Correspondence 0001193125-24-015399 from Kyverna Therapeutics, Inc. (KYTX)
Kyverna Therapeutics, Inc.
Date: Jan. 25, 2024 · CIK: 0001994702 · Accession: 0001193125-24-015399
AI Filing Summary & Sentiment
Reasoning
File numbers found in text: 333-276523
Referenced dates: December 28, 2023
Letter
VIA EDGAR AND SECURE FILE TRANSFER United States Securities and Exchange Commission Division of Corporation Finance Office of Life Sciences Attention: Jenn Do, Vanessa Robertson, Daniel Crawford and Tim Buchmiller Registration Statement on Form S-1 File No. 333-276523 CIK No. 0001994702 Rule 83 Confidential Treatment Request by Kyverna Therapeutics, Inc.
Dear Ladies and Gentlemen:
On behalf of Kyverna Therapeutics, Inc. (the “Company”), in response to comments from the staff (the “Staff”) of the Securities and Exchange Commission (the “Commission”) received by letter dated December 28, 2023 (the “Comment Letter”) relating to the Company’s Registration Statement on Form S-1, originally confidentially submitted to the Commission on October 5, 2023, and subsequently publicly filed by the Company with the Commission on January 16, 2024 (File No. 333-276523) (the “Registration Statement”), we submit this supplemental letter to address Comment 4 of the Comment Letter.
[*] Certain confidential information in this letter, marked by brackets, has been omitted and filed separately with the SEC pursuant to 17 C.F.R. §200.83.
January 25, 2024
Page
Because of the commercially sensitive nature of information contained herein, this submission is accompanied by the Company’s request for confidential treatment for selected portions of this letter. The Company has concurrently filed a separate letter with the Office of Freedom of Information and Privacy Act Operations in connection with the confidential treatment request, pursuant to Rule 83 of the Commission’s Rules on Information and Requests, 17 C.F.R. § 200.83. For the Staff’s reference, we have enclosed a copy of the Company’s letter to the Office of Freedom of Information and Privacy Act Operations.
We confirm on behalf of the Company that, prior to circulating copies of the preliminary prospectus in connection with the offering, the Company will file a pre-effective amendment to the Registration Statement that will include all information other than information that may be excluded in reliance upon Rule 430A of Regulation C, and the actual price range to be included in such amendment, which will comply with the Staff’s interpretation regarding the parameters of a bona fide price range.
The Company expects to reflect the Stock Split (as defined below) in a pre-effective amendment to the Registration Statement that includes the actual price range; however, all dollar amounts and per share amounts in this letter are pre-Stock Split, and therefore, consistent with the Registration Statement.
The Company respectfully requests that the bracketed information contained in this letter be treated as confidential information pursuant to Rule 83 promulgated by the Commission, 17 C.F.R. §200.83, and that the Commission provide timely notice to Samantha Eldredge at (650) 320-1838 before it permits any disclosure of the bracketed information in this letter.
Preliminary IPO Price Range
The Company advises the Staff that it estimates a preliminary price range of approximately $[***] to $[***] per share (the “Preliminary Price Range”) for its initial public offering (“IPO”), before giving effect to a reverse stock split that the Company plans to implement prior to effectiveness of the Registration Statement (the “Stock Split”) resulting in a midpoint of the Preliminary Price Range of $[***] per share (the “Midpoint Price”). The actual price range to be included in a subsequent amendment to the Registration Statement (which will comply with the Staff’s interpretation regarding the parameters of a bona fide price range) has not yet been determined and remains subject to adjustment based on factors outside of the Company’s control. However, the Company believes that the foregoing Preliminary Price Range will not be subject to significant change.
[*] Certain confidential information in this letter, marked by brackets, has been omitted and filed separately with the SEC pursuant to 17 C.F.R. §200.83.
January 25, 2024
Page
Determining the Fair Value of Common Stock Prior to the IPO
As there has been no public market for the Company’s common stock (“Common Stock”) prior to the IPO, the estimated fair value of the Common Stock underlying the Company’s stock option awards has been determined by the Company’s board of directors (the “Board”) as of each option grant date with input from management, considering the most recently available third-party valuations of Common Stock and the Board’s assessment of additional objective and subjective factors that it believed were relevant and which may have changed from the date of the most recent valuation through the date of the grant. These third-party valuations were performed in accordance with the guidance outlined in the American Institute of Certified Public Accountants’ Accounting and Valuation Guide, Valuation of Privately-Held-Company Equity Securities Issued as Compensation (the “Practice Aid”).
