Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

Management’s Discussion and Analysis of Financial Condition and Results of Operations is intended to help the reader understand the results of operations and financial condition of the Company. The Management’s Discussion and Analysis of Financial Condition and Results of Operations should be read in conjunction with our audited consolidated financial statements and notes thereto for the year ended December 31, 2024. In addition to historical information, this Annual Report on Form 10-K contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, which are intended to be covered by the safe harbors created thereby. See “Special Note Regarding Forward-Looking Statements” in this Annual Report on Form 10-K. Our actual results and the timing of events could differ materially from those discussed in our forward-looking statements as a result of many factors, including those set forth under the Part I, Item 1A. Risk Factors section and elsewhere in this report, as well as, in other reports and documents we file with the Securities and Exchange Commission from time to time. Except as required by law, we undertake no obligation to update any forward-looking statements to reflect events or circumstances occurring after the date of this Annual Report on Form 10-K.

RECENT DEVELOPMENTS

Overview

Our business strategy is to optimize the clinical and commercial value of tegoprubart and become a global biopharmaceutical company with a focused immunology franchise. Tegoprubart targets the CD40 ligand (also known as CD40L). Blocking CD40L has been shown to inhibit multiple costimulatory receptors including CD40 and CD11, key components of how immune cells communicate with one another. Blocking CD40L also increases polarization of lymphocytes into Tregs, a specialized subpopulation of T cells that act to suppress immune response.

We believe the central role of CD40L signaling in generating pro-inflammatory responses makes it an attractive candidate for therapeutic intervention in the protection of transplanted organs and the prevention of transplant rejection, as well as modulating immune responses in autoimmune disease, and in neuroinflammation. Blocking the activation of the CD40L pathway has been shown to slow disease progression and pathology in preclinical models of autoimmunity and neurodegeneration, and to prevent acute and long-term allograft transplant rejection in multiple animal species.

We continue to focus on the development of tegoprubart for the prevention of rejection of allograft (i.e., transplanting an organ from one human to another) and xenograft (i.e., transplanting an organ from an animal to a human) organs and cells. Our mission is to both extend the functional life of transplanted organ and reduce side effect of current immunosuppressive treatments such as kidney toxicity, high blood pressure, and tremor.

Tegoprubart is being evaluated in multiple kidney transplantation studies, including a Phase 1b trial, the Phase 2 BESTOW trial, and a Phase 2 open-label extension study, all designed to assess safety, pharmacokinetics, and efficacy compared to standard-of-care immunosuppression. Interim data suggest improved renal function and reduced immunosuppressive-related adverse events. Additionally, an investigator-initiated islet cell transplantation study has shown potential in achieving insulin independence without the use of calcineurin inhibitors, supporting further exploration in Type 1 diabetes. We also continue to explore xenotransplantation applications, an emerging area of scientific and commercial interest. Our collaboration with eGenesis, Inc. supports preclinical and clinical studies in kidney, heart, and islet cell transplantation.

Strategic Update

In January 2023, we announced our decision to prioritize resources on our kidney transplantation programs, discontinue the Company funded islet cell transplantation program and the IgAN program. We also remain committed to further progressing ALS clinical development and are working with key stakeholders on potential next steps to do so. However, we are unable to continue our clinical development of tegoprubart for people with ALS without additional financing.

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Financing Activities

2022 Exchange Agreement

On January 11, 2022, we entered into an exchange agreement (the “Series X1 Exchange Agreement”) with Biotechnology Value Fund, L.P., Biotechnology Value Fund II, L.P., Biotechnology Value Trading Fund OS, L.P., MSI BVF SPV, L.L.C. (collectively, the “BVF Exchanging Stockholders”), pursuant to which the Series X1 Exchanging Stockholders exchanged (the “Series X1 Exchange”) 550,000 shares of our common stock for 9,899.99 shares of Series X1 Non-Voting Convertible Preferred Stock. For information regarding the terms of our Series X1 Non-Voting Convertible Preferred Stock, see Note 8.Stockholders’ Equity of the Notes to Financial Statements included in this Annual Report on Form 10-K.

2023 Securities Purchase Agreement

On April 28, 2023, we entered into a Securities Purchase Agreement (the “2023 Securities Purchase Agreement”) with certain institutional and accredited investors, pursuant to which we agreed to issue and sell to the investors in a private placement (the “2023 Private Placement”) (i) in an initial closing, (a) an aggregate of 15,151,518 shares (the “Shares”) of our common stock, $0.001 par value per share, or pre-funded warrants in lieu thereof (the “Pre-Funded Warrants”), and (b) common stock warrants exercisable into an aggregate of 15,151,518 shares of common stock (or Pre-Funded Warrants in lieu thereof) (the “Common Warrants” and, together with the Pre-Funded Warrants, the “Warrants”); (ii) in a second closing (the “Second Closing”), upon the satisfaction or waiver of specified conditions set forth in the 2023 Securities Purchase Agreement, an aggregate of 20,202,024 shares of common stock (or Pre-Funded Warrants); and (iii) in a third closing (the “Third Closing”), upon the satisfaction or waiver of specified conditions set forth in the 2023 Securities Purchase Agreement, an aggregate of 25,252,530 shares of common stock (or Pre-Funded Warrants), in each case subject to customary adjustments as provided in the 2023 Securities Purchase Agreement, Pre-Funded Warrant or Common Warrant, as applicable. Each Common Warrant has an exercise price of $3.00 per share and expires five years after issuance. The Pre-Funded Warrants are exercisable immediately and until exercised in full, with an exercise price of $0.001 per share. The Pre-Funded Warrants and Common Warrants are subject to specified beneficial ownership limitations, which are generally set at 9.99% of the total common stock then issued and outstanding immediately following the exercise of such warrants, and provided that any beneficial ownership limitation may not exceed 19.99% unless otherwise permitted. The Shares, the Warrants, and the shares of common stock issuable upon the exercise of the Warrants, have not been registered under the Securities Act of 1933, as amended, and were offered pursuant to the exemption from registration provided in Section 4(a)(2) under the Securities Act of 1933, as amended, and Rule 506(b) promulgated thereunder.

On April 28, 2023, the initial closing occurred, and we received gross proceeds of $35.0 million, or net proceeds of approximately $33.0 million after deducting underwriting discounts and commissions and offering expenses, in exchange for 8,730,168 shares of common stock and Pre-Funded Warrants to purchase 6,421,350 shares of common stock.

On July 8, 2024, the Second Closing occurred, and the Company received gross proceeds of $2.1 million, or net proceeds of approximately $2.0 million after deducting underwriting discounts and commissions and offering expenses, in exchange for 909,088 shares of common stock.

On September 30, 2024, and October 1, 2024, the Third Closing occurred, and the Company received gross proceeds of $4.0 million, or net proceeds of approximately $3.8 million after deducting underwriting discounts and commissions and offering expenses, in exchange for 1,727,400 shares of common stock.

In connection with the 2023 Private Placement, the Company filed on May 18, 2023, a registration statement on Form S-3 (the “2023 Registration Statement”) with the SEC to register for resale the Shares and the shares of common stock issuable upon the exercise of the Warrants. The 2023 Registration Statement became effective on June 2, 2023.

2023 Conversion Agreement of Non-Voting Convertible Preferred Stock

On May 16, 2023, Cormorant Global Healthcare Master Fund LP provided us notice of its intention to convert (i) 1,782 shares of Series X Non-Voting Convertible Preferred Stock for 99,000 shares of common stock in accordance with the Certificate of Designation of Preferences, Rights and Limitations of the Series X Non-Voting Convertible Preferred Stock, and (ii) 7,883.586 shares of Series X1 Non-Voting Convertible Preferred Stock for 437,977 shares of common stock in accordance with the Certificate of Designation of Preferences, Rights and Limitations of the Series X1 Non-Voting Convertible Preferred Stock. The conversion was completed on May 23, 2023. For information regarding the terms of our Series X and Series X1 Non-Voting Convertible Preferred Stock, see Note 8. Stockholders’ Equity of the Notes to Financial Statements included in this Annual Report on Form 10-K.

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Exercise of Pre-Funded Warrants from 2023 Securities Purchase Agreement

On July 10, 2023, Armistice Capital Master Fund Ltd. (the “Exercising Stockholder”) exercised Pre-Funded Warrants to purchase 501,197 shares of common stock at an exercise price of $0.001 per share, which were issued in conjunction with the 2023 Securities Purchase Agreement. On July 14, 2023, the Company issued 501,197 shares of common stock to the Exercising Stockholder in accordance with such exercise.

On November 2, 2023, the Exercising Stockholder exercised Pre-Funded Warrants to purchase 653,000 shares of common stock at an exercise price of $0.001 per share, which were issued in conjunction with the 2023 Securities Purchase Agreement. On November 6, 2023, the Company issued 653,000 shares of common stock to the Exercising Stockholder in accordance with such exercise.

On January 30, 2024, the Exercising Stockholder exercised Pre-Funded Warrants to purchase 600,000 shares of common stock at an exercise price of $0.001 per share, which were issued in conjunction with the 2023 Securities Purchase Agreement. On January 30, 2024, the Company issued 600,000 shares of common stock to the Exercising Stockholder in accordance with such exercise.

On May 7, 2024, the Exercising Stockholder exercised Pre-Funded Warrants to purchase 583,000 shares of common stock at an exercise price of $0.001 per share, which were issued in conjunction with the 2023 Securities Purchase Agreement. On May 9, 2024, the Company issued 583,000 shares of common stock to the Exercising Stockholder in accordance with such exercise.

On July 11, 2024, the Exercising Stockholder exercised their remaining Pre-Funded Warrants to purchase 240,000 shares of common stock at an exercise price of $0.001 per share, which were issued in conjunction with the 2023 Securities Purchase Agreement. On July 11, 2024, the Company issued 240,000 shares of common stock to the Exercising Stockholder in accordance with such exercise.

