Company: LBRX
Filing Date: 2025-09-08
Form Type: S-1/A
Source: 0001193125-25-197877
Chunk: 366

Company: LB PHARMACEUTICALS INC
Filing Date: 2025-09-08
Form: S-1/A
Chunk 366
---
 financings. Should the planned equity financing no longer be considered probable of being consummated, the deferred offering costs are expensed
immediately as a charge to general and administrative expenses.

As of September 30, 2024, the Company recorded the write off of deferred offering
costs in the amount of $3.2 million in general and administrative expenses in the accompanying statements of operations.

Debt Issuance Costs and Debt Discounts

Capitalized debt issuance costs related to the Company’s convertible notes payable are included as a direct deduction
from the related debt liability. See Note 11 Notes for additional information.

The debt discount recorded in connection with the recognition of
the derivative liability for the embedded conversion feature is included as a direct deduction from the related debt liability.

These costs are amortized
into interest expense over the term of the notes.

Fair Value Measurements

The Company applies the fair value method under ASC 820 Fair Value Measurements and Disclosure to all financial assets and liabilities and nonfinancial
assets and liabilities that are recognized or disclosed at fair value in the financial statements on a recurring basis. Fair value is defined as the exchange price that would be received for an asset or an exit price that would be paid to transfer a
liability in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. ASC 820 establishes a fair value hierarchy that prioritizes the inputs to valuation
techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to measurements involving significant
unobservable inputs (Level 3 measurements). The three levels of the fair value hierarchy are as follows:

Level1–
Observable inputs, such as quoted prices for identical assets and liabilities in active markets.

Level2 –Observable
inputs (other than Level 1 quoted prices), such as quoted prices in active markets for similar assets or liabilities, quoted prices in markets that are not active for identical or similar assets or liabilities, or other inputs that are
observable or can be corroborated by observable market data.

Level3 – Unobservable inputs supported by little or no
market data and requires management to develop its own assumptions based on best estimates of what market participants would use in pricing an asset or liability at the reporting date.

The level in the fair value hierarchy within which a fair value measurement in its entirety falls is based on the lowest-level input that is significant to
the fair value measurement