What changed in this filing

/stocks — the workspaceLOADING

Item 9A. Controls and Procedures

2023-03-09 compared with 2022-03-11 · 285 added, 349 removed, 712 unchanged (47% of the section changed)

18 unchanged sentences

Under the supervision and with the participation of our management, including our principal executive officer and principal financial officer, we conducted an evaluation of the effectiveness of our internal control over financial reporting as of the end of the period covered by this Annual Report.

Management used the framework set forth in the report entitled “Internal Control — Integrated Framework (2013 Framework)” published by the

Committee of Sponsoring Organizations of the Treadway Commission to evaluate the effectiveness of our internal control over financial reporting.

Management used the framework set forth in the report entitled “Internal Control — Integrated Framework (2013 Framework)” published by the Committee of Sponsoring Organizations of the Treadway Commission to evaluate the effectiveness of our internal control over financial reporting.

Based on its evaluation, management concluded that our internal control over financial reporting was effective at a reasonable level of assurance as of December 31, 2022, the end of our most recent fiscal year.

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OTHER INFORMATION

On March 9, 2022, we changed our registered agent to Corporation Trust Center and our registered office to 1209 Orange Street, County of New Castle, Wilmington, Delaware 19801 pursuant to an amended and restated certificate of incorporation, filed with the Delaware Secretary of State on March 9, 2022 (the “Second Restated Certificate of Incorporation”).

The Second Restated Certificate of Incorporation was approved by the Company’s Board of Directors in accordance with Delaware law.

Pursuant to Delaware law, a stockholder vote was not necessary to effectuate the change in registered agent and registered office, and neither affects the rights of our stockholders.

A copy of the Second Restated Certificate of Incorporation is attached as Exhibit 3.1 to this Annual Report and incorporated herein by reference.

DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTION

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3.1 Second Restated Certificate of Incorporation of the Registrant, effective as of March 9, 2022

3.2 Amended and Restated Bylaws of the Registrant, effective as of January 20, 2021.

10-K 03/11/2022 3.1

3.2 Amended and Restated Bylaws of the Registrant, effective as of May 11, 2022.

10-Q 05/13/2022 3.2

3.3 Certificate of Designation of Series A Non-Voting Convertible Preferred Stock.

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4.5 Description of the Registrant’s Securities Registered Pursuant to Section 12 of the Securities Exchange Act of 1934.

10-K 03/26/2021 4.5

10.1^ License Agreement, by and between the Registrant and ImmunoGen, dated as of October 12, 2020.

5 unchanged sentences

10.4 Subscription Agreement, by and between the Registrant and Xencor, dated as of December 2, 2021.

10-K 03/11/2022 10.4

10.5+ Form of Indemnity Agreement between the Registrant and each of its directors and executive officers.

S-4 12/02/2016 10.32

10.6+ Employment Agreement by and between the Registrant and Jonathan Violin, dated as of January 15, 2021.

8-K 01/20/2021 10.1

10.7+ Employment Agreement by and between the Registrant and Barrett Katz, M.D., dated as of January 18, 2021.

10.6+ Barre t t Katz, M.D.

Employment Agreement , dated January 18, 2021.

10-K 03/26/2021 10.14

1 unchanged sentence

8-K 07/26/2021 10.1

10.9+ Amended and Restated 2016 Equity Incentive Plan.

10.8+ Carrie Melvin Employment Agreement, dated May 25, 2022.

8-K 06/23/2022 10.1

10.9+ Scott Myers Employment Agreement, dated December 29, 2022

8-K 02/06/2023 10.1

10.10+ Jonathan Violin General Release and Separation and Consulting Agreement, dated February 6, 2023

8-K 02/06/2023 10.2

10.11+ Viridian Therapeutics, Inc.

Amended & Restated 2016 Equity Incentive Plan.

10-Q 08/15/2022 10.3

10.12+ Form of Stock Option Grant Notice and Stock Option Agreement under 2016 Equity Incentive Plan.

30 unchanged sentences

10-Q 11/05/2021 10.4

10.25^ Loan and Security Agreement, dated as of April 30, 2015, by and between the Registrant and Silicon Valley Bank.

S-4 12/02/2016 10.47

10.26 First Loan Modification Agreement, dated as of December 22, 2016, by and between the Registrant and Silicon Valley Bank.

S-4 01/04/2017 10.47.1

10.27 Amended and Restated Loan and Security Agreement between Miragen Therapeutics, Inc.

and Silicon Valley Bank, dated November 14, 2017.

8-K 11/15/2017 10.1

10.28 Deferral Agreement between Silicon Valley Bank and the Registrant effective as of April 6, 2020.

10.27 Second Amendment to Lease by and between the Registrant and Watch City Ventures MT, LLC dated as of April 13, 2022.

10-Q 08/15/2022 10.2

10.29 Common Stock Purchase Agreement, dated December 11, 2019 between the Registrant and Aspire Capital Fund, LLC.

8-K 12/11/2019 10.1

10.28 Third Amendment to Lease by and between Registrant and Watch City Ventures MT, LLC dated as of July 29, 2022.

10-Q 11/14/2022 10.1

10.29 Registration Rights Agreement, dated December 11, 2019, by and between the Registrant and Aspire Capital Fund, LLC.

4 unchanged sentences

10-Q 11/12/2020 10.8

10.33 Open Market Sale Agreement SM , dated as of November 8, 2021, by and among the Registrant and Jefferies LL C

10.32 Open Market Sale Agreement SM , dated as of November 8, 2021, by and among the Registrant and Jefferies LLC

S-3 11/08/2021 1.2

10.33 Open Market Sale Agreement SM , dated as of September 9, 2022 by and between the Registrant and Jefferies LLC.

S-3 09/09/2022 1.2

10.34^ Loan and Security Agreement, dated as of April 1, 2022, among the Viridian Therapeutics, Inc., certain of its subsidiaries from time to time party thereto, the Lenders from time to time party thereto and Hercules Capital, Inc., as Agent.

8-K 04/05/2022 10.1

21.1 Subsidiaries of the Registrant.

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

and subsidiaries (the Company) as of December 31, 2021 and 2020, the related consolidated statements of operations and comprehensive loss, consolidated statements of changes in stockholders’ equity, and consolidated statements of cash flows for the years then ended, and the related notes (collectively, the consolidated financial statements).

and subsidiaries (the Company) as of December 31, 2022 and 2021, the related consolidated statements of operations and comprehensive loss, changes in stockholders’ equity, and cash flows for the years then ended, and the related notes (collectively, 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, 2022 and 2021, and the results of its operations and its cash flows for the years then ended, in conformity with U.S.

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The critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial statements that was communicated or required to be communicated to the audit committee and that:

(1) relate to accounts or disclosures that are material to the consolidated financial statements and (2) involved our especially challenging, subjective, or complex judgments.

The communication of a critical audit matter does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which they relate.

(1) relates to accounts or disclosures that are material to the consolidated financial statements and (2) involved our especially challenging, subjective, or complex judgments.

Accrued outsourced clinical trials and preclinical studies

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Property and equipment, net 1,326 375

Operating lease right-of-use asset, net 1,680 478

Other assets - related party — 856

Operating lease right-of-use asset 1,610 1,680

Other assets 982 1,491

6 unchanged sentences

Total current liabilities 33,349 13,636

Other liabilities - related party 1,149 501

Long-term debt, net 4,645 —

Deferred revenue - related party 861 1,149

Other liabilities 1,172 1,208

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435,000 shares authorized;

260,437 and 398,487 shares issued and outstanding at December 31, 2021 and 2020, respectively

188,381 and 260,437 shares issued and outstanding as of December 31, 2022 and 2021, respectively

85,470 118,164

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500,000 shares authorized;

23,126 and 0 shares issued and outstanding at December 31, 2021 and 2020, respectively

51,210 and 23,126 shares issued and outstanding as of December 31, 2022 and 2021, respectively

56,677 15,669

Common stock, $ 0.01 par value;

200,000,000 shares authorized;

23,924,004 and 4,231,135 shares issued and outstanding at December 31, 2021 and 2020, respectively

41,305,947 and 23,924,004 shares issued and outstanding as of December 31, 2022 and 2021, respectively

Additional paid-in capital 741,067 412,101

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(in thousands, except share and per share data)

Collaboration revenue (related party - $ 2,963 and $ 54 at December 31, 2021 and 2020, respectively)

$ 2,963 $ 735

Grant revenue — 315

Total revenue 2,963 1,050

Collaboration revenue - related party $ 1,772 $ 2,963

Operating expenses:

Research and development 56,886 28,304

Research and development (related party - $ 5,619 and $ — at December 31, 2022 and 2021, respectively)

100,894 56,886

General and administrative 35,182 25,805

Acquired in-process research and development — 69,861

Total operating expenses 136,076 82,691

3 unchanged sentences

Interest and other expense ( 486 ) ( 3 )

Net loss ( 79,413 ) ( 110,715 )

Change in unrealized loss on investments ( 149 ) ( 8 )

Comprehensive loss $ ( 79,562 ) $ ( 110,723 )

Other income, net 4,430 315

Net loss $ ( 129,874 ) $ ( 79,413 )

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Weighted-average shares used to compute basic and diluted net loss per share 32,087,293 11,918,712

Comprehensive loss:

Net loss $ ( 129,874 ) $ ( 79,413 )

Other comprehensive loss:

Change in unrealized loss on investments ( 233 ) ( 149 )

Total other comprehensive loss ( 233 ) ( 149 )

Total comprehensive loss $ ( 130,107 ) $ ( 79,562 )

See accompanying notes to these consolidated financial statements.

3 unchanged sentences

Preferred Stock Common Stock Additional

Capital Accumulated Other Comprehensive Gain (Loss) Accumulated

Capital Accumulated Other Comprehensive Loss Accumulated

Deficit Total

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Balance as of December 31, 2020 398,487 $ 180,801 — $ — 4,231,135 $ 42 $ 218,089 $ ( 8 ) $ ( 278,887 ) $ 120,037

Adjustment from adoption of ASC 842 — — — — — — — — ( 3 ) ( 3 )

Issuance of convertible preferred stock and common stock and warrants in the 2020 Public Offering, net of issuance costs 195,290 86,122 — — 1,000,000 10 13,857 — — 99,989

Issuance of preferred and common stock upon acquisition of Viridian 203,197 94,682 — — 72,131 1 678 — — 95,361

Adjustment for fractional shares resulting from reverse stock split and acquisition of Viridian — ( 3 ) — — ( 2,756 ) — ( 44 ) — — ( 47 )

Issuance of common stock pursuant to a 2019 stock purchase agreement, net of issuance costs — — — — 412,187 4 8,782 — — 8,786

Issuance of common stock under the 2017 ATM, net of issuance costs — — — — 65,004 1 669 — — 670

Issuance of common stock upon the conversion of convertible preferred stock ( 138,050 ) ( 62,637 ) — — 9,203,732 92 62,545 — — —

Issuance of Series B preferred stock and common stock in the 2021 Public Offering, net of issuance costs of $ 1,291 and $ 5,983 , respectively

— — 23,126 15,669 7,344,543 73 74,734 — — 90,476

Issuance of common stock upon exercises of warrants — — — — 77,871 1 1,284 — — 1,285

Issuance of common stock for exercises of stock options — — — — 106,831 1 1,026 — — 1,027

Issuance of common stock upon the vesting of restricted stock units — — — — 10,574 — — — — —

