ACHV 10-K & 10-Q changes, risk factors and insider trading

Investing in our common stock involves a high degree of risk. You should carefully consider the risks and uncertainties described below, together with all of the other information contained in this Annual Report on Form 10-K and in the other periodic and current reports and other documents we file with the Securities and Exchange Commission, before deciding to invest in our common stock. If any of the following risks materialize, our business, financial condition, results of operation and future prospects will likely be materially and adversely affected. In that event, the market price of our common stock could decline, and you could lose all or part of your investment. These disclosures reflect our beliefs and opinions as to factors that could materially and adversely affect the Company and our securities in the future. References to past events are provided by way of example only and are not intended to be a complete listing of such events or a representation as to whether or not such factors or similar events have occurred in the past or their likelihood of occurring in the future. This list is not exhaustive, and the order of presentation does not reflect management's determination of priority or likelihood.

The current financing environment in the United States, particularly for biotechnology companies like us, is challenging and we can provide no assurances as to when this will improve. Our business may be impacted by macroeconomic conditions, including fluctuating inflation, interest and tariff rates and market conditions as well as political events, war, terrorism, business interruptions and other geopolitical events and uncertainties beyond our control. These factors may make it challenging to raise additional capital on favorable terms, if at all. A severe or prolonged economic downturn could result in a variety of risks to our business, including in our ability to raise additional capital when needed on acceptable terms, if at all. A weak or declining economy also could strain our suppliers, possibly resulting in supply disruption. In addition, current macroeconomic conditions have caused uncertainty in various sectors, including capital markets. For these reasons, among others, we cannot be certain that additional financing will be available when and as needed or, if available, that it will be available on acceptable terms. If financing is available, it may be on terms that adversely affect the interests of our existing stockholders. If adequate financing is not available, we may need to reduce or eliminate our expenditures for research and development of cytisinicline, and may be required to suspend development of cytisinicline. Our actual capital requirements will depend on numerous factors, including:

We may not be able to secure sufficient financing on acceptable terms, or at all. Without additional funds, we maywould be forced to delay, scale back or eliminate some of our researchcommercialization and developmentR&D activities or other operations and potentially delay commercialization and product development in an effort to provide sufficient funds to continue our operations. Additionally, if we are unsuccessful in raising additional funds, we may decide to explore a range of strategic alternatives to maximize stakeholder value, which may include, without limitation, a sale of assets and/or the initiation of bankruptcy proceedings. If any of these events occur, our ability to achieve our development and commercialization goals would be adversely affected.

Servicing our debt requires a significant amount of cash. Our debt is subject to floating interest rates set in relation to the prime rate. Increases in interest rates have made and may continue to make our debt service costs increase. TheOur Newoutstanding Convertible Term Loan (as defined and further described under the section entitled “Management’s Discussion and Analysis of Financial Condition and Results of Operations”)debt matures on December 1, 2027, subject to certain potential extensions. We currently do not generate any cash flow from operations and if we are unable to make interest and/or principal payments when due, we would be in default under the New Debt Agreement. We may be required to raise additional capital through future financings or sales of assets to enable us to make interest payments and/or repay our outstanding indebtedness as it becomes due. There can be no assurance that we will be able to generate cash or raise additional capital. Any debt financing that is available could cause us to incur substantial costs and subject us to covenants that significantly restrict our ability to conduct our business. If we seek to complete additional equity financings, the interests of existing stockholders may be diluted. If we are unable to service our loan, the lender may foreclose on and sell the assets securing such indebtedness to satisfy our payment obligations, which could prevent us from accessing those assets for our business and conducting our business as planned, which could materially harm our financial condition and results of operations.

Our obligations under theour Newoutstanding Debt Agreementdebt are secured by substantially all of our assets, other than intellectual property. If we are unable to make payment on our secured debt instruments when due, the lender under such instrument may foreclose on and sell the assets securing such indebtedness to satisfy our payment obligations, which could prevent us from accessing those assets for our business and conducting our business as planned, which could materially harm our financial condition and results of operations. Further, if we are liquidated, the rights of the Lender to repayment would be senior to the rights of the holders of our common stock to receive any proceeds from the liquidation. The Lender could declare a default under the New Debt Agreement upon the occurrence of any event that the Lender interprets as a material adverse change as defined under the New Debt Agreement, thereby requiring us to repay the loan immediately or to attempt to reverse the declaration of default through negotiation or litigation. Any declaration by the Lender of an event of default could significantly harm our business, financial condition, results of operations and prospects and could cause the price of our common stock to decline. If we raise any additional debt financing, the terms of such additional debt could further restrict our operating and financial flexibility.

Further, theour Newoutstanding Debt Agreementdebt contains customary affirmative and restrictive covenants, including covenants regarding the incurrence of additional indebtedness or liens, investments, transactions with affiliates, delivery of financial statements, payment of taxes, maintenance of insurance, dispositions of property, mergers or acquisitions, and the requirement we keep substantially all of our cash and investments with Silicon Valley Bank, or SVB, among other customary covenants. We are also restricted from paying dividends or making other distributions or payments on capital stock, subject to limited exceptions. TheOur Newoutstanding Debt Agreementdebt includes customary representations and warranties, events of default and termination provisions.

Our existing and any future indebtedness may limit our cash resources available to invest in the ongoing needs of our businessbusiness.

We regularly maintain cash balances at third-party financial institutions, including with Silicon Valley Bank, or SVB, both in the United States and internationally, in excess of the FDIC insurance limit and similar regulatory insurance limits outside the United States. Further, if we enter into a credit, loan or other similar facility with a financial institution, certain covenants included in such facility may require as security that we keep a significant portion of our cash with the institution providing such facility. If a depository institution where we maintain deposits fails or is subject to adverse conditions in the financial or credit markets, we may not be able to recover all, if any, of our depositsdeposits, which could adversely impact our operating liquidity and financial performance.

Cytisinicline is currently our sole product candidate and there is no guarantee that we will be able to successfully developobtain andapproval from the FDA or other regulatory agencies to commercialize cytisinicline.

We are currently dependent on the potential development and FDA approval of a single product candidate, cytisinicline. We are still developing and seeking regulatory approval for cytisinicline and it cannot be marketed or sold in the United States or in foreign markets until regulatory approval has been obtained from the FDA or applicable foreign regulatory agencies. The process of obtaining regulatory approval is expensive and time consuming. The FDA and foreign regulatory authorities may never approve cytisinicline for sale and marketing, and even if cytisinicline is ultimately approved, regulatory approval may be delayed or limited in the United States or in other jurisdictions. In September 2025, we announced that the FDA accepted for review our NDA for cytisinicline as a treatment of nicotine dependence for smoking cessation as the first indication in the United States and assigned a Prescription Drug User Fee Act, or PDUFA, targeted action date of June 20, 2026. Deficiencies identified at the site of the third-party manufacturer designated in our NDA may delay approval of our NDA beyond the assigned PDUFA targeted action date of June 20, 2026. We may receive a complete response letter, or CRL, rather than approval of the NDA at the conclusion of the FDA’s review. The contents of such CRL could be made public by the FDA and could result in reputational harm to our company and cytisinicline, result in litigation, or result in a delay or the inability to commercialize cytisinicline. Even if we are authorized to sell and market cytisinicline in one or more markets, there can be no assurance that we will be able to successfully market cytisinicline or that cytisinicline will achieve market acceptance sufficient to generate profits. If we are unable to successfully develop and commercialize cytisinicline due to failure to obtain regulatory approval for cytisinicline, to successfully market cytisinicline, to generate profits from the sale of cytisinicline, or due to other risk factors outlined in this report, it would have material adverse effects on our business, financial condition.