2024 Securities Purchase Agreement

On May 6, 2024, we entered into a Securities Purchase Agreement (the “2024 Securities Purchase Agreement”) with certain institutional and accredited investors, pursuant to which we agreed to issue and sell to the investors in a private placement (the “2024 Private Placement”) an aggregate of 13,110,484 shares (the “2024 Shares”) of our common stock at a price of $2.37 per share, and pre-funded warrants (the “2024 Pre-Funded Warrants”) at a price of $2.369 per underlying share, which are exercisable to purchase 7,989,516 shares of common stock at an exercise price of $0.001 per share. The 2024 Pre-Funded Warrants were issued in lieu of shares of common stock and are exercisable immediately and until exercised in full. The 2024 Pre-Funded Warrants are subject to specified beneficial ownership limitations (equal to 4.99% or 9.99% as determined by holder of each such warrant) of the total common stock then issued and outstanding immediately following the exercise of such warrants, and provided that any beneficial ownership limitation may not exceed 19.99% unless otherwise permitted. The 2024 Shares, the 2024 Pre-Funded Warrants, and the shares of common stock issuable upon the exercise of the 2024 Pre-Funded Warrants, have not been registered under the Securities Act of 1933, as amended, and were offered pursuant to the exemption from registration provided in Section 4(a)(2) under the Securities Act of 1933, as amended, and Rule 506(b) promulgated thereunder.

The 2024 Private Placement resulted in gross proceeds to the Company of $50.0 million, or net proceeds of approximately $48.1 million after deducting offering costs.

In connection with the 2024 Private Placement, on May 24, 2024, we filed a registration statement on Form S-3 (the “2024 Registration Statement”) with the SEC to register for resale the 2024 Shares and the shares of common stock issuable upon the exercise of the 2024 Pre-Funded Warrants. The 2024 Registration Statement became effective on June 5, 2024.

2024 Equity Distribution Agreement

On September 20, 2024, we entered into an Open Market Sale Agreement (the “Sales Agreement”) with Guggenheim Securities, LLC (“Guggenheim Securities”) to sell shares of our common stock, having aggregate sales proceeds of up to $75.0 million, from time to time, through an “at the market” equity offering program under which Guggenheim Securities will act as sales agent. In connection with the Sales Agreement, we filed on September 20, 2024 a registration statement on Form S-3 containing a prospectus and prospectus supplement (the “Shelf Registration Statement”) with the SEC. The Shelf Registration Statement became effective on October 2, 2024. As of December 31, 2024, we have not sold any shares under the Sales Agreement.

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2024 Underwritten Offering

On October 29, 2024, we entered into an underwriting agreement with Leerink Partners, LLC, as representative of the several underwriters named therein (the “Underwriters”) in connection with the underwritten offering, issuance and sale by the Company (the “2024 Underwritten Offering”) of 18,356,173 shares of our common stock, at an offering price of $3.65 per share, and pre-funded warrants at a price of $3.649 per pre-funded warrant, which are exercisable to purchase 4,931,507 shares of our common stock at an exercise price of $0.001 per share (the “Offering Pre-Funded Warrants”).

The 2024 Underwritten Offering closed on October 30, 2024 and resulted in gross proceeds of $85 million, or net proceeds of approximately $79.5 million after deducting underwriting discounts and commissions and offering expenses. The 2024 Underwritten Offering was made pursuant to the Shelf Registration Statement and a prospectus supplement relating to the 2024 Underwritten Offering dated October 29, 2024.

A holder of the Offering Pre-Funded Warrants (together with its affiliates) may not exercise any portion of an Offering Pre-Funded Warrant to the extent that the that, after giving effect to such exercise, the holder (together with the holder’s affiliates, and any other persons acting as a group together with the holder or any of the holder’s affiliates) would beneficially own in excess of 4.99% (or, at the holder’s option upon issuance, 9.99%) of the number of shares of the our common stock outstanding immediately after giving effect to the issuance of shares of common stock issuable upon exercise of such Offering Pre-Funded Warrants.

Common Stock Warrants

As of December 31, 2024, 33,052,744 warrants were exercisable into common stock (after rounding for fractional shares and subject to beneficial ownership conversion blockers). The shares of common stock underlying the registered direct and private placement warrants are registered for offer and sale under the Securities Act of 1933, as amended (the “Securities Act”), pursuant to our effective registration statements on Forms S-1.

Series X1 Preferred Stock Warrants

As of December 31, 2024, 50,207.419 warrants were exercisable into Series X1 Non-Voting Convertible Preferred Stock which are convertible into 2,789,301 shares of common stock (after rounding for fractional shares and subject to beneficial ownership conversion blockers). For information regarding the terms of our Series X1 Non-Voting Convertible Preferred Stock, see Note 8.Stockholders' Equity of the Notes to Financial Statements included in this Annual Report on Form 10-K.

Financial Operations Overview

Operating Expenses

Our operating expenses consist primarily of costs associated with research and development activities and general and administrative activities.

Research and Development Expenses

Research and development expenses, which consist primarily of costs associated with our product research and development efforts, are expensed as incurred. Research and development expenses consist primarily of:

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personnel costs, including salaries, benefits, stock-based compensation and travel expenses, for employees engaged in research and development functions;

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expenses incurred under agreements with contract research organizations, or (“CROs”), and sites that conduct our non-clinical studies and clinical trials;

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expenses associated with manufacturing materials for use in non-clinical studies and clinical trials and developing external manufacturing capabilities;

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costs of outside consultants engaged in research and development activities, including their fees and travel expenses;

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other expenses related to our non-clinical studies and clinical trials and expenses related to our regulatory activities; and

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•

payments made under our third-party license agreements.

General and Administrative Expenses

General and administrative expenses consist primarily of personnel costs that include salaries, benefits and travel expenses for our executive, finance, and other administrative functions, and stock-based compensation expense. General and administrative expenses also include professional fees for expenses incurred under agreements with third parties relating to public relations, audit, tax and legal services, including legal expenses to pursue patent protection of our intellectual property; and our information technology, facilities and other related expenses, including rent, maintenance of facilities, insurance and supplies.

Change in fair value of warrant liabilities and fair value of financial instruments issued in excess of proceeds

Change in fair value of warrant liabilities and fair value of financial instruments issued in excess of proceeds represents the initial recognition of warrant liabilities at fair value in excess of proceeds received, as well as subsequent period remeasurements of these warrant liabilities at fair value. These remeasurements reflect changes in market conditions, such as fluctuations in stock price, volatility, interest rates, and other valuation inputs that impact the fair value of the liability.

CRITICAL ACCOUNTING POLICIES AND SIGNIFICANT JUDGMENTS AND ESTIMATES

Our management’s discussion and analysis of our financial condition and results of operations are based on our consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”). The preparation of these financial statements requires us to make estimates and judgments that affect the reported amount of assets, liabilities, and expenses and the disclosure of contingent assets and liabilities as of the date of the financial statements. On an ongoing basis, we evaluate our estimates and judgments. We base our estimates on historical experience, known trends and events, and various other factors that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources. Actual results may differ materially from these estimates under different assumptions or conditions.

Accrued Research and Development Expenses

As part of the process of preparing our consolidated financial statements, we are required to estimate our accrued research and development expenses. This process involves reviewing open contracts, communicating with our personnel and vendors to identify services that have been performed on our behalf and estimating the level of service performed and the associated costs incurred for the services when we have not yet been invoiced or otherwise notified of the actual costs. The majority of our service providers invoice us in arrears for services performed, on a pre-determined schedule or when contractual milestones are met; however, some require advance payments. We make estimates of our accrued expenses as of each balance sheet date in our consolidated financial statements based on facts and circumstances known to us at that time. Examples of estimated accrued research and development expenses include fees paid to:

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CROs in connection with performing research and development services on our behalf;

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other providers in connection with clinical trials;

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vendors in connection with non-clinical development activities; and

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vendors related to product manufacturing, development and distribution of clinical supplies.

We base our expenses related to clinical trials on our estimates of the services received and efforts expended pursuant to contracts with multiple CROs that conduct and manage clinical trials on our behalf. The financial terms of these agreements vary from contract to contract and may result in uneven payment flows. There may be instances in which payments made to our vendors will exceed the level of services provided and result in a prepayment of the clinical expense. Payments under some of these contracts depend on factors such as the successful enrollment of patients and the completion of clinical trial milestones. When determining accruals, we estimate the time period over which services will be performed, enrollment of patients, number of sites activated and level of effort to be expended in each period. If the actual timing of the performance of services or the level of effort varies from our estimate, we adjust the accrual or prepaid accordingly. Although we do not expect our estimates to be materially different from amounts actually incurred, our understanding of the status and timing of services performed relative to the actual status and timing of services performed may vary and may result in

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reporting expenses that are too high or too low in any particular period. To date, we have not made any material adjustments to our prior estimates of accrued research and development expenses.

Stock-Based Compensation

The Company recognizes compensation expense for all stock-based awards based on the grant-date estimated fair value.

The fair value of stock options is determined using the Black-Scholes option pricing model, using assumptions which are subjective and require significant judgment and estimation by management. The risk-free rate assumption was based on observed yields from governmental zero-coupon bonds with an equivalent term. The expected volatility assumption was based on historical volatilities of a group of comparable industry companies whose share prices are publicly available. The peer group was developed based on companies in the pharmaceutical industry. The expected term of stock options represents the weighted-average period that the stock options are expected to be outstanding. Because the Company does not have historical exercise behavior, the Company determined the expected life assumption using the simplified method for stock options granted to employees, which is an average of the options ordinary vesting period and the contractual term. The expected dividend assumption was based on the Company’s history and expectation of dividend payouts. The Company has not paid and does not expect to pay dividends at any time in the foreseeable future. The Company recognizes forfeitures on an actual basis and as such did not estimate forfeitures to calculate stock-based compensation.

