000 shares of Series B Preferred Stock at $ 600 per share in exchange for net proceeds of $ 84.6 million after deducting placement and offering costs of $ 5.4 million.

On March 20, 2024, as part of the March 2024 PIPE, the Company completed a private placement of 121,625 shares of Series B Preferred Stock at $ 1,480 per share in exchange for net proceeds of approximately $ 168.9 million, after deducting placement agent fees and offering costs of $ 11.2 million.

On May 14, 2024, the Company's stockholders approved the issuance of Company common stock upon the conversion of all issued and outstanding Series B Preferred Stock into shares of common stock in accordance with the Nasdaq Stock Market Rules (the "Series B Conversion Proposal"), among other matters, at its 2024 annual meeting of stockholders.

As a result of the approval of the Series B Conversion Proposal, all conditions that could have required cash redemption of the Series B Preferred Stock were satisfied.

Following stockholder approval of the Series B Conversion Proposal, each share of Series B Preferred Stock will automatically convert into 40 shares of the Company's common stock, subject to certain limitations, including that a holder of Series B Preferred Stock is prohibited from converting shares of Series B Preferred Stock into shares of common stock if, as a result of such conversion, such holder, together with its affiliates, would beneficially own more than a specified percentage (established by the holder between 0 % and 19.9 %) of the total number of shares of common stock issued and outstanding immediately after giving effect to such conversion.

254,958 shares of Series B Preferred Stock automatically converted to 10,198,320 shares of common stock;

16,667 shares of Series B Preferred Stock did not automatically convert and remain outstanding as of December 31, 2024 due to beneficial ownership limitations.

This conversion was recorded as a reclassification between Series B Preferred Stock and common stock based on the historical per-share contributed capital amount of the Series B Preferred Stock.

Strategic License Agreements

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In July 2021, the Company modified the agreement with Immedica to provide certain additional services in relation to the PEACE Phase 3 Trial and BLA package performance obligation in exchange for the reimbursement of up to $ 3.0 million of the actual costs incurred in relation to such incremental services.

The Company received a non-refundable payment of $ 21.5 million and Immedica agreed to provide payment of 50 % of the Company’s costs incurred in performing the PIP Trial up to a maximum of $ 1.8 million.

In addition, the Company has the ability to receive additional payments under the agreement of up to approximately $ 120.8 million in regulatory and commercial milestone payments, assuming an exchange rate of $ 1.07 to €1.00.

The Company is also entitled to receive royalties in the mid-20 percent range on net sales of the Product in the Territory.

The Company concluded that Immedica meets the definition to be accounted for as a customer because the Company is delivering intellectual property and other services within the Company’s normal course of business, in which the parties are not jointly sharing the risks and rewards.

Therefore, the Company concluded that the promises summarized above represent transactions with a customer within the scope of ASC 606.

The Company determined that the following promises represent distinct promised services, and therefore, performance obligations:

(i) the License, (ii) the PEACE Trial and BLA package, and (iii) the PIP Trial.

Specifically, in making these determinations, the Company considered the following factors:

- As of inception of the agreement, the Company had completed the Phase 1/2 clinical trial related to the Product and were conducting the ongoing PEACE Trial.

Accordingly, the

Company is not promising, nor expecting, to perform additional research and development activities pursuant to the agreement that would either significantly modify, customize or be considered highly interdependent or interrelated with pegzilarginase.

- The License represents functional intellectual property given the functionality of the License is not expected to change substantially as a result of the company’s ongoing activities.

- The services necessary to complete the PEACE Trial, BLA package and PIP Trial could be performed by other parties.

Given that Immedica was not obligated to purchase any minimum amount or quantities of the Product, the supply of the Product for commercial use to Immedica was determined to be an option for Immedica, rather than a performance obligation of the Company at contract inception and will be accounted for if and when exercised.

The Company also determined that Immedica’s option to purchase the Product does not create a material right as the expected pricing is not at a discount.

The Company determined that the upfront fixed payment amount of $ 21.5 million must be included in the transaction price.

Additionally, the Company determined at inception of the arrangement that 50 % of the estimated costs to be incurred in relation to the PIP Trial exceeded $ 1.8 million and included the full reimbursement amount of $ 1.8 million in the transaction price.

Upon subsequent re-evaluation due to changing facts and circumstances, the Company determined the estimated costs are now less than the maximum allowable reimbursement and a portion of the variable consideration was constrained, which did not materially impact the revenue recognized to date.

Additionally, upon the modification of the agreement in July 2021, the Company determined that the estimated costs to perform the additional services related to the PEACE Trial and BLA package exceeds the maximum allowable reimbursement of $ 3.0 million.

Therefore, the Company included an estimated total of $ 3.6 million that will be due in relation to the PIP Trial, PEACE Trial, and BLA package in the transaction price and it is probable that a significant reversal will not occur in the future.

In total, the modified transaction price was determined to be $ 25.1 million.