The Company’s most recent third-party valuations of the estimated fair value of its Common Stock were as follows:
Date of Third-Party Valuation
Date of Board Approval
Estimated Fair Market Value per share of Common Stock
January 31, 2022
February 28, 2022
$ [ ***]
October 31, 2022
November 22, 2022
$ [ ***]
June 30, 2023
July 13, 2023
$ [ ***]
September 25, 2023
October 31, 2023
$ [ ***]
December 18, 2023
December 29, 2023
$ [ ***]
The following table summarizes by grant date the number of stock options granted by the Company since January 1, 2022, the exercise price per share of Common Stock underlying the stock options and the estimated fair value of a share of Common Stock on each grant date:
Grant Date
Number of Shares Underlying Stock Options
Exercise Price Per Share of Common Stock
Estimated Fair Value Per Share of Common Stock
February 28, 2022
[ ***]
$ [ ***]
$ [ ***]
March 23, 2022
[ ***]
[ ***]
[ ***]
March 27, 2022
[ ***]
[ ***]
[ ***]
May 19, 2022
[ ***]
[ ***]
[ ***]
July 28, 2022
[ ***]
[ ***]
[ ***]
September 21, 2022
[ ***]
[ ***]
[ ***]
November 22, 2022
[ ***]
[ ***]
[ ***]
January 26, 2023
[ ***]
[ ***]
[ ***]
February 3, 2023
[ ***]
[ ***]
[ ***]
March 16, 2023
[ ***]
[ ***]
[ ***]
[*] Certain confidential information in this letter, marked by brackets, has been omitted and filed separately with the SEC pursuant to 17 C.F.R. §200.83.
January 25, 2024
Page
July 13, 2023
[***]
[***]
[***]
October 4, 2023(*)
[***]
[***]
[***]
November 6, 2023(*)
[***]
[***]
[***]
December 29, 2023
[***]
[***]
[***]
* The fair value of the Common Stock at the date of the respective grant was determined using a linear interpolation between two valuation dates for financial reporting purposes, as further described below.
The Company determined the hybrid method was the most appropriate method for determining the fair value of the Common Stock. The hybrid method is a probability-weighted expected return method, or PWERM, where the equity value in one or more scenarios is calculated using an option pricing model, or OPM. The Company determined this was the most appropriate method for determining the fair value of the Common Stock based on the Company’s stage of development and other relevant factors. The PWERM is a scenario-based analysis that estimates the value per share of the Common Stock based on the probability-weighted present value of expected future equity values for the Common Stock under various future liquidity event scenarios, considering the rights and preferences of each class of shares, and discounted for a lack of marketability, or DLOM. Under the hybrid method, an OPM was used to determine the fair value of the Common Stock in certain of the PWERM scenarios (capturing situations where the development path and future liquidity events were difficult to forecast), and potential exit events were explicitly modeled in the other PWERM scenarios. A DLOM was applied to the value derived under each scenario to account for a lack of access to an active public market to estimate the fair value of the Common Stock.
In addition to considering the results of independent third-party valuations, the Board considered various objective and subjective factors to determine the fair value of the Common Stock as of each grant date, including:
•
the prices at which the Company sold shares of its preferred stock and the superior rights, preferences, and privileges of its preferred stock relative to those of the Common Stock at the time of each grant;
•
the progress of research and development programs, including the status of preclinical studies and clinical trials for the Company’s product candidates;
•
the stage of development and business strategy, and material risks related to the Company’s business;
•
external market conditions affecting the biotechnology industry and trends within the biotechnology industry;
•
the competitive landscape for the Company’s product candidates;
[*] Certain confidential information in this letter, marked by brackets, has been omitted and filed separately with the SEC pursuant to 17 C.F.R. §200.83.
January 25, 2024
Page
•
the Company’s financial position, including cash on hand, and its historical and forecasted performance and operating results;
•
the lack of an active public market for the Common Stock and the Company’s preferred stock;
•
the likelihood of achieving a liquidity event, such as an IPO or a sale of the Company, given prevailing market conditions; and
•
general economic conditions.
The assumptions underlying these valuations represented management’s best estimate, which involved inherent uncertainties and the application of management’s judgment. As a result, if the Company had used significantly different assumptions or estimates, the fair value of the Common Stock and the stock-based compensation expense could be materially different.
