Quarterly Report for Quarter Ending September 30, 2024 (Form 10-Q)

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1. Description of Business, Organization and Liquidity

Kyverna Therapeutics, Inc. ("Kyverna" or "the Company") is a patient-centered, clinical-stage biopharmaceutical company focused on developing cell therapies for patients suffering from autoimmune diseases. The lead product candidate, KYV-101, is advancing through clinical development across two broad areas of autoimmune disease: rheumatology and neurology. The Company was incorporated on June 14, 2018, was initially named BAIT Therapeutics, Inc., changed its name to Kyverna Therapeutics, Inc. on October 1, 2019, and is headquartered in Emeryville, California.

Initial Public Offering

On February 7, 2024, the Company's Registration Statement on Form S-1 for its initial public offering (the "IPO") was declared effective, and on February 12, 2024, the Company closed the IPO and issued 16,675,000shares of common stock at a price to the public of $22.00per share, including 2,175,000shares issued upon the exercise of underwriters' option to purchase additional shares of common stock. The Company received gross proceeds of $366.9million. Net proceeds were $336.2million, after deducting underwriting commissions and other offering costs totaling $30.7million. On February 8, 2024, the Company's common stock began trading on the Nasdaq Global Select Market under the symbol "KYTX". Immediately prior to the IPO closing, all of the outstanding shares of the Company's redeemable convertible preferred stock converted into shares of the Company's common stock on a 1-for-4.5511basis.

Reverse Stock Split

On January 30, 2024, the Company's shareholders approved and the Company effected a reverse stock split of the shares of common stock at a ratio of 1-for-4.5511(the "Reverse Stock Split"). The number of authorized shares and par value per share were not adjusted as a result of the Reverse Stock Split. All references to shares, restricted stock awards, restricted stock units and options to purchase common stock, share data, per share data, and related information contained in the financial statements have been retrospectively adjusted to reflect the effect of the Reverse Stock Split for all periods presented. The conversion ratios for each series of the Company's redeemable convertible preferred stock, which was automatically converted into shares of common stock upon the closing of the IPO, were proportionally adjusted.

Liquidity

The Company has incurred losses and negative cash flows from operations since inception. As of September 30, 2024, the Company has an accumulated deficit of $226.0million. The Company had net losses of $90.0million and $39.7million for the nine months ended September 30, 2024 and 2023, respectively.

The Company has historically financed its operations primarily through issuances of redeemable convertible preferred stock and convertible notes, revenue from its collaboration agreement and sale of shares of its common stock in the IPO. As of September 30, 2024, the Company had cash and cash equivalents and available-for-sale marketable securities of $321.6million. The Company expects to continue to incur operating losses and negative cash flows from operations to support the development of its product candidates, to expand its product portfolio and to continue its research and development activities, including preclinical studies and clinical trials. The Company's activities are subject to significant risks and uncertainties, including the completion of requisite clinical activities to support regulatory approvals, market acceptance of the Company's product candidates, if approved, as well as the timing and extent of spending on research and development. There can be no assurance that the Company will ever earn revenue or achieve profitability, or if achieved, that the revenue or profitability will be sustained on a continuing basis. Unless and until it does, the Company will need to continue to raise additional capital. Based on its current operating plan, management estimates that its existing cash and cash equivalents and available-for-sale marketable securities balances will be sufficient to fund its operating plan and capital expenditure requirements for at least the next 12 months from the date of this Quarterly Report on Form 10-Q.

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2. Summary of Significant Accounting Policies

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In October 2023, the FASB issued ASU 2023-06, Disclosure Improvements: Codification Amendments in Response to the SEC's Disclosure Update and Simplification Initiative. This ASU aligns the requirements in the ASC to the removal of certain disclosure requirements set out in Regulation S-X and Regulation S-K, announced by the SEC. The effective date for each amended topic in the ASC is either the date on which the SEC's removal of the related disclosure requirement from Regulation S-X or Regulation S-K becomes effective, or on June 30, 2027, if the SEC has not removed the requirements by that date. Early adoption is prohibited. The Company is currently evaluating the impact of the adoption of this standard on its financial statements.