The Company has allocated $ 9.6 million and $ 3.5 million of the modified transaction price to the PEACE Trial and BLA package and PIP Trial performance obligations, respectively, based on the stand-alone selling prices ("SSP"), which was based on the estimated costs that a third-party would charge in performing such services on a stand-alone basis.

The SSP for the License was established at inception of the arrangement using a residual value approach due to the uniqueness of and lack of observable data related to the License, and without a specific analog from which to make reliable estimates, resulting in an allocation of $ 12.0 million.

The potential regulatory milestone payments that the Company is eligible to receive were excluded from the transaction price, as the milestone amounts were fully constrained based on the probability of achievement, since the milestones relate to successful achievement of certain regulatory approvals, which might not be achieved.

The Company determined that the royalties and commercial milestone payments relate predominantly to the license of intellectual property and are therefore excluded from the transaction price under the sales- or usage-based royalty exception of ASC 606.

The Company will reevaluate the transaction price, including all constrained amounts, at the end of each reporting period and as uncertain events are resolved or other changes in circumstances occur, the Company will adjust its estimate of the transaction price as necessary.

The Company will recognize the royalties and commercial milestone payments as revenue when the associated sales occur, and relevant sales-based thresholds are met.

The Company assessed the arrangement with Immedica and concluded that a significant financing component does not exist.

The Company recognized revenue allocated to the License performance obligation at a point in time and upon transfer of the License.

The Company completed the transfer of the know-how necessary for Immedica to benefit from the License in June 2021 and recognized $ 12.0 million of revenue at that time.

The development fee allocated to the PEACE Trial, BLA package and PIP Trial performance obligations will be recognized over time using an input method of costs incurred related to the performance obligations.

For the years ended December 31, 2023 and 2022, the Company recognized revenue of $ 0.9 million and $ 2.3 million, respectively, related to the PEACE Trial and BLA package performance obligation using a cost to cost model.

The Company recognized revenue of $ 6.7 million related to the PEACE Trial and BLA package performance obligation using a cost to cost model and $ 12.0 million related to the transfer of the License for the year ended December 31, 2021.

As of December 31, 2022, the Company recorded deferred revenue of $ 2.7

million associated with the license and supply agreement with Immedica, of which $ 0.5 million was classified as current.

On July 27, 2023, the Company announced that it had entered into an agreement to sell the global rights to pegzilarginase to Immedica for $ 15.0 million in upfront cash proceeds and up to $ 100.0 million in contingent milestone payments.

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Contract liabilities are recognized as revenue after control of the goods or services is transferred to the customer and all revenue recognition criteria have been met.

The following table presents changes in the Company’s contract liabilities for the periods presented (in thousands):

Year Ended December 31, 2022 December 31,

2022 Additions Deductions

Contract liabilities:

Deferred revenue $ 2,696 $ 575 $ ( 3,271 ) $ —

The Company had no contract assets during the years ended December 31, 2023 and 2022.

Sale of Pegzilarginase to Immedica

The sale of pegzilarginase to Immedica superseded and terminated the previous license agreement between the Company and Immedica.

On July 27, 2023, the carrying value of the asset was zero as it was internally developed.

Accordingly the Company recognized a $ 16.4 million gain within Gain on sale of in-process research and development, which is comprised of $ 15.0 million in upfront cash proceeds and the reimbursement of $ 1.8 million in pre-paid manufacturing costs that was contingent upon a favorable opinion being received by the Committee for Medicinal Products for Human Use, net of transaction costs and the derecognition of pegzilarginase related nonfinancial assets and liabilities totaling $ 0.4 million.

The milestone payments are contingent on formal reimbursement decisions by national authorities in key European markets and pegzilarginase approval by the FDA, among other events.

Accordingly, the Company will recognize any future milestone payments once the contingency is resolved and payment is contractually required.

The upfront payment and contingent milestone payments if paid, net of expenses and

adjustments, will be distributed to CVR holders pursuant to the CVR Agreement resulting from the Asset Acquisition .

The Company had no contract assets or liabilities during the years ended December 31, 2024 and 2023.

Novation of Manufacturing Agreements

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Biologics Master Services Agreement

In April 2023, Paragon and WuXi Biologics entered into the WuXi Biologics MSA, which was subsequently novated to the Company by Paragon on September 19, 2023 pursuant to the Novation Agreement.

The WuXi Biologics MSA governs certain development activities and GMP manufacturing and testing for the SPY001 program, as well as potential future programs, on a work order basis.

In April 2023, Paragon and WuXi Biologics entered into the WuXi Biologics MSA, which was subsequently novated to the Company by Paragon on September 19, 2023 pursuant to the Novation

The WuXi Biologics MSA was subsequently amended and restated in October 2024.

The WuXi Biologics MSA governs certain development activities and GMP manufacturing and testing for the SPY001 , SPY002, and SPY003 programs, as well as potential future programs, on a work order basis.

