Company: LBRX
Filing Date: 2025-07-23
Form Type: DRS/A
Source: 0000950123-25-006557
Chunk: 161

Company: LB PHARMACEUTICALS INC
Filing Date: 2025-07-23
Form: DRS/A
Chunk 161
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 conditions. The estimates of fair value of our common stock are highly complex and subjective. There are significant judgments and estimates inherent in 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 management’s best estimates, which involve inherent uncertainties and the application of management judgment. 107

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