Issuance of common stock, 2021 ATM, net of issuance costs of $ 1,004

— — — — 2,551,269 26 32,423 — — 32,449

Issuance of common stock under license agreement — — — — 394,737 4 7,496 7,500

Issuance of common stock upon exercise of warrants — — — — 33,333 — 550 — — 550

Issuance of common stock for cash upon the exercise of stock options under equity incentive plans — — — — 2,203 — 29 — — 29

Issuance of common stock for cash under employee stock purchase plan — — — — 3,312 — 39 — — 39

Share-based compensation expense — — — — — — 14,465 — — 14,465

Employee stock purchase plan expense — — — — — — 16 — — 16

Change in unrealized loss on investments — — — — — — — ( 149 ) — ( 149 )

2 unchanged sentences

Issuance of common stock upon the conversion of convertible preferred stock ( 72,056 ) ( 32,694 ) — — 4,803,965 48 32,646 — — —

Issuance of Series B preferred stock and common stock in the 2021 Public Offering, net of issuance costs of $ 1,291 and $ 5,983 , respectively

Issuance of Series B preferred stock and common stock, 2022 Public Offering, net of issuance costs of $ 2,992 and $ 18,146 , respectively

— — 28,084 41,008 11,352,640 114 248,528 — — 289,650

Issuance of common stock, September 2022 ATM, net of issuance costs of $ 926

— — — — 964,357 10 24,150 — — 24,160

Issuance of common stock upon exercises of warrants — — — — 56,666 1 934 — — 935

Issuance of common stock for exercises of stock options — — — — 191,291 2 2,760 — — 2,762

Issuance of common stock upon the vesting of restricted stock units — — — — 10,574 — — — — —

Issuance of common stock, 2021 ATM, net of issuance costs of $ 1,004

— — — — 2,551,269 26 32,423 — — 32,449

Issuance of common stock under license agreement — — — — 394,737 4 7,496 7,500

Issuance of common stock for cash under employee stock purchase plan — — — — 13,024 — 183 — — 183

Share-based compensation expense — — — — — — 19,765 — — 19,765

Employee stock purchase plan expense — — — — — — 23 — — 23

Change in unrealized gain on investments — — — — — — — ( 149 ) — ( 149 )

Change in unrealized loss on investments — — — — — — — ( 233 ) — ( 233 )

Net loss — — — — — — — — ( 129,874 ) ( 129,874 )

7 unchanged sentences

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

Non-cash portion of acquired IPR&D — 65,990

Issuance of common stock under license agreement — 7,500

Share-based compensation expense 19,765 14,465

Amortization of financing issuance costs 87 281

Non-cash interest expense — 263

Non-cash interest expense and amortization of debt issuance costs 228 87

Depreciation and amortization 255 120

Amortization of premiums and discounts on available-for-sale securities 965 56

Accretion and amortization of premiums and discounts on available-for-sale securities ( 210 ) 965

Realized gain on investments — ( 4 )

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Purchases of short-term investments ( 223,264 ) ( 188,431 )

Proceeds from sale of short-term investments 67,538 —

Cash acquired in acquisition of Private Viridian — 29,371

Proceeds from maturities of short-term investments 46,860 2,000

Proceeds from sales and maturities of short-term investments 108,935 114,398

Proceeds from sale of property and equipment — 79

Purchases of property and equipment, net ( 338 ) ( 42 )

Other — ( 3 )

Purchases of property and equipment ( 797 ) ( 338 )

Net cash used in investing activities ( 115,126 ) ( 74,292 )

Cash flows from financing activities:

Proceeds from the issuance of common stock, pursuant to 2022 Public Offering and September 2022 ATM Agreement 291,874 —

Proceeds from the issuance of common stock, pursuant to 2021 Public Offering and April 2021 ATM Agreement — 114,242

Payments of issuance costs associated with the sale of common stock ( 19,072 ) ( 6,987 )

Proceeds from the issuance of Series B preferred stock 44,000 16,960

Proceeds from the issuance of Series A preferred stock — 90,997

Payment of issuance costs associated with the issuance of preferred stock ( 1,291 ) ( 4,875 )

Proceeds from the sale of common stock, the 2021 Public Offering and April 2021 ATM 114,242 —

Proceeds from the sale of common stock and warrants in 2020 — 25,104

Payment of issuance costs associated with the sale of preferred stock ( 2,992 ) ( 1,291 )

Proceeds from the exercise of warrants 935 1,285

Payment of issuance costs associated with the issuance of common stock and warrants ( 6,987 ) ( 1,304 )

Proceeds from issuance of common stock for exercised stock options 1,027 —

Proceeds from stock purchases under employee stock purchase plan 39 —

Payments of principal of notes payable — ( 10,293 )

Proceeds from the issuance of notes payable — 1,726

Fractional share payment – reverse split — ( 44 )

Proceeds from issuance of long-term debt 5,000 —

Payment of debt issuance costs ( 446 ) —

Proceeds from issuance of common stock upon the exercise of stock options 2,762 1,027

Proceeds from the issuance of common stock for cash under employee stock purchase plan 183 39

Net cash provided by financing activities 322,244 125,275

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DESCRIPTION OF BUSINESS

Viridian Therapeutics, Inc., a Delaware corporation (the “Company” or “Viridian”), is a biotechnology company advancing new treatments for patients suffering from serious diseases that are underserved by today’s therapies.

Viridian Therapeutics, Inc., a Delaware corporation (the “Company” or “Viridian”), is a biopharmaceutical company advancing new treatments for patients suffering from serious diseases that are underserved by today’s therapies.

The Company’s most advanced program, VRDN-001, is a differentiated monoclonal antibody targeting insulin-like growth factor-1 receptor (“IGF-1R”), a clinically and commercially validated target for the treatment of thyroid eye disease (“TED”).

The Company’s second product candidate, VRDN-002, is a distinct anti-IGF-1R antibody that incorporates half-life extension technology, and is designed to support administration as a convenient, low-volume, subcutaneous injection.

The Company’s second product candidate, VRDN-002, is a distinct anti-IGF-1R antibody that incorporates half-life extension technology.

VRDN-003 is an extended half-life version of VRDN-001.

Both VRDN-002 and VRDN-003 are designed for administration as convenient, low-volume, subcutaneous pen injections.

TED is a debilitating autoimmune disease that causes inflammation and fibrosis within the orbit of the eye which can cause double vision, pain, and potential blindness.

Patients with severe disease often require multiple remedial surgeries to the orbit, eye muscles and eyelids.

Agreement and Plan of Merger

On October 27, 2020, the Company acquired a private company, Viridian Therapeutics, Inc.

(“Private Viridian”) in accordance with the terms of the Agreement and Plan of Merger, dated October 27, 2020 (the “Merger Agreement”).

Pursuant to the Merger Agreement, Oculus Merger Sub I, Inc., a Delaware corporation and a wholly-owned subsidiary of the Company (“First Merger Sub”), merged with and into Private Viridian, pursuant to which Private Viridian was the surviving corporation and became a wholly-owned subsidiary of the Company (the “First Merger”).

Immediately following the First Merger, Private Viridian merged with and into Oculus Merger Sub II, LLC, a Delaware limited liability company and wholly-owned subsidiary of the Company (“Second Merger Sub”), pursuant to which Second Merger Sub was the surviving entity (together with the First Merger, the “Merger”).

The Merger is intended to qualify as a tax-free reorganization for U.S.

federal income tax purposes.

On October 27, 2020, the Company completed a short-form merger under which the Second Merger Sub merged with Viridian Therapeutics, Inc (then Miragen Therapeutics, Inc.) pursuant to which Viridian Therapeutics, Inc.

was the surviving entity.

Under the terms of the Merger Agreement, at the closing of the Merger, the Company issued 72,131 shares of the Company’s common stock (“Common Stock”) and 203,197 shares of Series A Non-Voting Convertible Preferred Stock (the “Series A Preferred Stock”) to securityholders of Private Viridian.

Each share of Series A Preferred Stock is convertible into 66.67 shares of common stock, subject to certain conditions described below.

November 2021 Open Market Sale Agreement

On November 8, 2021, the Company entered into an Open Market Sale Agreement SM (the “November 2021 ATM Agreement”) with Jefferies LLC (“Jefferies”), relating to shares of its common stock.

In accordance with the terms of the November 2021 ATM Agreement, the Company may offer and sell shares of its common stock having an aggregate offering price of up to $ 75.0 million from time to time at prices and on terms to be determined by market conditions at the time of offering, with Jefferies acting as its sales agent.

Jefferies will receive a commission of 3.0 % of the gross proceeds of any shares of common stock sold under the November 2021 ATM Agreement.

As of December 31, 2021, no shares have been sold under the November 2021 ATM Agreement with Jefferies.

In addition to developing therapies for TED, the Company is executing a similar strategic approach to identify opportunities in other rare and/or serious disease indications.

The accompanying consolidated financial statements have been prepared on a basis that assumes the Company is a going concern and do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or the amounts and classifications of liabilities that may result from any uncertainty related to its ability to continue as a going concern.

1 unchanged sentence

Since its inception and through December 31, 2022, the Company has generated an accumulated deficit of $ 488.2 million.

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

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

The Company has no products approved for commercial sale, has not generated any revenue from product sales, and cannot guarantee when or if it will generate any revenue from product sales.

Substantially all of the Company’s operating losses resulted from expenses incurred in connection with its research and development programs and from general and administrative

costs associated with its operations.

Substantially all of the Company’s operating losses resulted from expenses incurred in connection with its research and development programs and from general and administrative costs associated with its operations.

The Company expects to incur significant expenses and operating losses for at least the next several years as it continues the development of, and seeks regulatory approval for, its product candidates.

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The amount and timing of future funding requirements will depend on many factors, including the pace and results of the Company’s clinical development efforts, equity financings, entering into license and collaboration agreements, and issuing debt or other financing vehicles.

The Company’s ability to secure additional capital is dependent upon a number of factors, some of which are outside of the Company’s control, including success in developing its technology and drug product candidates, operational performance, and market conditions, including resulting from the ongoing COVID-19 pandemic.

Failure to raise capital as and when needed, on favorable terms or at all, would have a negative impact on the Company’s financial condition and its ability to develop its product candidates.

11 unchanged sentences

The Company’s management performed an evaluation of its activities through the date of filing of these consolidated financial statements and concluded that there are no subsequent events requiring disclosure, other than as disclosed.

Risk and Uncertainties – Impact of the COVID-19 Pandemic

The Company is subject to risks and uncertainties as a result of the ongoing COVID-19 pandemic.

The virus continues to spread globally and the impact of this pandemic has been and may continue to be extensive in many aspects of society, which has resulted in and will likely continue to result in significant disruptions to the global economy, as well as businesses and capital markets around the world.

The spread of COVID-19 has caused the Company to modify its business practices, including implementing a work-from-home policy for all employees who are able to perform their duties remotely and restricting all nonessential travel, and it expects to continue to take actions as may be required or recommended by government authorities or as the Company determines are in the best interests of its employees, the patients it serves, and other business partners in light of COVID-19.

Potential impacts to the Company’s business include temporary closures of its facilities or those of its vendors, disruptions or restrictions on its employees’ ability to travel, disruptions to or delays in ongoing laboratory experiments and operations, and the potential diversion of healthcare resources away from the conduct of clinical trials to focus on pandemic concerns, manufacturing delays or disruptions, and its ability to raise capital.

As of December 31, 2021, there have been no material impacts to the Company as a result of the COVID-19 pandemic.

The Company continually assesses the impacts of COVID-19 and the extent to which the pandemic may materially impact the Company’s financial condition, liquidity, or results of operations in the future is uncertain.