In March 2024, the FASB issued ASU No. 2024-02, Codification Improvements - Amendments to Remove References to the Concepts Statements. The amendments in ASU 2024-02 clarify and simplify references to certain concept statements within U.S. GAAP. ASU 2024-02 is effective for fiscal years beginning after December 15, 2024, with early application permitted. The Company is currently evaluating the impact of the adoption of this standard on its financial statements.

3. Fair Value Measurements and Fair Value of Financial Instruments

Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. As such, fair value is a market-based measurement that should be determined based on assumptions that market participants would use in pricing an asset or liability. The authoritative guidance on fair value measurements establishes a three-tier fair value hierarchy for disclosure of fair value measurements, as follows:

Level 1-Quoted prices in active markets for identical assets or liabilities.

Level 2-Observable inputs other than Level 1 prices, such as quoted prices for similar assets or liabilities, quoted prices in markets that are not active or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.

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.

Assets and liabilities measured at fair value are classified in their entirety based on the lowest level of input that is significant to the fair value measurement. The Company's assessment of the significance of a particular input to the fair value measurement in its entirety requires management to make judgments and consider factors specific to the asset or liability.

Financial assets measured at fair value on a recurring basis consist of the Company's cash equivalents and available-for-sale marketable securities. Cash equivalents consisted of money market funds, corporate debt obligations and U.S. Treasury bills, and available-for-sale marketable securities consisted of U.S. Treasury notes and bills. The Company obtains pricing information from its

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investment manager and generally determines the fair value of available-for-sale marketable securities using standard observable inputs, including reported trades, broker/dealer quotes and bids and/or offers. The Company recognizes transfers into and out of levels within the fair value hierarchy in the period in which the actual event or change in circumstances that caused the transfer occurs.

4. Available-for-Sale Marketable Securities

As of September 30, 2024, the Company's available-for-sale marketable securities consisted of debt securities issued by the U.S. Treasury and corporate debt obligations with contractual maturities on various dates within the next 12 months.

As of September 30, 2024, $102.1million was included in cash equivalents and $216.9million was included in available-for-sale marketable securities.

As of September 30, 2024 and December 31, 2023, no significant facts or circumstances were present to indicate a deterioration in the creditworthiness of the issuers of the Company's marketable securities, and the Company has no requirement or intention to sell these securities before maturity or recovery of their amortized cost basis. The Company considered the current and expected future economic and market conditions and determined that its investments were not significantly impacted by such conditions. For all securities with a fair value less than its amortized cost basis, the Company determined the decline in fair value below amortized cost basis to be immaterial and non-credit related, and therefore no allowance for losses has been recorded. During the three and nine months ended September 30, 2024 and 2023, the Company did not recognize any impairment losses on its investments.

As of each of September 30, 2024 and December 31, 2023, accrued interest receivable was $0.3million and zero, respectively, and included in the fair value of available-for-sale marketable securities and cash equivalents. The Company's accounting policy is to not measure an allowance for credit losses for accrued interest receivables and to write-off any uncollectible accrued interest receivable as a reversal of interest income in a timely manner, which it considers to be in the period in which the Company determines the accrued interest will not be collected. During the three and nine months ended September 30, 2024, the Company did not write off any accrued interest receivables.

5. Property and Equipment, Net

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Depreciation and amortization expense related to property and equipment was $0.3million and $0.2million for the three months ended September 30, 2024 and 2023, respectively, and $0.9million and $0.6million for the nine months ended September 30, 2024 and 2023, respectively.

6. Significant Agreements

Patent License Agreements with the National Institutes of Health

In May 2021, the Company entered into twopatent license agreements (the "NIH Agreements") with the National Institutes of Health (the "NIH"), pursuant to which the Company obtained exclusive, worldwide licenses to certain patents to use an anti-CD19 CAR in the Company's autologous and allogeneic CAR T-cell products for the treatment of patients with autoimmune disease. The Company paid $3.3million for acquired licenses.

Under the NIH Agreements, commencing in January 2023 and subsequently on January 1 of each calendar year thereafter, the Company is also required to make minimum annual royalty payments of $0.2million, which shall be credited against any earned royalties due based on a low single-digit percentage of net sales made in a respective year. In addition, benchmark royalties following the completion of certain regulatory-and clinical-related benchmarks are due to the NIH, with the minimum cumulative royalty due for a product reaching FDA approval or foreign-equivalent approval totaling $5.7million for the autologous patent license agreement and $1.7million for the allogeneic patent license agreement. Additional benchmark royalties would be payable for a subsequent indication under each NIH Agreement. If the Company enters into a sublicensing agreement, it will be required to pay the NIH a sublicense royalty payment as a percentage of the fair market value of any consideration received for each sublicense granted. The sublicensing percentage starts at a high teens to low twenties percentage if clinical trials for the product have not yet begun and decreases to a mid-single-digit percentage if the product has received FDA approval or foreign-equivalent approval.