Restricted Stock Units (“RSU”) are measured and recognized based on the quoted market price of our common stock on the date of grant.

Warrant Liabilities

Warrants are accounted for as either derivative liabilities or as equity instruments depending on the specific terms of the underlying agreement. Warrants that are equity-classified instruments and recorded in additional paid-in capital at issuance are not subject to remeasurement. The Common Warrants and the Subsequent Closing Warrants (as defined in Note 8. Stockholder’s Equity of the Notes to Financial Statements) issued in the 2023 Private Placement are liability classified and recorded at fair value using the Black-Scholes option-pricing model at issuance, with any subsequent changes in fair value recognized in the consolidated statements of operations. We periodically evaluate changes in facts and circumstances that could impact the classification of warrants. As of December 31, 2024, the Subsequent Closing Warrants were settled or expired and only the Common Warrants remain.

In-Process Research and Development

Amounts allocated to in-process research and development (“IPR&D”) in connection with a business combination are recorded at fair value and are considered indefinite-lived intangible assets until completion or abandonment of the associated research and development efforts. If and when development is complete, which generally occurs when regulatory approval to market a product is obtained, the associated assets are deemed finite-lived and amortized over a period that best reflects the economic benefits provided by these assets. During the period the assets are considered indefinite-lived, they will not be amortized but will be tested annually for impairment or more frequently if indicators of impairment exist.

We first assess qualitative factors to determine whether it is more likely than not that the fair value of the IPR&D is less than its carrying amount as a basis for determining whether it is necessary to perform a quantitative assessment. If, after assessing qualitative factors, we determine it is not more likely than not that the fair value is less than its carrying amount, then a quantitative assessment is unnecessary. If the quantitative assessment is deemed necessary, the excess of the carrying value over fair value will be recorded as an impairment. The qualitative assessment focuses on the key inputs, assumptions and rationale utilized in the establishment of the carrying value and related changes since the last quantitative assessment. Based on the results of our annual qualitative assessment, we concluded that it is not more likely than not that IPR&D was impaired for any of the periods presented.

Recently Issued Accounting Pronouncements

A description of recently issued accounting pronouncements that may potentially impact our financial position and results of operations is set forth in Note 2. Summary of Significant Accounting Policies, of the Notes to Financial Statements included in this Annual Report on Form 10-K.

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RESULTS OF OPERATIONS

Comparison of the Years Ended December 31, 2024 and 2023

The following table provides comparative results of operations for the years ended December 31, 2024 and 2023 (in thousands):

Year EndedDecember 31,

Operating expenses:

Provision for income taxes (431 ) — (431 ) -100 %

Research and Development Expenses

The following table summarizes the period-over-period changes in research and development expenses for the periods presented (in thousands):

Year EndedDecember 31,

Tegoprubart - other development programs 306 3,186 (2,880 )

Research and development expenses increased $21.7 million for the year ended December 31, 2024, compared to the year ended December 31, 2023. The increase was primarily due to the following:

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an increase of $15.5 million in Tegoprubart - kidney transplantation programs, primarily with external CROs, related to increased activities in our Phase 1b, Phase 2 BESTOW and Phase 2 open-label extension trials for kidney transplantation;

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a decrease of $2.9 million in Tegoprubart - other development programs, primarily with external CROs, related to our IgAN program that was completed in 2023;

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an increase of $4.4 million in manufacturing costs, primarily with contract manufacturing organizations, for the increased production of drug substance and drug product clinical trial supply;

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an increase of $1.8 million in personnel-related expenses due to an increase in headcount to support ongoing clinical development programs;

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an increase of $2.8 million in stock-based compensation expense, primarily due to the recognition of expense for the achievement of performance-based vesting criteria during the year ended December 31, 2024; and

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•

an increase of $0.1 million in other operating expenses.

General and Administrative Expenses

The following table summarizes the period-over-period changes in general and administrative expenses for the periods presented (in thousands):

Year EndedDecember 31,

General and administrative expenses increased $5.9 million for the year ended December 31, 2024, compared to the year ended December 31, 2023. The increase was primarily due to the following:

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an increase of $1.5 million in professional fees and consulting fees primarily driven by increased audit and legal services;

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an increase of $0.6 million in personnel-related expenses due to increased headcount; and

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an increase of $3.8 million in stock-based compensation expense, primarily due to the recognition of expense for the achievement of performance-based vesting criteria during the year ended December 31, 2024.

Other Income, Net

The $1.3 million increase in other income, net was primarily due to an increase in interest income, driven by higher balances of our cash and cash equivalents and short-term investments during the year ended December 31, 2024 as compared to the year ended December 31, 2023.

Change in fair value of warrant liabilities and fair value of financial instruments issued in excess of proceeds

For the year ended December 31, 2024, the fair value of warrant liabilities and fair value of financial instruments issued in excess of proceeds increased by $107.1 million to $30.9 million. The change was primarily due to the reversal of $59.1 million in warrant liabilities associated with the Subsequent Closing Warrants, which were settled or expired in 2024, partially offset by increase in the fair value of Common Warrants of $27.8 million. This is compared to $76.2 million in fair value of the Common Warrants and the Subsequent Closing Warrants for the year ended December 31, 2023.

Provision for Income Taxes

The $0.4 million provision for income taxes for the year ended December 31, 2024, is the result of a change in the effective state tax rate used to remeasure deferred tax liability related to indefinite-lived assets.

LIQUIDITY AND CAPITAL RESOURCES

Sources of Liquidity

As of December 31, 2024, the Company had cash and cash equivalents and short-term investments of $140.2 million, working capital of $132.2 million and an accumulated deficit of $355.6 million.

We do not have any approved products for commercial sale and have never generated revenue from product sales and have incurred significant net losses since our inception and expect to continue to incur net operating losses for the foreseeable future. We do not expect to receive any revenue from any product candidates that we develop unless and until we obtain regulatory approval and commercialize our product candidates or enter into collaborative arrangements with third parties. We currently have no credit facility or committed sources of capital. To date, our operations have been financed primarily by net

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proceeds from the sale of preferred and common stock, and the sale of warrants. Additionally, in view of our expectation to incur significant losses for the foreseeable future we will be required to raise additional capital resources in the future in order to fund our operations, although the availability of, and our access to, such resources is not assured.

We have based this estimate on assumptions that may prove to be incorrect, and we could utilize our available resources sooner than we currently expect. To finance our operations beyond that point we will need to raise additional capital, which cannot be assured. Further, from time to time, our operating plans may change, and we may need additional funds to meet operational needs for clinical studies sooner than planned or to fund additional clinical studies. For example, we do not currently have sufficient liquidity to fund the continued clinical development of tegoprubart for people with ALS without additional financing. We will continue to monitor our liquidity position in light of various financing alternatives and may pursue additional financing or other alternatives to allow us to continue our product development. However, there can be no assurance such financing or other alternatives will be available to us on acceptable terms, or at all, which could force us to significantly alter our business strategy, substantially curtail our current operations, or liquidate and cease operations altogether.

Material Cash Requirements

Our primary use of cash is to fund operating expenses, which consist of clinical research and development expenses, manufacturing expenses, legal and compliance expenses, compensation and related expenses, and general overhead costs. Cash used to fund operating expenses is impacted by the timing of when we pay or prepay these expenses.

We expect our expenses to increase in connection with our ongoing activities, particularly as we expand our clinical program with tegoprubart, continue the research and development of, and seek marketing approval for, our product candidates. In addition, if we obtain marketing approval for any of our product candidates, we expect to incur significant commercialization expenses related to product sales, marketing, manufacturing and distribution.

We will continue to require additional financing in order to advance our drug product through clinical development, to manufacture, obtain regulatory approval for and to commercialize our product candidates, to develop, acquire or in-license other potential product candidates, and to fund operations for the foreseeable future. Therefore, we will seek to raise additional capital through equity offerings, debt financings or other capital sources, including potentially collaborations, licenses and other similar arrangements. The ability to raise substantial additional capital will depend on many factors, including:

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the initiation, progress, timing, costs and results of our ongoing and future clinical trials of tegoprubart, including as such activities may be adversely impacted by global events or macroeconomic conditions;

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the impact of global macroeconomic trends and uncertainties, which continue to experience volatility and disruptions, including diminished liquidity and credit availability, declines in consumer confidence, declines in economic growth, increases in unemployment rates, increases in inflation rates, rising interest rates and uncertainty about economic stability;

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the number and scope of indications we decide to pursue for tegoprubart development;

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the cost, timing and outcome of regulatory review of any biologics license application, or BLA, we may submit for tegoprubart;

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the costs and timing of manufacturing for tegoprubart, if approved;

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the costs of preparing, filing and prosecuting patent applications, maintaining and enforcing our intellectual property rights and defending intellectual property-related claims;

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our efforts to enhance operational systems and our ability to attract, hire and retain qualified personnel, including personnel to support the development of tegoprubart;

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the costs associated with being a public company;

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the terms and timing of establishing and maintaining collaborations, licenses and other similar arrangements;

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the extent to which we acquire or in-license other product candidates and technologies; and

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the cost associated with commercializing tegoprubart, if approved for commercial sale.