The development and commercialization of our product candidate is dependent upon securing sufficient quantities of cytisinicline from treesplant and other plants,sources, which grow outside of the United States in a limited number of locations.

The therapeutic component of our product candidate, cytisinicline, is derived from theplants seeds of trees and shrubs fromin the Faboideae subfamily of plant species, which grow in the mountains of Southern EuropeEurope, Russia, China and other limited locations around the world. We have and will continue to pursue alternative sources for cytisinicline, including synthetic routes, however, all of the cytisinicline sourced to date for our product candidate has been from natural sources and there is no guarantee that any potential synthetic route developed will be commercially viable. We currently secure cytisinicline exclusively from Sopharma. There can be no assurances that trees and shrubsplants from the Faboideae subfamily of plant species will continue to grow in sufficient quantities around the world to meet our forecasts or commercial supply requirements or that the countries from which we can secure them will continue to allow the exportation of cytisinicline.

Cytisinicline is a naturally occurring, plant-basedoccurring alkaloid. Cytisinicline is structurally similar to nicotine and has a well-defined, dual-acting mechanism of action that is both agonistic and antagonistic. It is believed to aid in smoking cessation and the treatment of nicotine dependence by interacting with nicotine receptors in the brain, reducing the severity of nicotine craving and withdrawal symptoms through agonistic effects on nicotine receptors and reducing the reward and satisfaction associated with nicotine through antagonistic properties. Cytisinicline has been studied for smoking cessation in two company-sponsored randomized, multicenter, double-blind, placebo-controlled Phase 3 clinical studies that randomized a total of 1,602 adult smokers in 37 study sites across the United States. Cytisinicline has also been evaluated for vaping cessation in a company-sponsored, randomized, multicenter, double-blind, placebo-controlled Phase 2 clinical study involving 160 adults who used nicotine e-cigarettes.

The FDA has advised us that long-term exposure data to assess for safety beyond 12 weeks willwould be needed to adequately assess safety risks given that the FDA views smoking cessation drugs as products for chronic, repeated, and intermittent use as patients may relapse and require subsequent courses of treatment over a lifetime. In the first quarter of 2024, we reached agreement with the FDA that a single, open-label study, which we refer to as ORCA-OL, evaluating the long-term safety effects of cytisinicline willwould be sufficient to complete the requirement and enable an NDA submission. We initiated theThe ORCA-OL open-label exposure trial was initiated in May 2024 and was completed in September 2025. The clinical trial enrolled 479 subjects at 29 clinical trial sites across the United States. Safety data, from the ORCA-OL trial, on over 300 participants with at least six months of cumulative cytisinicline exposure was included in our NDA submission in June 2025 and on over 100 participants receiving at least one year of cumulative cytisinicline exposure was submitted to the FDA in October 20242025 weas announcedpart of the completion120-day ofsafety enrollment of 479 subjects.update. In JanuarySeptember 2025, we announced that the ORCA-OLFDA trialaccepted hadfor reachedreview our NDA for cytisinicline as a treatment of nicotine dependence for smoking cessation in adults and assigned a PDUFA targeted action date of June 20, 2026. Deficiencies identified at the goalsite of atthe leastthird-party 300manufacturer subjectsdesignated completingin sixour monthsNDA may delay approval of cumulativeour cytisiniclineNDA exposure.beyond the assigned PDUFA targeted action date of June 20, 2026. However, regardless of these discussions and the results of the ORCA-OL open label study, the FDA may determine that:

the existing data, and the data from the ORCA-OL open labelopen-label study, may not be sufficient and the FDA may require additional clinical and/or nonclinical studies prior to filing an NDA or prior to approval of cytisinicline for treating nicotine dependence for smoking cessation in adults;

Even if our future clinical trials are completed as planned, we cannot be certain that their results will be consistent with the results of the earlier clinical trials of cytisinicline. Positive results in non-clinical testing and past clinical trials with respect to the safety and efficacy of cytisinicline do not ensure that results from subsequent clinical trials will also be positive, and we cannot be sure that the results of subsequent clinical trials will replicate the results of prior clinical trials and non-clinical testing. Any such failure may cause us to abandon cytisinicline, which would negatively affect our ability to generate any product revenues.

Clinical trials, including the ongoing ORCA-OL trial,trials are costly, time consuming and inherently risky, and we may fail to demonstrate safety and efficacy to the satisfaction of applicable regulatory authorities. Any advances of cytisinicline into clinical trials may not have favorable results or receive regulatory approval.

Clinical development is expensive, time consuming and involves significant risk. We cannot guarantee that any clinical trial, including the ongoing ORCA-OL trial,trial will be conducted as planned or completed on schedule, if at all. A failure of one or more clinical trials can occur at any stage of development. Events that may prevent successful or timely completion of theclinical ongoingdevelopment ORCA-OL trial,include, but are not limited to:

subjects terminating enrollmentdelays in therecruiting ORCA-OLqualified trialpatients in its clinical trials;

disruptions to our supply chain for the cytisinicline required for theour ORCA-OLclinical trialtrials;

the occurrence of previously unknown on unobserved adverse events or tolerability issues associated with our product candidate, including those significant enough to stop the trial or for the FDA or other regulatory agencies to put theany ORCA-OLor trialall clinical trials on hold;

the cost of theclinical ORCA-OLtrials trialof cytisinicline;

negative or inconclusive results from theour ORCA-OLclinical trial,trials which may result in us deciding, or regulators requiring us, to conduct further additional clinical trials or abandon development programs in ongoing or other planned indications for cytisinicline;

discovery of impurities in our cytisinicline drug product, such as nitrosamines, above the regulators’ prescribed thresholds; and delays in the manufacture or packaging of sufficient quantities of cytisinicline for use thein ORCA-OLclinical trial.trials.

Further, even if the ORCA-OL trial is completed as planned, we cannot be certain that its long-term safety results will be consistent with the results of the earlier clinical trials of cytisinicline or support an NDA filing. Positive results in non-clinical testing and past clinical trials with respect to the adequate safety and efficacy of cytisinicline do not ensure that results from subsequent clinical trials will also be positive or adequate, and we cannot be sure that the results of subsequent clinical trials will replicate the results of prior clinical trials and non-clinical testing. Any such failure may cause us to abandon cytisinicline, which would negatively affect our ability to conduct our business and generate any product revenues and result in a loss of company value.

diversion of management’s attention from our business; and damage to our reputation and the reputation of our products and our technology.technology; and diversion of management’s attention from our business.