Unless terminated sooner, the NIH Agreements remain in effect until the last licensed patent right granted pursuant to the respective agreement expires.

The acquisition of the licenses, including patent rights and know-how, was accounted for as an asset acquisition. As the acquired technology did not have an alternative use for accounting purposes, the consideration of $3.3million was recorded as research and development expense in the statements of operations and comprehensive loss for the year ended December 31, 2021. Nobenchmark royalties were probable or payable as of September 30, 2024 and December 31, 2023.

Intellia License and Collaboration Agreement

In December 2021, the Company entered into a License and Collaboration Agreement (the "Intellia Agreement") with Intellia Therapeutics, Inc. ("Intellia") to research and develop an allogeneic CD19-directed CAR cell therapy product (the "CRISPR Product"), suitable for validation through pre-clinical and clinical proof-of-concept clinical trials, including the performance of activities as agreed in the collaboration plan. Pursuant to the Intellia Agreement, Intellia granted to the Company an exclusive, worldwide, sublicensable in multiple tiers, royalty bearing license under certain of Intellia's intellectual property to research, develop, sell and otherwise exploit the CRISPR Product. The Company is performing the majority of the work under the collaboration plan.

As consideration for the licenses granted to the Company pursuant to the Intellia Agreement, the Company issued to Intellia shares of its Series B Preferred Stock with the fair value of $7.0million. The Company is also obligated to make aggregate milestone payments to Intellia of up to $64.5million upon the achievement of specified development and regulatory milestones and is obligated to pay to Intellia low to mid-single-digit royalties as a percentage of annual worldwide sales, subject to certain adjustments, and additional potential royalties and milestones to Intellia's licensors. The royalties are payable on a country-by-country basis, commencing upon the first commercial sale of the CRISPR Product in the applicable country and expiring upon the later of (i) 12 years after the first commercial sale or (ii) the expiration of the last-to-expire valid patent claim.

Under the Intellia Agreement, Intellia owns rights, title and interests in and to any intellectual property developed in the course of performance under the Intellia Agreement that is not specifically directed to the CRISPR Product. The Company granted to Intellia certain non-exclusive, royalty-free, fully paid-up, worldwide licenses under the Company's intellectual property solely to perform the activities designated to Intellia under the collaboration, and to research, develop or otherwise exploit any human therapeutic product that is developed or commercialized by Intellia, utilizes or incorporates Intellia intellectual property and that is not the CRISPR Product or any product directed to CD19 or any other B-cell antigen.

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During the term of the Co-Co Agreement, subject to certain exceptions, neither party will clinically develop or commercialize a cell therapy product directed to CD19 other than the CRISPR Product for use in the treatment or prevention of certain indications set forth in the Intellia Agreement and any additional indication that the parties mutually agree to include (any such product, a Competitive Product); provided, however, that (i) any products for use in any indications that are the subject of a development program or third-party collaboration as of the effective date of the Co-Co Agreement shall not be considered Competitive Products and (ii) any products for use in any additional indications that are the subject of a development program or third-party collaboration as of the date that such additional indications are included in the global development plan shall not be considered Competitive Products.

The Intellia Agreement terminates on a country-by-country basis upon the expiration of the last valid claim within Intellia's patent rights covering the CRISPR Product within such country, unless the agreement is earlier terminated in its entirety by either party for insolvency, by either party for material breach of contract, by Intellia if the Company participates in legal action or proceeding challenging the validity or enforceability of Intellia's patents, or by the execution of the Co-Co Agreement. The Company may terminate the Intellia Agreement in its entirety, or on a country-by-country basis, by providing a written notice after the expiration or termination of the Intellia Option. Following the expiration of the term for a given country, the licenses granted to the Company in such country will automatically become fully paid-up, perpetual, irrevocable and royalty-free licenses.

Nomilestone payments were probable or payable as of September 30, 2024 and December 31, 2023.