Once a public trading market for the Common Stock has been established in connection with the completion of the IPO, it will no longer be necessary for the Board to estimate the fair value of the Common Stock in connection with accounting for granted stock options and other equity awards the Company may grant, as the fair value of the Common Stock will be based on the quoted market price of the Common Stock.
January 2022 Valuation
The Company, with the assistance of a third-party valuation firm, performed a valuation of the Common Stock as of January 31, 2022. The Company utilized the Hybrid OPM model to estimate the fair value of the Common Stock, considering two scenarios: June 2023 IPO scenario with [***]% probability, and non-IPO scenario (the “Remain Private scenario”) with [***]% probability. The probabilities were based on management’s estimates of the likelihood of each outcome as of the valuation date.
Management estimated that the equity value for the June 2023 IPO scenario would be $[***] million. This value was based on the Series B preferred stock financing post-money valuation adjusted for a step-up of [***]x and the future financing of $[***] million adjusted for a step-up of [***]x. The Company initially issued shares of its Series B preferred stock in three closings that occurred in November 2021, December 2021 and January 2022, to existing and new investors for aggregate gross cash proceeds of $85.0 million at a purchase price of $1.8719 per share, of which $12.0 million was sold to new investors in January 2022. The Company’s management also considered that it would need an additional crossover financing to bridge to the estimated June 2023 IPO, and as such, the additional financing was included in the Company’s equity value. The step-up multiples were estimated based on comparable companies’ financing transactions prior to their IPOs and expected market conditions. The selected exit value of $[***] million fell within the first quartile and the median of the pre-money IPO value of biopharma IPO transactions with the lead program in Phase I of development at the time of the IPO, which was consistent with management’s expectations of the Company’s stage of clinical development at the time of IPO. Then, the calculated fair value of the Common Stock was discounted using a [***]% discount rate, which resulted in the fair value of the Common Stock of $[***] per share. The [***]% discount rate represents an enterprise-level weighted-average cost of capital.
[*] Certain confidential information in this letter, marked by brackets, has been omitted and filed separately with the SEC pursuant to 17 C.F.R. §200.83.
January 25, 2024
Page
For the Remain Private scenario, the Company used the OPM backsolve model. The equity value was determined to be approximately $[***] million based on the Company’s recent Series B preferred stock financing. To arrive at the equity value under the Remain Private scenario, the Company’s management used a [***]% risk-free rate, [***]% volatility and [***] years expected term. The expected term was estimated by management as a time to an exit event. The Company estimated volatility using comparable public companies’ volatilities that correspond with the expected term. The fair value of the Common Stock was estimated to be $[***] per share.
The Board and the third-party valuation firm also considered the fact that the Company’s stockholders could not freely trade the Common Stock on the public markets. The Company calculated DLOM of [***]% and [***]% for the June 2023 IPO and the Remain Private scenarios, respectively, using the Finnerty and Asian Put models, which was then applied to the fair value of the Common Stock for each scenario. The probabilities-adjusted fair value was estimated as $[***] per share of Common Stock (the “January 2022 Valuation”).
February, March, May, July and September 2022 Grants
From February through September 2022, the Company granted options to purchase an aggregate of [***] shares of Common Stock with an exercise price of $[***] per share, which was the estimated fair value at each grant date. In determining the fair value of the Common Stock, the Board considered the January 2022 Valuation, the Company’s progress in its research and development activities and overall economic and biotechnology market conditions. The Board determined that there were no significant changes between January and September 2022 that would significantly impact the valuation of the Company and the value of the Common Stock. In December 2021, the Company entered into a license agreement with Intellia Therapeutics, Inc., and was making progress to advance its lead product candidate, KYV-101, through investigational new drug application (“IND”)-enabling studies. Furthermore, market conditions had not improved from January to September 2022, and early-stage biotech valuations were decreasing significantly.
