Aardvark Therapeutics (AARD) risk factors, FY2025 10-K

Other

1. 01facilities-related costs, depreciation and other allocated expenses, which include direct and allocated expenses for rent, maintenance of facilities, insurance, equipment, and other supplies and services
2. 02A change in the outcome of any of these variables with respect to development of any of our product candidates could significantly change the costs and timing associated with the development of that product candidate
3. 03General and Administrative
4. 04Credit Loss – Related Party Accounts Receivable
5. 05Other Income (Expense), Net
6. 06Comparison of the Year Ended December 31, 2025 and 2024
7. 07Research and Development Expenses
8. 08General and Administrative (G&A) Expenses
9. 09Future Funding Requirements
10. 10We have incurred significant operating losses since our inception and, as of December 31, 2025, we had an accumulated deficit of $115.9 million. We expect to continue to incur losses for the foreseeable future, and we anticipate these losses will increase substantially for the reasons described above
11. 11the effects of competing technological and market developments as well as disruptions to and volatility in the credit and financial markets
12. 12We entered into a lease for office space commencing on August 1, 2024 and expiring on December 31, 2026. Total future aggregate operating lease commitments under the lease agreement is $0.4 million
13. 13Critical Accounting Estimates
14. 14Emerging Growth Company and Smaller Reporting Company Status
15. 15(iv) the date on which we are deemed to be a large accelerated filer under the rules of the SEC
16. 16Opinion on the Consolidated Financial Statements
17. 17Liabilities, Convertible Preferred Stock and Stockholders’ Equity (Deficit)
18. 18Principles of Consolidation
19. 19The Company believes its cash, cash equivalents and short-term investments of $ 110.0 million as of December 31, 2025 will be sufficient for the Company to continue as a going concern for at least one year following the date that the consolidated financial statements are available to be issued
20. 20Cash and Cash Equivalents
21. 21Concentration of Credit Risk
22. 22Fair Value of Financial Instruments
23. 23At the inception of an arrangement, the Company determines whether the arrangement is or contains a lease based on the unique facts and circumstances present, the existence of an identified asset(s), if any, and the Company’s control over the use of the identified asset(s), if applicable
24. 24Convertible Preferred Stock
25. 25Stock-Based Compensation Expense
26. 26Recent Accounting Standards
27. 27Recently Adopted Accounting Standards
28. 28Recently Issued Accounting Standards Not Yet Adopted
29. 29Level 3 —Unobservable inputs that are supported by little or no market activity and that are significant to determining the fair value of the assets or liabilities, including pricing models, discounted cash flow methodologies and similar techniques
30. 30There were no transfers in or out of Level 3 during the years ended December 31, 2025 and 2024
31. 31Initial Public Offering and Related Transactions
32. 32Employee Stock Purchase Pla n
33. 33The weighted-average fair value of stock options granted during the years ended December 31, 2025 and 2024 was $ 8.84 and $ 3.67 per share, respectively
34. 34Common Stock Reserved for Future Issuance
35. 35The Company's pretax loss for 2025 and 2024 was solely due to domestic operations
36. 36There were no federal or state payments for income taxes in 2025 or 2024
37. 37Effects of changes in tax laws or rates in the current period
38. 38Total income tax expense (benefit)
39. 39Operating lease liability, net of current portion
40. 40Acquisition-Related Liabilities
41. 41Indemnification Agreements
42. 42Aardwolf Therapeutics, Inc
43. 43I tem 9A. Controls and Procedures
44. 44Remediation of the Material Weakness Identified as of December 31, 2024
45. 45Management’s Report on Internal Control over Financial Reporting
46. 46Inherent Limitations on Effectiveness of Controls
47. 47Changes in Internal Control over Financial Reporting
48. 48Rule 10b5-1 Trading Arrangements
49. 49Chief Financial Officer and Chief Operating Officer
50. 50Executive Officers and Employee Directors
51. 51We believe Dr. Chi is qualified to serve on our board of directors because of his experience, relationships and contacts, combined with his experience serving on the boards of directors of successful, high-growth public and private companies
52. 52We believe Dr. Baynes is qualified to serve on our board of directors because of his extensive experience in the life sciences and biopharmaceutical industry and his medical and drug development expertise