Global Economic Considerations

The global macroeconomic environment is uncertain, and could be negatively affected by, among other things, increased U.S.

trade tariffs and trade disputes with other countries, instability in the global capital and credit markets, supply chain weaknesses, and instability in the geopolitical environment, including as a result of the Russian invasion of Ukraine, the rising tensions between China and Taiwan and other political tensions, and lingering effects of the COVID-19 pandemic.

Such challenges have caused, and may continue to cause, recession fears, concerns regarding potential sanctions, rising interest rates, foreign exchange volatility and inflationary pressures.

At this time, the Company is unable to quantify the potential effects of this economic instability on its future operations.

Going Concern

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Revenue Recognition

The Company accounts for revenue in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 606, Revenue from Contracts with Customers (“ASC 606”).

The Company accounts for revenue in accordance with ASC Topic 606, Revenue from Contracts with Customers (“ASC 606”).

The Company enters into collaboration agreements and certain other agreements that are within the scope of ASC 606, under which the Company licenses, may license, or grants an option to license rights to certain of the Company’s product candidates and performs research and development services in connection with such agreements.

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The consideration may include fixed consideration or variable consideration.

At the inception of each agreement that includes variable consideration, the Company evaluates the amount of potential payment and the likelihood

that the payments will be received.

At the inception of each agreement that includes variable consideration, the Company evaluates the amount of potential payment and the likelihood that the payments will be received.

The Company utilizes either the most likely amount method or expected value method to estimate the amount expected to be received based on which method best predicts the amount expected to be received.

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Research and development costs are expensed as incurred in performing research and development activities.

The costs include employee-related expense including salaries, benefits, share-based compensation, restructuring charges, fees for acquiring and maintaining licenses under third-party license agreements, consulting fees, market research, costs of research and development activities conducted by third parties on the Company’s behalf, costs to manufacture or have manufactured clinical trial materials, laboratory supplies, depreciation, and facilities and overhead costs.

The costs include employee-related expense including salaries, benefits, share-based compensation, restructuring charges, fees for acquiring and maintaining licenses under third-party license agreements, consulting fees, costs of research and development activities conducted by third parties on the Company’s behalf, costs to manufacture or have manufactured clinical trial materials, laboratory supplies, depreciation, and facilities and overhead costs.

The Company records research and development expense in the period in which the Company receives or takes ownership of the applicable goods or when the applicable services are performed.

1 unchanged sentence

The Company records up-front and milestone payments to acquire and retain contractual rights to licensed technology as research and development expenses when incurred if there is uncertainty in the Company receiving future economic benefit from the acquired contractual rights.

Such expenses are included within operating activities in the consolidated statements of cash flows.

The Company considers future economic benefits from acquired contractual rights to licensed technology to be uncertain until such a drug candidate is approved for sale by the U.S.

Food and Drug Administration or when other significant risk factors are abated.

Food and Drug Administration (“FDA”) or when other significant risk factors are abated.

Clinical Trial and Preclinical Study Accruals

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Adjustments to the Company’s research and development expenses may be necessary in future periods as its estimates change.

Acquired In-Process Research and Development

The Company measures and recognizes asset acquisitions that are not deemed to be business combinations based on the cost to acquire the assets, which includes transaction costs.

Goodwill is not recognized in asset acquisitions.

In an asset acquisition, the cost allocated to acquire in-process research and development (“IPR&D”) with no alternative future use is charged to expense at the acquisition date.

Refer to Note 3.

Acquisition of Private Viridian for a more detailed description of the accounting policy utilized for the recent asset acquisition.

Restructuring and Other Charges

The Company accounts for exit or disposal activities in accordance with FASB ASC Topic 420, Exit or Disposal Cost Obligations ( “ ASC 420 ” ).

A business restructuring is defined as an exit or disposal activity that includes, but is not limited to, a program that is planned and controlled by management and materially changes either the scope of a business or the manner in which that business is conducted.

Business restructuring charges include (i) one-time termination benefits related to employee separations, (ii) contract termination costs, and (iii) other related costs associated with exit or disposal activities including.

In 2020 and 2019, t he Company implemented two phases of a restructuring plan to streamline the organization, reduce costs, and direct resources to advance the Company’s primary operating goals in place at that time.

The Company recognizes and measures a liability for one-time termination benefits, for which no future service is required, once the plan of termination meets all of the following criteria for an established communication date:

(i) management commits to a plan of termination, (ii) the plan identifies the number of employees to be terminated and their job classifications or functions, locations, and the expected completion date, (iii) the plan establishes the terms of the benefit arrangement, and (iv) it is unlikely that significant changes to the plan will be made or the plan will be withdrawn.

For one-time termination benefits for which future service is required, a liability is measured at the communication date based on its value as of the termination date and recognized ratably over the future service period.

The Company recognizes and measures a liability for other related costs in the period in which the liability is incurred.

Share-Based Compensation

The Company accounts for share-based compensation expense to employees and non-employees based on their fair values on the date of the grant.

The Company accounts for share-based compensation expense to employees and non-employees based on the fair value of each stock option or award on the date of the grant.

The Company uses the Black-Scholes option pricing model to determine the fair value of stock options.

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Cash equivalents are reported at cost, which approximates fair value due to the short maturities of these instruments.

The Company has designated its investments as available-for-sale securities and accounts for them at their respective fair values.

The securities are classified as short-term or long-term based on the nature of the securities and their availability to meet current operating requirements.

Securities that are readily available for use in current operations are classified as short-term available-for-sale securities and are reported as a component of current assets in the accompanying consolidated balance sheets.

Securities that are classified as available-for-sale are measured at fair value, including accrued interest, with temporary unrealized gains and losses reported as a component of stockholders’ equity until their disposition.

The Company reviews available-for-sale securities at the end of each period to determine whether they remain available-for-sale based on its then-current intent.

The cost of securities sold is based on the specific identification method.

The Company’s investments consist of highly-rated corporate and U.S.

Treasury securities and have been classified as available-for-sale securities.

Accordingly, these investments are recorded at their respective fair values, as determined based on quoted market prices.

The Company may hold securities with stated maturities greater than one year.

All available-for-sale securities are considered available to support current operations, and thus investments with maturities beyond one year are generally classified as current assets.

Unrealized gains and losses are reported as a component of stockholders’ equity until their disposition.

Realized gains and losses are included as a component of other income (expense), net based on the specific identification method.

The securities are subject to a periodic impairment review.

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Fair Value Measurements

Certain assets and liabilities are carried at fair value under GAAP.

Certain assets and liabilities are carried at fair value under U.S.

Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date.

Valuation techniques used to measure fair value must maximize the use of observable inputs and minimize the use of observable in puts.

Valuation techniques used to measure fair value must maximize the use of observable inputs and minimize the use of unobservable inputs.

Financial assets and liabilities carried at fair value are to be classified and disclosed in one of the following three levels of the fair value hierarchy, of which the first two are considered observable and the last is considered unobservable:

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Certain of the Company’s financial instruments are not measured at fair value on a recurring basis but are recorded at amounts that approximate their fair value due to the short-term nature of their maturities, such as cash and cash equivalents, accounts receivable, accounts payable and accrued expenses.

The Company accounts for warrants to purchase its common stock pursuant to ASC Topic 470, Debt , and ASC Topic 480, Distinguishing Liabilities from Equity , and classifies warrants for common stock as liabilities or equity.

The warrants classified as liabilities are reported at their estimated fair value (see Note 5.

Investments and Fair Value Measurements ) and any changes in fair value are reflected in interest and other expense.

The warrants classified as equity are reported at their estimated fair value with no subsequent remeasurement.

The Company’s outstanding warrants are discussed in more detail in Note 11.

Concentrations of Credit Risk

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Repairs and maintenance costs are expensed as incurred and expenditures for major improvements are capitalized.

Operating Lease Right-of-Use Asset

Operating Lease Right-of-Use Assets and Liabilities

The Company determines if an arrangement is, or contains, a lease at contract inception and during modifications or renewal of existing leases.

Operating lease assets represent the Company’s right to use an underlying asset for the lease term and operating lease liabilities represent the Company’s obligation to make lease payments arising from the lease.

The Company’s existing operating lease assets and liabilities were recognized on January 1, 2020, the date of transition to Accounting Standards Update (“ASU”) No.

The Company has recorded operating lease assets and liabilities pursuant to the guidance in Accounting Standards Update (“ASU”) No.

2016-02 , Leases (Topic 842), and subsequent amendments to the initial guidance:

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2018-11 (collectively, “ASC 842”).

After January 1, 2020, the Company’s operating lease assets and

liabilities are recognized at the commencement date of the lease based upon the present value of lease payments over the lease term.

These operating lease assets and liabilities are recognized at the commencement date of the lease based upon the present value of lease payments over the lease term.

The lease payments used to determine the Company’s operating lease assets may include lease incentives, stated rent increases, and escalation clauses and are recognized in the Company’s operating lease assets in the Company’s consolidated balance sheets.

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Commitments and Contingencies - Lease Obligations for additional information related to the Company’s operating leases.

Debt and Debt Issuance Costs

Debt issuance costs and expenses paid by the Company to its lenders are presented on the consolidated balance sheet as a direct deduction from the related debt liability rather than capitalized as an asset in accordance with ASU No.

2015-03, Interest - Imputation of Interest (Subtopic 835-30):

Simplifying the Presentation of Debt Issuance Costs .

Debt issuance costs represent

legal and other direct costs incurred in connection with the Company’s Term Loan (as defined in Note 6.

These costs are amortized as a non-cash component of interest expense using the effective interest method over the term of the loan.

Convertible Preferred Stock

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Unrealized accumulated comprehensive gains or losses are reflected as a separate component in the consolidated statements of changes in stockholders’ equity.

The Company had unrealized losses on investments of $ 0.1 million and $ 8 thousand during the years ended December 31, 2021 and 2020, respectively.

The Company had unrealized losses on investments of $ 0.2 million and $ 0.1 million during the years ended December 31, 2022 and 2021, respectively.

The Company accounts for income taxes by using an asset and liability method of accounting for deferred income taxes.

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No such expenses have been recognized during the years ended December 31, 2022 and 2021.

Upon the issuance of warrants to purchase shares of common stock, the Company evaluates the terms of the warrant issue to determine the appropriate accounting and classification of the warrant issue pursuant to FASB ASC Topic 480, Distinguishing Liabilities from Equity , FASB ASC Topic 505, Equity , FASB ASC 815, Derivatives and Hedging , and ASC 718, Compensation - Stock Compensation .

Compensation - Stock Compensation , and classifies warrants for common stock as liabilities or equity.

Warrants are classified as liabilities when the Company may be required to settle a warrant exercise in cash and classified as equity when the Company settles a warrant exercise in shares of its common stock.

Liability-classified warrants are valued at fair value at the date of issue and at each reporting date pursuant to FASB ASC 820, Fair Value Measurement , and are reflected as a warrant liability on the Company’s consolidated balance sheets.

Any changes in the warrant liability during each reporting period would be reflected as other expense in the consolidated statement of operations and comprehensive loss.

Segment Information

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The Company does not believe that the adoption of recently issued standards have or may have a material impact on the Company’s consolidated financial statements or disclosures.

ACQUISITION OF PRIVATE VIRIDIAN

On October 27, 2020, the Company completed its acquisition of Private Viridian in accordance with the terms of the Merger Agreement as discussed in Note 1.

Description of Business.

Under the terms of the Merger Agreement, the Company issued 72,131 shares of common stock and 203,197 shares of Series A Preferred Stock.

Each share of Series A Preferred Stock is convertible into 66.67 shares of common stock, subject to certain conditions.