Gilead Collaboration, Option and License Agreement (Related Party)

In January 2020, the Company entered into the Collaboration, Option and License Agreement (the "Gilead Agreement") with Gilead Sciences, Inc. ("Gilead"). Simultaneously with the entry into the Gilead Agreement, the Company entered into (i) a License Agreement (the "Kite Agreement") with Kite Pharma, Inc. ("Kite"), an affiliate of Gilead (see below), and (ii) a stock purchase agreement, pursuant to which the Company issued to Gilead an aggregate of 6,890,744shares of its Series A-2 redeemable convertible preferred stock, of which 4,042,066shares were issued as consideration under the Kite Agreement (see below).

Pursuant to the Gilead Agreement, the Company and Gilead collaborated to develop potential cell-based therapy products, which could use the SynNotch Technology and the SynNotch intellectual property related thereto, controlled by Gilead through Kite, for the treatment, diagnosis or prevention of autoimmune, inflammatory, or allogeneic stem cell transplant inflammatory diseases (excluding post-transplant infectious diseases), subject to certain exceptions. The Gilead Agreement initially involved the research and development of cell-based products for the treatment, diagnosis or prevention of two indications under two research programs and non-exclusive research licenses, specifically, Crohn's disease, or Program A, and Ulcerative colitis, or Program B. Upon execution of the Gilead Agreement, Gilead paid the Company a one-time, non-refundable and non-creditable payment of $17.5million.

Pursuant to the Gilead Agreement, the Company also granted Gilead, on a research program-by-program basis, an exclusive option, exercisable at any time during the Option Period for such program, to obtain an exclusive license under such program's intellectual property to develop, manufacture, and commercialize optioned products belonging to such program for a specified fee and on the terms and conditions set out in the Gilead Agreement. For purposes of the foregoing, an Option Period meant, on a program-by-program basis, the period commencing on the date of execution of the Gilead Agreement and ending upon the earlier of (i) the expiration of the review period for such program, and (ii) the ten-year anniversary of the date of execution of the Gilead Agreement.

The Company concluded that the Gilead Agreement was in the scope of ASC Topic 606. The Company estimated the transaction price as $17.5million, which was allocated to two performance obligations, Program A and Program B, based on the relative fair value of each program. Other milestone payments were constrained and not included in the transaction price as they were

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considered not probable. On November 30, 2022, after the completion of research activities under Program A and Program B, Gilead provided the Company with notice that Program A and Program B were terminated. As of December 31, 2022, there were no other active programs under the Gilead Agreement and deferred revenue was zero.

On October 24, 2023, after agreement by both parties that the Gilead Agreement had no active programs, Gilead provided the Company with 90days' written notice to terminate the Gilead Agreement, and such termination became effective as of January 22, 2024.

Kite License Agreement (Related Party)

Concurrently with the Gilead Agreement, the Company entered into the Kite Agreement. Pursuant to the Kite Agreement, Kite granted to the Company a ten-year, co-exclusive license for the SynNotch technology primarily used in the Company's own internal research and development programs for the treatment, diagnosis or prevention of autoimmune, inflammatory or allogeneic stem cell transplant inflammatory diseases (excluding post-transplant infectious diseases). Upon expiration of the ten-year co-exclusive license term, the license will become a non-exclusive license through expiration of the related patents.

Kite had licensed certain of the SynNotch technology included in the Kite Agreement pursuant to that certain Amended and Restated Exclusive License Agreement, between The Regents of the University of California and Kite (as successor to Cell Design Labs, Inc.), or the UCSF License Agreement. The Company is responsible for all costs and payments arising under the UCSF License Agreement and as a result of activities under the Kite Agreement, including earned royalties based on a low single-digit percentage of net sales, milestone payments in an aggregate amount of up to $10.8million and accrued interest payables.

Pursuant to the Kite Agreement, the Company is also obligated to pay mid-teen-and mid-single-digit percentages of annual maintenance fees, minimum annual royalties and patent prosecution costs payable under the UCSF License Agreement during the co-exclusive term and non-exclusive term, respectively. The Company was also obligated to pay a $6.3million sublicensing fee under the UCSF License Agreement, which the Company agreed to offset with future milestone payments payable by Gilead under the Gilead Agreement.