In recent years, extreme weather events and changing weather patterns such as storms, flooding, drought, and temperature changes appear to have become more common. The production of cytisinicline from the Faboideae subfamily of plant species depends on the availability of natural resources, including sufficient rainfall. Sopharma,Our our suppliersuppliers of cytisinicline, could be adversely affected if itthey experiencesexperience a shortage of fresh water due to droughts or if itthey experiencesexperience other adverse weather conditions in the locations where cytisinicline is sourced. The long-term effects of climate change on general economic conditions and the pharmaceutical industry in particular are unclear and may heighten or intensify existing risk of natural disasters. As a result of such events, we could experience cytisinicline shortages, which could have a material adverse effect on our business, financial condition and results of operations.

In addition, thesome manufacturing and other operations of Sopharma are located near earthquake fault lines in Sofia, Bulgaria.lines. In the event of a major earthquake, we could experience business interruptions from the disruption of our cytisinicline supplies, which could have a material adverse effect on our business, financial condition and results of operations.

We will need approval from the FDA to commercialize cytisinicline in the United States and approvals from similar regulatory authorities in foreign jurisdictions to commercialize cytisinicline in those jurisdictions. In orderSeptember to2025, obtainwe announced that the FDA accepted for review our NDA for cytisinicline as a treatment of nicotine dependence for smoking cessation in adults and assigned a PDUFA targeted action date of June 20, 2026. Deficiencies identified at the site of the third-party manufacturer designated in our NDA may delay approval of cytisinicline, we must submit anour NDA tobeyond the assigned PDUFA targeted action date of June 20, 2026. Even with the acceptance of our NDA by the FDA, demonstrating that cytisinicline is safe, pure and potent, and effective for its intended use. This demonstration requires significant research including completion of clinical trials. Satisfaction of the FDA’s regulatory requirements typically takes many years, depending upon the type, complexity and novelty of the product candidate and requires substantial resources for research, development and testing. Wewe cannot predict whether the results of our clinical trials and/or the data from our research and clinical approaches included in the NDA will be sufficient to demonstrate the safety and efficacy of cytisinicline or if the results of any clinical trials will be sufficient to advance to the next phase of development or for approval from the FDA. We also cannot predict whether our research and clinical approaches will result in data that the FDA considers safe and effective for the proposed indicationsindication of cytisinicline. The FDA has substantial discretion in the product approval process. The approval process may be delayed by changes in government regulation, future legislation or administrative action or changes in FDA policy that occur prior to or during our regulatory review. Even if we comply with all FDA requests, the FDA may ultimately reject one or more of our applications. We may never obtain regulatory approval for cytisinicline. Failure to obtain approval from the FDA or comparable regulatory authorities in foreign jurisdictions to commercialize cytisinicline will leave us without saleable products and therefore without any source of revenues. In addition, the FDA may require us to conduct additional clinical testing or to perform post-marketing studies, as a condition to granting marketing approval of a product or permit continued marketing, if previously approved. If conditional marketing approval is obtained, the results generated after approval could result in loss of marketing approval, changes in product labeling, and/or new or increased concerns about the side effects or efficacy of a product. The FDA has significant post-market authority, including the explicit authority to require post-market studies and clinical trials, labeling changes based on new safety information and compliance with FDA-approved risk evaluation and mitigation strategies. The FDA’s exercise of its authority has in some cases resulted, and in the future could result, in delays or increased costs during product development, clinical trials and regulatory review, increased costs to comply with additional post-approval regulatory requirements and potential restrictions on sales of approved products. In foreign jurisdictions, the regulatory approval processes generally include the same or similar risks as those associated with the FDA approval procedures described above. We cannot be certain that we will receive the approvals necessary to commercialize cytisinicline for sale either within or outside the United States.

Similar consequences would also result in the event of another significant shutdown of the federal government. For example, in 2024,2024 and 2025, the U.S. government was on the verge of a shutdown and has previouslyor shut down several times, and certain regulatory agencies, such as the FDA, had to furlough critical employees and stop critical activities. If a prolonged government shutdown occurs, or if geopolitical or global health concerns prevent the FDA from conducting their regular inspections, reviews, or other regulatory activities, it could significantly impact the ability of the FDA to timely review and process our regulatory submissions, which could have a material adverse effect on our business. Further, future government shutdowns or delays could impact our ability to access the public markets and obtain necessary capital in order to properly capitalize and continue our operations.

FDA-regulated industries, such as ours, face uncertainty with regard to the regulatory environment we will face as we proceed with research, development and commercialization. Some of these efforts have manifested to date inas efforts to reduce the formsize of the federal government, including large-scale reductions in force at the FDA. The loss of key personnel measuresat thatthe couldFDA, including those in leadership positions, is likely to impact operations at the FDA’s ability to hire and retain key personnel,FDA, which could result inin, among other things, delays or limitations on our ability to obtain guidance from the FDA on our product candidates in developmentdevelopment, longer review times and obtaindelays thein requisiteobtaining regulatory approvals infor theour future.product candidates. There remains general uncertainty regarding future activities. New executive orders, regulations, policies or guidance could be issued or promulgated that adversely affects us or creates a more challenging or costly environment to pursue the development of new therapeutic products. Alternatively, state governments may attempt to address or react to changes at the federal level with changes to their own regulatory frameworks in a manner that is adverse to our operations. If we become negatively impacted by future governmental orders, regulations, policies or guidance, there could be a material adverse effect on us and our business.

Even if cytisinicline is approved by the FDA or comparable foreign regulatory authorities, we will be subject to ongoing regulatory requirements with respect to manufacturing, labeling, packaging, storage, advertising, promotion, sampling, record-keeping, conduct of post-marketing clinical trials, and submission of safety, efficacy and other post-approval information, including both federal and state requirements in the United States and the requirements of comparable foreign regulatory authorities. Compliance with such regulatory requirements will likely be costlycostly, and the failure to comply would likely result in penalties, up to and including, the loss of such approvals from the FDA or comparable foreign regulatory authorities.

Manufacturers and manufacturers’ facilities are required to continuously comply with FDA and comparable foreign regulatory authority requirements, including ensuring that quality control and manufacturing procedures conform to current cGMP regulations and corresponding foreign regulatory manufacturing requirements. As such, we, Sopharma and otherour third-party contract manufacturers, if any, will be subject to continual review and inspections to assess compliance with cGMP and adherence to commitments made in any NDA or marketing authorization application. Sopharma currently does not have FDA approval of its facilities in Bulgaria. If Sopharma or our other contract manufacturers fail to maintain cGMP compliance or fail inspections with the FDA and other regulators, then our business could be severely be harmed.

