Company: MIRM
Filing Date: 2025-11-04
Form Type: 10-Q
Source: 0001759425-25-000054
Chunk: 68

Company: Mirum Pharmaceuticals, Inc.
Filing Date: 2025-11-04
Form: 10-Q
Item: Part I, Item 3
Chunk 68
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 of our outstanding Notes may result in the dilution of existing stockholders, create downward pressure on the price of our common stock, and restrict our ability to take advantage of future opportunities.

The conditional conversion feature of the Notes entitles holders of the Notes to convert the Notes at any time during specified periods at their option if such conditions are met. For example, the conditional conversion feature of the Notes has been met previously, including in September 2025. Consequently, for prior quarterly periods, the Notes were, and for the quarterly period ending December 31, 2025, the Notes are, subject to conversion at the election of the holders. If one or more holders elect to convert their Notes, unless we elect to satisfy our conversion obligation by delivering solely shares of our common stock (other than paying cash in lieu of delivering any fractional share), we would be required to settle a portion or all of our conversion obligation in cash, which could adversely affect our liquidity.

The Notes may be converted into cash, shares of our common stock or a combination of cash and shares of our common stock. If shares of our common stock are issued to the holders of the Notes upon conversion as they have been in the past, there will be dilution to our stockholders’ equity and the market price of our shares may decrease due to the additional selling pressure in the market. Any downward pressure on the price of our common stock caused by the sale or potential sale of shares issuable upon conversion of the Notes could also encourage short sales by third parties, creating additional selling pressure on our stock. The existence of the Notes and the obligations that we incurred by issuing them may restrict our ability to take advantage of certain future opportunities, such as engaging in future debt or equity financing activities.

Also, ASU No. 2020-06 requires the application of the if-converted method to calculate the impact of convertible instruments on diluted earnings per share when the instruments may be settled in cash or shares. See Note 2, Summary of Significant Accounting Policies. During the three months ended September 30, 2025, the conditional conversion feature of the Notes was triggered and the Notes are convertible, in whole or in part, at the option of the holders between October 1, 2025 through December 31, 2025. We use the if-converted method for calculating any potential dilutive effect of the conversion options embedded in the Notes on diluted net income per share.

The accounting method for the Notes could adversely affect our reported financial condition and results. 

In August