Under the WuXi Biologics MSA, the Company is obligated to pay WuXi Biologics a service fee and all non-cancellable obligations in the amount specified in each work order associated with the agreement for the provision of services.

The WuXi Biologics MSA terminates on the later of (i) June 20, 2027 or (ii) the completion of services under all work orders executed by the parties prior to June 20, 2027, unless terminated earlier.

The WuXi Biologics MSA terminates on the later of (i) October 14, 2029 or (ii) the completion of services under all work orders executed by the parties prior to October 14, 2029, unless terminated earlier.

The term of each work order terminates upon completion of the services under such work order, unless terminated earlier.

The Company can terminate the WuXi Biologics MSA or any work order at any time upon 30 days' prior written notice and immediately upon written notice if WuXi Biologics fails to obtain or maintain required material governmental licenses or approvals.

The Company can also terminate the WuXi Biologics MSA, or any work order, in the event that any law is enacted that has, or could be reasonably expected to have, a material adverse effect on the Company or any of its products that is the subject of the WuXi Biologics MSA, in each case, as a result of WuXi Biologics providing services under the WuXi Biologics MSA or the Company being a party to the WuXi Biologics MSA.

Either party may terminate a work order (i) at any time upon six months prior notice with reasonable cause, provided however that if WuXi Biologics terminates a work order in such manner, no termination or cancellation fees shall be paid by the Company and (ii) immediately for cause upon (a) the other party’s material breach that remains uncured for 30 days after notice of such breach, (b) the other party’s bankruptcy or (c) a force majeure event that prevents performance for a period of at least 90 days.

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In April 2023, Paragon and WuXi Biologics entered into the Cell Line License Agreement, which was subsequently novated to the Company by Paragon pursuant to the Novation Agreement.

The Cell Line License Agreement was subsequently amended and restated in October 2024.

Under the Cell Line License Agreement, the Company received a non-exclusive, worldwide, sublicensable license to certain of WuXi Biologics’s know-how, cell line, biological materials (the “WuXi Biologics Licensed Technology”) and media and feeds to make, have made, use, sell and import certain therapeutic products produced through the use of the cell line licensed by WuXi Biologics under the Cell Line License Agreement (the “WuXi Biologics Licensed Products”).

Specifically, the WuXi Biologics Licensed Technology is used in certain manufacturing activities in support of the SPY001 program.

Specifically, the WuXi Biologics Licensed Technology is used in certain manufacturing activities in support of the SPY001 , SPY002, and SPY003 programs.

In consideration for the license, the Company agreed to pay WuXi Biologics a non-refundable license fee of $ 0.2 million .

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If the Company manufactures part of its commercial supplies of the WuXi Biologics Licensed Products with WuXi Biologics or its affiliates, then the Royalty will be reduced accordingly on a pro rata basis.

Subject to the terms of the Cell Line License Agreement, royalties owed under the Cell Line License Agreement may be bought out on a product-by-product basis for a lump-sum payment.

The Cell Line License Agreement will continue indefinitely unless terminated (i) by the Company upon six months prior written notice and our payment of all undisputed amounts due to WuXi Biologics through the effective date of termination, (ii) by WuXi Biologics for a material breach by the Company that remains uncured for 60 days after written notice, (iii) by WuXi Biologics if the Company fails to make a payment and such failure continues for 30 days after receiving notice of such failure, or (iv) by either party upon the other party’s bankruptcy.

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2015 Equity Incentive Plan

In March 2015, the Company adopted the 2015 Equity Incentive Plan (“2015 Plan”), administered by the board of directors, and provides for the Company to sell or issue share of Common Stock or restricted Common Stock, or to grant incentive stock options or nonqualified stock options for the purchase of Common Stock, to employees, members of the board of directors and consultants of the Company.

In March 2015, the Company adopted the 2015 Equity Incentive Plan (“2015 Plan”), administered by the board of directors, and provides for the Company to sell or issue shares of common stock or restricted common stock, or to grant incentive stock options or nonqualified stock options for the purchase of common

stock, to employees, members of the board of directors and consultants of the Company.

Under the terms of the 2015 Plan, the exercise prices, vesting and other restrictions may be determined at the discretion of the board of directors, or their committee if so delegated, except that the exercise price per share of stock options may not be less than 100 % of the fair market value of the share of common stock on the date of grant, the term of stock options may not be greater than ten years for all grants, and for grantees holding more than 10 % of the total combined voting power of all classes of stock, the term may not be greater than five years .

The Company granted options under the 2015 Plan until April 2016 when it was terminated as to future awards, although it continues to govern the terms of options that remain outstanding under the 2015 Plan.

As of December 31, 2023, a total of 3,029 shares of Common Stock are subject to options outstanding under the 2015 Plan and will become available under the 2016 Equity Incentive Plan (“2016 Plan”) to the extent the options are forfeited or lapse unexercised.