Any regulatory approvals that we receive for cytisinicline may be subject to limitations on the approved indicated uses for which cytisinicline may be marketed or to the conditions of approval, or contain requirements for potentially costly post-marketing testing, including Phase 4 clinical trials, and surveillance to monitor the safety and efficacy of cytisinicline. We will be required to report adverse reactions and production problems, if any, to the FDA and comparable foreign regulatory authorities. Any new legislation addressing product safety issues could result in delays in product development or commercialization, or increased costs to assure compliance. If our original marketing approval for cytisinicline was obtained through an accelerated approval pathway, weWe could be required to conduct a successful post-marketing clinical trial in order to confirm the clinical benefit for our products. An unsuccessful post-marketing clinical trial or failure to complete such a trial could result in the withdrawal of marketing approval.

A Breakthrough Therapy designation by the FDA and our receipt of a CNPV may not lead to a faster development or regulatory review or approval process for the vaping/nicotine e-cigarette/vaping cessation indication and it does not increase the likelihood that our product candidates will receive marketing approval.

Our receipt of Breakthrough Therapy designation and a CNPV for cytisinicline may not result in a faster development process, review or approval and does not assure ultimate approval by the FDA. In addition, when a product candidate qualifies as a breakthrough therapy, the FDA may later decide that the product no longer meets the conditions for qualification.

We will need to expand and effectively manage our managerial, operational, financial, developmentdevelopment, commercial and other resources in order to successfully pursue our development and commercialization efforts for our existing and future product candidates. We expect to need additional scientific, technical, operational, financial and other personnel. Our success depends on our continued ability to attract, retain and motivate highly qualified personnel, such as management, clinical and preclinical personnel, including our executive chairman Thomas B. King, and our executive officers Richard Stewart, Craig Donnelly, Erik Atkisson, Jaime Xinos, Mark Oki, Cindy JacobsOki and JaimeMark Xinos.Rubinstein. In addition, although we have entered into employment agreements with each of Mr. King, Mr. Stewart, Mr. Oki,Donnelly, Dr.Mr. Jacobs andAtkisson, Ms. Xinos, Mr. Oki and Dr. Rubinstein, such agreements permit those executives to terminate their employment with us at any time, subject to providing us with advance written notice.

We will need to expand our organization as we prepare for potential commercialization of cytisinicline, which may require us to divert a disproportionate amount of our attention away from our day-to-day activities and devote a substantial amount of time to managing these growth activities. We do not currently have a commercial infrastructure, and we may not be able to successfully develop a commercial infrastructure to support the commercialization of cytisinicline on the timeline needed, or at all. Commercialization requires significantly greater financial and organizational resources, which may not be available to us. We may not be able to effectively manage the expansion of our operations, which may result in weaknesses in its infrastructure, operational mistakes, loss of business opportunities, loss of employees, and reduced productivity among remaining employees. Expanded growth and commercialization requires significant capital expendituresexpenditure and may divert financial resources from other projects, such as the development of additional product candidates. If we are unable to effectively manage our growth or commercialize plans, our expenses may increase more than expected, our ability to generate and/or grow revenue could be reducedreduced, and we may not be able to implement our business strategy. Our future financial performance and our ability to commercialize product candidates and compete effectively will depend, in part, on our ability to effectively manage any future growth and commercialization.

InWe theplan future, we mayto invest in the development of additional indications for cytisinicline. If we invest in and are unsuccessful in developing additional indications for cytisinicline, our business, financial condition and results of operations may be adversely affected.

InWe theplan future, we mayto invest in the research and development of new indications for cytisinicline to address nicotine dependence associated with the use of e-cigarette, or vaping, products. Given their recent introduction, the use of vaping products is not fully understood which may increase the risk of failure in this area. We expect that we will need to invest significant amounts of capital to pursue development of an e-cigarette cessation indication. If we are unable to provide such additional capital when needed, we may be unable to complete the development, regulatory approval and commercialization of an e-cigarette cessation indication.

In efforts to innovate and optimize operational efficiency, certain third parties with whom we work may integrate AI into various aspects of their work with us. While we do not currently utilize AI tools in a significant way, we may in the future integrate AI into various projects.projects, including as a component of our commercialization strategy. While AI presents opportunities for enhanced productivity and innovation, it also introduces inherent risks, including legal and regulatory, that could adversely impact our business and reputation. Proper use of AI can lead to improved decision-making, cost reduction, and competitive advantage. However, improper use, including algorithmic biases, ethical considerations, data privacy issues, unknown or zero-day software vulnerabilities, and potential regulatory non-compliance, by our employees or third parties with whom we work could result in reputational damage, legal liabilities, and financial losses. The rapidly evolving regulatory landscape surrounding AI also poses a risk, as new laws and regulations could impose additional compliance burdens, resulting in increased operational costs. We are committed to implementing robust governance and control mechanisms to mitigate these risks, but there can be no assurance that such measures will adequately prevent or mitigate the adverse effects that the integration and use of AI may have on our business, financial condition, and results of operations.

We are a late-stage clinical specialty pharmaceutical company with athe sole mission to address the global nicotine dependence epidemic in combustible cigarette and e-cigarette usage through the development and commercialization of cytisinicline. There are an estimated 29 million adults in the United States alone who smoke combustible cigarettes and an estimated 1117 million adults in the United States who utilize e-cigarettes. Tobacco use is currently the leading cause of preventable death and is responsible for more than eight million deaths worldwide and nearly half a million deaths in the United States annually. More than 87% of lung cancer deaths, 61% of all pulmonary disease deaths, and 32% of all deaths from coronary heart disease are attributable to smoking and exposure to secondhand smoke. Our primary focus is to address this global epidemic.

While nicotine e-cigarettes are thought to be less harmful than combustible cigarettes, they remain highly addictive and can deliver harmful chemicals which can cause lung injury or cardiovascular disease. In 2024, 1.6 million high school and middle school students reported using e-cigarettes. Research shows adolescents who have used e-cigarettes are seven times more likely to become smokers one year later compared to those who have never used e-cigarettes. Recently,In 2024, the U.S. Food and Drug Administration, or FDA,FDA granted Breakthrough Therapy Designationdesignation for cytisinicline for nicotine e-cigarette, or vaping, cessation. Breakthrough Therapy Designationdesignation is a process that expedites the development and review of new drugs and biologics that are intended to treat serious or life-threatening conditions and have preliminary clinical evidence indicating substantial improvement over existing therapies. Currently, there are no FDA approved drug therapies indicated specifically as an aid to nicotine e-cigarette cessation. We believe cytisinicline represents a unique opportunity to significantly impact global health by addressing the considerable unmet need among millions of smokers and e-cigarettes users.

We believe cytisinicline represents a unique opportunity to significantly impact global health by addressing the considerable unmet need among millions of smokers and e-cigarettes users. If approved by the FDA, it may become one of the first new prescription medicines in nearly two decades aimed at aiding individuals in overcoming nicotine dependence. We believe cytisinicline is differentiated from existing smoking cessation treatments given its combination of efficacy, well-tolerated safety profile,profile and dosing flexibility with a shorter6 therapyor duration,12-week regimen, as demonstrated in clinical trials.