October 2022 Valuation
The Company, with the assistance of a third-party valuation firm, performed a valuation of the Common Stock as of October 31, 2022. The Company utilized the Hybrid OPM model to estimate the fair value of the Common Stock, considering two scenarios: June 2024 IPO scenario with [***]% proba
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CORRESP 1 filename1.htm CORRESP Submitted pursuant to a Request for Confidential Treatment Pursuant to 17 C.F.R. 200.83 January 25, 2024 FOIA CONFIDENTIAL TREATMENT REQUEST The entity requesting confidential treatment is Kyverna Therapeutics, Inc. 5980 Horton St., STE 550 Emeryville, CA 94608 Telephone: (510) 925-2492 CERTAIN PORTIONS OF THIS LETTER HAVE BEEN OMITTED FROM THE VERSION FILED VIA EDGAR. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTIONS. INFORMATION THAT WAS OMITTED IN THE EDGAR VERSION HAS BEEN NOTED IN THIS LETTER WITH A PLACEHOLDER IDENTIFIED BY THE MARK “[***].” VIA EDGAR AND SECURE FILE TRANSFER United States Securities and Exchange Commission Division of Corporation Finance Office of Life Sciences 100 F Street, N.E. Washington, D.C. 20549 Attention: Jenn Do, Vanessa Robertson, Daniel Crawford and Tim Buchmiller RE: Kyverna Therapeutics, Inc. Registration Statement on Form S-1 File No. 333-276523 CIK No. 0001994702 Rule 83 Confidential Treatment Request by Kyverna Therapeutics, Inc. Dear Ladies and Gentlemen: On behalf of Kyverna Therapeutics, Inc. (the “Company”), in response to comments from the staff (the “Staff”) of the Securities and Exchange Commission (the “Commission”) received by letter dated December 28, 2023 (the “Comment Letter”) relating to the Company’s Registration Statement on Form S-1, originally confidentially submitted to the Commission on October 5, 2023, and subsequently publicly filed by the Company with the Commission on January 16, 2024 (File No. 333-276523) (the “Registration Statement”), we submit this supplemental letter to address Comment 4 of the Comment Letter. [*] Certain confidential information in this letter, marked by brackets, has been omitted and filed separately with the SEC pursuant to 17 C.F.R. §200.83. January 25, 2024 Page 2 Because of the commercially sensitive nature of information contained herein, this submission is accompanied by the Company’s request for confidential treatment for selected portions of this letter. The Company has concurrently filed a separate letter with the Office of Freedom of Information and Privacy Act Operations in connection with the confidential treatment request, pursuant to Rule 83 of the Commission’s Rules on Information and Requests, 17 C.F.R. § 200.83. For the Staff’s reference, we have enclosed a copy of the Company’s letter to the Office of Freedom of Information and Privacy Act Operations. We confirm on behalf of the Company that, prior to circulating copies of the preliminary prospectus in connection with the offering, the Company will file a pre-effective amendment to the Registration Statement that will include all information other than information that may be excluded in reliance upon Rule 430A of Regulation C, and the actual price range to be included in such amendment, which will comply with the Staff’s interpretation regarding the parameters of a bona fide price range. The Company expects to reflect the Stock Split (as defined below) in a pre-effective amendment to the Registration Statement that includes the actual price range; however, all dollar amounts and per share amounts in this letter are pre-Stock Split, and therefore, consistent with the Registration Statement. The Company respectfully requests that the bracketed information contained in this letter be treated as confidential information pursuant to Rule 83 promulgated by the Commission, 17 C.F.R. §200.83, and that the Commission provide timely notice to Samantha Eldredge at (650) 320-1838 before it permits any disclosure of the bracketed information in this letter. Preliminary IPO Price Range The Company advises the Staff that it estimates a preliminary price range of approximately $[***] to $[***] per share (the “Preliminary Price Range”) for its initial public offering (“IPO”), before giving effect to a reverse stock split that the Company plans to implement prior to effectiveness of the Registration Statement (the “Stock Split”) resulting in a midpoint of the Preliminary Price Range of $[***] per share (the “Midpoint Price”). The actual price range to be included in a subsequent amendment to the Registration Statement (which will comply with the Staff’s interpretation regarding the parameters of a bona fide price range) has not yet been determined and remains subject to adjustment based on factors outside of the Company’s control. However, the Company believes that the foregoing Preliminary Price Range will not be subject to significant change. [*] Certain confidential information in this letter, marked by brackets, has been omitted and filed separately with the SEC pursuant to 17 C.F.R. §200.83. January 25, 2024 Page 3 Determining the Fair Value of Common Stock Prior to the IPO As there has been no public market for the Company’s common stock (“Common Stock”) prior to the IPO, the estimated fair value of the Common Stock underlying the Company’s stock option awards has been determined by the Company’s board of directors (the “Board”) as