As of September 30, 2024 and December 31, 2023, the Company recognized the total sublicensing fee of $6.3million as current accrued license expense - related party, of which $2.5million became payable as a result of the qualified financing. The Company expects to pay such amount of $2.5million by end-of-year 2024. The remaining $3.8million was available to be offset against future milestones payable by Gilead under the Gilead Agreement; however, due to the termination of the Gilead Agreement, there are no future milestones payable to offset the sublicensing fee, and the payment schedule for the remaining $3.8million of the sublicensing fee has not been agreed to by the Company and Gilead.

The annual maintenance fee, patent prosecution costs and minimal annual royalties are expensed as incurred and were minimal for each of the three and nine months ended September 30, 2024 and 2023.

7. Commitments and Contingent Liabilities

License Agreements

The Company entered into license agreements with the NIH, Intellia and Kite (see Note 6), pursuant to which the Company is required to pay certain milestone payments contingent upon the achievement of specific development and regulatory events. Nosuch milestones were achieved or probable as of September 30, 2024 and December 31, 2023. The Company is required to pay royalties on sales of products developed under these agreements. The Company's product candidates were in clinical trials or the pre-clinical stage of development as of September 30, 2024 and December 31, 2023, and nosuch royalties were due.

Contractual Obligations and Commitments

The Company enters into contracts in the normal course of business with CROs for clinical trials, with CMOs for clinical supplies manufacturing and with other vendors for preclinical studies, supplies and other products and services for operating purposes.

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These agreements generally provide for termination at the request of either party generally with less than one-year notice. The Company did not expect any of these agreements to be terminated and did not have any non-cancellable obligations under these agreements as of September 30, 2024.

Legal Contingencies

From time to time, the Company may become involved in legal proceedings arising from the ordinary course of business. The Company records a liability for such matters when it is probable that future losses will be incurred and that such losses can be reasonably estimated. Significant judgment is required to determine both probability and the estimated amount. Management is not aware of any legal matters that could have a material adverse effect on the Company's financial position, results of operations or cash flows.

Guarantees and Indemnifications

In the normal course of business, the Company enters into agreements that contain a variety of representations and provide for general indemnification. The Company's exposure under these agreements is unknown because it involves claims that may be made against the Company in the future. To date, the Company has not paid any claims or been required to defend any action related to its indemnification obligations. As of September 30, 2024 and December 31, 2023, the Company does not have any material indemnification claims that were probable or reasonably possible.

Leases

As of September 30, 2024, the Company leased 68,153square feet of office and laboratory space in Emeryville, California under operating leases which have terms through February 2027.

The Company has multiple leases for laboratory equipment with terms of 36months that are accounted for as finance leases. Some of the Company's office and lab space were leased under short-term lease agreements during the three and nine months ended September 30, 2023.

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The weighted-average remaining lease term and discount rate related to the Company's operating lease liabilities as of September 30, 2024, were 2.4years and 9%, respectively. The weighted-average remaining lease term and discount rate related to the Company's finance lease liabilities as of September 30, 2024, were 1.3years and 11%, respectively. The weighted-average remaining lease term and discount rate related to the Company's operating lease liabilities as of December 31, 2023, were 3.1years and 8%, respectively. The weighted-average remaining lease term and discount rate related to the Company's finance lease liabilities as of December 31, 2023, were 2.0years and 11%, respectively. The discount rates were based on the Company's estimate of its incremental borrowing rate, as the discount rates implicit in the leases could not be readily determined. As the Company does not have any outstanding debt, the Company estimated the incremental borrowing rate based on its estimated credit rating and available market information.

8. Redeemable Convertible Preferred Stock

In June 2023 and July 2023, the Company issued 32,052,994additional shares of Series B redeemable convertible preferred stock to existing and new investors for an aggregate cash consideration of $60.0million at a price per share of $1.8719, net of $0.1million issuance costs.

On February 12, 2024, in connection with the closing of the IPO, all outstanding shares of redeemable convertible preferred stock automatically converted into 25,171,265shares of common stock. Subsequent to the closing of the IPO, there were noshares of redeemable convertible preferred stock outstanding.