We are party to a license agreement, or the Sopharma License Agreement, and a supply agreement, or the Sopharma Supply Agreement, with Sopharma. Pursuant to the Sopharma License Agreement, we were granted access to all available manufacturing, efficacy and safety data related to cytisinicline, as well as a granted patent in several European countries related to new oral dosage forms of cytisinicline providing enhanced stability.cytisinicline. Additional rights granted under the Sopharma License Agreement include the exclusive use of, and the right to sublicense, certain cytisiniclineSopharma trademarkspatent rights and the trademark Tabex in all territories described in the Sopharma License Agreement. Under the Sopharma License Agreement, we agreed to pay a nonrefundable license fee. In addition, we agreed to make certain royalty payments equal to a mid-single digit percentage of all net sales of cytisiniclineTabex branded products in our territory during the term of the Sopharma License Agreement, including those sold by a third party pursuant to any sublicense which may be granted by us. We have agreed to coordinate with Sopharma in the defense against any actual or threatened infringement claims with respect to Tabex branded products. The Sopharma License Agreement will also terminate under customary termination provisions including bankruptcy or insolvency and material breach. To date, any amounts paid to Sopharma pursuant to the Sopharma License Agreement have been immaterial.

InOn May 14, 2015, we entered into a Share Purchase Agreement with Sopharma to acquire 75% of the outstanding shares of Extab Corporation for $2.0 million in cash and $2.0 million in a deferred payment, contingent on regulatory approval of cytisinicline by the FDA or the European Medicines Agency, or EMA. The fair value of the contingent consideration on the acquisition date was nil. The contingent consideration liability is measured at fair value in our financial statements, As of December 31, 2024, the fair value of the contingent consideration was estimated to be $1.1 million as compared to $0.5 million as of December 31, 2023. (see Note 2 "Significant Accounting Policies, Sopharma Share Purchase Agreement Contingent Consideration" in the accompanying consolidated Financial Statements). We recognized a loss of $0.6 million for the year ended December 31, 2024.statements.

Our R&D expenses will vary materially between quarters based on the timing of our clinical trials. The process of conducting clinical trials and non-clinical studies necessary to obtain regulatory approval is costly and time consuming and we may never succeed in achieving marketing approval for cytisinicline. (See “Item 1A. Risk Factors—Risks Related to the Development of Our Product Candidate Cytisinicline.”)

General and administrative expenses consist primarily of salariespersonnel andcosts related costs for our personnel into executive, finance and accounting, and other administrative functions, as well as consulting costs, including commercial, corporate communications, market research, business consulting, human resources and intellectual property. Other costs include professional fees for legal and auditing services, insurance and facility costs.

ResearchOur andR&D expenses are devoted to our ongoing clinical development program, cytisinicline. R&D expenses for the years ended December 31, 20242025 and 20232024 were $22.8$23.0 million and $15.8$22.8 million, respectively. The increase in 20242025 as compared to 20232024 was primarily due to thehigher initiation,employee incosts Mayfrom 2024,increased headcount and higher manufacturing and supply chain costs associated with commercial launch preparation, including purchase of ourraw ORCA-OLcytisinicline openinventory labelexpensed safetyto trial.R&D prior to regulatory approval. This increase was partially offset by alower reductionclinical intrial costs associated with ourthe Phasewind 3down ORCA-3of the ORCA-OL trial andwhich Phase 2 ORCA-V1 trial as both werewas completed inat the second quarterend of 2023.September 2025.

G&AGeneral and administrative expenses for the years ended December 31, 20242025 and 20232024 were $16.3$31.9 million and $11.4$16.3 million, respectively. The increase in 20242025 as compared to 20232024 was primarily due to higher employee expenses associated with stock based compensation expense and severance costs, commercial launch preparation costs, consultingwhich costs,were $12.3 million in 2025 as compared to $1.2 million in 2024, and legala expenses$2.7 associatedmillion withincrease patentin activitiesstock-based andcompensation generalexpense corporatein activities.2025 as compared to 2024.

Total interest income for the years ended December 31, 20242025 and 20232024 was $2.4$1.5 million and $0.8$2.4 million, respectively. The increasedecrease in interest income for the year ended December 31, 20242025 as compared to the2024 same period in 2023waswas primarily due to higherlower average cash balances throughout 20242025 and higherlower interest rates.

Total interest expense for the years ended December 31, 20242025 and 20232024 was $2.2$0.8 million and $2.9$2.2 million, respectively. The decrease in interest expense for the year ended December 31, 20242025 as compared to the same period in 20232024 was due to a lower principal balance on our New Convertible Term Loan, relative to the Convertibleprior Termcontingent Loan,convertible debt agreement with the Lenders, that bears only a monthly interest as a result of the debt refinancing under the New Debt Agreement (seesuch “terms as defined in "Liquidity and Capital Resources”" below).

We determine the fair value of the contingent consideration using a probability based discounted cash flow model whereby we forecast the timing of the cash flow of the related future payment based on cytisinicline’s current clinical development phase and the remaining requirements for regulatory approval. Adjustments to the fair value of the contingent liabilities, other than payments, are recorded as a gain or loss in the Consolidated Statements of Loss and Comprehensive Loss (see Note 76 “Fair Value Measurements, Measurements—Fair Value of Sopharma Share Purchase Agreement Contingent Consideration” in the accompanying consolidated Financialfinancial Statementsstatements).

Loss on extinguishment of 2023 SVBSilicon Valley Bank convertible term loan

We have incurred an accumulated deficit of $205.6$260.2 million through December 31, 20242025, and we expect to incur substantial additional losses in the future as we operate our business and continue or expand our regulatory, manufacturing, commercialization and other R&D activities and other operations. We have not generated any revenue from product sales to date, and we may not generate product sales revenue in the near future, if ever. As of December 31, 2024,2025, we had a cash, cash equivalents and marketable securities balance of $34.4$36.4 million and a positive working capital balance of $29.8$30.8 million. For the year ended December 31, 2024,2025, net cash used in operations was $29.8$49.5 million.

We have historically financed our operations through equity and debt financings. While we believe that we will be able to settle our commitmentsfinancings and liabilitiesgovernment ingrants. the normal course of business as they fall due during the next 12 months, asAs a late-stage clinical specialty pharmaceutical company with no current sources of revenue, we are dependent on our ability to raise funds (through public or private securities offerings, debt financings, government funding or grants, or other sources, which may include licensing, collaborations or other strategic transactions or arrangements) to support the ongoing advancement of our clinical trialsdevelopment and corporatecommercialization activities. We believe that our existing cash, cash equivalents and marketable securities will be sufficient for us to fund our current operating expenses and capital expenditures into the third quarter of 2025.

Substantial doubt exists as to our ability to continue as a going concern. Our ability to continue as a going concern is subject to material uncertainty and dependent on our ability to obtain additional financing. WeWhile we have historically financed our operations through equity offerings and/orofferings, debt financings.financings, and government grants, the timing and amount of future financings may be impacted by macroeconomic conditions including uncertainty in the capital markets. There can be no assurance that financing from these or other sources will be available to us in the future. Without additional funds, we maywould be forced to delay, scale back or eliminate some of our commercialization and research and developmentdevelopment, or R&D, activities or other operations and potentially delay product development in an effort to provide sufficient funds to continue our operations. If any of these events occur,occurs, our ability to achieve our developmentcommercialization and commercializationdevelopment goals would be adversely affected.

