Company: LBRX
Filing Date: 2025-09-08
Form Type: S-1/A
Source: 0001193125-25-197877
Chunk: 169

Company: LB PHARMACEUTICALS INC
Filing Date: 2025-09-08
Form: S-1/A
Chunk 169
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 the determination of the fair value of our common stock. These judgments and estimates include assumptions regarding our future operating performance, the time to completing an IPO or other liquidity event, the related valuations associated with these events, and the determinations of the appropriate valuation methods at each valuation date. The assumptions underlying these valuations represent 111

management’s best estimates, which involve inherent uncertainties and the application of management judgment. If we had made different assumptions, our stock-based compensation expense, net
loss, and net loss per share applicable to common stockholders could have been materially different.

For valuations after the completion
of this offering, our board of directors will determine the fair value of each share of underlying common stock based on the closing price of our common stock as reported on the Nasdaq Global Market on the date of grant.

Warrants

We review the terms of
debt instruments, equity instruments, and other financing arrangements to determine whether there are embedded derivative features, including embedded conversion options that are required to be bifurcated and accounted for separately as a derivative
financial instrument. Additionally, in connection with the issuance of financing instruments, we may issue freestanding warrants.

We
account for warrants as either equity-classified or liability-classified instruments based on an assessment of the warrant’s specific terms and applicable authoritative guidance in FASB ASC Topic 480, Distinguishing Liabilities from Equity, or ASC Topic 480, and FASB ASC Topic 815, Derivatives and Hedging, or ASC Topic 815. The assessment considers whether the warrants are freestanding financial instruments pursuant to ASC Topic 480, meet the definition of a
liability pursuant to ASC Topic 480, and whether the warrants meet all of the requirements for equity classification under ASC Topic 815, including whether the warrants are indexed to our own stock and whether the warrant holders could potentially
require “net cash settlement” in a circumstance outside of our control, among other conditions for equity classification. This assessment, which requires the use of professional judgment, is conducted at the time of warrant issuance and
as of each subsequent quarterly period end date while the warrants are outstanding.

For warrants that meet all criteria for equity
classification, the warrants are recorded as a component of additional paid-in capital, on the statement of stockholders’ deficit at the time of issuance. For warrants that do not meet all the criteria
for equity classification, the warrants are required to be recorded at their initial fair value on the date of issuance, and on each balance