The Company concluded that the acquisition of Private Viridian did not result in the acquisition of a business, as substantially all of the fair value of the non-monetary assets acquired was concentrated in a single identifiable asset, the exclusive license agreement with ImmunoGen, which includes the Company’s lead program VRDN-001.

The Company determined that the cost to acquire the assets was $ 97.4 million, based on the fair value of the equity consideration issued and including direct costs of the acquisition of $ 2.0 million.

The net assets acquired in connection with the Merger were recorded at their estimated fair values as of October 27, 2020, the date the Merger was completed.

The following table summarizes the net assets acquired based on their estimated fair values as of October 27, 2020 (in thousands):

Acquired IPR&D $ 69,861

Cash and cash equivalents 29,371

Accrued liabilities ( 1,843 )

Net acquired tangible assets $ 97,389

In the estimation of fair value of the asset purchase consideration, the Company used the carrying value of the cash and cash equivalents and accrued liabilities as the most reliable indicator of fair value based on the associated short-term nature of the balances.

The remaining fair value was attributable to the acquired IPR&D.

As the asset had not yet received regulatory approval in any territory, the cost attributable to the license agreement was expensed in the Company’s consolidated statements of operations and comprehensive loss for the year ended December 31, 2020, as the acquired IPR&D had no alternative future use, as determined by the Company in accordance with U.S.

COLLABORATION AGREEMENTS

License Agreement with Zenas BioPharma

In October 2020, Private Viridian entered a license agreement with Zenas BioPharma (Cayman) Limited (“Zenas BioPharma”) to license technology comprising certain materials, patent rights, and know-how to Zenas BioPharma.

On October 27, 2020, in connection with the closing of the Private Viridian acquisition, the Company became party to the license agreement with Zenas BioPharma.

Since February 2021, the Company has entered into several letter agreements with Zenas BioPharma pursuant to which the Company agreed to provide assistance to Zenas BioPharma with certain development activities, including manufacturing.

The license agreement and subsequent letter agreements (collectively, the “Zenas Agreements”) were negotiated with a single commercial objective and are treated as a combined contract for accounting purposes.

Under the terms of the Zenas Agreements, the Company granted Zenas BioPharma an exclusive license to develop, manufacture, and commercialize certain IGF-1R directed antibody products for non-oncology indications in the greater area of China.

As consideration for the Zenas Agreements, the transaction price included upfront non-cash consideration and variable consideration in the form of payment for the Company’s goods and services and milestone payments due upon the achievement of specified events.

Under the Zenas Agreements, the Company can receive non-refundable milestone payments upon achieving specific milestone events during the contract term.

Additionally, the Company may receive royalty payments based on a percentage of the annual net sales of any licensed products sold on a country-by-country basis in the greater area of China.

The royalty percentage may vary based on different tiers of annual net sales of the licensed products made.

Zenas BioPharma is obligated to make royalty payments to the Company for the royalty term in the Zenas Agreements.

The Zenas Agreements would qualify as a collaborative arrangement under the scope of Accounting Standards Codification, Topic 808, Collaborative Arrangements (“ASC 808”).

While this arrangement is in the scope of ASC 808, the Company analogized to ASC 606 to account for certain aspects of this arrangement.

The Company analogized to ASC 606 for certain activities within the arrangement associated with the Company’s transfer of a good or service (i.e., a unit of account) that is part of the Company’s ongoing major or central operations.

The Company allocated the transaction price based on the relative estimated standalone selling prices of each performance obligation or, in the case of certain variable consideration, to one or more performance obligations.

Research and development activities are priced generally at cost.

The Company’s license of goods and services to Zenas BioPharma during the contract term was determined to be a single performance obligation satisfied over time.

The Company will recognize the transaction price from the license agreement over the Company’s estimated period to complete its activities.

At the inception of the arrangement, the Company evaluated whether the milestones were considered probable of being reached and estimated the amount to be included in the transaction price using the most likely amount method.

As it was not probable that a significant revenue reversal would not occur, none of the associated milestone payments were included in the transaction price at contract inception.

For the sales-based royalties included in the arrangement, the license was deemed to be the predominant item to which the royalties relate.

The Company will recognize royalty revenues at the later of (i) when the related sales occur, or (ii) when the performance obligation to which some or all of the royalty has been allocated has been satisfied (or partially satisfied).

During the years ended December 31, 2021 and 2020, the Company recognized $ 3.0 million and $ 54 thousand of collaboration revenue related to the Zenas Agreements, respectively.

As of December 31, 2021, the Zenas Agreements are considered related party transactions because Fairmount Funds Management LLC beneficially owns more than 5 % of the Company’s common stock and is also a 5 % or greater stockholder of Zenas BioPharma and has a seat on Zenas BioPharma’s board of directors.

Servier License and Collaboration Agreement

In 2011, the Company entered into a license and collaboration agreement (the “Servier Collaboration Agreement”) with Les Laboratoires Servier and Institut de Recherches Servier (collectively, “Servier”) for the research, development, and commercialization of RNA-targeting therapeutics in cardiovascular disease.

Under the Servier Collaboration Agreement, the Company granted Servier an exclusive license to research, develop, manufacture, and commercialize RNA-targeting therapeutics for certain microRNA targets in the cardiovascular field.

During the period from receipt of notice from Servier in August 2019 and termination in February 2020, the Company completed certain activities under its development plan with Servier, which included finalizing two Phase 1 clinical trials of a legacy product candidate.

The activities for which the Company was eligible for reimbursement under the Servier Collaboration Agreement were considered a research and development performance obligation and revenue was recognized in accordance with ASC 606 through the termination date.

As the Servier Collaboration Agreement was terminated in February 2020, no revenue was recorded under the Servier Collaboration Agreement subsequent to March 31, 2020.

INVESTMENTS AND FAIR VALUE MEASUREMENTS

The Company’s investments consisted of the following as of December 31, 2022 and December 31, 2021:

As of December 31, 2021

Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Estimated Fair Value

(in thousands)

(in thousands) Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value

December 31, 2022

Money market funds $ 137,903 $ — $ — $ 137,903

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Total $ 424,840 $ 124 $ ( 514 ) $ 424,450

As of December 31, 2020

Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Estimated Fair Value

(in thousands)

December 31, 2021

Money market funds $ 42,199 $ — $ — $ 42,199

treasury securities 22,215 — ( 54 ) 22,161

corporate paper and bonds 128,005 6 ( 94 ) 127,917

International corporate bond holdings 4,603 — ( 15 ) 4,588

Total $ 197,022 $ 6 $ ( 163 ) $ 196,865

As of December 31, 2021, the Company considers the unrealized losses in its investment portfolio to be temporary in nature and not due to credit losses.

The Company considers the unrealized losses in its investment portfolio to be temporary in nature and not due to credit losses.

The Company has the intent and ability to hold such investments until their recovery at fair value.

The Company had realized gains of $ 4 thousand and zero in its available for sale securities for the years ended December 31, 2021 and 2020, respectively.

The Company had realized gains of zero and $ 4 thousand in its available for sale securities for the years ended December 31, 2022 and 2021, respectively.

The contractual maturity dates of all of the Company’s investments are all less than 24 months.

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The following tables summarize the Company’s assets and liabilities that are measured at fair value on a recurring basis:

Fair Value Measurements at December 31, 2021, Using:

Level 1 Level 2 Level 3 Total

(in thousands)

(in thousands) Quoted Prices in Active Markets

(Level 1) Significant Other Observable Inputs

(Level 2) Significant Unobservable Inputs

(Level 3) Total

December 31, 2022

Cash equivalents:

Money market funds $ 137,903 $ — $ — $ 137,903

corporate paper and bonds — 17,576 — 17,576

Short-term investments:

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Total cash equivalents and short-term investments $ 137,903 $ 286,547 $ — $ 424,450

Preferred stock warrants (included in accrued and other liabilities) $ — $ — $ 100 $ 100

Fair Value Measurements at December 31, 2020, Using:

Level 1 Level 2 Level 3 Total

(in thousands)

December 31, 2021

Cash equivalents:

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treasury securities — 22,161 — 22,161

corporate paper and bonds — 127,917 — 127,917

International corporate bond holdings — 4,588 — 4,588

Total cash equivalents and short-term investments $ 42,199 $ 154,666 $ — $ 196,865

Preferred stock warrants (included in accrued and other liabilities) $ — $ — $ 100 $ 100

PROPERTY AND EQUIPMENT

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Property and equipment, net $ 1,326 $ 375

During the year ended December 31, 2021, certain lab equipment related to certain legacy microRNA programs associated with Miragen met the criteria to be classified and were reclassified as held for sale and included in prepaid expenses and other current assets.

During the year ended December 31, 2021, certain lab equipment met the criteria to be classified and were reclassified as held for sale and included in prepaid expenses and other current assets.

The assets held for sale totaled $ 0.1 million, which was the net book value on the date of transfer.

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During the years ended December 31, 2022 and 2021, depreciation and amortization expense was $ 0.3 million and $ 0.1 million, respectively.

Depreciation and amortization expense is recorded primarily in research and development expense on the consolidated statements of operations and comprehensive loss.

ACCRUED LIABILITIES

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Value of liability-classified stock purchase warrants 100 100

License agreement liability — 86

Other accrued liabilities 197 210

Total accrued liabilities $ 18,827 $ 11,018

NOTES PAYABLE

2017 Silicon Valley Bank Loan Agreement

In November 2017, the Company entered into a loan and security agreement with Silicon Valley Bank (the “2017 SVB Loan Agreement”).

Upon entry into the 2017 SVB Loan Agreement, the Company borrowed $ 10.0 million bearing interest at the prime rate with a 30-month payment period following an 18-month interest-only payment period ending in November 2021.

In April 2020, the 2017 Loan Agreement was amended to extend the interest-only payment period and extended the maturity date by an additional six months .

On December 18, 2020, the Company repaid the full outstanding loan balance, including accrued interest and a final payment fee equal to $ 0.9 million that was due upon maturity.

As of December 31, 2020, no additional amounts were outstanding under the 2017 SVB Loan Agreement.

Paycheck Protection Program Loan

In April 2020, the Company received approximately $ 1.7 million in loan funding under the Paycheck Protection Program (the “PPP”), which was established pursuant to the Coronavirus Aid, Relief, and Economic Security Act and is administered by the U.S.

Small Business Administration.

The unsecured loan (the “PPP Loan”) was evidenced by a promissory note of the Company (the “Note”) in the principal amount of approximately $ 1.7 million to Silicon Valley Bank (the “Bank”).

Under the terms of the Note and the PPP Loan, interest accrued on the outstanding principal at the rate of 1.0 % per annum.

On December 18, 2020, the PPP Loan, including accrued interest, was repaid to the Bank.

As of December 31, 2021 and 2020, there were no amounts outstanding under the PPP Loan.

Loan and Security Agreement with Hercules Capital, Inc.

In April 2022, the Company entered into a loan and security agreement (the “Hercules Loan and Security Agreement”) among the Company, certain of its subsidiaries from time to time party thereto (together with the Company, collectively, the “Borrower”), Hercules Capital, Inc.

(“Hercules”) and certain other lenders named therein (the “Lenders”).

Under the Hercules Loan and Security Agreement, the Lenders provided the Company with access to a term loan with an aggregate principal amount of up to $ 75.0 million, in four tranches (collectively the “Term Loan”), consisting of (1) an initial tranche of $ 25.0 million, available to the Company through June 15, 2023;

(2) a second tranche of $ 10.0 million, subject to the achievement of certain regulatory milestones, available through June 15, 2023;

(3) a third tranche of $ 15.0 million, subject to the achievement of certain regulatory milestones, available through March 15, 2024;

and (4) a fourth tranche of $ 25.0 million, subject to approval by the Lenders’ investment committee(s), available through December 15, 2024.