9. Common Stock

Early Exercise of Options for a Promissory Note

In December 2022, the Company's former chief executive officer (the "Former CEO"), a then-related party, early exercised options for 349,321shares of common stock in exchange for a partial recourse promissory note receivable with the principal amount

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of $1.1million. The note bore interest at 4.27% per annum and was to be due in December 2027. For accounting purposes, the promissory note was determined to be non-recourse and, as such, the issuance of the promissory note and subsequent early exercise of stock options were considered not substantive. While the issued shares were not considered outstanding for accounting purposes, they were legally issued and had voting and dividend rights. The shares were included in common stock on the statement of redeemable convertible preferred stock and stockholders' deficit as of December 31, 2023, and were not included in the calculation of net loss per share attributable to common stockholders for the three and nine months ended September 30, 2023.

On January 12, 2024, the Company and the Former CEO entered into a note forgiveness letter, pursuant to which the promissory note and all accrued interest thereon in an aggregate amount of $1.1million were forgiven. As the shares subject to the options that were early exercised were vested as of the date of the forgiveness of the note, these are included in the calculation of net loss per share attributable to common stockholders from the date of the note's forgiveness. The Company concluded that the note forgiveness was effectively a repricing of options and is a modification. Therefore, the incremental stock-based compensation expense was recognized for the vested shares at the modification date (see Note 10).

10. Equity Incentive Plans

In January 2024, the Company's board of directors adopted, and stockholders approved, the Company's 2024 Equity Incentive Plan (the "2024 Plan"), which became effective on February 6, 2024. The Company initially reserved 4,215,000shares of common stock for future issuance under the 2024 Plan. In addition, 3,960,713shares issued and outstanding under the Company's 2019 Equity Incentive Plan, as amended (the "2019 Plan"), may be added to the 2024 Plan as such shares become available from time to time if awards terminate, expire, or lapse for any reason without the delivery of shares, or are reacquired or withheld (or not issued) to satisfy a tax withholding obligation or the purchase or exercise price. The 2024 Plan also provides that the number of shares reserved and available for issuance will automatically increase each January 1, beginning on January 1, 2025 and ending on January 1, 2034, by an amount equal to the lesser of (i) 5% of the shares of common stock outstanding on the last day of the immediately preceding fiscal year, and (ii) such smaller number of shares of stock as determined by the Company's board of directors. No more than 12,645,000shares of stock may be issued upon the exercise of incentive stock options under the 2024 Plan.

The Company may grant incentive stock options ("ISOs"), nonstatutory stock options ("NSOs"), restricted stock units ("RSUs"), restricted stock awards ("RSAs"), stock appreciation rights ("SARs"), performance awards and other awards to the Company's officers, employees, directors and consultants. Options under the 2024 Plan may be granted for periods of up to 10years at exercise prices no less than the fair market value of the common stock on the date of grant and usually vest over four years. The exercise price of an option granted to a 10% stockholder may not be less than 110% of the fair market value of the shares on the date of grant and such option may not be exercisable after the expiration of five years from the date of grant. The grant date fair market value of all awards made under our 2024 Plan and all cash compensation paid by us to any non-employee director for services as a director in any fiscal year may not exceed $750,000, increased to $1,000,000in the fiscal year of their initial service as a non-employee director. The 2024 Plan is the successor to the 2019 Plan and no additional awards may be granted under the 2019 Plan. All outstanding awards granted under the 2019 Plan will remain subject to the terms of the 2019 Plan. The 2019 Plan provided for the grant of incentive stock options, nonstatutory stock options, RSUs and RSAs to the Company's officers, employees, directors and consultants.

As of September 30, 2024, ISOs, NSOs and RSUs had been granted under the 2024 Plan. As of September 30, 2024, 2,903,178shares of the Company's common stock were reserved for issuance under the 2024 Plan.

In January 2024, the Company's board of directors and stockholders adopted the Company's 2024 Employee Stock Purchase Plan (the "ESPP"), which became effective on February 6, 2024. The Company initially reserved 422,000shares of common stock for future issuance under the ESPP. The ESPP permits participants to purchase common stock through payroll deductions of up to 15% of their eligible compensation. Employees purchase shares of common stock at a price per share equal to 85% of the lower of the fair market value at the start of the offering or on the date of purchase. The aggregate number of shares reserved for issuance under the ESPP will automatically increase each January 1, beginning on January 1, 2025 and ending on January 1, 2034, by an amount equal to the lesser of 1% of the Company's total outstanding shares of common stock on the immediately preceding December 31st, and 422,000shares or a lesser number of shares as may be determined by the Company's board of directors.