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Conditions in the financial and credit markets may also limit the availability of funding or increase the cost of funding. As a result of any of the foregoing factors, adequate additional funding may not be available to us on acceptable terms on a timely basis, or at all. The severity and duration of any such impacts cannot be predicted. Any such failure to raise capital as and when needed could have a negative impact on our financial condition and on our ability to pursue our business plans and strategies or cause us to delay our clinical development plans, research and development programs or commercialization efforts, out-license intellectual property rights to our product candidates or sell unsecured assets, or a combination of the above. Any of these actions could materially harm our business. The issuance of shares of common stock in the 2023 Private Placement, the 2024 Private Placement and the 2024 Underwritten Offering diluted the ownership interests of our existing stockholders, and to the extent that we raise additional capital through the sale of additional equity, including through our “at the market” equity offering program, or convertible debt securities in the future, our stockholders’ ownership interests may be further diluted, and the terms of these securities may also include liquidation or other preferences that adversely affect our stockholders’ rights. Debt financing, if available, would result in fixed payment obligations and may involve agreements that include restrictive covenants that limit our ability to take specific actions, such as incurring additional debt, making capital expenditures or declaring dividends, that could adversely impact our ability to conduct our business. If we raise funds through collaborations, licenses and other similar arrangements with third parties, we may have to relinquish valuable rights to our technologies, future revenue streams, research programs or product candidates or to grant licenses on terms that may not be favorable to us. Please see Part I, Item 1A. Risk Factors of this Annual Report on Form 10-K for additional risks associated with our substantial capital requirements and the challenges we may face in raising capital.

We lease our office facilities in Irvine, California and Burlington, Massachusetts under non-cancelable operating leases that expire in June 2027 and November 2027, respectively. As of December 31, 2024, we expect to make total lease payments of $1.1 million through November 2027.

We enter into contracts in the normal course of business with third-party contract organizations for preclinical and clinical studies, manufacture and supply of our preclinical and clinical materials and providing other services and products for operating purposes. Contracts for preclinical and clinical studies and other services generally provide for termination following a certain period after notice, and therefore we believe that our non-cancelable obligations under these agreements are not material. We do not have any long-term manufacturing and supply agreements with our third-party contract manufacturers but enter into specific contracts on an as needed basis for individual batch production runs.

Cash Flows

The following table provides a summary of our net cash flow activity for the years ended December 31, 2024 and 2023 (in thousands):

Year EndedDecember 31,

Net cash used in operating activities $ (47,271 ) $ (39,527 )

Net cash used in investing activities (70,314 ) (45,287 )

Net cash provided by financing activities 133,522 33,017

Net change in cash and cash equivalents $ 15,937 $ (51,797 )

Operating Activities

For the year ended December 31, 2024, operating activities used $47.3 million of cash, which primarily consisted of our net loss of $36.2 million. Operating activities include adjustments for certain non-cash charges including $30.9 million due to a change in fair value of warrant liabilities and fair value of financial instruments issued in excess of proceeds, accretion of investment discounts of $2.8 million, partially offset by $13.1 million of stock-based compensation, $0.4 million of operating lease amortization, and $0.4 million of deferred tax provision. Net operating assets and liabilities changed by $8.7 million, primarily driven by an increase in accounts payable and accrued expenses of $7.7 million and a decrease in prepaid expenses and other assets of $1.3 million.

For the year ended December 31, 2023, operating activities used $39.5 million of cash, which resulted from our net loss of $116.5 million and the changes in operating activities described below. Operating activities include adjustments for certain non-cash charges including $76.2 million due to a change in fair value of warrant liabilities and fair value of financial instruments issued in excess of proceeds, $6.5 million of stock-based compensation, and $0.4 million of operating lease

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amortization, partially offset by accretion of investment discounts of $1.2 million. Net operating assets and liabilities changed by $4.9 million, primarily driven by a decrease in accounts payable and accrued expenses of $2.6 million, a decrease in operating lease liability of $0.4 million and an increase in prepaid expenses and other assets of $2.0 million.

Investing Activities

Net cash used in investing activities for the year ended December 31, 2024 was $70.3 million. We purchased $156.1 million of short-term investments, which was partially offset by the maturing of $85.8 million of our short-term investments during the year.

Net cash used in investing activities for the year ended December 31, 2023 was $45.3 million. We purchased $78.3 million of short-term investments, which was partially offset by the maturing of $33.0 million of our short-term investments during the year.

Financing Activities

Net cash provided by financing activities for the year ended December 31, 2024 consisted of the following: $79.5 million in net proceeds from the 2024 Underwritten Offering, involving the sale of 18.4 million shares of the common stock and pre-funded warrants to purchase 4.9 million shares of common stock; $48.1 million in net proceeds from the 2024 Private Placement, involving the sale of 13.1 million shares of common stock and pre-funded warrants to purchase 8.0 million shares of common stock; $1.9 million in net proceeds from the Second Closing, involving the sale of 0.9 million shares of common stock; $3.8 million in net proceeds from the Third Closing, involving the sale of 1.7 million shares of common stock; and $0.2 million from exercise of stock options.

Net cash provided by financing activities for the year ended December 31, 2023 consisted of the 2023 Private Placement, totaling $33.0 million in net proceeds from the sale of 8.7 million shares of common stock and pre-funded warrants to purchase 6.4 million shares of common stock.

Item 7A. Quantitative and Qualitative Disclosures About Market Risk.

Per §229.305 of Regulation S-K, the Company, designated a Smaller Reporting Company as defined in §229.10(f)(1) of Regulation S-K, is not required to provide the disclosure required by this Item.

Item 8. Financial Statements and Supplementary Data.

The Report of Independent Registered Public Accounting Firm, our consolidated financial statements and accompanying notes listed under Part IV, Item 15. Exhibits, Financial Statement Schedules of this Annual Report on Form 10-K are set forth beginning on page F-1 immediately following the signature page hereof and incorporated by reference herein.

Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure.

Not applicable

Item 9A. Controls and Procedures.

Evaluation of Disclosure Controls and Procedures

As of the end of the period covered by this Annual Report on Form 10-K, our management, with the participation of our principal executive officer and principal financial officer, evaluated the effectiveness of our disclosure controls and procedures. The term “disclosure controls and procedures,” as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act, means controls and other procedures of a company that are designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is accumulated and communicated to the Company’s management, including its principal executive and principal financial officers, as appropriate to allow timely decisions regarding required disclosure. Management recognizes that any controls and procedures, no matter how well designed and operated, can provide only

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reasonable assurance of achieving their objectives and management necessarily applies its judgment in evaluating the cost benefit relationship of possible controls and procedures.

Based on this evaluation, management concluded that our disclosure controls and procedures were effective at the reasonable assurance level, as of December 31, 2024.

Internal Control Over Financial Reporting

Management’s Report on Internal Control Over Financial Reporting

Our management is responsible for establishing and maintaining adequate internal control over financial reporting as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act. Our internal control system is designed to provide reasonable assurance to our management and Board regarding the preparation and fair presentation of published financial statements. All internal control systems, no matter how well designed, have inherent limitations. Therefore, even those systems determined to be effective can provide only reasonable assurance with respect to financial statement preparation and presentation.

Our management has assessed the effectiveness of our internal control over financial reporting as of December 31, 2024. In making this assessment, management used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO Framework”) in its 2013 Internal Control—Integrated Framework. Management believes that the COSO Framework is a suitable framework for its evaluation of financial reporting because it is free from bias, permits reasonably consistent qualitative and quantitative measurements of our internal control over financial reporting, is sufficiently complete so that those relevant factors that would alter a conclusion about the effectiveness of our internal control over financial reporting are not omitted and is relevant to an evaluation of internal control over financial reporting.

Completed Remediation of Prior Years’ Material Weakness

In the course of preparing our unaudited condensed consolidated financial statements as of and for the three and six months ended June 30, 2024, our management concluded that the Common Warrants and Subsequent Closing Warrants do not meet the conditions to be classified as equity instruments under ASC 815-40, “Derivatives and Hedging - Contracts in Entity’s Own Equity,” and must instead be recorded as liabilities on our consolidated balance sheet at their fair value and remeasured at fair value for each subsequent reporting period. In light of this determination, on August 13, 2024, management and the Audit Committee of our Board together concluded that our previously issued (i) audited consolidated financial statements as of and for the year ended December 31, 2023 included in our Annual Report on Form 10-K filed with the SEC on March 28, 2024 and (ii) unaudited condensed consolidated financial statements as of and for (a) the three months ended March 31, 2024 included in our Quarterly Report on Form 10-Q filed with the SEC on May 15, 2024, (b) the three and nine months ended September 30, 2023 included in our Quarterly Report on Form 10-Q filed with the SEC on November 9, 2023 and (c) the three and six months ended June 30, 2023 included in our Quarterly Report on Form 10-Q filed with the SEC on August 10, 2023 (together, the “Impacted Reports”) were each materially misstated.

As a result, our management, including our principal executive officer and principal financial officer, determined that there existed a material weakness identified in our internal control over financial reporting related to our accounting for equity instruments for the periods covered by each of the Impacted Reports. A material weakness is a deficiency, or a combination of deficiencies, in the internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of our annual or interim consolidated financial statements will not be prevented or detected on a timely basis. Specifically, our management determined that we did not maintain effective controls to timely identify and account for complex derivative type financial instruments. This material weakness resulted in the material misstatement of each of the Impacted Reports.

As previously disclosed, in August 2024, the Company immediately implemented a plan to address and remediate the material weakness described above and to improve our internal control over financial reporting. As part of the remediation plan, management identified and implemented a number of actions including, but not limited to, the following actions:

•

Engaged with independent technical accounting experts to advise and review complex financial matters, ensuring appropriate technical analysis, documentation, and oversight prior to the preparation of our financial statements.

•

Hiring of internal financial expertise within the corporate accounting department.

•

Implemented an accounting standards compliance framework to ensure timely adoption and assessment of evolving accounting standards.

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•

Strengthened financial disclosure and technical guidance resources.