The milestones for the second and third tranches have not yet been achieved.

The obligations of the Borrower under the Loan Agreement are secured by substantially all of the assets of the Borrower, excluding the Borrower’s intellectual property.

The Term Loan has a maturity date of October 1, 2026.

The Term Loan bears interest at a floating per annum rate equal to the greater of (i) 7.45 % and (ii) 4.2 % above the Prime Rate, provided that the Term Loan interest rate shall not exceed a per annum rate of 8.95 %.

Interest is payable monthly in arrears on the first day of each month.

The interest rate as of December 31, 2022 was 8.95 % based upon an increase in the prime rate in June 2022.

Per the terms of the Hercules Loan and Security Agreement, the Company was originally obligated to make interest-only payments through April 1, 2024.

However, upon the achievement of a development milestone in August 2022 the interest-only period was extended to October 1, 2024.

If additional development milestones are met, the interest-only period will be further extended to April 1, 2025.

The Borrower is required to repay the Term Loan amount in equal monthly installments of the principal amount and interest between the end of the interest-only period and the maturity date of October 1, 2026.

In addition, the Borrower is required to pay an end-of-term fee equal to 6 % of the principal amount of funded Term Loan advances at maturity, which are being accreted as additional interest expense over the term of the loan.

Upon signing the Hercules Loan and Security Agreement, the Company drew an initial principal amount of $ 5.0 million.

The Company incurred debt issuance costs of $ 0.2 million in connection with the Term Loan.

In addition, in connection with the initial draw, the Company paid to the Lenders a facility fee of $ 0.1 million, as well as $ 0.1 million of other expenses incurred by the Lenders and reimbursed by the Company (“Lender Expenses”).

The debt issuance costs and the Lender Expenses are being amortized as additional interest expense over the term of the loan.

Debt issuance costs and the Lender Expenses are presented on the consolidated balance sheet as a direct deduction from the related debt liability rather than capitalized as an

asset in accordance with ASU No.

2015-03, Interest - Imputation of Interest (Subtopic 835-30):

Simplifying the Presentation of Debt Issuance Costs .

The total cost of all items (cash interest, the amortization/accretion of the debt issuance costs and the end-of-term fee) is being recognized as interest expense using an effective interest rate of approximately 9.3 %.

The Company recorded interest expense of $ 0.5 million during the year ended December 31, 2022.

The following table summarizes the impact of the Term Loan, on the Company’s consolidated balance sheet at December 31, 2022:

December 31, 2022

(in thousands)

Gross proceeds 5,000

Unamortized debt issuance costs ( 355 )

Carrying value $ 4,645

Future principal payments, which exclude the end of term charge, in connection with the Hercules Loan and Security Agreement as of December 31, 2022 are as follows (in thousands):

Total $ 5,000

COLLABORATION AGREEMENTS

License Agreement with Zenas BioPharma

In October 2020, the Company became party to a license agreement with Zenas BioPharma (Cayman) Limited (“Zenas BioPharma”) to license technology comprising certain materials, patent rights, and know-how to Zenas BioPharma.

In May 2022, the Company entered into a Manufacturing Development and Supply Agreement with Zenas BioPharma (the “Supply Agreement”) to manufacture and supply, or to have manufactured and supplied, clinical drug product for developmental purposes.

The license agreement and subsequent letter agreements and supply agreement (collectively, the “Zenas Agreements”) were negotiated with a single commercial objective and are treated as a combined contract for accounting purposes.

Under the Zenas Agreements, the Company can receive non-refundable milestone payments upon achieving specific milestone events during the contract term.

Additionally, the Company may receive royalty payments based on a percentage of the annual net sales of any licensed products sold on a country-by-country basis in the greater area of China.

The royalty percentage may vary based on different tiers of annual net sales of the licensed products made.

Zenas BioPharma is obligated to make royalty payments to the Company for the royalty term in the Zenas Agreements.

The Zenas Agreements would qualify as a collaborative arrangement under the scope of Accounting Standards Codification, Topic 808, Collaborative Arrangements (“ASC 808”).

While this arrangement is in the scope of ASC 808, the Company applied ASC 606 to account for certain aspects of this arrangement.

The Company applied ASC 606 for certain activities within the arrangement associated with the Company’s transfer of a good or service (i.e., a unit of account) that is part of the Company’s ongoing major or central operations.

The Company allocated the transaction price based on the relative estimated

standalone selling prices of each performance obligation or, in the case of certain variable consideration, to one or more performance obligations.

Research and development activities are priced generally at cost.

The Company’s license of goods and services to Zenas BioPharma during the contract term was determined to be a single performance obligation satisfied over time.

The Company will recognize the transaction price from the license agreement over the Company’s estimated period to complete its activities.

As it was not probable that a significant revenue reversal would not occur, none of the associated milestone payments were included in the transaction price at contract inception.

For the sales-based royalties included in the arrangement, the license was deemed to be the predominant item to which the royalties relate.

During the years ended December 31, 2022 and 2021, the Company recognized $ 1.8 million and $ 3.0 million, respectively, of collaboration revenue related to the Zenas Agreements.

As of December 31, 2022, the Zenas Agreements are considered related party transactions because Fairmount Funds Management LLC beneficially owns more than 5 % of the Company’s common stock and is also a 5 % or greater stockholder of Zenas BioPharma and has a seat on Zenas BioPharma’s board of directors.

Antibody and Discovery Option Agreement with Paragon Therapeutics, Inc.

In January 2022, the Company and Paragon Therapeutics, Inc.

(“Paragon”) entered into an antibody and discovery option agreement (the “Paragon Agreement”) under which the Company and Paragon will cooperate to develop one or more antibodies.

Under the terms of the Paragon Agreement, Paragon will perform certain development activities in accordance with an agreed upon research plan, and the Company will pay Paragon agreed upon development fees in exchange for Paragon’s commitment of the necessary personnel and resources to perform these activities.

The Paragon Agreement stipulates a final deliverable to the Company comprising of a report summarizing the experiments and processes performed under the research plan (the “Final Deliverable”).

Additionally, Paragon agreed to grant the Company an option for an exclusive license to all of Paragon’s right, title and interest in and to certain antibody technology and the Final Deliverable, and a non-exclusive license to certain background intellectual property owned by Paragon solely to research, develop, make, use, sell, offer for sale and import of the licensed intellectual property and resulting products worldwide (each, an “Option” and together, the “Options”).

Paragon also granted to the Company a limited, exclusive, royalty-free license, without the right to sublicense, to certain antibody technology and the Final Deliverable, and a non-exclusive, royalty-free license without the right to sublicense, under certain background intellectual property owned by Paragon, solely to evaluate the antibody technology and Option and for the purpose of allowing the Company to determine whether to exercise the Option with respect to certain programs.

The Company may, at its sole discretion, exercise the Option with respect to specified programs at any time until the date that is 90 days after the Company’s receipt of the Final Deliverable the applicable program, or such longer period as agreed upon by the parties (“Option Period”) by delivering written notice of such exercise to Paragon.

If the Company fails to exercise an Option prior to expiration of the applicable Option Period, such Option for such Program will terminate.

In consideration for Paragon’s grant of the Options to the Company, the Company paid to Paragon a non-refundable, non-creditable one-time fee of $ 2.5 million, which was recorded as research and development expense during the three months ended March 31, 2022.

In December 2022, the Company and Paragon entered into a first amendment to the Paragon Agreement, under which the Company obtained an additional limited license for the purpose of conducting certain activities.

In consideration for the rights and licenses obtained under the first amendment, Viridian paid Paragon a non-refundable fee of $ 2.3 million (the “First Amendment Payment”), which was recorded as research and development expense during the three months ended December 31, 2022.

The non-refundable upfront fee and the First Amendment Payment are separate from any development costs or cost advance paid or owing with respect to the specified program.

During the year ended December 31, 2022, the Company recorded $ 5.6 million in research and development costs related to the Paragon Agreement.

As of December 31, 2022, the Paragon Agreement is considered a related party transaction because Fairmount beneficially owns more than 5 % of the Company’s capital stock and has two seats on the Company’s board of directors, and beneficially owns more than 5 % of Paragon, which is a joint venture between Fairmount and FairJourney Biologics, and has appointed the sole director on Paragon’s board of directors and has the contractual right to approve the appointment of any executive officers.

COMMITMENTS AND CONTINGENCIES

License Agreement with ImmunoGen, Inc.

In October 2020, in connection with the closing of the Private Viridian acquisition, the Company became party to a license agreement (the “ImmunoGen License Agreement”) with Immunogen, Inc.

In October 2020, the Company became party to a license agreement (the “ImmunoGen License Agreement”) with Immunogen, Inc.

(“ImmunoGen”), under which the Company obtained an exclusive, sublicensable, worldwide license to certain patents and other intellectual property rights to develop, manufacture, and commercialize certain products for non-oncology and non-radiopharmaceutical indications.

In consideration for rights granted by ImmunoGen, the Company is obligated to make certain future development milestone payments of up to $ 48.0 million upon the achievement of specified clinical and regulatory milestones.

Out of these development milestones payments, in December 2021 the Company paid a $ 2.5 million milestone payment to ImmunoGen upon the submission of an Investigational New Drug (“IND”) application for VRDN-001 with the U.S.

Food and Drug Administration.

Additionally, if the Company successfully commercializes any product candidate subject to the ImmunoGen License Agreement, it is responsible for royalty

payments equal to a percentage in the mid-single digits of net sales and commercial milestone payments of up to $ 95.0 million.

In December 2021, the Company paid a $ 2.5 million milestone payment to ImmunoGen upon the submission of an investigational new drug (“IND”) application for VRDN-001 with the FDA.

In May 2022, the Company paid a $ 3.0 million milestone payment to ImmunoGen related to the first patient dosed in the clinical trial for VRDN-001.

In December 2022, the Company recorded $ 10.0 million as research and development expense related to a milestone owed to ImmunoGen related to the first patient dosed in a Pivotal Clinical Trial for VRDN-001, amount which was paid in January 2023 and which was included in accounts payable in the consolidated balance sheet as of December 31, 2022.

Additionally, if the Company successfully commercializes any product candidate subject to the ImmunoGen License Agreement, it is responsible for royalty payments equal to a percentage in the mid-single digits of net sales and commercial milestone payments of up to $ 95.0 million.

The Company is obligated to make any such royalty payments on a product-by-product and country-by-country basis from the first commercial sale of a specified product in each country until the later of (i) the expiration of the last patent claim subject to the ImmunoGen License Agreement in such country, (ii) the expiration of any applicable regulatory exclusivity obtained for each product in such country, or (iii) the 12th anniversary of the date of the first commercial sale of such product in such country.

License Agreements with Xencor, Inc.

In December 2021, the Company entered into a subsequent technology license agreement with Xencor (the “2021 Xencor License Agreement”) for a non-exclusive license to certain antibody libraries developed by Xencor.

Under the 2021 Xencor License Agreement, Xencor the Company received a one-year research license to review the antibodies and the right to select up to three antibodies for further development.

In December 2021, the Company entered into a subsequent technology license agreement (the “2021 Xencor License Agreement”) with Xencor for a non-exclusive license to certain antibody libraries developed by Xencor.

Under the 2021 Xencor License Agreement, the Company received a one-year research license to review the antibodies and the right to select up to three antibodies for further development.