As of December 31, 2024, a total of 952 shares of common stock are subject to options outstanding under the 2015 Plan and will become available under the 2016 Equity Incentive Plan (as amended and restated, the “2016 Plan”), to the extent the options are forfeited or lapse unexercised.

2016 Equity Incentive Plan

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In October 2018, the 2016 Plan was amended to increase the number of shares of common stock reserved for issuance thereunder by 70,384 shares, extend the term of the 2016 Plan through August 7, 2028, and provide for an automatic increase in the number of shares reserved for issuance thereunder on January 1 of each year for the remaining term of the plan equal to (a) 4.0 % of the number of issued and outstanding shares of common stock on December 31 of the immediately preceding year, or (b) a lesser amount as approved by the board each year (the "Evergreen Provision").

As a result of the operation of each of these provisions, on January 1, 2023, 2022, and 2021, an additional 104,561 , 78,968 , and 76,735 shares, respectively, became available for issuance under the 2016 Plan.

In November 2023, the 2016 Plan was amended to (i) increase the number of shares of Common Stock reserved for issuance thereunder by 4,481,152 shares, (ii) revise the annual limit on non-employee director compensation from 4,000 shares to (a) $ 750,000 in total value or (b) $ 1,000,000 in the year of the director’s initial service as a non-employee director or in any year a director serves as chairman of the Board of Directors, in either case, applicable to fees paid in both cash and equity, (iii) remove the fixed termination date of the 2016 Plan and, (iv) revise the Evergreen Provision from 4 % to 5 % of issued and outstanding shares of Common Stock on December 31 of the preceding calendar year and to include shares issuable upon the exercise of pre-funded warrants and the conversion of outstanding shares of non-voting convertible preferred stock in the calculation.

In November 2023, the 2016 Plan was amended to (i) increase the number of shares of common stock reserved for issuance thereunder by 4,481,152 shares, (ii) revise the annual limit on non-employee director compensation from 4,000 shares to (a) $ 750,000 in total value or (b) $ 1,000,000 in the year of the director’s initial service as a non-employee director or in any year a director serves as chairman of the Board of Directors, in either case, applicable to fees paid in both cash and equity, (iii) remove the fixed termination date of the 2016 Plan and, (iv) revise the Evergreen Provision from 4 % to 5 % of issued and outstanding shares of Company common stock on December 31 of the preceding calendar year and to include shares issuable upon the exercise of pre-funded warrants and the conversion of outstanding shares of non-voting convertible preferred stock in the calculation.

As a result of the Evergreen Provision, on January 1, 2024, 2023, and 2022, an additional 3,023,650 , 104,561 , and 78,968 shares, respectively, became available for issuance under the 2016 Plan.

As of December 31, 2024, the total number of shares reserved for issuance under the 2016 Plan was 7,193,219 , of which 3,145,248 shares were subject to outstanding option awards and restricted unit awards.

2018 Equity Inducement Plan

In February 2018, the board of directors approved and adopted the 2018 Equity Inducement Plan (“2018 Plan”), which became effective on the same date.

In February 2018, the board of directors approved and adopted the 2018 Equity Inducement Plan (as amended, the “2018 Plan”), which became effective on the same date.

The board of directors approved an initial reserve of 44,000 shares of common stock to be used exclusively for individuals who were not previously employees or directors, or following a bona fide period of non-employment, as an inducement material to the individual entering into employment with the Company.

Nonqualified stock options or restricted stock units may be granted

under the 2018 Plan at the discretion of the Compensation Committee or the board of directors.

Nonqualified stock options or restricted stock units may be granted under the 2018 Plan at the discretion of the Compensation Committee or the board of directors.

The Company did not seek stockholder approval of the 2018 Plan pursuant to Nasdaq Rule 5635(c)(4).

During 2023, the 2018 Plan was amended to increase the number of shares of Common Stock reserved for issuance by 6,000,000 .

The 2018 Plan was amended to increase the number of shares of common stock reserved for issuance by 1,000,000 and 6,000,000 during the years ended December 31, 2024 and 2023, respectively.

Under the 2016 Plan and 2018 Plan, the Company may grant stock-based awards with service conditions (“service-based” awards), performance conditions (“performance-based” awards), and market conditions (“market-based” awards).

Service-based awards granted under the 2018 Plan, 2016 Plan, and 2015 Plan generally vest over four years and expire after ten years , although awards have been granted with vesting terms less than four years .

The Company granted 153,865 service-based restricted stock units (“RSUs”) during the year ended December 31, 2023 to certain employees under the 2018 Plan.

As of December 31, 2024, the total number of shares reserved for issuance under the 2018 Plan was 6,895,602 , of which 6,219,622 shares were subject to outstanding awards.

Spyre 2023 Equity Incentive Plan

On June 22, 2023, in connection with the Asset Acquisition, the Company assumed the Amended and Restated Spyre 2023 Equity Incentive Plan (the "Spyre Equity Plan") and its outstanding and unexercised stock options, which were converted to options to purchase 2,734 shares of Common Stock.

