9. Redeemable convertible preferred stock

Redeemable convertible preferred stock

The Company had previously issued Series A redeemable convertible preferred stock (the “Series A Preferred Stock”), Series B redeemable convertible preferred stock (the “Series B Preferred Stock”) and Series B-1 redeemable convertible preferred stock (the “Series B-1 Preferred Stock”), which are collectively referred to as "Preferred Stock". In connection with the Company's initial public offering, all outstanding shares of the Preferred Stock were converted into an equivalent number of shares of common stock, after giving effect to the forward stock split.

Series A Preferred Stock

In June 2024, the Company entered into a Series A preferred stock purchase agreement (the “Series A SPA”) under which it issued and sold 2,487,790 shares of Series A Preferred Stock, at a price of $19.42 per share, for gross cash proceeds of $48.3 million (the “Series A Initial Closing”). Contemporaneously, investors converted their Simple Agreements for Future Equity (“SAFEs”) with a principal amount of $0.9 million into 43,762 shares of Series A Preferred Stock, bringing the total number of shares of Series A Preferred Stock issued at the Series A Initial Closing to 2,531,552 shares. An initial additional closing under the Series A SPA occurred in July 2024, at which the Company sold 2,883,206 additional shares of Series A Preferred Stock at a price of $19.42 per share for gross cash proceeds of $56.0 million.

Pursuant to the Series A SPA, the Company had an obligation to issue and certain Series A investors were obligated to purchase additional shares in two additional closings of $100.0 million each, subject to the satisfaction of specified milestone and cash-related conditions. The Second Tranche closing was to be funded upon the Company’s successful enrollment of the first patient in a Phase 3 clinical trial of either the Tonlamarsen Product or the Ataciguat Product, whichever occurs first (the “Second Tranche”). The Third Tranche closing was to be funded at the earlier of enrollment of the first patient in a Phase 3 clinical trial or an acquisition of any other clinical-stage pharmaceutical product or compound other than Tonlamarsen Product or Ataciguat Product or compound other than Ataciguat (the “Third Tranche”). Each investor could elect to voluntarily fund their share of the two tranches prior to the achievement of the milestones.

In November 2024, the Company determined, that the conditions related to the Third Tranche had become probable of achievement, subject to meeting the required cash-balance condition. In February 2025, following the satisfaction of the cash-balance condition, the Third Tranche closing was consummated, pursuant to which the Company sold 5,148,587 additional shares of Series A Preferred Stock, resulting in total gross cash proceeds of $100.0 million. In August 2025, the condition applicable to the Second Tranche was waived, and the tranche closed, pursuant to which the Company sold 5,148,587 additional shares of Series A Preferred Stock, resulting in additional gross cash proceeds of $100.0 million.

Preferred stock tranche obligations

Upon the initial closing of the Series A Preferred Stock, with respect to the Second Tranche, the Company recorded a preferred stock tranche obligation liability of $3.2 million, and, with respect to the Third Tranche, the Company recorded a preferred stock tranche liability of $9.2 million. The fair value of the Series A Preferred Stock tranche obligations was allocated from the gross cash proceeds of the Series A Preferred Stock issuance, and the residual value was then allocated to the Series A Preferred Stock.

As of December 31, 2024, the fair value of the Second Tranche obligation was estimated as a liability in an amount of $7.3 million, and the fair value of the Third Tranche was estimated as an asset in an amount of $1.7 million.

In February 2025, upon closing of the Third Tranche, the Company remeasured the preferred stock tranche obligation as of the closing date. The estimated fair value of the preferred stock tranche asset in an amount of $1.7 million was settled and the shares of Series A Preferred Stock issued in the Third Tranche were recorded at fair value on the date of issuance.

As of June 30, 2025, the estimated fair value of the Second Tranche preferred stock tranche liability was $11.2 million. Accordingly, the Company recognized a loss in an amount of $3.9 million which was recorded within change in fair value of preferred stock tranche obligations in its condensed consolidated financial statements. Both the Second and Third Tranches of the Series A Preferred Stock were closed during the year ended December 31, 2025, and accordingly, no change in fair value was recorded for the six months ended June 30, 2026.

Refer to Note 3, “Fair Value Measurements” for further details on valuation methodology and assumptions used.

BMS Co. license

In November 2024, in connection with license agreements, the Company issued an aggregate of 1,544,576 shares of Series A Preferred Stock to MyoKardia and BMS Co., at the estimated fair value of $19.10 per share as of issuance date, with a total estimated fair value of $29.5 million. Refer to Note 5, “Acquisitions and Licensing Agreements” for more details.

Series B Preferred Stock and Series B-1 Preferred Stock

In September 2025, the Company entered into a Series B preferred stock purchase agreement (the “Series B SPA”) under which it issued and sold 4,082,529 shares of Series B Preferred Stock and 2,610,635 shares of Series B-1 Preferred Stock, at a price of $21.37 per share for each series, for gross cash proceeds of $143.0 million (the “Series B Initial Closing”). In addition, the Company issued warrants to purchase 1,752,080 shares of the Company’s common stock to certain investors. Refer to Note 10, “Common Stock” for more details.

Subsequent to the Series B Initial Closing, the first additional closing occurred on October 9, 2025, at which the Company sold 4,025,257 additional shares of Series B Preferred Stock at the same price of $21.37 per share for gross cash proceeds of $86.0 million. Additionally, the second additional closing was consummated on October 15, 2025, at which the Company sold 1,170,134 additional shares of Series B-1 Preferred Stock at a price of $21.37 per share for gross cash proceeds of $25.0 million.

In March 2026, the Company amended its certificate of incorporation to authorize the issuance of additional shares of Series B Preferred Stock and sold 468,053 shares of Series B Preferred Stock at the original price of $21.37 per share, for gross cash proceeds of $10.0 million. At the closing date, the estimated fair value of the Series B Preferred Stock was $24.36 per share. As additional consideration, the investor agreed to provide the Company with access to certain intellectual property pursuant to a license that was subject to final documentation and expected to be executed within 90 days of the closing date. Based on the stage of negotiations and the Company’s existing relationship with the investor, management concluded that execution of the license was probable and that the Company had a present right to future economic benefits at issuance. Accordingly, the Company recorded the issuance of shares of the Series B Preferred Stock at fair value of $11.4 million. The excess of the fair value over the cash proceeds of $1.4 million was initially recorded as an other current asset within prepaid and other current assets on its condensed consolidated balance sheet. The definitive license agreement was executed in June 2026. Upon execution, the Company reassessed the prepaid asset and concluded that the rights received relate to research and development activities; accordingly, the $1.4 million was expensed as research and development costs during the three months ended June 30, 2026.

Summary

Immediately prior to the closing of the Company's initial public offering on June 22, 2026, pursuant to the stock split and proportional adjustment reflecting the 1.5928-for-1 conversion ratio, all of the Company's outstanding Preferred Stock was converted into an aggregate of 47,764,024 shares of common stock.