of each option grant date with input from management, considering the most recently available third-party valuations of Common Stock and the Board’s assessment of additional objective and subjective factors that it believed were relevant and which may have changed from the date of the most recent valuation through the date of the grant. These third-party valuations were performed in accordance with the guidance outlined in the American Institute of Certified Public Accountants’ Accounting and Valuation Guide, Valuation of Privately-Held-Company Equity Securities Issued as Compensation (the “Practice Aid”). The Company’s most recent third-party valuations of the estimated fair value of its Common Stock were as follows: Date of Third-Party Valuation Date of Board Approval Estimated Fair Market Value per share of Common Stock January 31, 2022 February 28, 2022 $ [ ***] October 31, 2022 November 22, 2022 $ [ ***] June 30, 2023 July 13, 2023 $ [ ***] September 25, 2023 October 31, 2023 $ [ ***] December 18, 2023 December 29, 2023 $ [ ***] The following table summarizes by grant date the number of stock options granted by the Company since January 1, 2022, the exercise price per share of Common Stock underlying the stock options and the estimated fair value of a share of Common Stock on each grant date: Grant Date Number of Shares Underlying Stock Options Exercise Price Per Share of Common Stock Estimated Fair Value Per Share of Common Stock February 28, 2022 [ ***] $ [ ***] $ [ ***] March 23, 2022 [ ***] [ ***] [ ***] March 27, 2022 [ ***] [ ***] [ ***] May 19, 2022 [ ***] [ ***] [ ***] July 28, 2022 [ ***] [ ***] [ ***] September 21, 2022 [ ***] [ ***] [ ***] November 22, 2022 [ ***] [ ***] [ ***] January 26, 2023 [ ***] [ ***] [ ***] February 3, 2023 [ ***] [ ***] [ ***] March 16, 2023 [ ***] [ ***] [ ***] [*] Certain confidential information in this letter, marked by brackets, has been omitted and filed separately with the SEC pursuant to 17 C.F.R. §200.83. January 25, 2024 Page 4 July 13, 2023 [***] [***] [***] October 4, 2023(*) [***] [***] [***] November 6, 2023(*) [***] [***] [***] December 29, 2023 [***] [***] [***] * The fair value of the Common Stock at the date of the respective grant was determined using a linear interpolation between two valuation dates for financial reporting purposes, as further described below. The Company determined the hybrid method was the most appropriate method for determining the fair value of the Common Stock. The hybrid method is a probability-weighted expected return method, or PWERM, where the equity value in one or more scenarios is calculated using an option pricing model, or OPM. The Company determined this was the most appropriate method for determining the fair value of the Common Stock based on the Company’s stage of development and other relevant factors. The PWERM is a scenario-based analysis that estimates the value per share of the Common Stock based on the probability-weighted present value of expected future equity values for the Common Stock under various future liquidity event scenarios, considering the rights and preferences of each class of shares, and discounted for a lack of marketability, or DLOM. Under the hybrid method, an OPM was used to determine the fair value of the Common Stock in certain of the PWERM scenarios (capturing situations where the development path and future liquidity events were difficult to forecast), and potential exit events were explicitly modeled in the other PWERM scenarios. A DLOM was applied to the value derived under each scenario to account for a lack of access to an active public market to estimate the fair value of the Common Stock. In addition to considering the results of independent third-party valuations, the Board considered various objective and subjective factors to determine the fair value of the Common Stock as of each grant date, including: • the prices at which the Company sold shares of its preferred stock and the superior rights, preferences, and privileges of its preferred stock relative to those of the Common Stock at the time of each grant; • the progress of research and development programs, including the status of preclinical studies and clinical trials for the Company’s product candidates; • the stage of development and business strategy, and material risks related to the Company’s business; • external market conditions affecting the biotechnology industry and trends within the biotechnology industry; • the competitive landscape for the Company’s product candidates; [*] Certain confidential information in this letter, marked by brackets, has been omitted and filed separately with the SEC pursuant to 17 C.F.R. §200.83. January 25, 2024 Page 5 • the Company’s financial position, including cash on hand, and its historical and forecasted performance and operating results; • the lack of an active public market for the Common Stock and the Company’s preferred stock; • the likelihood of achieving a liquidity event, such as an IPO or a sale of the Company, given prevailing market conditions; and • general economic conditions. The assumptions underlying these valuations represented management’s best estimate, which involved inherent uncertainties and the application of management’s judgment. As a result, if the Company had used significantly different assumptions or