The acquisition-date fair value of these grants will be recognized as an expense on a pro-rata basis over the vesting period.

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On June 22, 2023, in connection with the Asset Acquisition, the Company assumed the Parapyre Option Obligation which provided for an annual equity grant of warrants for Parapyre to purchase 1 % of the then outstanding shares of Pre-Merger Spyre's common stock, on a fully diluted basis, on the last business day of each calendar year during the term of the Paragon Agreement, at the fair market value determined by the board of directors of Pre-Merger Spyre.

On September 29, 2023, the Company amended the Paragon Agreement to amend and restate certain terms of the option grant pertaining to the Parapyre Option Obligation, including but not limited to (i) defining that the annual equity grant of warrants is based on the outstanding shares of the Company’s Common Stock, (ii) establishing the grant date as the last business day of 2023 and 2024, and (iii) defining the term of the warrants granted as ten years .

On September 29, 2023, the Company amended the Paragon Agreement to amend and restate certain terms of the option grant pertaining to the Parapyre Option Obligation, including but not limited to (i) defining that the annual equity grant of warrants is based on the outstanding shares of the Company’s common stock, on a fully-diluted basis, (ii) establishing the grant date as the last business day of 2023 and 2024, and (iii) defining the term of the warrants granted as ten years .

The Company determined that the 2023 and 2024 grants are two separate grants, as there would be no obligation for the 2024 grant had the Company exercised or terminated all of the options under the Paragon Agreement prior to December 31, 2023.

The service inception period for the grant precedes the grant date, with the full award being vested as of the grant date with no post-grant date service requirement.

Accordingly, a liability related to the Parapyre Option Obligation was recorded pursuant to the amended Paragon Agreement during 2023 interim periods.

The Company determined that the grant date of the award was December 31, 2023, as all terms of the award, including number of shares and exercise price, were known by all parties.

Accordingly, the Company measured the grant-date fair value of the warrants granted at approximately $ 11.5 million as an equity-classified award, of which $ 0.1 million was recognized as part of the liabilities assumed with the Asset Acquisition on June 22, 2023.

For the year ended December 31, 2023, $ 11.4 million was recognized as stock compensation expense related to the Parapyre Option Obligation.

There was no similar expense for the years ended December 31, 2022 and 2021.

Accordingly, a liability related to the Parapyre Option Obligation was recorded pursuant to the amended Paragon Agreement during the 2023 and 2024 interim periods.

The Company settled its 2024 and 2023 obligations under the Parapyre Option Obligation by issuing Parapyre 848,184 and 684,407 warrants, respectively, to purchase the Company's common stock at an exercise price per share per warrant of $ 23.28 and $ 21.52 , respectively.

For the years ended December 31, 2024 and 2023, $ 14.5 million and $ 11.4 million, respectively, was recognized as stock compensation expense related to the Parapyre Option Obligation.

There was no similar expense for the years ended December 31, 2022.

As of December 31, 2024, the unamortized expense related to the Parapyre Option Obligation was nil .

The following table summarizes employee and non-employee stock option activity for the year ended December 31, 2023:

The following table summarizes stock option activity for the year ended December 31, 2024:

Options Weighted

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For the years ended December 31, 2024, 2023, and 2022, the weighted-average grant date fair value of options granted was $ 28.39 , $ 9.67 , and $ 1.80 , per share, respectively.

The total intrinsic value of options exercised during the years ended December 31, 2023, and 2021 was $ 0.4 million and $ 0.7 million, respectively.

No options were exercised in the year ended December 31, 2022.

There were 477,000 stock options issued to non-employees during the years ended December 31, 2023.

There were no stock options issued to non-employees during the years ended December 31, 2022 and 2021.

For the years ended December 31, 2023, 2022 and 2021, no non-employee stock options vested in the period.

The total intrinsic value of options exercised during the years ended December 31, 2024, 2023 and 2022 was $ 22.7 million, $ 0.4 million and $ 0.7 million, respectively.

There were 10,000 and 477,000 stock options issued to non-employees during the years ended December 31, 2024 and 2023, respectively.

There were no stock options issued to non-employees during the year ended December 31, 2022.

For the year ended December 31, 2024 139,187 non-employee stock options vested in the period.

There were no non-employee stock options vested during the years ended December 31, 2023 and 2022.

2016 Employee Stock Purchase Plan

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In February 2023, the 2016 ESPP was amended to increase the maximum shares purchased during any one period from 80 shares to 400 shares or a lesser amount determined by the board of directors.

For the year ended December 31, 2023, stock-based compensation expense related to the 2016 ESPP plan was di minimis.

For the years ended 2022 and 2021, stock-based compensation expense related to the 2016 ESPP plan was $ 0.1 million and $ 0.2 million, respectively.

Restricted Common Stock Units

In July 2020, the Company granted 9,128 restricted stock units to certain employees, with vesting terms subject to regulatory, commercial, and clinical milestones, in addition to a service condition.

