ROCKET PHARMACEUTICALS INC

Accounting Pronouncements Not Adopted as of March 31, 2025

ASU 2023-09: Income Taxes Topic 740 - Improvements to Income Tax Disclosures. This update standardizes categories for the effective tax rate reconciliation, requires disaggregation of income taxes and additional income tax-related disclosures. This update is required to be effective for the Company for fiscal periods beginning after December 15, 2024. The Company is evaluating the effect that ASU 2023-09 will have on its financial statements and disclosures.

ASU 2024-03: Expense Disaggregation Disclosures. This update requires disaggregated disclosure of income statement expenses. This update will be effective for the Company for fiscal years beginning after December 15, 2027. Early adoption is permitted. The Company is evaluating the effect that ASU 2024-03 will have on its financial statements and disclosures.

Fair Value of Financial Instruments

Items measured at fair value on a recurring basis are the Company’s investments and warrant liability. The following table sets forth the Company’s financial investments that were measured at fair value on a recurring basis by level within the fair value hierarchy:

The Company classifies its money market mutual funds as Level 1 assets under the fair value hierarchy, as these assets have been valued using quoted market prices in active markets without any valuation adjustment. The Company classifies its U.S. Treasury Securities as Level 2 assets as these assets are not traded in an active market and have been valued through a third-party pricing service based on quoted prices for similar assets.

The Company’s warrant liability, which expired on April 23, 2025 and is recorded as part of other liabilities in the Consolidated Balance Sheets, is measured at fair value on a recurring basis using unobservable inputs (Level 3). The warrant liability balance was approximately $0 at March 31, 2025 and December 31, 2024.

The Company utilizes a Black-Scholes model to value the warrant liability (see Note 10 “Warrants”) at each reporting period, with changes in fair value recognized in the Consolidated Statements of Operations. The estimated fair value of the warrant liability is determined using Level 3 inputs. Inherent in an options pricing model are assumptions related to expected share-price volatility, expected life, risk-free interest rate and dividend yield. The Company estimates the expected volatility of its common stock based on historical volatility of its common stock, considering the expected remaining life of the warrants. The risk-free interest rate is based on the U.S. Treasury zero-coupon yield curve on the valuation date for a maturity similar to the expected remaining life of the warrants. The expected life of the warrants is assumed to be equivalent to their remaining contractual term. The dividend rate is based on the historical rate, which the Company anticipates will remain at zero.

The fair value of the warrant liability has been estimated with the following assumptions:

Property and Equipment, Net

The Company’s property and equipment consisted of the following:

During the three months ended March 31, 2025 and 2024, the Company recognized $2.5 million and $1.7 million of depreciation and amortization expense, respectively.

Intangible Assets and Goodwill

The Company’s intangible assets consisted of an acquired IPR&D asset received in the acquisition of Renovacor. Intangible assets as of March 31, 2025 and December 31, 2024 are summarized as follows:

The carrying value of Goodwill as of March 31, 2025 and December 31, 2024 was $39.2 million.

Accounts Payable and Accrued Expenses

The Company’s accounts payable and accrued expenses consisted of the following:

Stockholders’ Equity

Public Offerings and Private Placements

On December 12, 2024, the Company completed the Offering of 15,180,000 shares of its common stock at a public offering price of $12.50 per share and Private Placement of pre-funded warrants to purchase 400,000 shares of common stock at a price of $12.49 per warrant. The gross proceeds from the Offering and Private Placement were approximately $194.7 million, net of $12.2 million of offering costs, underwriting discounts and commissions, legal and other expenses for net proceeds from the Offering and Private Placement of $182.5 million.

Stock-Based Compensation