In consideration for rights granted by Xencor, the Company issued 394,737 shares of our common stock to Xencor in December 2021.

2 unchanged sentences

Additionally, for each licensed product that the Company successfully commercializes, it would be responsible for royalty payments equal to a percentage in the mid-single digits of net sales.

In December 2020, the Company entered into a license agreement (the “Xencor License Agreement”) with Xencor, Inc.

(“Xencor”), under which Xencor granted the Company rights to an exclusive, worldwide, sublicensable, non-transferable, royalty-bearing license to use specified Xencor technology for the research, development, manufacturing, and commercialization of therapeutic antibodies targeting IGF-1R indications.

In December 2020, the Company entered into a license agreement (the “Xencor License Agreement”) with Xencor, under which Xencor granted the Company rights to an exclusive, worldwide, sublicensable, non-transferable, royalty-bearing license to use specified Xencor technology for the research, development, manufacturing, and commercialization of therapeutic antibodies targeting IGF-1R indications.

In consideration for rights granted by Xencor, the Company issued 322,407 shares of its common stock in December 2020.

4 unchanged sentences

Contingent Value Rights Agreement

In accordance with the Merger Agreement, on November 4, 2020, the Company and the Rights Agent (as defined therein) executed and delivered a contingent value rights agreement (the “CVR Agreement”), pursuant to which each holder of the Company’s common stock as of November 6, 2020, other than former stockholders of Private Viridian, was entitled to one contractual contingent value right issued by the Company, subject to and in accordance with the terms and conditions of the CVR Agreement, for each share of its common stock held by such holder.

The CVR Agreement terminated as of December 31, 2021 and no CVRs were issued under the CVR Agreement.

In accordance with the merger agreement with miRagen Therapeutics, Inc., on November 4, 2020, the Company and the Rights Agent (as defined therein) executed and delivered a contingent value rights agreement (the “CVR Agreement”), pursuant to which each holder of the Company’s common stock as of November 6, 2020, other than former stockholders of Private Viridian, was entitled to one contractual contingent value right issued by the Company, subject to and in accordance with the terms and conditions of the CVR Agreement, for each share of its common stock held by such holder.

No CVRs have been or may in the future be issued pursuant to the terms of the CVR Agreement as of December 31, 2022.

Lease Obligations

Colorado-based Office and Lab Space

The Company is party to a multi-year, non-cancelable lease agreement for its Colorado-based office and lab space.

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Upon adoption of ASC 842 and upon subsequent modification of the lease in 2020 and in March 2021, the Company recognized a right-of-use asset and corresponding lease liability for the lease agreement of approximately $ 1.6 million by calculating the present value of lease payments, discounted at 6 %, the Company’s estimated incremental borrowing rate, over the 12 months expected remaining term.

In April 2021, the Company entered into a sublease with Cogent Biosciences, Inc.

(“Cogent”) for its Colorado-based office and lab space, which was subsequently amended in November 2021 to extend the term of the sublease.

As of the sublease inception date, Fairmount Funds Management LLC beneficially owned more than 5% of the Company’s common stock and Cogent’s capital stock.

Under the terms of the current sublease, which expires on April 30, 2022, Cogent will pay the Company an

aggregate of $ 0.2 million in rent payments plus related taxes and lease operating costs.

The sublease was negotiated on an arm’s-length basis and is a market-rate transaction on terms that the Company believes are no less favorable than would have been reached with an unrelated third party.

In connection with the acquisition of Private Viridian, the Company became party to a multi-year, non-cancelable lease agreement in October 2020 for its Massachusetts-based office space (the “Original Lease”).

Massachusetts-based Office Space

The Company is party to a multi-year, non-cancelable lease agreement for its Massachusetts-based office space (as subsequently amended, the “Original Lease”).

The Original Lease included rent escalation clauses through the lease term.

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Upon assumption of the Original Lease, the Company recognized a right-of-use asset and corresponding lease liability for the Original Lease of $ 0.1 million by calculating the present value of lease payments, discounted at 6 %, the Company’s estimated incremental borrowing rate, over the expected remaining term.

In July 2021, the Company amended the Original Lease to increase its Massachusetts-based office space (the “Amended Lease”).

The office space leased under the Original Lease will expire in February 2023 and the additional office space leased under the Amended Lease will expire in October 2024.

Consolidated future minimum lease payments as of December 31, 2021 were approximately $ 1.9 million through 2025.

As of December 31, 2021, the Company’s operating lease obligations were reflected as operating lease liabilities of $ 0.5 million as accrued liabilities and $ 1.2 million as other liabilities in the Company’s consolidated balance sheets.

Amortization of the operating lease right-of-use assets, and corresponding reduction of operating lease obligations, amounted to $ 0.5 million for the year ended December 31, 2021, which was included in operating expense in the consolidated statements of operations and comprehensive loss.

During the year ended December 31, 2020, lease rental expense, and the corresponding cash outflow, was approximately $ 0.3 million.

The Company is also required to pay for operating expenses related to the leased space, which were $ 0.3 million for both of the years ended December 31, 2021 and 2020.

In July 2021, the Company entered into an amendment to the Original Lease to increase its Massachusetts-based office space (the “First Amendment”).

In April 2022, the Company entered into a second amendment to the Original Lease of its Massachusetts-based office space (the “Second Amendment”).

The Second Amendment made certain modifications to both the Original Lease and First Amendment, including (i) the addition of 2,432 square feet of office space in the same building and (the “April 2022 Expansion Premises”), (ii) the termination of the 1,087 square feet of leased space under the Original Lease seven days after the delivery of the April 2022 Expansion Premises, which occurred in the fourth quarter of 2022, and (iii) the extension of the expiration date of the 3,284 square feet of leased space under the First Amendment from October 2024 through November 2026.

Under the Second Amendment, the Company has the option to extend the lease term for an additional period of three years upon notice to the landlord.

The Second Amendment provides for annual base rent for the April 2022 Expansion Premises of approximately $ 0.4 million during the lease term.

The Company is also obligated to pay the landlord certain costs, taxes and operating expenses.

In July 2022, the Company entered into a third amendment to the Original Lease of its Massachusetts-based office space (the “Third Amendment”).

The Third Amendment makes certain modifications to the Original Lease, including (i) the addition of 5,240 square feet of office space in the same building (the “July 2022 Expansion Premises”), (ii) the termination of the 1,087 square feet of leased space under the Original Lease, and (iii) the extension of the expiration date of the 3,284 square feet of leased space under the First Amendment to four years from the delivery of the July 2022 Expansion Premises.

Under the Third Amendment, the Company has the option to extend the lease term for an additional period of three years upon notice to the landlord.

The Third Amendment provides for annual base rent for the July 2022 Expansion Premises of approximately $ 0.9 million during the lease term.

The Company is also obligated to pay the landlord certain costs, taxes and operating expenses.

Future lease payments under noncancellable leases as of December 31, 2022 are as follows:

(in thousands)

Total future minimum lease payments 1,940

imputed interest ( 217 )

Total $ 1,723

As of December 31, 2022, the Company’s operating lease obligations were reflected as short-term operating lease liabilities of $ 0.6 million within accrued liabilities and $ 1.1 million of long-term lease obligations as other liabilities in the Company’s consolidated balance sheets.

Amortization of the operating lease right-of-use assets, and corresponding reduction of operating lease obligations, amounted to $ 0.5 million for both the years ended December 31, 2022 and 2021, and which was included in operating expense in the consolidated statements of operations and comprehensive loss.

The Company is also required to pay for operating expenses related to the leased space, which were $ 0.3 million for both the years ended December 31, 2022 and 2021.

The operating expenses are incurred separately and were not included in the present value of lease payments.

CAPITAL STOCK

Under the Company’s restated certificate of incorporation, the Company is authorized to issue 205,000,000 shares of its stock, of which 200,000,000 shares have been designated as common stock and 5,000,000 shares have been designated as Preferred Stock, both with a par value of $ 0.01 per share.

Under the Company’s second restated certificate of incorporation, the Company is authorized to issue 205,000,000 shares of its stock, of which 200,000,000 shares have been designated as common stock and 5,000,000 shares have been designated as preferred stock, both with a par value of $ 0.01 per share.

The number of authorized shares of common stock may be increased or decreased by the affirmative vote of the holders of a majority of the Company’s stock who are entitled to vote.

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The holders of common stock are entitled to receive dividends when and as declared or paid by its board of directors.

Common Stock Sales Agreements

Jefferies LLC

In November 2021, the Company entered into an Open Market Sale Agreement SM (the “November 2021 ATM Agreement”) with Jefferies, relating to shares of its common stock.

Jefferies will receive a commission of 3.0 % of the gross proceeds of any shares of common stock sold under the November 2021 ATM Agreement.

As of December 31, 2021, no shares have been sold under the November 2021 ATM Agreement with Jefferies.

In April 2021, the Company entered into an Open Market Sale Agreement SM (the “April 2021 ATM Agreement”) with Jefferies LLC (“Jefferies”) under which the Company could offer and sell, from time to time at its sole discretion, shares of its common stock having an aggregate offering price of up to $ 50.0 million through Jefferies as its sales agent in an “at the market” offering.

Jefferies will receive a commission equal to 3.0 % of the gross sales proceeds of any common stock sold through Jefferies under the April 2021 ATM Agreement.

Through December 31, 2021, the Company sold an aggregate of 2,551,269 shares of common stock pursuant to the terms of the April 2021 ATM Agreement, at a volume weighted-average price of $ 13.13 per share, for aggregate net proceeds of approximately $ 32.4 million, including commissions to Jefferies as sales agent.

The April 2021 ATM Agreement was replaced by the November 2021 ATM Agreement.

Cowen and Company LLC

In March 2017, the Company entered into a Common Stock Sales Agreement (the “2017 ATM Agreement”) with Cowen and Company LLC (“Cowen”) under which the Company could offer and sell, from time to time at its sole discretion, shares of its common stock having an aggregate offering price of up to $ 50.0 million through Cowen as its sales agent in an “at the market” offering.

Cowen received a commission equal to 3.0 % of the gross sales proceeds of any common stock sold through Cowen under the 2017 ATM Agreement.

The Company terminated the 2017 ATM Agreement with Cowen in April 2021.

Since March 2017 and through December 31, 2020, the Company sold, pursuant to the terms of the 2017 ATM Agreement, an aggregate of 189,763 shares of common stock for aggregate net proceeds of approximately $ 11.6 million, including initial expenses for executing the “at the market offering” and commissions to Cowen as sales agent.

No shares were issued during the year ended December 31, 2021, relating to the 2017 ATM Agreement with Cowen.

Reverse Stock Split

On November 12, 2020, the Company effected a reverse stock split of its shares of common stock at a ratio of 1-for-15, and trading of the common stock began on a split-adjusted basis on November 13, 2020.

As a result of the reverse stock split, every 15 shares of the Company’s pre-reverse split common stock were combined and reclassified into one share of common stock.

No fractional shares were issued in connection with the reverse stock split.

In the result of any stockholders owning a fractional share, such stockholders received a cash payment in lieu of any fractional shares.

The reverse stock split did not modify any rights of the Company’s common stock.

The reverse stock split reduced the number of shares of common stock issuable upon the conversion of the Company’s outstanding shares of Series A Preferred Stock to a ratio of 66.67 and the exercise or vesting of its outstanding stock options and warrants in proportion to the ratio of the reverse stock split and caused a proportionate increase in the conversion and exercise prices of such preferred stock, stock options, and warrants.

The accompanying consolidated financial statements and notes to the consolidated financial statements give retroactive effect to the exchange ratio for all periods presented.