As of December 31, 2023 none of these restricted stock units had vested and all restricted stock units were forfeited since the performance milestones were not met within the required time frame.

No stock-based compensation expense was recognized on these awards.

The Company granted 153,865 service-based restricted stock units during the year ended December 31, 2023.

For the years ended December 31, 2024, 2023 and 2022, stock-based compensation expense related to the 2016 ESPP plan was $ 0.3 million , $ 0.1 million and $ 0.2 million, respectively.

Restricted Stock Units

The Company granted 153,865 service-based restricted stock units during the year ended December 31, 2023, of which 38,467 vested during the year ended December 31, 2024.

There were no restricted stock units granted during the years ended December 31, 2024 and 2022.

The following table summarizes employee restricted stock activity for the year ended December 31, 2023:

The following table summarizes employee restricted stock unit activity for the year ended December 31, 2024:

Average Grant

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Unvested restricted stock units as of December 31, 2023 153,865 $ 18.17

Granted 153,865 18.17

Vested ( 38,467 ) 18.17

Forfeited — —

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Stock-Based Compensation Expense

Total stock-based compensation expense recognized from the Company’s equity incentive plans, 2018 Plan, and the 2016 ESPP for the years ended December 31, 2023, 2022, and 2021 was as follows (in thousands):

Total stock-based compensation expense recognized from the Parapyre Option Obligation, the Company’s equity incentive plans, 2018 Plan, and the 2016 ESPP for the years ended December 31, 2024, 2023, and 2022 was as follows (in thousands):

Year Ended December 31,

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Research and development (1)

$ 9,112 $ 14,459 $ 2,910 $ 11,328 $ 2,591 $ —

General and administrative 19,833 1,429 11,327 109 4,520 —

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$ 28,945 $ 15,888 $ 14,237 $ 11,437 $ 7,111 $ —

(1) For the years ended December 31, 2024 and 2023, $ 14.5 million and $ 11.4 million, respectively, was recognized as stock compensation expense related to the Parapyre Option Obligation.

There was no such expense for the year ended December 31, 2022.

(2) Of the total $ 28.9 million, $ 14.2 million and $ 7.1 million of employee related stock-based compensation expense for the years ended December 31, 2024, 2023 and 2022, respectively, $ 3.6 million, $ 8.3 million and $ 6.9 million is related to legacy Aeglea employees and directors who no longer served the Company as of the end of the respective period.

No related tax benefits were recognized for the years ended December 31, 2024, 2023, and 2022 (see Note 18).

The employee and non-employee awards contain both performance and service-based vesting conditions.

No expense was recognized for the unvested employee and non-employee awards with only a performance condition for the years ended December 31, 2023, 2022, and 2021.

The awards contain both performance and service-based vesting conditions.

No expense was recognized for the unvested awards with only a performance condition for the years ended December 31, 2024, 2023, and 2022.

The performance-based vesting conditions represent specific performance targets.

Compensation expense for employee and non-employee share-based payment awards with performance conditions is recognized when the performance condition is deemed probable of achievement.

Compensation expense for share-based payment awards with performance conditions is recognized when the performance condition is deemed probable of achievement.

As of December 31, 2024, the Company had an aggregate of $ 85.2 million of unrecognized stock-based compensation expense for options outstanding, which is expected to be recognized over a weighted average period of 2.9 years.

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Valuation of Stock Options and 2016 ESPP

The fair value of the stock options granted under the the Company's equity incentive plans, as well as the shares available for purchase under the 2016 ESPP were determined using the Black-Scholes option-pricing model.

The fair value of the stock options granted under the Company's equity incentive plans, as well as the shares available for purchase under the 2016 ESPP were determined using the Black-Scholes option-pricing model.

The following table summarizes the weighted-average assumptions used in calculating the fair value of the awards:

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The Company recorded these restructuring charges based on each employee’s role to the respective research and development and general and administrative operating expense categories on its consolidated statements of operations and comprehensive loss.

The following table summarizes the changes in the Company's accrued restructuring balance (in thousands):

Beginning Balance

December 31, 2022 Charges Payments

Ending Balance

December 31, 2023

Severance liability $ — $ 6,448 $ ( 5,325 ) $ 1,123

Sale of Assets

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A summary of the charges related to the restructuring activities is as follows (in thousands):

Severance Related Expenses Stock Compensation Expenses Loss on Disposal of Long Lived Assets Lease Asset Impairment Total Restructuring Costs

Severance Related Expenses Stock Compensation Expenses Loss on Disposal of Long-Lived Assets

Lease Asset Impairment Total Restructuring Costs

Research and development $ 3,182 $ 123 $ 749 $ 1,405 $ 5,459

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Total $ 6,448 $ 993 $ 931 $ 2,580 $ 10,952

As of December 31, 2024 and 2023, nil and $ 1.1 million of restructuring costs remained outstanding and unpaid, respectively, under the restructuring plan described above.