Our current resources are insufficient to fund our planned operations for the next 12 months. We will continue to require substantial additional capital to continue our clinical development and commercialization activities. Accordingly, we will need to raise substantial additional capital from the sale of our securities, debt, partnering arrangements, non-dilutive fundraising or other financing transactions in order to continue to fund our operations and finance the remaining development and commercialization of our product candidate. The amount and timing of our future funding requirements will depend on many factors, including the pace of our commercialization activities and the pace and results of our clinical development, regulatory review and commercializationdevelopment efforts. The uncertainty with respect to our operations and the market generally may also make it challenging to raise additional capital on favorable terms, if at all. In addition, current macroeconomic conditions have caused uncertainty in various sectors, including the capital markets. Failure to raise capital as and when needed, on favorable terms or at all, will have a negative impact on our financial condition and our ability to prepare for commercialization and develop our product candidate. We expect our expenses to substantially increase over time in connection with our development, particularly as we prepare our commercialization activities and advance our product candidate in clinical development.

In addition, we expect to incur significant expenses and increasing operating losses for at least the next several years as we continue our clinical development of, seek regulatory approval for, and commercialize, cytisinicline and add personnel necessary to operate as a commercial-stage public company. We expect that our operating losses will fluctuate significantly from quarter to quarter and year to year due to timing of clinical development programs and efforts to achieve regulatory approvalapproval, commercialization activities, and commercialization.of clinical development programs.

The New Convertible Term Loan matures on December 1, 2027, which maturity date may be extended to June 1, 2028 upon the occurrence of certain events as provided for in the New Debt Agreement.2028. The first tranche of the New Convertible Term Loan, which was advanced on July 25, 2024, has an aggregate original principal amount of $10.0 million. The Lender will further makemade available to us, upon our request: (a) on or prior to October 31, 2025, a second tranche of the New Convertible Term Loan having an aggregate principal amount of $5.0 million in the event that we receivereceived written notice that the FDA hashad accepted for filing our NDA with respect to cytisinicline for a smoking cessation indication, or the Additional Term Loan Event I, and (b) on or prior to December 31, 2025, a third tranche of the New Convertible Term Loan having an aggregate principal amount of $5.0 million, subject to the Lender’s sole discretion. Interest is calculated on the outstanding principal amount of the New Convertible Term Loan at a floating rate per annum equal to the greater of (i) 7.0% and (ii) the prime rate minus 1.0%, which interest shall be payable in cash monthly in arrears and shall be payable on the earlier to occur of (x) the first day of the first month following any extension of credit by the Lender for our credit, (y) the date of any prepayment pursuant to the New Debt Agreement, or (z) the maturity date. The New Convertible Term Loan will be “interest-only” until December 31, 2025, subject to extension as provided for in the New Debt Agreement. The “interest-only” period may be extended to June 30, 2026, if (i) prior to December 31, 2025, we have received at least $40,000,000 in net cash proceeds from the issuance equity interests and (ii) the conditions of Additional Term Loan Event I have been satisfied.

Subject to certain terms and conditions, the conversion feature grants the Lender or, pursuant to an assignment, any designee thereof, or Conversion Right Holders (as defined in the New Debt Agreement),Holders, the right to convert part or all of the outstanding aggregate original principal amount of the New Convertible Term Loan, plus accrued and unpaid interest, into shares of our common stock at a conversion price equal to $7.00, subject to customary adjustment provisions. The Conversion Right Holders have the further right to convert part or all of the outstanding principal amount of the second and third tranchestranche of the New Convertible Term Loan, plus accrued and unpaid interest, into shares of our common stock at a conversion price equal to the greater of (i) $4.854, subject to customary adjustment provisions, and (ii) the lower of (a) 150% of the average of the closing sale price of our common stock during the 10 trading days preceding the effective date of such tranche and (b) 150% of the closing sale price of our common stock on the trading day immediately preceding the effective date of such tranche.

Additionally, the outstanding principal of the New Convertible Term Loan, plus accrued and unpaid interest, will automatically be converted into shares of our common stock at the applicable conversion price on such date if any, when the closing price per share of our common stock has been equal to or greater than (a) in the case of the outstanding aggregate original principal amount of the New Convertible Term Loan, plus accrued and unpaid interest, $24.00 or, (b) in the case of the outstanding principal amount of the second and third tranchestranche of the New Convertible Term Loan, plus accrued and unpaid interest, three times the applicable conversion price, in each case for the thirty consecutive trading days prior to such date, and the Liquidity Conditions (as defined in the New Debt Agreement) have been satisfied.

The New Debt Agreement contains customary affirmative and restrictive covenants, including covenants regarding the incurrence of additional indebtedness or liens, investments, transactions with affiliates, delivery of financial statements, payment of taxes, maintenance of insurance, dispositions of property, mergers or acquisitions, among other customary covenants. We are also restricted from paying dividends or making other distributions or payments on our capital stock, subject to limited exceptions. The New Debt Agreement also includes customary representations and warranties, events of default and termination provisions. The Lender may not engage in any short sales of, or other hedging transactions in, our common stock while any amounts are outstanding under the New Debt Agreement. As of December 31, 2025, we are in compliance with all covenants under the New Debt Agreement.

In a concurrent private placement, we issued unregistered warrants to purchase up to 13,086,151 shares of common stock at an exercise price of $4.906 per share (provided, however, that the purchaser may elect to exercise the warrants for pre-funded warrants in lieu of shares of common stock at an exercise price of $4.906, minus $0.001, the exercise price of each pre-funded warrant). These warrants will bewere immediately exercisable for shares of common stock or pre-funded warrants in lieu thereof,thereof and willexpired expirein October 2025 on the earlier of (i) three and one-half years following the date of issuance and (ii) 30 days followingafter our public disclosure of the acceptance of an NDA filing for cytisinicline by the FDA in a Day 74 Letter or equivalent correspondence. The shares of common stock issuable upon exercise of the warrants (or pre-funded warrants, as applicable) were subsequently registered pursuant to our registration statement on Form S-3, which was declared effective on May 6, 2024.

For the years ended December 31, 20242025 and 2023,2024, net cash used in operating activities was $29.8$49.5 million and $24.5$29.8 million, respectively. The increase in net cash used in operations in 20242025 as compared to 20232024 was due to higher R&D expenses associated with initiation,our ORCA-OL open-label safety trial, which was initiated in May 2024, andcontinued rampat upfull enrollment throughout the majority of enrollment of our ORCA-OL trial2025, and the timing of required upfront prepayments by our clinical vendors. This was partially offset by reduced costs associated with our Phase 3 ORCA-3 trial and Phase 2 ORCA-V1 trial as both were completed in theSeptember second quarter of 2023.2025.