Public Offerings

In August 2022, the Company entered into an underwriting agreement (the “2022 Underwriting Agreement”) with Jefferies LLC (“Jefferies”), SVB Securities LLC and Evercore Group L.L.C.

(“Evercore”) relating to the offer and sale (the “2022 Offering”) of 11,352,640 shares of the Company’s common stock, which includes 1,725,000 shares of common stock issued in connection with the exercise in full by the underwriters of their option to purchase additional shares at a public offering price of $ 23.50 per share, and 28,084 shares of Series B Non-Voting Convertible Preferred Stock, par value $ 0.01 per share, at a public offering price of $ 1,566.745 per share (collectively the “2022 Public Offering”).

The aggregate gross proceeds to the Company from the 2022 Public Offering, including the exercise of the option were approximately $ 311.0 million, before deducting underwriting discounts and commissions and other offering expenses payable by the Company.

In September 2021, the Company entered into an underwriting agreement (the “2021 Underwriting Agreement”) with Jefferies, SVB Leerink LLC and Evercore for the sale and issuance of 7,344,543 shares of common stock, which includes 1,159,089 shares of common stock issued in connection with the exercise in full by the underwriters of their option to purchase additional shares at a public offering price of $ 11.00 per share and 23,126 shares of Series B Non-Voting Convertible Preferred Stock at a public offering price of $ 733.37 per share (collectively the “2021 Public Offering”).

The aggregate gross proceeds to the Company from the 2021 Public Offering, including the exercise of the option, were approximately $ 97.7 million, before deducting underwriting discounts and commissions and estimated offering expenses payable by the Company.

Common Stock Sales Agreements - Jefferies LLC

In September 2022, the Company entered into an Open Market Sale Agreement SM (the “September 2022 ATM Agreement”) with Jefferies, pursuant to which the Company may offer and sell shares of its common stock having an aggregate offering price of up to $ 175.0 million from time to time at prices and on terms to be determined by market conditions at the time of offering, with Jefferies acting as its sales agent.

Jefferies will receive a commission of 3.0 % of the gross proceeds of any shares of common stock sold under the September 2022 ATM Agreement.

During the quarter ended December 31, 2022, 964,357 shares have been sold under the September 2022 ATM Agreement with Jefferies at a weighted average price of $ 26.01 per share, for aggregate net proceeds of approximately $ 24.2 million, including commissions to Jefferies as a sales agent.

In November 2021, the Company entered into an Open Market Sale Agreement SM (the “November 2021 ATM Agreement”) with Jefferies, pursuant to which the Company could offer and sell shares of its common stock having an aggregate offering price of up to $ 75.0 million from time to time at prices and on terms to be determined by market conditions at the time of offering, with Jefferies acting as its sales agent.

The November 2021 ATM Agreement was terminated in connection with the September 2022 ATM Agreement.

No shares were sold under the November 2021 ATM Agreement.

In April 2021, the Company entered into an Open Market Sale Agreement SM (the “April 2021 ATM Agreement”) with Jefferies pursuant to which the Company could offer and sell shares of its common stock having an aggregate offering price of up to $ 50.0 million from time to time at prices and on terms to be determined by market conditions at the time of offering, with Jefferies as its sales agent.

Jefferies could receive a commission equal to 3.0 % of the gross sales proceeds of any common stock sold through Jefferies under the April 2021 ATM Agreement.

The April 2021 ATM Agreement was terminated in connection with the November 2021 ATM Agreement.

An aggregate of 2,551,269 shares of common stock were sold pursuant to the April 2021 ATM Agreement prior to its termination, at a volume weighted average price of $ 13.13 per share, for aggregate net proceeds of approximately $ 32.4 million, including commissions to Jefferies as sales agent.

Common Stock Purchase Agreement - Aspire Capital Fund, LLC

In December 2019, the Company entered into a common stock purchase agreement (the “Aspire Stock Purchase Agreement”), with Aspire Capital Fund, LLC (“Aspire Capital”), which provides that, subject to the terms, conditions, and limitations set forth therein, Aspire Capital is committed to purchase up to an aggregate of $ 20.0 million of shares of common stock over the 30-month term of the Aspire Stock Purchase Agreement.

During the year ended December 31, 2020, the Company sold to Aspire Capital 412,187 shares of common stock at a weighted-average price of $ 21.35 per share for aggregate net proceeds of $ 8.8 million.

Through December 31, 2020, the Company sold 412,187 shares of common stock to Aspire Capital at a weighted-average price of $ 21.35 per share for aggregate net proceeds of $ 8.8 million.

The Company did not sell any shares to Aspire Capital during the years ended December 31, 2021 or 2022.

As of December 31, 2022, the Company has the ability to sell an additional $ 10.2 million of shares of common stock to Aspire Capital.

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There are no limitations on use of proceeds, financial or business covenants, restrictions on future financings, rights of first refusal, participation rights, penalties, or liquidated damages in the Aspire Stock Purchase Agreement.

Common Stock Purchase Agreement - The Leukemia & Lymphoma Society, Inc.

In August 2018, the Company and The Leukemia & Lymphoma Society, Inc.

(“LLS”) entered into a Common Stock Purchase Agreement (the “LLS Stock Purchase Agreement”), which was subsequently assigned to LLS TAP Miragen, LLC (“LLS TAP”) pursuant to an Assignment and Assumption Agreement, effective October 28, 2019, for the sale of up to $ 5.0 million of

shares of Common Stock to LLS and its affiliates in a private placement.

Under the terms of the LLS Stock Purchase Agreement, the Company could raise up to approximately $ 5.0 million in gross proceeds by selling shares of common stock to LLS and its affiliates.

From inception and through December 31, 2020, the Company issued 50,490 shares of common stock for net proceeds of approximately $ 1.4 million, after deducting expenses incurred in connection with the private placement.

The LLS Stock Purchase Agreement was terminated on December 11, 2020.

Common Stock Public Offering

2021 Underwritten Public Offering

In September 2021, the Company entered into an underwriting agreement (the “2021 Underwriting Agreement”) with Jeffries LLC, SVB Leerink LLC and Evercore Group, LLC (collectively, the “Underwriters”) for the sale and issuance of 7,344,543 shares of common stock, which includes 1,159,089 shares of common stock issued in connection with the exercise in full by the underwriters of their option to purchase additional shares, at a public offering price of $ 11.00 per share and 23,126 shares of Series B Non-Voting Convertible Preferred Stock at a public offering price of $ 733.37 per share (collectively the “2021 Public Offering”).

The aggregate gross proceeds to the Company from the 2021 Public Offering are approximately $ 97.7 million, before deducting underwriting discounts and commissions and estimated offering expenses payable by the Company.

2020 Underwritten Public Offering

In February 2020, the Company entered into an underwriting agreement with Oppenheimer & Co.

(“Oppenheimer”) as the underwriter relating to a public offering of common stock, pursuant to which Oppenheimer purchased 1,000,000 shares of common stock and warrants to purchase 500,000 shares of common stock (the “2020 Public Offering”).

Each whole warrant has an exercise price of $ 16.50 per share and expires on the fifth anniversary of the date of issuance.

The shares of common stock and warrants were sold together as a fixed combination, each consisting of one share of common stock and one-half warrant, with each whole warrant exercisable to purchase one whole share of common stock but were issued separately and were immediately separable upon issuance.

The combined price to the public in the offering for each share of common stock and accompanying half warrant was $ 15.00 , which resulted in approximately $ 13.9 million of net proceeds to the Company after deducting underwriting commissions and discounts and other estimated offering expenses payable by the Company and excluding the proceeds from the exercise of the warrants.

Preferred Stock

As of December 31, 2021, the Company had 260,437 shares of Series A Preferred Stock and 23,126 shares of Series B Preferred Stock outstanding.

Under the Company’s restated certificate of incorporation, the Company’s board of directors has the authority to designate and issue up to 5,000,000 shares of preferred stock, at its discretion, in one or more classes or series and to fix the powers, preferences and rights, and the qualifications, limitations, or restrictions thereof, including dividend rights, conversion rights, voting rights, terms of redemption, and liquidation preferences, without further vote or action by the Company’s stockholders.

Under the Company’s second restated certificate of incorporation, the Company’s board of directors has the authority to designate and issue up to 5,000,000 shares of preferred stock, at its discretion, in one or more classes or series and to fix the powers, preferences and rights, and the qualifications, limitations, or restrictions thereof, including dividend rights, conversion rights, voting rights, terms of redemption, and liquidation preferences, without further vote or action by the Company’s stockholders.

Series A Preferred Stock

Concurrent with the acquisition of Private Viridian, on October 27, 2020, the Company entered into a Securities Purchase Agreement (the “Purchase Agreement”) with the purchasers named therein, pursuant to which the Company sold an aggregate of approximately 195,290 shares of Series A Preferred Stock for an aggregate purchase price of approximately $ 91.0 million (collectively, the “Financing”).

Each share of Series A Preferred Stock is convertible into 66.67 shares of common stock, as described below.

The powers, preferences, rights, qualifications, limitations, and restrictions applicable to the Series A Preferred Stock are set forth in the Certificate of Designation filed in connection with the Financing.

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

Except 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, (b) alter or amend the Certificate of Designation, (c) amend its certificate of incorporation or other charter documents in any manner that adversely affects any rights of the holders of Series A Preferred Stock, (d) increase the number of authorized shares of Series A Preferred Stock, (e) at any time while at least 30% of the originally issued Series A Preferred Stock remains issued and outstanding, consummate a Fundamental Transaction (as defined in the Certificate of

Designation) or (f) enter into any agreement with respect to any of the foregoing.

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, (i) alter or change adversely the powers, preferences or rights given to the Series A Preferred Stock, (ii) alter or amend the Certificate of Designation, (iii) amend its certificate of incorporation or other charter documents in any manner that adversely affects any rights of the holders of Series A Preferred Stock, (iv) increase the number of authorized shares of Series A Preferred Stock, (v) at any time while at least 30 % of the originally issued Series A Preferred Stock remains issued and outstanding, consummate a Fundamental Transaction (as defined in the Certificate of Designation) or (vi) 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.

Following stockholder approval of the conversion of the Series A Preferred Stock into shares of common stock in December 2020, each share of Series A Preferred Stock is convertible into 66.67 shares of common stock at any time at the option of the holder thereof, 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 (to be established by the holder between 4.99 % and 19.99 %) of the total number of shares of common stock issued and outstanding immediately after giving effect to such conversion.

On October 30, 2020, the Company entered into a Registration Rights Agreement (the “Registration Rights Agreement”), pursuant to which the Company agreed to register for resale the shares of common stock sold to investors in the Financing.

The registration statement that was filed pursuant to the Registration Rights Agreement was declared effective by the SEC on December 22, 2020 (File No.

As of December 31, 2020, no Series A Preferred Stock had been converted.

During the year ended December 31, 2021, 138,050 shares of Series A Preferred Stock were converted into 9,203,732 shares of common stock.

Each share of Series A Preferred Stock is convertible into 66.67 shares of common stock at any time at the option of the holder thereof, 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 (to be established by the holder between 4.99 % and 19.99 %) of the total number of shares of common stock issued and outstanding immediately after giving effect to such conversion.

As of December 31, 2022 and 2021, there were 188,381 and 260,437 shares of Series A Preferred Stock outstanding, respectively.

Series B Preferred Stock

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Except 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, (a) alter or change adversely the powers, preferences or rights given to the Series B Preferred Stock, (b) alter or amend the Certificate of Designation, or (c) amend its certificate of incorporation or other charter documents in any manner that adversely affects any rights of the holders of Series B Preferred Stock.