The following table summarizes the (loss) income before income tax expense by jurisdiction for the periods indicated:

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Loss before income tax expense $ ( 207,967 ) $ ( 338,816 ) $ ( 83,951 )

For the year ended December 31, 2023, the Company recognized no provision or benefit from income taxes.

For both the years ended December 31, 2022 and 2021, the Company recognized an income tax expense of $ 0.1 million, related to foreign subsidiaries income tax expense and the Texas margins tax.

For the years ended December 31, 2024 and 2023, the Company recognized no provision or benefit from income taxes.

For the year ended December 31, 2022, the Company recognized an income tax expense of $ 0.1 million related to foreign subsidiaries income tax expense.

The difference between the Company’s provision for income taxes and the amounts computed by applying the statutory federal income tax rate to income before income taxes is as follows (in thousands):

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Effect of tax rate on foreign jurisdiction ( 2 ) ( 53 ) 42

Other, net 191 — —

Change in the valuation allowance 37,471 17,839 20,609

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The components of the deferred tax assets and liabilities consist of the following (in thousands):

2024 2023 2022

Deferred tax assets

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State tax credits 1,631 1,631 1,631

Other 64 88 190

Total deferred tax assets 163,021 125,491 108,328

Deferred tax liabilities

Unrealized gain ( 92 ) — —

Depreciable assets — — ( 676 )

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net operating loss carryforwards (“NOL”) of $ 415.8 million and $ 354.5 million, respectively.

For both the years ended December 31, 2023 and 2022, the Company had U.S.

For the year ended December 31, 2024, the Company had U.S.

tax credit carryforwards and state tax credit carryforwards of $ 18.2 million and $ 2.1 million, respectively.

Of the net operating loss and tax credit carryforwards $ 58.4 million and $ 21.9 million, respectively,

will expire in 2033, if not utilized.

Of the net operating loss and tax credit carryforwards $ 58.4 million and $ 20.3 million will begin to expire in 2033 and 2034, respectively.

For the year ended December 31, 2023, the Company had U.S.

tax credit carryforwards and state tax credit carryforwards of $ 21.9 million and $ 2.1 million, respectively.

Of the net operating loss and tax credit carryforwards $58.4 million and $ 21.9 million will begin to expire in 2033 and 2034, respectively, if not utilized.

Any remaining net operating loss will carry forward indefinitely and can be utilized to offset up to 80% of the taxable income in any tax year.

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Additionally, the separate return limitation year (“SRLY”) rules may apply to losses of the Company’s eight wholly owned U.S.

subsidiary corporations.

subsidiary corporations that have now been merged with the parent company.

The SRLY rules limit the consolidated group’s use of a subsidiary corporation’s net operating losses to the amount of income generated by the subsidiary corporation after it becomes a member of the group.

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Any carryforwards that will expire prior to utilization as a result of such limitations will be removed from deferred tax assets with a corresponding reduction of the valuation allowance.

The Company is subject to examination by taxing authorities in its significant jurisdictions for the 2019 and subsequent years.

The Company is subject to examination by taxing authorities in its significant jurisdictions for the year ended 2020 and subsequent years.

However, due to NOL and tax attribute carryovers, the taxing authorities have the ability to adjust the NOLs and other tax attributes related to closed years.

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income taxes have been incurred on the undistributed earnings of the foreign subsidiaries and therefore, the tax impact upon distribution is limited to state income and withholding taxes and is not material.

Segment Reporting

The Company operates under a single operating and reportable segment, which is the development of biopharmaceutical products for the treatment of patients with IBD and other immune-mediated diseases.

The Company's Chief Operating Decision Maker ("CODM") is the Company's Chief Executive Officer.

The Company's CODM uses consolidated Net loss as the measure of segment profit or loss and uses consolidated Total Assets as reported on the balance sheet as the measure of segment assets.

The Company's CODM compares Net loss against budgeted and/or forecasted amounts to track the Company's financial performance against expectations and to inform, along with development timelines and scientific and commercial considerations, their decisions regarding resource allocations to fund the Company's development of its pipeline.

The following table sets forth the significant expenses provided to the CODM on a regular basis (in thousands):

Year Ended December 31,

2024 2023 2022

Revenue $ — $ 886 $ 2,329

Compensation $ 21,780 $ 22,590 $ 25,776

Share-based compensation (1)

44,833 25,675 7,111

Research and development, excluding compensation and share-based compensation (2) (3)

127,491 65,282 40,700

Other segment items (4)

13,914 226,129 12,557

Segment net loss $ 208,018 $ 338,790 $ 83,815

Reconciliation of net loss

Adjustments and reconciling items — — —

Consolidated net loss $ 208,018 $ 338,790 $ 83,815

(1) Includes $ 15.6 million and $ 11.4 million in related party expenses for the years ended December 31, 2024 and 2023, respectively, and no related party expenses for the year ended December 31, 2022.

(2) Includes non-clinical study expenses, clinical trial expenses and manufacturing costs.