During the fourth quarter of the year ended December 31, 2024, we successfully completed the testing necessary to conclude that the material weakness has been remediated. As such, management, including our principal executive officer and principal financial officer have concluded that the plan and actions described above were satisfactorily executed and the related policies, procedures and controls have been implemented, operated effectively and tested satisfactorily for a sufficient period of time to demonstrate that the previously identified material weakness has been remediated as of December 31, 2024. The Company is committed to evaluating and monitoring adherence to the established policies and procedures listed above.

As a non-accelerated filer, we are not required to provide an attestation report on our internal control over financial reporting issued by the Company’s independent registered public accounting firm.

Changes in Internal Control over Financial Reporting

Other than as described above, there have been no changes in our internal control over financial reporting (as defined in Rules 13a-15(f) or 15d-15(f) of the Exchange Act) during the quarter ended December 31, 2024, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Item 9B. Other Information.

Insider Trading Arrangements

None.

Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspection.

Not applicable.

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PART III

Item 10. Directors, Executive Officers and Corporate Governance.

The information required by this Item 10 is incorporated herein by reference to information in our proxy statement for our 2025 Annual Meeting of Stockholders (the “2025 Proxy Statement”), which we expect to be filed with the SEC within 120 days of the end of our fiscal year ended December 31, 2024, including under headings “Board of Directors and Corporate Governance—Election of Directors,” “Executive Officers and Executive Compensation—Executive Officers,” “Board of Directors and Corporate Governance—Director Nomination Process,” “Board of Directors and Corporate Governance— Committees of the Board of Directors” and “Board of Directors and Corporate Governance—Insider Trading Policy.”

We have adopted a written code of business conduct and ethics that applies to our directors, officers and employees, including our principal executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions. A copy of the code is available on the Corporate Governance section of our website, which is located at http://ir.eledon.com/corporate-governance/governance-overview. We intend to disclose on our website any amendments to, or waivers from, the code of business conduct and ethics that are required to be disclosed pursuant to the disclosure requirements of Item 5.05 of Form 8-K within four business days following the date of the amendment or waiver.

Item 11. Executive Compensation.

The information required by this Item 11 is incorporated herein by reference to information in our 2025 Proxy Statement, including under headings “Executive Compensation,” “Director Compensation,” and “Board of Directors and Corporate Governance—Compensation Committee Interlocks and Insider Participation”.

Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.

The information required by this Item 12 is incorporated herein by reference to information in our 2025 Proxy Statement, including under headings “Security Ownership of Certain Beneficial Owners and Management” and “Securities Authorized for Issuance Under Equity Compensation Plans”.

Item 13. Certain Relationships and Related Transactions, and Director Independence.

The information required by this Item 13 is incorporated herein by reference to information in our 2025 Proxy Statement, including under headings “Board of Directors and Corporate Governance—Related Person Transactions,” “Board of Directors and Corporate Governance,” and “Board of Directors and Corporate Governance—Committees of the Board of Directors”.

Item 14. Principal Accountant Fees and Services.

The information required by this Item 14 is incorporated herein by reference to information in our 2025 Proxy Statement, including under headings “Matters to be Voted—on Proposal No. 2—Ratification of the Appointment of Independent Registered Public Accounting Firm”.

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PART IV

Item 15. Exhibits, Financial Statement Schedules.

(a)

The following documents are filed as part of this Annual Report on Form 10-K:

(1)

Financial Statements:

The Report of Independent Registered Public Accounting Firm, our consolidated financial statements and accompanying notes are set forth beginning on page F-1 immediately following the signature page of this Annual Report on Form 10-K.

(2)

Financial Statement Schedules:

The financial statement schedules are omitted as they are either not applicable or the information required is presented in the financial statements and notes thereto under Part II, Item 8. Financial Statements and Supplementary Data.

(3)

Exhibits:

Exhibit Incorporated by Reference Filed

Number Exhibit Description Form File No. Exhibit Filing Date Herewith

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10.14* David-Alexandre Gros, M.D. Letter Agreement, dated December 16, 2024 X

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19.1 Eledon Pharmaceuticals, Inc. Insider Trading Policy X

23.1 Consent of Crowe LLP, independent registered public accounting firm X

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101.SCH INLINE XBRL Taxonomy Extension Schema with Embedded Linkbase Documents X

104 Cover page formatted as INLINE XBRL and contained in Exhibit 101 X

* Indicates a management contract or compensatory plan

Item 16. Form 10-K Summary.

None.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

Eledon Pharmaceuticals, Inc.

Date: March 20, 2025 By: /s/ David-Alexandre C. Gros, M.D.

David-Alexandre C. Gros, M.D.

Date: March 20, 2025 By: /s/ Paul Little

Paul Little

Chief Financial Officer (Principal Financial and Accounting Officer)

Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, this Report has been signed below by the following persons on behalf of the Registrant in the capacities and on the dates indicated.

Name Title Date

David-Alexandre C. Gros, M.D. (Principal Executive Officer)

/s/ Paul Little Chief Financial Officer March 20, 2025

Paul Little (Principal Financial and Accounting Officer)

/s/ Keith A. Katkin Chairman of the Board of Directors March 20, 2025

Keith A. Katkin

/s/ Jan Hillson, M.D. Director March 20, 2025

Jan Hillson, M.D.

/s/ James Robinson Director March 20, 2025

James Robinson

/s/ Allan Kirk, M.D. Director March 20, 2025

Allan Kirk, M.D.

/s/ John S. McBride Director March 20, 2025

John S. McBride

/s/ June Lee, M.D. Director March 20, 2025

June Lee, M.D.

/s/ Steven Perrin President, Director March 20, 2025

Steven Perrin

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ELEDON PHARMACEUTICALS, INC.

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

Page

Consolidated Balance Sheets as of December 31, 2024 and 2023 F-5

Notes to Consolidated Financial Statements F-9

F-1

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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Stockholders of

Eledon Pharmaceuticals, Inc.

Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheets of Issuer (the "Company") as of December 31, 2024, the related consolidated statements of operations and comprehensive loss, stockholders’ equity, and cash flows, and the related notes (collectively referred to as the "financial statements"). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2024, and the results of its operations and its cash flows for the year then ended, in conformity with accounting principles generally accepted in the United States of America.

The financial statements of the Company as of December 31, 2023, were audited by other auditors whose report dated March 28, 2024, except for the effects of the Restatement disclosed in Note 13, as to which the date is August 19, 2024, expressed an unqualified opinion on those statements.

Basis for Opinion

These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company's financial statements based on our audit. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) ("PCAOB") and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audit we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting. Accordingly, we express no such opinion.

Our audit included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audit provided a reasonable basis for our opinion.

Critical Audit Matter

The critical audit matter communicated below is a matter arising from the current period audit of the financial statements that was communicated or required to be communicated to the audit committee and that: (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of the critical audit matter does not alter in any way our opinion on the 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 it relates.

Classification and Valuation of Pre-Funded Warrants

As described in Note 2, Summary of Significant Accounting Policies, and Note 8, Stockholder’s Equity, to the consolidated financial statements, the Company accounts for issued pre-funded warrants either as a liability or equity in accordance with ASC 815-40, Derivatives and Hedging - Contracts in Entity’s Own Equity. Liability-classified warrants are measured at fair value on the issuance date and at the end of each reporting period with any change in the fair value of the warrants recorded in the consolidated statements of operations and comprehensive loss as a gain or loss. The Common Warrants and the Subsequent Closing Warrants (as defined in Note 8) issued in the 2023 Private Placement are liability classified and recorded at fair value using the Black-Scholes option-pricing model at issuance, with any subsequent changes in fair value recognized in the

F-2

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consolidated statements of operations. Determining the proper classification of pre-funded warrants as either a derivative liability or as equity instruments requires significant management judgment in assessing the specific terms and conditions. The valuation of the derivative liability for liability classified pre-funded warrants also requires management judgment in determining the fair value.

The classification and valuation of warrants was determined to be a critical audit matter because of the complexity and significant judgment involved in determining the accounting for the pre-funded warrants and the significant audit effort, including the use of specialists, in assessing management’s conclusions and inputs to its calculation of fair value.

Our audit procedures to evaluate the classification and fair market value of the pre-funded warrants included:

•

Obtaining and inspecting the securities purchase agreements to evaluate the contractual terms of the pre-funded warrants.

•

Evaluating management's technical accounting analysis on the classification of the pre-funded warrants.

•

Consulting with specialists on the classification and valuation of the pre-funded warrants.

Developing an independent expectation of the valuation of the liability-classified warrants to compare to management’s valuation.

/s/ Crowe LLP

We have served as the Company's auditor since 2024.

Los Angeles, CA

March 20, 2025

F-3

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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Stockholders of

Eledon Pharmaceuticals, Inc.

Opinion on the Consolidated Financial Statements

We have audited the accompanying consolidated balance sheet of Eledon Pharmaceuticals, Inc. (the “Company”) as of December 31, 2023, the related consolidated statements of operations and comprehensive loss, stockholders’ equity and cash flows for the year then ended, and the related notes (collectively referred to as the “consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2023, and the results of its operations and its cash flows for the years then ended, in conformity with accounting principles generally accepted in the United States of America.

Basis for Opinion

These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these consolidated financial statements based on our audit. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audit, we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.

Our audit included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audit provide a reasonable basis for our opinion.

/s/ KMJ Corbin & Company LLP

We served as the Company's auditor from 2019 to 2024.

Glendora, California

March 28, 2024 (except for previously disclosed adjustments to 2023, as to which the date is August 19, 2024 and Note 10, as to which the date is March 20, 2025)

F-4

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ELEDON PHARMACEUTICALS, INC.