53. 53We believe Ms. Graf is qualified to serve on our board of directors because of her extensive experience in the life sciences industry and her financial expertise
54. 54Board Leadership Structure
55. 55reviewing and establishing appropriate insurance coverage for our directors and executive officers; and
56. 56reviewing human capital management strategies, programs and policies, including, but not limited to, those regarding recruitment, retention, career development, diversity, equity and inclusion, pay equity, workplace culture and employee engagement
57. 57reviewing and discussing with management our Compensation Discussion and Analysis, and recommending to our board of directors that the Compensation Discussion and Analysis be approved for inclusion in our Annual Reports on Form 10-K, registration statements and our annual meeting proxy statements
58. 58Nominating and Corporate Governance Committee
59. 59considering any recommendations for director nominees and proposals submitted by stockholders
60. 60Insider Trading Policy; Prohibition Against Hedging and Pledging Policy
61. 61Attendance by Members of the Board of Directors at Meetings
62. 62Communications from Stockholders
63. 63Code of Business Conduct and Ethics
64. 64It em 11. Executive Compensation
65. 65Summary Compensation Table
66. 66Lee Offer Letter and Compensation
67. 67Sun Offer Letter and Compensation
68. 68Jaiman Offer Letter and Compensation
69. 69Equity-Based Incentive Awards
70. 70Potential Payments Upon Termination or Change in Control
71. 71Perquisites, Health, Welfare and Retirement Plans and Benefits
72. 72Outstanding Equity Awards at Fiscal Year-End 2025
73. 73Non-Employee Director Compensation Policy
74. 74each non-Chairperson member of the Nominating and Corporate Governance Committee receives a cash retainer in the amount of $5,000 per year for such member’s service on the Nominating and Corporate Governance Committee
75. 752025 Equity Incentive Plan
76. 762025 Inducement Equity Incentive Plan
77. 772025 Employee Stock Purchase Plan
78. 78Equity Award Timing Procedures
79. 79Limitations on Liability and Indemnification
80. 80any transaction from which the director or officer derived an improper personal benefit
81. 81We believe that the Certificate of Incorporation and the Bylaws provisions and indemnification agreements are necessary to attract and retain qualified persons as directors and officers. We also maintain customary directors’ and officers’ liability insurance
82. 82Compensation Committee Interlocks
83. 83Security Ownership of Certain Beneficial Owners and Management
84. 84each person or group of affiliated persons known by us to beneficially own more than 5% of our common stock
85. 85Percent of Shares Beneficially Owned
86. 86Consists of (i) 1,551,613 shares of our common stock held directly, (ii) 1,474,028 shares of our common stock held directly by Dr. Lee’s spouse, Jane Wu Lee, M.D., and (iii) 8,605 shares of our common stock subject to options that are exercisable within 60 days of February 28, 2026
87. 87Consists solely of 10,448 shares of our common stock subject to options that are exercisable within 60 days of February 28, 2026
88. 88Equity Compensation Plan Information
89. 89(1) Includes the 2017 Plan, the 2025 Plan and our ESPP, the terms of each of which are described in more detail above under “—Equity Compensation Plans.” 185,408 shares under column (c) are attributable to our ESPP
90. 90It em 13. Certain Relationships and Related Transactions, and Director Independence
91. 91Additional detail regarding these stockholders and their equity holdings is provided under Part III, Item 12, “Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters”, of this Annual Report
92. 92Series C Convertible Preferred Stock Financing
93. 93Additional detail regarding these stockholders and their equity holdings is included in Part III, Item 12, “Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters”, of this Annual Report
94. 94Aardwolf Convertible Promissory Note
95. 95Investors’ Rights Agreement
96. 96The Rights Agreement granted certain rights to the holders of our then-outstanding convertible preferred stock, which automatically converted into shares of common stock immediately prior to the completion of our IPO, including certain registration rights with respect to the registrable securities held by them
97. 97Right of First Refusal and Co-Sale Agreement
98. 98Management Rights Letters
99. 99Related Person Transaction Policy
100. 100Audit Committee Pre-Approval of Audit and Non-Audit Services