(3) Includes $ 25.5 million and $ 37.1 million in related party expenses for the years ended December 31, 2024 and 2023, respectively, and no related party expenses for the year ended December 31, 2022.

(4) Includes general and administrative expenses such as audit, legal, and other professional fees, interest income, and Other expense, net.

For the year ended December 31, 2023, includes acquired IPR&D expense related to the Asset Acquisition, a gain on sale related to sale of Pegzilarginase to Immedica, and changes in the forward-contract liability related to the Asset Acquisition.

Net Loss Per Share

The Company computes net loss attributable per common stockholder using the two-class method required for participating securities.

The Company considers convertible preferred stock to be participating securities.

In the event that the Company paid out distributions, holders of convertible preferred stock would participate in the distribution.

The two-class method is an earnings (loss) allocation method under which earnings (loss) per share is calculated for Common Stock and participating security considering a participating security’s rights to undistributed earnings (loss) as if all such earnings (loss) had been distributed during the period.

The holders of Series A Preferred Stock and Series B Preferred Stock do not have an obligation to fund losses and therefore the Series A Preferred Stock and the Series B Preferred Stock were excluded from the calculation of basic net loss per share.

Basic and diluted net loss per share is computed by dividing the net loss by the weighted-average number of Common Stock and pre-funded warrants outstanding during the period, without consideration of potential dilutive securities.

The Company computes net loss per share of common stock, Series A Preferred Stock, and Series B Preferred Stock using the two-class method required for multiple classes of common stock and other participating securities.

The two-class method is an earnings (loss) allocation method under which earnings (loss) per share is calculated for each class of common stock.

The Company has determined that the Series A Preferred Stock and Series B Preferred Stock do not have preferential rights when compared to the Company's common stock and therefore it must allocate losses to these other classes of common stock, as illustrated in the table below.

Basic and diluted net loss per share is computed by dividing the net loss by the weighted-average number of shares and pre-funded warrants outstanding during the period, without consideration of potential dilutive securities.

The pre-funded warrants are included in the computation of basic net loss per share as the exercise price is negligible and they are fully vested and exercisable.

For periods in which the Company generated a net loss, the Company does not include the potential impact of dilutive securities in diluted net loss per share, as the impact of these items is anti-dilutive.

The Company has generated a net loss for all periods presented, therefore diluted net loss per share is the same as basic net loss per share since the inclusion of potentially dilutive securities would be anti-dilutive.

For periods in which the Company generated a net loss, the Company does not include potential shares of common stock in diluted net loss per share when the impact of these items is anti-dilutive.

The Company has generated a net loss for all periods presented, therefore diluted net loss per share is the same as basic net loss per share since the inclusion of potential shares of common stock would be anti-dilutive.

The following table sets forth the computation of basic and diluted net loss per share of common stock, Series A Preferred Stock, and Series B Preferred Stock (in thousands, except share and per share amounts):

Year Ended December 31, 2024

Series A Preferred Stock

Preferred Stock

Net loss per share, basic and diluted:

Allocation of losses

$ ( 47,624 ) $ ( 10,839 ) $ ( 149,555 )

Weighted-average shares outstanding

374,387 85,208 46,940,206

Weighted-average pre-funded warrants outstanding

Number of shares used in per share computation

374,387 85,208 47,027,638

Net loss per share, basic and diluted

$ ( 127.21 ) $ ( 127.21 ) $ ( 3.18 )

Year Ended December 31, 2023

Series A Preferred Stock

Preferred Stock

Net loss per share, basic and diluted:

Allocation of losses

$ ( 239,158 ) $ ( 4,749 ) $ ( 94,883 )

Weighted-average shares outstanding

434,612 8,630 6,201,954

Weighted-average pre-funded warrants outstanding

Number of shares used in per share computation

434,612 8,630 6,897,065

Net loss per share, basic and diluted

$ ( 550.28 ) $ ( 550.29 ) $ ( 13.76 )

Year Ended December 31, 2022

Series A Preferred Stock

Preferred Stock

Net loss per share, basic and diluted:

Allocation of losses

$ — $ — $ ( 83,815 )

Weighted-average shares outstanding

— — 2,307,668

Weighted-average pre-funded warrants outstanding

— — 1,063,563

Number of shares used in per share computation

— — 3,371,231

Net loss per share, basic and diluted

$ — $ — $ ( 24.86 )

The following weighted-average equity instruments were excluded from the calculation of diluted net loss per share because their effect would have been anti-dilutive for the periods presented:

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Outstanding Parapyre Warrants 686,724 5,625 —

The following is a reconciliation of the shares used as the denominator for the calculation of basic and diluted net loss per share:

Year Ended December 31,

2023 2022 2021

Weighted average Common Shares 6,201,954 2,307,668 1,956,933

Weighted average pre-funded warrants 695,111 1,063,563 672,851

Total basic and diluted weighted average shares 6,897,065 3,371,231 2,629,784

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