CONSOLIDATED BALANCE SHEETS

(In thousands, except share and per share data)

December 31,

ASSETS

Current assets:

Prepaid expenses and other current assets 3,552 5,027

Operating lease right-of-use asset, net 926 365

LIABILITIES AND STOCKHOLDERS’ EQUITY

Current liabilities:

Current operating lease liability 314 383

Accrued expenses and other liabilities 5,430 2,545

Non-current operating lease liability 640 —

Commitments and contingencies (Note 6) — —

Stockholders’ equity:

Accumulated other comprehensive income 26 —

Total liabilities and stockholders’ equity $ 177,405 $ 89,066

See accompanying notes to consolidated financial statements.

F-5

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ELEDON PHARMACEUTICALS, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

(In thousands, except share and per share data)

Year EndedDecember 31,

Operating expenses

Provision for income taxes (431 ) —

Net loss and comprehensive loss $ (36,184 ) $ (116,537 )

Net loss per share, basic and diluted $ (0.75 ) $ (4.73 )

See accompanying notes to consolidated financial statements.

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ELEDON PHARMACEUTICALS, INC.

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

(In thousands, except share data)

Shares Amount Shares Amount Shares Amount Capital Income Deficit Equity

Stock-based compensation — — — — — — 6,545 — — 6,545

Net loss and comprehensive loss — — — — — — — — (116,537 ) (116,537 )

Share based compensation — — — — — — 13,122 — — 13,122

Accumulated other comprehensive loss — — — — — — — 26 — 26

See accompanying notes to consolidated financial statements.

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ELEDON PHARMACEUTICALS, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

Year EndedDecember 31,

Cash flows used in operating activities:

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

Gain on lease termination (10 ) —

Amortization of operating lease right-of-use asset 359 374

Accretion of investment discounts (2,799 ) (1,203 )

Deferred tax provision 431 —

Changes in operating assets and liabilities:

Prepaid expenses and other assets 1,298 (1,954 )

Accounts payable, accrued expenses and other liabilities 7,751 (2,600 )

Operating lease liabilities (339 ) (363 )

Net cash used in operating activities (47,271 ) (39,527 )

Cash flows from investing activities:

Purchase of available-for-sale short-term investments (156,131 ) (78,287 )

Net cash used in investing activities (70,314 ) (45,287 )

Cash flows from financing activities:

Proceeds from exercise of stock options 215 —

Net cash provided by financing activities 133,522 33,017

Net change in cash and cash equivalents 15,937 (51,797 )

Cash and cash equivalents at beginning of year 4,612 56,409

Cash and cash equivalents at end of year $ 20,549 $ 4,612

Supplemental disclosure of non-cash investing and financing activities

Non-cash activities:

Unrealized gain on available-for-sale securities $ 26 $ —

Settlement of warrant liability into common stock due to exercise $ 446 $ —

See accompanying notes to consolidated financial statements.

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ELEDON PHARMACEUTICALS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 1. Description of Business

Eledon Pharmaceuticals, Inc. is a clinical stage biotechnology company using its immunology expertise in targeting the CD40 Ligand (“CD40L”) pathway to develop therapies to protect transplanted organs and prevent rejection, and to treat amyotrophic lateral sclerosis (“ALS”). The Company’s lead compound in development is tegoprubart, an IgG1, anti-CD40L antibody with high affinity for the CD40 Ligand, a well-validated biological target that we believe has broad therapeutic potential. Unless otherwise indicated, references to the terms “Eledon,” “our,” “us,” “we,” or the “Company” refer to Eledon Pharmaceuticals, Inc. and its wholly owned subsidiaries, on a consolidated basis.

On September 14, 2020, Eledon acquired Anelixis Therapeutics, Inc. (“Anelixis”), a privately held clinical stage biotechnology company developing a next generation anti-CD40L antibody as a potential treatment for organ and cellular transplantation, autoimmune diseases, and neurodegenerative diseases. The Company maintains its corporate headquarters in Irvine, California and has research and development facilities in Burlington, Massachusetts.

Note 2. Summary of Significant Accounting Policies

Basis of Presentation and Principles of Consolidation

The consolidated financial statements are prepared in accordance with GAAP. Eledon, a Delaware corporation, owns 100% of the issued and outstanding common stock or other ownership interest in Anelixis Therapeutics, LLC, a Delaware limited liability company, and Otic Pharma, Ltd., a private limited company organized under the laws of the State of Israel (“Otic”). Otic owns 100% of the issued and outstanding common stock or other ownership interest in its U.S. subsidiary, Otic Pharma, Inc. The functional currency of the Company’s foreign subsidiary is the U.S. Dollar; however, certain expenses, assets and liabilities are transacted at the local currency. These transactions are translated from the local currency into U.S. Dollars at exchange rates during or at the end of the reporting period. The activities of the Company’s foreign subsidiary are not significant to the consolidated financial statements. All significant intercompany accounts and transactions among the entities have been eliminated in consolidation.

Use of Estimates

The preparation of the Company’s consolidated financial statements in conformity with GAAP requires management to make informed estimates and assumptions that affect the reported amounts of assets, liabilities and expenses and the disclosure of contingent assets and liabilities in the Company’s consolidated financial statements and accompanying notes. The most significant estimates in the Company’s consolidated financial statements relate to stock-based compensation expense, warrant liabilities, the fair value of right-of-use (“ROU”) assets and liabilities, accruals for liabilities, impairment of long-lived assets, and other matters that affect the consolidated financial statements and related disclosures. Management bases its estimates on historical experience and on various other market-specific and relevant assumptions that management believes to be reasonable under the circumstances. Actual results could differ materially from those estimates under different assumptions or conditions and the differences may be material to the consolidated financial statements.

Concentration of Credit Risk

Financial instruments which potentially subject the Company to significant concentration of credit risk consists of cash, cash equivalents and short-term investments. The Company maintains deposits in federally insured institutions in excess of federally insured limits and invests in short-term investments with the primary objective of seeking to preserve principal, achieve liquidity requirements and safeguard invested funds. We believe that the Company is not exposed to significant credit risk due to the financial position of the depository institution in which those deposits are held and the nature, including the credit ratings, of our cash equivalents and short-term investments, but we have not eliminated all credit risk.

Cash and Cash Equivalents

The Company considers all highly liquid investments with original maturities of three months or less when purchased to be cash equivalents. Cash and cash equivalents include cash in readily available checking accounts, money market funds,

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U.S. government securities and U.S. government agency securities. Cash and cash equivalents are valued at cost, which approximates their fair value due to the short-term maturities of these investments.

Risks and Uncertainties

As of December 31, 2024 and 2023, all of the Company’s long-lived assets were located in the United States. The Company’s products will require approval from the U.S. Food and Drug Administration (“FDA”) and foreign regulatory agencies before commercial sales can commence. There can be no assurance that its products will receive any of these required approvals. The denial or delay of such approvals may impact the Company’s business in the future. In addition, after the approval by the FDA, there is still an ongoing risk of adverse events that did not appear during the product approval process.

The Company is subject to risks common to companies in the pharmaceutical industry, including, but not limited to, new technological innovations, clinical development risk, establishment of appropriate commercial partnerships, protection of proprietary technology, compliance with government and environmental regulations, uncertainty of market acceptance of products, product liability, the volatility of its stock price and the need to obtain additional financing.

The Company's facilities and equipment, including those of the Company's suppliers and vendors, may be affected by natural or man-made disasters. The Company's administrative office is based in Irvine, California and the Company manages all its research and development activities through third parties that are located throughout the world. The Company has taken precautions to safeguard its facilities, equipment and systems, including insurance, health and safety protocols, and off-site storage of computer data. However, the Company's facilities and systems, as well as those of its third-party suppliers and vendors, may be vulnerable to earthquakes, fire, storm, public health or similar emergencies, power loss, telecommunications failures, physical and software break-ins, software viruses and similar events which could cause substantial delays in its operations, damage or destroy its equipment or inventory, and cause the Company to incur additional expenses and delay research and development activities. In addition, the insurance coverage the Company maintains may not be adequate to cover its losses in any circumstance and may not continue to be available to use on acceptable terms, or at all.

Reportable Segments

Operating segments under GAAP are defined as components of an enterprise about which separate financial information is available that is evaluated regularly by the Chief Operating Decision Maker (“CODM”), or decision-making group, in deciding how to allocate resources and in assessing performance. The CODM is the Company’s Chief Executive Officer and the Company has determined that it operates in one business segment, which is the development of tegoprubart, to develop therapies to protect transplanted organs and prevent rejection, and to treat ALS.

Long-Lived Assets

Property and equipment are recorded at cost. Depreciation is computed using the straight-line method over the estimated useful lives of the respective assets. Additions, major renewals and improvements are capitalized and repair and maintenance costs are charged to expense as incurred. Leasehold improvements are amortized over the remaining life of the initial lease term or the estimated useful lives of the assets, whichever is shorter.

The Company reviews property and equipment for impairment whenever events or changes in circumstances indicate that the carrying value of an asset may not be recoverable. An impairment loss would be recognized when estimated future undiscounted cash flows relating to the asset are less than its carrying amount. An impairment loss is measured as the amount by which the carrying amount of an asset exceeds its fair value. Significant management judgment is required in the forecast of future operating results that are used in the preparation of expected cash flows. No impairments of long-lived assets have been identified during the years presented.

In-Process Research and Development

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The Company first assesses qualitative factors to determine whether it is more likely than not that the fair value of the IPR&D is less than its carrying amount as a basis for determining whether it is necessary to perform a quantitative assessment. If, after assessing qualitative factors, the Company determines it is not more likely than not that the fair value is less than its carrying amount, then a quantitative assessment is unnecessary. If the quantitative assessment is deemed necessary, the excess of the carrying value over fair value will be recorded as an impairment. The qualitative assessment focuses on the key inputs, assumptions and rationale utilized in the establishment of the carrying value and related changes since the last quantitative assessment. Based on the results of the Company’s annual qualitative assessment, the Company concluded that it is not more likely than not that IPR&D was impaired for any of the periods presented.

