Company: LBRX
Filing Date: 2025-08-22
Form Type: S-1
Source: 0001193125-25-186467
Chunk: 357

Company: LB PHARMACEUTICALS INC
Filing Date: 2025-08-22
Form: S-1
Chunk 357
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 of such securities issued. If the per-shareprice of the next qualified financing was below $2.35, the outstanding principal of the 2020 Notes and 2022 Notes would convert at the per-shareprice paid for such securities issued (see Note 11 Notes). In May 2023, the Company received a signed commitment for a qualified financing at $1.50 per share, thus the Company determined that the conversion feature had no value as of June 30, 2023. The 2020 Notes and 2022 Notes were converted to Series C preferred stock on August 29, 2023. See Note 11 Notesfor additional information related to the 2020 Notes and the 2022 Notes and the note conversion features. For the year ended December 31, 2023, the change in the fair value of the Level 3 note conversion feature liability resulted in the recording of a gain on change in fair value of derivative instruments of $16.6 million in the accompanying statements of operations. The following are the assumptions used in the Black-Scholes valuation model in order to determine the fair value of the note conversion feature derivative liabilities for the embedded conversion feature related to 2022 Notes issued during the year ended December 31, 2023:

|                                   |     | January 26, 2023 |            |   |
|:----------------------------------|:----|:-----------------|-----------:|:--|
| Term – financing event (in years) |     |                  |       0.33 |   |
| Term – exit event (in years)      |     |                  |       1.33 |   |
| Volatility                        |     |                  |      65.90 | % |
| Risk-free rate                    |     |                  |       4.53 | % |
| Debt maturity date                |     |                  | 11/30/2024 |   |
| Discount rate                     |     |                  |      31.50 | % |

Warrants In 2018 and 2019, the Company issued warrants to investors in connection with its private placement of Series A convertible preferred stock “A and B Warrants” (as defined in Note 8 Redeemable Convertible Preferred Stock and Equity). Pursuant to the terms of the A and B Warrants, the Company could be required to adjust the exercise price upon an adjustment of the price or exercise price of the Company’s existing stock or stock options. In May 2022