In September 2024, the Company adopted the 2024 Inducement Equity Incentive Plan (the "Inducement Plan"). The Inducement Plan provides for the grant of equity-based awards in the form of stock options, stock appreciation rights, restricted stock, restricted stock units, performance units and performance shares solely to prospective employees of the Company or an affiliate of the Company provided that certain criteria are met. Awards under the Inducement Plan may only be granted to an individual, as a material inducement to such individual to enter into employment with the Company or an affiliate of the Company, who (i) has not previously been an employee or director of the Company or (ii) is rehired following a bona fide period of non-employment with the Company. The Company reserved 4,000,000shares of common stock for future issuance under the Inducement Plan. As of September 30, 2024, 2,579,259shares were granted and 1,420,741shares were available for future grant under the Inducement Plan.

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Stock Options

Stock options issued under the 2019 Plan, 2024 Plan and the Inducement Plan generally vest over a four-yearperiod and expire ten yearsfrom the date of grant. Certain options provide for accelerated vesting if there is a change in control, as defined in the individual award agreements and the Company's severance policies.

* Outstanding number of options as of December 31, 2023 excludes 349,321shares of common stock issued in connection with the early exercised options for a non-recourse promissory note, which were not considered substantive for accounting purposes. These shares are included in the number of options exercised during the nine months ended September 30, 2024, upon the note forgiveness in January 2024 (see Note 9).

** Includes 885,937shares of unvested stock options for which the holders have the right to early exercise such options as of September 30, 2024.

Aggregate intrinsic value represents the difference between the fair value of the underlying common stock and the exercise price. The weighted-average grant date fair value of options granted for the three and nine months ended September 30, 2024 was $5.43and $6.43, respectively. The weighted-average grant date fair value of options granted for the three and nine months ended September 30, 2023 was $3.32and $3.01, respectively. The intrinsic value of options exercised during the three and nine months ended September 30, 2024 was $0.1million and $3.5million, respectively, and is calculated as the difference between the exercise price and the fair value of common stock as of the exercise date. The intrinsic value of options exercised during the three and nine months ended September 30, 2023 was $0.1million and $0.2million, respectively.

Restricted Stock Units

During the nine months ended September 30, 2024, the Company granted RSU awards for 464,143shares with a weighted-average price per share of $7.35and performance RSU awards for 100,000shares with a weighted-average price per share of $8.05. RSU shares vest over a four-yearperiod. Performance RSU shares vest in full upon the Company receiving certain regulatory approvals within 36months from the grant date. During the nine months ended September 30, 2024, 19,292RSUs were forfeited. As of September 30, 2024, noRSU shares were vested and 544,851RSUs remained unvested. The estimated fair value of RSUs granted was $4.2million. The fair value of the RSUs equals the fair value of the Company's common stock as of the grant date. As of September 30, 2024, total unrecognized compensation expense for RSUs was $3.9million, of which $3.1million for time-vesting RSUs is expected to be recognized over weighted-average period of 3.7years. Compensation expense of $0.8million for performance RSUs is expected to be recognized upon satisfaction of the performance criteria.

Early Exercise of Employee Options

Certain employees received stock options prior to the IPO that allow for exercise of the stock option prior to vesting. The shares of common stock issued upon an early exercise that have not yet vested are subject to repurchase by the Company in the event of termination of the holder's continuous status as a service provider, at the price paid by the holder.

Proceeds from the early exercise of stock options are recorded as repurchase liability, and as shares vest, they are recognized as additional paid-in capital in the balance sheets. Shares purchased by employees pursuant to the early exercise of stock options are not deemed, for accounting purposes, to be issued until those shares vest according to their respective vesting schedules, and the Company recognizes stock-based compensation expense related to these options as they continue to vest. As of September 30, 2024 and December 31, 2023 , there was zeroand less than $0.1million repurchase liability related to the unvested shares, respectively. As of September 30, 2024 and December 31, 2023, zeroand 8,125common stock shares, respectively, remained subject to the right of repurchase as a result of the early exercise of stock options and are included in common stock outstanding. Early exercises as of

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December 31, 2023 exclude 349,321shares of common stock issued in connection with the early exercised options for a non-recourse promissory note, which are not considered substantive for accounting purposes (see Note 9).

Stock-Based Compensation Expense