estimates, the fair value of the Common Stock and the stock-based compensation expense could be materially different. Once a public trading market for the Common Stock has been established in connection with the completion of the IPO, it will no longer be necessary for the Board to estimate the fair value of the Common Stock in connection with accounting for granted stock options and other equity awards the Company may grant, as the fair value of the Common Stock will be based on the quoted market price of the Common Stock. January 2022 Valuation The Company, with the assistance of a third-party valuation firm, performed a valuation of the Common Stock as of January 31, 2022. The Company utilized the Hybrid OPM model to estimate the fair value of the Common Stock, considering two scenarios: June 2023 IPO scenario with [***]% probability, and non-IPO scenario (the “Remain Private scenario”) with [***]% probability. The probabilities were based on management’s estimates of the likelihood of each outcome as of the valuation date. Management estimated that the equity value for the June 2023 IPO scenario would be $[***] million. This value was based on the Series B preferred stock financing post-money valuation adjusted for a step-up of [***]x and the future financing of $[***] million adjusted for a step-up of [***]x. The Company initially issued shares of its Series B preferred stock in three closings that occurred in November 2021, December 2021 and January 2022, to existing and new investors for aggregate gross cash proceeds of $85.0 million at a purchase price of $1.8719 per share, of which $12.0 million was sold to new investors in January 2022. The Company’s management also considered that it would need an additional crossover financing to bridge to the estimated June 2023 IPO, and as such, the additional financing was included in the Company’s equity value. The step-up multiples were estimated based on comparable companies’ financing transactions prior to their IPOs and expected market conditions. The selected exit value of $[***] million fell within the first quartile and the median of the pre-money IPO value of biopharma IPO transactions with the lead program in Phase I of development at the time of the IPO, which was consistent with management’s expectations of the Company’s stage of clinical development at the time of IPO. Then, the calculated fair value of the Common Stock was discounted using a [***]% discount rate, which resulted in the fair value of the Common Stock of $[***] per share. The [***]% discount rate represents an enterprise-level weighted-average cost of capital. [*] Certain confidential information in this letter, marked by brackets, has been omitted and filed separately with the SEC pursuant to 17 C.F.R. §200.83. January 25, 2024 Page 6 For the Remain Private scenario, the Company used the OPM backsolve model. The equity value was determined to be approximately $[***] million based on the Company’s recent Series B preferred stock financing. To arrive at the equity value under the Remain Private scenario, the Company’s management used a [***]% risk-free rate, [***]% volatility and [***] years expected term. The expected term was estimated by management as a time to an exit event. The Company estimated volatility using comparable public companies’ volatilities that correspond with the expected term. The fair value of the Common Stock was estimated to be $[***] per share. The Board and the third-party valuation firm also considered the fact that the Company’s stockholders could not freely trade the Common Stock on the public markets. The Company calculated DLOM of [***]% and [***]% for the June 2023 IPO and the Remain Private scenarios, respectively, using the Finnerty and Asian Put models, which was then applied to the fair value of the Common Stock for each scenario. The probabilities-adjusted fair value was estimated as $[***] per share of Common Stock (the “January 2022 Valuation”). February, March, May, July and September 2022 Grants From February through September 2022, the Company granted options to purchase an aggregate of [***] shares of Common Stock with an exercise price of $[***] per share, which was the estimated fair value at each grant date. In determining the fair value of the Common Stock, the Board considered the January 2022 Valuation, the Company’s progress in its research and development activities and overall economic and biotechnology market conditions. The Board determined that there were no significant changes between January and September 2022 that would significantly impact the valuation of the Company and the value of the Common Stock. In December 2021, the Company entered into a license agreement with Intellia Therapeutics, Inc., and was making progress to advance its lead product candidate, KYV-101, through investigational new drug application (“IND”)-enabling studies. Furthermore, market conditions had not improved from January to September 2022, and early-stage biotech valuations were decreasing significantly. October 2022 Valuation The Company, with the assistance of a third-party valuation firm, performed a valuation of the Common Stock as of October 31, 2022. The Company utilized the Hybrid OPM model to estimate the fair value of the Common Stock, considering two scenarios: June 2024 IPO scenario with [***]% proba