Research and Development Expenses

Research and development expenses include personnel and facility-related expenses, outside contracted services including clinical trial costs, manufacturing and process development costs, research costs and other consulting services and non-cash stock-based compensation. Research and development costs are expensed as incurred. Amounts due under contracts with third parties may be either fixed fee or fee for service, and may include upfront payments, monthly payments and payments upon the completion of milestones or receipt of deliverables. Non-refundable advance payments under agreements are capitalized and expensed as the related goods are delivered or services are performed.

The Company contracts with third parties to perform various clinical trial activities in the on-going development of potential products. The financial terms of these agreements are subject to negotiation, vary from contract to contract and may result in uneven payment flows to its vendors. Payments under the contracts depend on factors such as the achievement of certain events, successful enrollment of patients, and completion of portions of the clinical trial or similar conditions. The Company’s accrual for clinical trials is based on estimates of the services received and efforts expended pursuant to contracts with clinical trial centers and clinical research organizations. These contracts may be terminated by the Company upon written notice and the Company is generally only liable for actual effort expended by the organizations to the date of termination, although in certain instances the Company may be further responsible for termination fees and penalties. The Company estimates its research and development expenses and the related accrual as of each balance sheet date based on the facts and circumstances known to the Company at that time. There have been no material adjustments to the Company’s prior period accrued estimates for clinical trial activities through December 31, 2024.

Net Loss Per Share

Basic net loss per common share is calculated by dividing the net loss attributable to common stockholders by the weighted-average number of common shares outstanding during the period, without consideration for potentially dilutive securities. Diluted net loss per share is computed by dividing the net loss attributable to common stockholders by the weighted-average number of common shares and potentially dilutive securities outstanding for the period determined using the treasury-stock and if-converted methods. For purposes of the diluted net loss per share calculation, incentive stock options, restricted stock units and warrants are considered to be potentially dilutive securities and are excluded from the calculation of diluted net loss per share because their effect would be anti-dilutive. Therefore, basic and diluted net loss per share was the same for the periods presented due to the Company’s net loss position. Basic weighted average shares outstanding for the years ended December 31, 2024 and 2023 include 12,443,755 and 5,776,270, respectively, shares underlying pre-funded warrants to purchase common shares. As the shares underlying these pre-funded warrants can be issued for little consideration (an exercise price per share equal to $0.001 per share), these shares are deemed to be issued for purposes of basic earnings per share.

Year EndedDecember 31,

(In thousands, except share and per share data)

Net loss per share, basic and diluted $ (0.75 ) $ (4.73 )

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The computation of diluted earnings per share excludes incentive stock options, restricted stock units, and warrants that are anti-dilutive. The following table provides a summary as of December 31, 2024 and 2023 common share equivalents that were excluded because their inclusion would have been anti-dilutive.

Year EndedDecember 31,

Stock-Based Compensation

The Company recognizes compensation expense for all stock-based awards based on the grant-date estimated fair value.

Restricted Stock Units (“RSUs”) are measured and recognized based on the quoted market price of our common stock on the date of grant.

Income Taxes

Significant judgment is required in determining the Company’s provision for income taxes, deferred tax assets and liabilities and the valuation allowance recorded against net deferred tax assets. We assess the likelihood that deferred tax assets will be recovered as deductions from future taxable income. The evaluation of the need for a valuation allowance is performed on a jurisdiction-by-jurisdiction basis and includes a review of all available positive and negative evidence. Factors reviewed include projections of pre-tax book income for the foreseeable future, determination of cumulative pre-tax book income after permanent differences, earnings history, and reliability of forecasting. We have provided a valuation allowance on our deferred tax assets as of December 31, 2024 and 2023 because we believe it is more likely than not that a majority of our deferred tax assets will not be realized as of this date.

The Company evaluates the accounting for uncertainty in income tax recognized in its consolidated financial statements and determines whether it is more likely than not that a tax position will be sustained upon examination by the appropriate taxing authorities before any part of the benefit is recorded in its consolidated financial statements. For those tax positions where it is “not more likely than not” that a tax benefit will be sustained, no tax benefit is recognized. Where applicable, associated interest and penalties are also recorded. The Company has not accrued any liabilities for any such uncertain tax positions as of December 31, 2024 and 2023. The Company is subject to U.S. federal and state tax authority examinations for all the years since inception due to net operating loss and tax credit carryforwards. The net operating losses and tax credits are subject to adjustment until the statute closes on the year the attributes are ultimately utilized.

The Company’s income tax returns are based on calculations and assumptions that are subject to examination by the Internal Revenue Service and other tax authorities. In addition, the calculation of the Company’s tax liabilities involves dealing with uncertainties in the application of complex tax regulations. The Company recognizes liabilities for uncertain tax positions based on a two-step process. The first step is to evaluate the tax position for recognition by determining if the weight of available evidence indicates that it is more likely than not that the position will be sustained on audit, including resolution of related appeals or processes, if any. The second step is to measure the tax benefit as the largest amount that is

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more than 50% likely of being realized upon settlement. While the Company believes it has appropriate support for the positions taken on its tax returns, the Company regularly assesses the potential outcomes of examinations by tax authorities in determining the adequacy of its provision for income taxes. The Company continually assesses the likelihood and amount of potential revisions and adjusts the income tax provision, income taxes payable and deferred taxes in the period in which the facts that give rise to a revision become known. For additional information, seeNote 7. Income Taxes of the Notes to Financial Statements.

Warrant Liabilities

The Company accounts for issued warrants either as a liability or equity in accordance with Accounting Standards Codification (“ASC”) 815-40 Derivatives and Hedging - Contracts in Entity’s Own Equity (“ASC 815-40”). Under ASC 815-40, contracts that may require settlement for cash are liabilities, regardless of the probability of the occurrence of the triggering event. Liability-classified warrants are measured at fair value on the issuance date and at the end of each reporting period. Any change in the fair value of the warrants after the issuance date is recorded in the consolidated statements of operations and comprehensive loss as a gain or loss. If warrants do not require liability classification under ASC 815-40, in order to conclude warrants should be classified as equity, the Company assesses whether the warrants are indexed to its common stock and whether the warrants are classified as equity under ASC 815-40 or other applicable GAAP standard. Equity-classified warrants are accounted for at fair value on the issuance date with no changes in fair value recognized after the issuance date.

Recent Adopted Accounting Pronouncements

In November 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures. This update requires public entities to disclose information about their reportable segments’ significant expenses and other segment items on an interim and annual basis. Public entities with a single reportable segment are required to apply the disclosure requirements in ASU 2023-07, as well as all existing segment disclosures and reconciliation requirements in ASC 280, on an interim and annual basis. ASU 2023-07 is effective for fiscal years beginning after December 15, 2023 and for interim periods beginning after December 15, 2024, with early adoptions permitted. The Company adopted ASU 2023-07, effective December 31, 2024, in these consolidated financial statements. ASU 2023-07 only impacted the disclosures and did not impact the consolidated financial statements. See Note 10, Segment Reporting, for disclosures related to the adoption of ASU 2023-07.

Recent Accounting Pronouncements Issued But Not Adopted

In December 2023, the FASB issued ASU No. 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures. This update requires disaggregated information about a reporting entity’s effective tax rate reconciliation as well as information on income taxes paid. ASU No. 2023-09 is effective for public entities with annual periods beginning after December 15, 2024, with early adoption permitted. The Company is currently evaluating the impact of this guidance on its consolidated financial statements.

In November 2024, the FASB issued ASU No. 2024-03, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses, which requires new financial statement disclosures in tabular format, in the notes to financial statements, of specified information about certain costs and expenses. The amendments in this update do not change or remove current expense disclosure requirements. The amendments in this update are effective for fiscal years beginning after December 15, 2026, and interim periods within fiscal years beginning after December 15, 2027. Early adoption is permitted. The Company is currently evaluating the impact of the new standard on its financial statement disclosures.

Other recent accounting pronouncements issued by the FASB (including its Emerging Issues Task Force), the American Institute of Certified Public Accountants, and the SEC did not, or are not believed by management to, have a material impact on the Company’s present or future financial position, results of operations or cash flows.

Note 3. Short-Term Investments

The objectives of the Company’s investment policy are to preserve principal, meet the Company's liquidity requirements and safeguard invested funds. Short-term investments consist of U.S. government securities and U.S. government agency securities. The Company has classified these investments as available-for-sale securities, as the sale of

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such investments may be required prior to maturity to implement management strategies, and therefore has classified all investments with maturity dates beyond three months at the date of purchase as current assets in the accompanying consolidated balance sheets. Any premium or discount arising at purchase is amortized and/or accreted to interest income as an adjustment to yield using the straight-line method over the life of the instrument. The amortized cost of available-for-sale securities is adjusted for amortization of premiums and accretion of discounts to maturity. Investments are reported at their estimated fair value. Unrealized gains and losses are included in accumulated other comprehensive loss as a component of stockholders' equity until realized.

The following is a summary of short-term investments, which were classified as available-for-sale securities as of December 31, 2024 and 2023:

Amortized Cost Unrealized Gains Unrealized Losses Fair Value

All of the Company's available-for-sale securities have a stated maturity of less than one year.

Note 4. Fair Value Measurements

Financial assets and liabilities are recorded at fair value.

The Company classifies fair value measurements using a three-level hierarchy that prioritizes the inputs used to measure fair value. This hierarchy requires entities to maximize the use of observable inputs and minimize the use of unobservable inputs. The three levels of inputs used to measure fair value are as follows:

•

Level 1—Quoted market prices (unadjusted) in active markets for identical assets and liabilities.

