Company: MIRM
Filing Date: 2025-05-07
Form Type: 10-Q
Source: 0001759425-25-000032
Chunk: 174

Company: Mirum Pharmaceuticals, Inc.
Filing Date: 2025-05-07
Form: 10-Q
Item: Part I, Item 4
Chunk 174
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 triggered and the Notes are convertible, in whole or in part, at the option of the holders between April 1, 2025 through June 30, 2025. We use the if-converted method for calculating any potential dilutive effect of the 

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conversion options embedded in the Notes on diluted net income per share; however, since we are in a net loss position, there was no dilutive effect during any period presented.

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

In August 2020, the Financial Accounting Standards Board published an Accounting Standards Update, which we refer to as ASU 2020-06, which simplifies certain of the accounting standards that apply to convertible notes. In accordance with ASU 2020-06, the Notes are reflected as a liability on our balance sheets, with the initial carrying amount equal to the principal amount of the Notes, net of issuance costs. The issuance costs are treated as a debt discount for accounting purposes, which will be amortized into interest expense over the term of the Notes. As a result of this amortization, the interest expense that we expect to recognize for the Notes for accounting purposes will be greater than the cash interest payments we will pay on the Notes, which will result in lower reported income. 

In addition, the shares underlying the Notes are reflected in our diluted earnings per share using the “if converted” method, in accordance with ASU 2020-06. Under that method, diluted earnings per share would generally be calculated assuming that all the Notes were converted solely into shares of common stock at the beginning of the reporting period, unless the result would be anti-dilutive. The application of the if-converted method may reduce our reported diluted earnings per share. 

In the future, we may, in our sole discretion, irrevocably elect to settle the conversion value of the Notes in cash up to the principal amount being converted. Following such an irrevocable election, if the conversion value of the Notes exceeds their principal amount for a reporting period, then we will calculate our diluted earnings per share by assuming that all of the Notes were converted at the beginning of the reporting period and that we issued shares of our common stock to settle the excess, unless the result would be anti-dilutive. 

Risks Related to Our Intellectual Property

We do not currently have patent protection or regulatory exclusivity for certain of our approved medicines or rely on regulatory exclusivity. If we are unable to obtain and