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, (i) alter or change adversely the powers, preferences or rights given to the Series B Preferred Stock, (ii) alter or amend the Certificate of Designation, or (iii) amend its certificate of incorporation or other charter documents in any manner that adversely affects any rights of the holders of Series B Preferred Stock.

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

As of December 31, 2021, none of the 23,126 shares of Series B Preferred Stock has been converted into common stock.

As of December 31, 2022 and 2021, there were 51,210 and 23,126 shares of Series B Preferred Stock outstanding, respectively.

The following table presents information about the Company’s outstanding warrants:

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Outstanding at December 31, 2022 363,963 $ 15.82

Equity-Classified Warrants

In connection with the Merger in 2020, the Company assumed 29,446 outstanding warrants to purchase shares of common stock at an exercise price of $ 0.15 per share that expire ten years from the date of issuance.

At the time of the Merger, the warrants were classified as equity and recorded at fair value with no subsequent remeasurement.

In connection with the Company’s 2020 Public Offering, the Company issued warrants to purchase 500,000 shares of its common stock at a price of $ 16.50 per share that expire five years from the date of issuance (the “Warrants”).

The terms of the warrants include certain provisions related to fundamental transactions, a cashless exercise provision in the event registered shares are not available, and do not include any mandatory redemption provisions.

Therefore, the Warrants were classified as equity with no subsequent remeasurement as long as the warrants continued to be classified as equity.

On November 6, 2020, Warrants were exercised to purchase 33,333 shares of common stock for proceeds of approximately $ 0.5 million.

In connection with a debt financing in 2017, the Company issued detachable warrants to purchase up to 1,606 shares of the Company’s common stock at an exercise price of $ 107.25 per share that expire seven years from the date of issuance.

At issuance, the Warrants were classified as equity and recorded at fair value with no subsequent remeasurement.

SHARE-BASED COMPENSATION

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The Company has grants outstanding under its 2008 Equity Incentive Plan (the “2008 Plan”), its amended and restated 2016 Equity Incentive Plan (the “2016 Plan”), and the Viridian 2020 Equity Incentive Plan (the “2020 Plan” and collectively with the 2008 Plan and the 2016 Plan, the “Equity Incentive Plans”).

Upon closing of the Merger, the Company assumed all outstanding options issued under the 2020 Plan.

The terms and conditions for each assumed option were substantially the same as prior to the Merger, including that the assumed options remained subject to the terms and conditions of the 2020 Plan, provided that each assumed option are exercisable for shares of the Company’s common stock and the number of shares issuable upon exercise of, and the exercise price per share for, each assumed option has been appropriately adjusted to give effect to the Merger.

The 2016 Plan provides for the grant of incentive stock options, nonstatutory stock options, stock appreciation rights, restricted stock awards, restricted stock unit awards, other stock awards, and performance awards that may be settled in cash, stock, or other property.

All employees and non-employee directors are eligible to participate in the 2016 Plan.

Incentive stock options may be granted under the 2016 Plan only to employees and employees of the Company’s affiliates.

The term of stock options granted under the 2016 Plan may not exceed ten years .

Pursuant to the 2016 Plan, the aggregate number of shares of common stock that may be issued will not exceed 3,419,368 shares.

Subsequent to December 31, 2020, any awards granted under the 2016 Plan that expire or terminate subsequent to December 31, 2020, for any reason prior to exercise or settlement, are forfeited, or are reacquired, withheld, or not issued to satisfy a tax withholding obligation or to satisfy the exercise price of a stock award, will become available for grant under the 2016 Plan in accordance with its terms.

Similarly, any shares of common stock issued pursuant to a stock award under the 2020 Plan that are forfeited, repurchased by the Company, or reacquired by the Company in satisfaction of tax withholding obligations will become available for grant under the 2020 Plan.

In July 2021, the Company granted stock options outside of its Equity Incentive Plans to certain employees to induce them to accept employment with the Company (the “Inducement Awards”).

Additionally, beginning in July 2021, the Company granted stock options outside of its Equity Incentive Plans to certain employees to induce them to accept employment with the Company (the “Inducement Awards”).

The terms and conditions of the Inducement Awards are substantially similar to those awards granted under the Company’s Equity Incentive Plans.

Options granted under the Equity Incentive Plans, as well as the Inducement Awards, have an exercise price equal to the market value of the common stock at the date of grant and expire ten years from the date of grant.

Generally, options vest 25 % on the first anniversary of the vesting commencement date and 75 % ratably in equal monthly installments over the remaining 36 months.

The Company has also granted options that vest in equal monthly or quarterly amounts over periods up to 48 months.

On June 8, 2022 (the “Effective Date”), the Company’s stockholders approved the amendment and restatement of the 2016 Plan (the “Amended 2016 Plan”), which increased the number of shares reserved for issuance under the Amended 2016 Plan by 3,050,000 shares and transferred the number of shares that remain available for issuance under the 2020 Plan as of the Effective Date into the Amended 2016 Plan so that the Company operates from a single equity plan going forward.

The term of the Amended 2016 Plan is 10 years following the Effective Date.

As of December 31, 2022, the Company had the following balances by plan:

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Total 5,722,449 3,781,888

Options granted under the Equity Incentive Plans and the Inducement Awards have an exercise price equal to the market value of the common stock at the date of grant and expire 10 years from the date of grant.

Generally, options vest 25 % on the first anniversary of the vesting commencement date and 75 % ratably in equal monthly installments over the remaining 36 months.

The Company has also granted options that vest in equal monthly or quarterly amounts over periods up to 48 months.

The Company does not currently hold any treasury shares.

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(in thousands)

Outstanding at December 31, 2020 1,033,256 $ 15.34 8.56 $ 11,427

Outstanding as of December 31, 2021 3,683,839 $ 16.94 8.94 $ 15,969

Granted 2,545,500 17.72

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Forfeited or expired ( 315,599 ) 19.48

Outstanding at December 31, 2021 3,683,839 16.94 8.94 $ 15,969

Outstanding as of December 31, 2022 5,722,449 17.23 8.64 $ 68,977

Vested or expected to vest as of December 31, 2022 5,722,449 $ 17.23 8.64 $ 68,977

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The Black-Scholes model requires inputs for risk-free interest rate, dividend yield, volatility, and expected lives of the options.

Because the Company has a limited history of stock purchase and sale activity, expected volatility is based on historical data from public companies that are similar to the Company in size and nature of operations.

Because the Company has a limited history of stock purchase and sale activity, expected volatility is based on a blend of historical data from public companies that are similar to the Company in size and nature of operations, as well as the Company’s own volatility.

The Company will continue to use similar entity volatility information until its historical volatility is relevant to measure expected volatility for option grants.

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

The expected term (without regard to forfeitures) for options granted represents the period of time that options granted are expected to be outstanding and is derived from the contractual terms of the options granted and expected option-exercise behaviors.

The fair value of the underlying common stock is based on the closing price of the common stock on The Nasdaq Capital Market at the date of grant.

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Change in valuation allowance ( 24.5 ) ( 28.5 )

IPR&D 0.0 ( 12.9 )

Other permanent items ( 0.8 ) —

10 unchanged sentences

Stock-based expense 4,161 3,123

Start-up costs 5,013 2,467

Start-up costs and amortized costs 9,460 5,013

IRC § 174 capitalized costs 18,252 —

Operating lease right-of-use asset, net 22 —

Total deferred tax assets 86,684 53,869

2 unchanged sentences

Deferred tax liabilities:

Unrealized gains/losses ( 82 ) —

Operating lease right-of-use asset, net — ( 439 )

4 unchanged sentences

In addition, the realization of net operating losses to offset potential future taxable income and related income taxes that would otherwise be due is subject to annual limitations under Sections 382 and 383 of the Internal Revenue Code of 1986, as amended (the “Code”), and similar state provisions, which may result in the expiration of additional net operating losses before future utilization as a result of ownership changes.

As a result of these ownership change provisions during 2020, the Company estimated an aggregate limitation on the utilization of net operating loss carryforwards of $ 59.0 million as of December 31, 2020.

In addition to the limitation of net operating losses of $ 59.0 million, approximately $ 15.3 million of research and development tax credits were derecognized as of December 31, 2020, with the inability of the Company to ever realize a benefit from those credits in the future.

As a result of these ownership change provisions during 2020, the Company estimated an aggregate limitation on the utilization of net operating loss carryforwards of $ 59.0 million.

In addition to the limitation of net operating losses of $ 59.0 million, approximately $ 15.3 million of research and development tax credits were derecognized with the inability of the Company to ever realize a benefit from those credits in the future.

The Company determines on an annual basis whether net operating loss carryforwards will be limited.

An IRC 382 analysis has been completed through December 31, 2022 and determined that there were no additional ownership changes.

The Company will continue to evaluate changes in ownership and the related limitations on a go forward basis.

1 unchanged sentence

In assessing the realizability of its deferred tax assets, the Company considers whether it is more likely than not that some portion or all of its deferred tax assets will not be realized.

The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible.

The ultimate realization of deferred tax

assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible.

The Company considers the scheduled reversal of deferred tax liabilities, projected future taxable income, and tax planning strategies in making this assessment.

As the Company does not have any historical taxable income or

projections of future taxable income over the periods in which the deferred tax assets are deductible, and after consideration of its history of operating losses, the Company does not believe it is more likely than not that it will realize the benefits of its net deferred tax assets, and accordingly, has established a valuation allowance equal to 100 % of its net deferred tax assets at December 31, 2021 and 2020.

As the Company does not have any historical taxable income or projections of future taxable income over the periods in which the deferred tax assets are deductible, and after consideration of its history of operating losses, the Company does not believe it is more likely than not that it will realize the benefits of its net deferred tax assets, and accordingly, has established a valuation allowance equal to 100 % of its net deferred tax assets at December 31, 2022 and 2021.

The change in valuation allowance was an increase of $ 33.2 million in 2022 and an increase of $ 24.4 million in 2021.

6 unchanged sentences

March 9, 2023 By:

/s/ Jonathan Violin

Jonathan Violin

/s/ Scott Myers

President, Chief Executive Officer, and Director

6 unchanged sentences

Principal Accounting Officer)

KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints Jonathan Violin and Kristian Humer, and each of them, as his or her attorneys-in-fact, with the power of substitution, for him or her in any and all capacities, to sign any amendments to this Annual Report on Form 10-K, and to file the same, with exhibits thereto and other documents in connection therewith with the Securities and Exchange Commission, hereby ratifying and confirming all that said attorneys-in-fact, and each of them, or his substitute or substitutes may do or cause to be done by virtue hereof.

KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints Scott Myers and Kristian Humer, and each of them, as his or her attorneys-in-fact, with the power of substitution, for him or her in any and all capacities, to sign any amendments to this Annual Report on Form 10-K, and to file the same, with exhibits thereto and other documents in connection therewith with the Securities and Exchange Commission, hereby ratifying and confirming all that said attorneys-in-fact, and each of them, or his substitute or substitutes may do or cause to be done by virtue hereof.

Pursuant to the requirements of the Securities Exchange Act of l934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

Signature Title Date

/s/ Jonathan Violin President, Chief Executive Officer, and Director March 11, 2022

Jonathan Violin (Principal Executive Officer)

/s/ Scott Myers President, Chief Executive Officer, and Director March 9, 2023

Scott Myers (Principal Executive Officer)

/s/ Kristian Humer Chief Financial Officer March 9, 2023

9 unchanged sentences

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 9A. Controls and Procedures