•

Level 2—Observable inputs other than quoted market prices included in Level 1, such as quoted market prices for markets that are not active or other inputs that are observable or can be corroborated by observable market data.

•

Level 3—Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities, including certain pricing models, discounted cash flow methodologies and similar techniques that use significant unobservable inputs. These fair values are obtained from independent pricing services which utilize Level 1 and Level 2 inputs.

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Financial Assets

The following table summarizes the Company's financial asset instruments measured at fair value on a recurring basis as of December 31, 2024 and 2023 (in thousands). Included within cash and cash equivalents on the consolidated balance sheets, but excluded from the fair value hierarchy table, are cash deposits held at financial institutions.

Level 1 Level 2 Level 3 Total

Assets:

Cash equivalents:

Money market funds $ 1,215 $ — $ — $ 1,215

Short-term investments:

U.S. government agency securities — — — —

Level 1 Level 2 Level 3 Total

Assets:

Cash equivalents:

Money market funds $ 4,246 $ — $ — $ 4,246

Short-term investments:

U.S. government agency securities — 13,277 — 13,277

Warrant Liabilities

The following table summarizes the Company's warrant liabilities (see Note 8. Stockholders' Equity) measured at fair value on a recurring basis as of December 31, 2024 and 2023 (in thousands) and was based on significant inputs not observable in the market, which represents a Level 3 measurement within the fair value hierarchy.

Level 1 Level 2 Level 3 Total

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The following table provides a roll-forward of the aggregate fair value of the warrant liabilities categorized with Level 3 inputs (in thousands):

Warrant Liability

Settlement of warrant liability (446 )

The change in fair value of warrant liabilities and fair value of financial instruments issued in excess of proceeds includes the reversal of $59.1 million in warrant liabilities associated with the Subsequent Closing Warrants (as defined in Note 8. Stockholders' Equity), which expired and or settled as of year ended December 31, 2024.

Note 5. Prepaid Expenses, Other Assets, Accrued Expenses and Other Liabilities

Prepaid expenses and other current assets consisted of the following as of December 31, 2024 and 2023 (in thousands):

Year EndedDecember 31,

Other current assets 729 90

Total prepaid expenses and other current assets $ 3,552 $ 5,027

Accrued expenses and other liabilities consisted of the following as of December 31, 2024 and 2023 (in thousands):

Year EndedDecember 31,

Accrued compensation and related expenses 1,601 2,003

Accrued professional services 140 47

Total accrued expenses and other liabilities $ 5,430 $ 2,545

Note 6. Commitments and Contingencies

Operating Leases

The Company leases office space under various operating leases. Total rent expense for all operating leases in the consolidated statements of operations and comprehensive loss was approximately $0.4 million for each of the years ended December 31, 2024 and 2023.

On April 19, 2024, the Company entered into a 38-month operating lease for 5,817 square feet of office space in Irvine, California, that expires on June 30, 2027 (the “Irvine Lease Agreement”). On April 19, 2024, in conjunction with the Irvine Lease Agreement, the Company terminated an existing operating lease for 5,197 square feet of office space in Irvine, California, that was set to expire on December 31, 2024. On April 19, 2024, the effective date of the Irvine Lease Agreement, the Company recognized additional net ROU assets and lease liabilities in the amount of $0.5 million.

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On September 4, 2024, the Company entered into a 36-month operating lease for 6,138 square feet of office space in Burlington, Massachusetts, that expires on November 21, 2027 (the “Burlington Lease Agreement”). The existing lease expired on November 20, 2024. On November 21, 2024, the effective date of the Burlington Lease Agreement, the Company recognized additional net ROU assets and lease liabilities in the amount of $0.5 million.

The Company determines if a contract contains a lease at inception. Our office leases have a remaining term of approximately 3 years and do not include options to extend the leases for additional periods.

Operating lease assets and liabilities are recognized at the lease commencement date. Operating lease liabilities represent the present value of lease payments not yet paid. Operating lease assets represent our right to use an underlying asset and are based upon the operating lease liabilities as adjusted for prepayments or accrued lease payments, initial direct costs, lease incentives, and impairment of operating lease assets. To determine the present value of lease payments not yet paid, we estimate incremental secured borrowing rates corresponding to the maturities of the leases. As we have no outstanding debt nor committed credit facilities, secured or otherwise, we estimate this rate based on prevailing financial market conditions, comparable company and credit analysis, and management’s judgment.

Our leases contain rent escalations over the lease term. We recognize expense for these leases on a straight-line basis over the lease term. Additionally, tenant incentives used to fund leasehold improvements are recognized when earned and reduce our right-of-use asset related to the lease. These are amortized through the right-of-use asset as reductions of expense over the lease term. Our lease agreements do not contain any material residual value guarantees or material restrictive covenants.

While we do not currently have any lease agreement with lease and non-lease components, we elected to account for lease and non-lease components as separate components.

We have elected the short-term lease recognition exemption for all applicable classes of underlying assets. Short-term disclosures include only those leases with a term greater than one month and 12 months or less, and expense is recognized on a straight-line basis over the lease term. Leases with an initial term of 12 months or less, that do not include an option to purchase the underlying asset that we are reasonably certain to exercise, are not recorded on the consolidated balance sheet.

The total operating lease expense were as follows (in thousands):

Year EndedDecember 31,

Operating lease cost(a) $ 407 $ 400

(a) Includes variable operating lease expenses, which are immaterial.

Other supplemental cash flow information related to leases were as follows (in thousands):

Year EndedDecember 31,

Cash paid for amounts included in the measurement of lease liability:

Operating cash flows from operating leases $ 378 $ 378

Year EndedDecember 31,

Weighted-average remaining lease term (in years) 2.7 1.0

Weighted-average discount rate 9.46 % 2.49 %

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As of December 31, 2024, future minimum payments under non-cancelable operating leases, were as follows (in thousands):

Year EndedDecember 31,

Total minimum lease payments 1,087

Less imputed interest (133 )

Present value of lease liabilities 954

Less current portion of operating lease liabilities (314 )

Non-current operating lease liabilities $ 640

Grants and Licenses

ALS Therapy Development Foundation, Inc. License Agreement

In May 2015, Anelixis executed a License Agreement (the “Agreement”), which is an exclusive patent rights agreement with ALS Therapy Development Foundation, Inc. (“ALS TDI”) for certain patents and “know-how” of ALS TDI. This agreement continues until the licensee terminates the agreement with ninety days written notice. The Agreement requires license fees payable to ALS TDI, subject to the achievement of certain milestones and other conditions.

The first and second milestones of the Agreement are the dosing of the first subjects in a first toxicity study in non-human primates and the dosing of the first patient in a Phase I Clinical Trial, respectively. Both of these milestones were achieved as of December 31, 2018 and 2017. The fee due for the achievement of these milestones was $1.0 million each. During 2018 and 2017, Anelixis issued $1.0 million worth of its common stock in lieu of making a cash payment. There were no milestones achieved during 2024 or 2023.

The Agreement was amended and restated in February 2020, and a first amendment to the restated license agreement was executed in September 2020. As amended in September 2020, the remaining milestone payments for a first licensed product total $6.0 million. In the event that the Company develops a second licensed product, the Company is obligated to pay up to $2.5 million in additional milestone payments.

In addition to the milestone payments, the Company is required to pay ALS TDI an amended annual license maintenance fee of $0.1 million beginning on the earlier of January 1, 2022, the Company’s first sublicense, or change in control, as defined in the Agreement. The Company has made a $0.1million annual license maintenance fee in each year since 2022.

Furthermore, the Company is required to pay ALS TDI fees based on reaching certain levels of annual net sales of any product produced with the patent rights. A royalty in the low single digits will be due on aggregate net sales. Upon the first calendar year of reaching $500.0 million in aggregate net sales, the Company will be required to pay ALS TDI a one-time milestone payment of $15.0 million. Upon the first calendar year of reaching $1.0 billion in aggregate net sales, the Company is obligated to pay ALS TDI a one-time milestone payment of $30.0 million.

Lonza Sales AG Inc. License Agreement

In September 2018, Anelixis executed a License Agreement (the “Lonza Agreement”), which is a manufacturing know-how rights agreement with Lonza Sales AG Inc. (“Lonza”) for the use of certain processes and know-how related to the manufacture of tegoprubart. The Lonza Agreement continues until the later of the last Valid Claim (as defined therein) or ten years from the First Commercial Sale of tegoprubart, as defined and subject to the conditions therein. A royalty in the low single digits will be due on aggregate net sales of tegoprubart that is manufactured by Lonza or any other third-party or licensee.

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ELDN US Equity

ELDN · 10-K · period ended 2024-12-31

Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

Item 7A. Quantitative and Qualitative Disclosures About Market Risk.

Item 8. Financial Statements and Supplementary Data.

Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure.

Item 9A. Controls and Procedures.

Item 9B. Other Information.

Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspection.

Item 10. Directors, Executive Officers and Corporate Governance.

Item 11. Executive Compensation.

Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.

Item 13. Certain Relationships and Related Transactions, and Director Independence.

Item 14. Principal Accountant Fees and Services.

Item 15. Exhibits, Financial Statement Schedules.

Item 16. Form 10-K Summary.

ELDN US Equity☆

ELDN · 10-K · period ended 2024-12-31

Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

Item 7A. Quantitative and Qualitative Disclosures About Market Risk.

Item 8. Financial Statements and Supplementary Data.

Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure.

Item 9A. Controls and Procedures.

Item 9B. Other Information.

Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspection.

Item 10. Directors, Executive Officers and Corporate Governance.

Item 11. Executive Compensation.

Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.

Item 13. Certain Relationships and Related Transactions, and Director Independence.

Item 14. Principal Accountant Fees and Services.

Item 15. Exhibits, Financial Statement Schedules.

Item 16. Form 10-K Summary.

ELDN US Equity