For the years ended December 31, 20242025 and 20232024 net cash provided by financing activities was $48.5$51.5 million and $15.3$48.5 million, respectively. Net cash provided by financing activities for the year ended December 31, 2025 relates to proceeds received from our June 2025 public offering, warrant exercises, and the drawdown of the second tranche of the New Convertible Term Loan. Net cash provided by financing activities for the year ended December 31, 2024 relates to proceeds received from our February 2024 registered direct offering, the New Convertible Term Loan associated with the refinancing transaction in July 2024, warrant exercises, and stock sales under our employee stock purchase plan. This was partially offset by repayment of our Convertible Term Loan associated with the refinancing transaction.transaction Netin cashJuly provided by financing activities for the year ended December 31, 2023 relates to proceeds received from our May 2023 private placement, and warrant exercises.2024.

Under the fair value recognition provisions of the ASC 718, “Stock CompensationCompensation,”, we use the modified prospective method with respect to options granted to employees and directors. The expense is amortized on a straight-line basis over the graded vesting period.

We account for warrants pursuant to the authoritative guidance on accounting for derivative financial instruments indexed to, and We account for warrants pursuant to the authoritative guidance on accounting for derivative financial instruments indexed to, and potentially settled in, a company’s own stock, on the understanding that in compliance with applicable securities laws, the warrants require the issuance of registered securities upon exercise and therefore do not sufficiently preclude an implied right to net cash settlement. We have warrants classified as equity and these are not reassessed for their fair value at the end of each reporting period. Warrants classified as equity are initially measured at their fair value and recognized as part of stockholders’ equity. Determining the appropriate fair-value model and calculating the fair value of registered warrants requires considerable judgment, including estimating stock price volatility and expected warrant life. The computation of expected volatility was based on the historical volatility of comparable companies from a representative peer group selected based on industry and market capitalization. A small change in the estimates used may have a relatively large change in the estimated valuation. We use the Black-Scholes pricing model to value the warrants.

Investing in our common stock involves a high degree of risk. You should carefully consider the risks and uncertainties described below, together with all of the other information contained in this Quarterly Report on Form 10-Q and in the other periodic and current reports and other documents we file with the Securities and Exchange Commission, before deciding to invest in our common stock. If any of the following risks materialize, our business, financial condition, results of operationoperations and future prospects will likely be materially and adversely affected. In that event, the market price of our common stock could decline and you could lose all or part of your investment. These disclosures reflect our beliefs and opinions as to factors that could materially and adversely affect the Company and our securities in the future. References to past events are provided by way of example only and are not intended to be a complete listing of such events or a representation as to whether or not such factors or similar events have occurred in the past or their likelihood of occurring in the future. This list is not exhaustive and the order of presentation does not reflect management's determination of priority or likelihood.

As of MarchJune 31,30, 2026, the principal amounts due under our debt instruments (including the New Debt Agreement, as defined and further described under the section entitled “Management’s Discussion and Analysis of Financial Condition and Results of Operations”) totaled $15.0 million.

Cytisinicline is currently our sole product candidate and there is no guarantee that we will be able to successfully obtain approval from the FDAU.S. Food and Drug Administration, or FDA, or other regulatory agencies to commercialize cytisinicline.

We are currently dependent on the potential development and FDA approval of a single product candidate, cytisinicline. We are still developing and seeking regulatory approval for cytisinicline and it cannot be marketed or sold in the United States or in foreign markets until regulatory approval has been obtained from the FDA or applicable foreign regulatory agencies. The process of obtaining regulatory approval is expensive and time consuming. The FDA and foreign regulatory authorities may never approve cytisinicline for sale and marketing, and even if cytisinicline is ultimately approved, regulatory approval may be delayed or limited in the United States or in other jurisdictions. In September 2025, we announced that the FDA accepted for review our NDA for cytisinicline as a treatment of nicotine dependence for smoking cessation as the first indication in the United States and assigned a Prescription Drug User Fee Act, or PDUFA, targeted action date of June 20, 2026. OneIn June 2026, we received a Complete Response Letter, or CRL, from the FDA regarding our New Drug Application, or NDA, for cytisinicline relating to outstanding manufacturing-related observations from a current Good Manufacturing Practice, or cGMP, inspection of a third-party manufacturing facility and to final product labeling that was not completed by the FDA’s action date. The deficiencies cited in the CRL concern our prior third-party manufacturer named in our NDANDA, who underwent a non-Achieve related FDA current Good Manufacturing Practices, or cGMP,cGMP inspection and the FDA made observations, two of which were related to solid oral dose manufacturing. As a result, the third-party manufacturer's facility, where the FDA made the two observations, received an Official Action Indicated, or OAI, classification and a warning letter. We expect to receive a Complete Response Letter from the FDA on or before our June 20, 2026 PDUFA targeted action date, which would delay our NDA approval. The contents of such CRL could be made public by the FDA and could result in reputational harm to our company and cytisinicline, result in litigation, or result in a delay or the inability to commercialize cytisinicline. Even if we are authorized to sell and market cytisinicline in one or more markets, there can be no assurance that we will be able to successfully market cytisinicline or that cytisinicline will achieve market acceptance sufficient to generate profits. If we are unable to successfully develop and commercialize cytisinicline due to failure to obtain regulatory approval for cytisinicline, to successfully market cytisinicline, to generate profits from the sale of cytisinicline, or due to other risk factors outlined in this report, it would have material adverse effects on our business, financial condition and results of operations.

The FDA advised us that long-term exposure data to assess for safety beyond 12 weeks would be needed to adequately assess safety risks given that the FDA views smoking cessation drugs as products for chronic, repeated, and intermittent use as patients may relapse and require subsequent courses of treatment over a lifetime. In the first quarter of 2024, we reached agreement with the FDA that a single, open-label study, which we refer to as ORCA-OL, evaluating the long-term safety effects of cytisinicline would be sufficient to complete the requirement and enable an NDA submission. The ORCA-OL open-label exposure trial was initiated in May 2024 and was completed in September 2025. The clinical trial enrolled 479 subjects at 29 clinical trial sites across the United States. Safety data, from the ORCA-OL trial, on over 300 participants with at least six months of cumulative cytisinicline exposure was included in our NDA submission in June 2025 and on over 100 participants receiving at least one year of cumulative cytisinicline exposure was submitted to the FDA in October 2025 as part of the 120-day safety update. In September 2025, we announced that the FDA accepted for review our NDA for cytisinicline as a treatment of nicotine dependence for smoking cessation as the first indication in adultsthe United States and assigned a PDUFA targeted action date of June 20, 2026. OneIn third-partyJune manufacturer2026, namedwe in our NDA underwentreceived a non-Achieve related FDA cGMP inspection and the FDA made observations, two of which were related to solid oral dose manufacturing. As a result, the third-party manufacturer's facility, where the FDA made the two observations, received an Official Action Indicated, or OAI, classification and a warning letter. We expect to receive a Complete Response LetterCRL from the FDA on or before our June 20, 2026 PDUFA targeted action date, which would delayregarding our NDA approval.for cytisinicline relating to outstanding manufacturing-related observations from a cGMP inspection of a third-party manufacturing facility and to final product labeling that was not completed by the FDA’s action date. However, regardless of these discussionsdevelopments and the results of the ORCA-OL open label study, the FDA may determine that:

We will need approval from the FDA to commercialize cytisinicline in the United States and approvals from similar regulatory authorities in foreign jurisdictions to commercialize cytisinicline in those jurisdictions. In September 2025, we announced that the FDA accepted for review our NDA for cytisinicline as a treatment of nicotine dependence for smoking cessation as the first indication in adultsthe United States and assigned a PDUFA targeted action date of June 20, 2026. OneIn June 2026, we received a CRL from the FDA regarding our NDA for cytisinicline relating to outstanding manufacturing-related observations from a current Good Manufacturing Practice, or cGMP, inspection of a third-party manufacturing facility and to final product labeling that was not completed by the FDA’s action date. The deficiencies cited in the CRL concern our prior third-party manufacturer named in our NDANDA, who underwent a non-Achieve related FDA cGMP inspection and the FDA made observations, two of which were related to solid oral dose manufacturing. As a result, the third-party manufacturer's facility, where the FDA made the two observations, received an Official Action Indicated, or OAI, classification and a warning letter. We expectintend to receive a Complete Response Letter fromresubmit the FDANDA onnaming orAdare beforeas our Junefinished 20,drug product manufacturer for commercial supply in the fourth quarter of 2026 PDUFAand targetedanticipate actionthe date, that would delaypotential approval of ourcytisinicline NDA.for smoking cessation in the first half of 2027, followed by U.S. commercial launch. Even with the acceptance ofif our resubmitted NDA is accepted by the FDA, we cannot predict whether the results of our clinical trials and/or the data from our research and clinical approaches included in the NDA will be sufficient to demonstrate the safety and efficacy of cytisinicline for approval from the FDA for the proposed indication of cytisinicline. The FDA has substantial discretion in the product approval process. The approval process may be delayed by changes in government regulation, future legislation or administrative action or changes in FDA policy that occur prior to or during our regulatory review. Even if we comply with all FDA requests, the FDA may ultimately reject one or more of our applications. We may never obtain regulatory approval for cytisinicline. Failure to obtain approval from the FDA or comparable regulatory authorities in foreign jurisdictions to commercialize cytisinicline will leave us without saleable products and therefore without any source of revenues. In addition, the FDA may require us to conduct additional clinical testing or to perform post-marketing studies, as a condition to granting marketing approval of a product or permit continued marketing, if previously approved. If conditional marketing approval is obtained, the results generated after approval could result in loss of marketing approval, changes in product labeling, and/or new or increased concerns about the side effects or efficacy of a product. The FDA has significant post-market authority, including the explicit authority to require post-market studies and clinical trials, labeling changes based on new safety information and compliance with FDA-approved risk evaluation and mitigation strategies. The FDA’s exercise of its authority has in some cases resulted, and in the future could result, in delays or increased costs during product development, clinical trials and regulatory review, increased costs to comply with additional post-approval regulatory requirements and potential restrictions on sales of approved products. In foreign jurisdictions, the regulatory approval processes generally include the same or similar risks as those associated with the FDA approval procedures described above. We cannot be certain that we will receive the approvals necessary to commercialize cytisinicline for sale either within or outside the United States.

There have also been multiple recent U.S. congressional inquiries and proposed and adopted federal and state legislation designed to, among other things, bring more transparency to drug pricing, review the relationship between pricing and manufacturer patient programs, and reform government program reimbursement methodologies for drugs and biologics. In addition, Congress and multiple presidential administrations have indicated that they will continue to seek new legislative and/or administrative measures to control drug costs. These initiatives recently culminated in the enactment of the Inflation Reduction Act, or the IRA, in August 2022, which will, among other things, allow HHS to negotiate the selling price of certain drugs and biologics that CMS reimburses under Medicare Part B and Part D, although only high-expenditure single-source drugs that have been approved for at least 7 years (11 years for biologics) can be selected by CMS for negotiation, with the negotiated price taking effect two years after the selection year. The negotiated prices, which willthe first becomeof which became effective inon January 1, 2026, will beare capped at a statutory ceiling priceprice. beginningBeginning in October 2023, penalizethe IRA penalizes drug manufacturers that increase prices of Medicare Part B and Part D drugs at a rate greater than the rate of inflation. The IRA permits the Secretary of HHS to implement many of these provisions through guidance, as opposed to regulation, for the initial years. Manufacturers that fail to comply with the IRA may be subject to various penalties, including civil monetary penalties. The IRA also extends enhanced subsidies for individuals purchasing health insurance coverage in U.S. Affordable Care Act, or ACA, marketplaces through plan year 2025. These provisions took effect progressively starting in 2023, although they may be subject to legal challenges. We anticipate that additional state and federal healthcare measures could be adopted in the future, any of which could limit the amounts that federal and state governments will pay for healthcare products and services, which could result in reduced demand or lower pricing for cytisinicline, or additional pricing pressures. Currently, ACA and other federal laws and rules require most health insurance plans in the U.S. to cover some level of tobacco cessation treatments, including smoking cessation counseling and medications. If these provisions are repealed, in whole or in part, our business, financial condition, or results of operations could be negatively affected.

U.S. federal government agencies currently face potentially significant spending reductions. Under the Budget Control Act of 2011, the failure of Congress to enact deficit reduction measures of at least $1.2 trillion for the years 2013 through 2021 triggered automatic cuts to most federal programs. These cuts include aggregate reductions to Medicare payments to providers of up to two percent per fiscal year, which went into effect beginning on April 1, 2013 andand, willfollowing staysubsequent Congressional extensions, are scheduled to remain in effect through 2025fiscal unlessyear additional Congressional action is taken.2032. The American Taxpayer Relief Act of 2012, which was enacted on January 1, 2013, among other things, reduced Medicare payments to several providers, including hospitals and imaging centers. The full impact on our business of these automatic cuts is uncertain.

Third-party manufacturers, or CMOs, are subject to regulatory requirements covering manufacturing, testing, quality control and record keeping relating to product candidates and are also subject to ongoing inspections by regulatory agencies. Failure by CMOs to pass a pre-approval inspection by the FDA may require us to pursue alternative manufacturers, which could result in delay in review or approval of our NDA and commercialization, additional costs or other adverse impacts. Additionally, failure by CMOs to pass a pre-approval inspection by the FDA or to otherwise comply with applicable regulations may result in delays and interruptions to our product candidate supply, or additional costs, while we seek to secure another supplier that meets all regulatory requirements. One third-party manufacturer named in our NDA underwent a non-Achieve related FDA cGMP inspection and the FDA made observations, two of which were related to solid oral dose manufacturing. As a result, the third-party manufacturer's facility, where the FDA made the two observations, received an Official Action Indicated, or OAI, classification and a warning letter. The observations resulting in the OAI classification and warning letter at the third-party manufacturer's facility relate to general cGMP matters at the facility and are not specific to cytisinicline. We expect to receive a Complete Response Letter, or CRL, from the FDA on or before our June 20, 2026 PDUFA targeted action date, which would delay our NDA approval.

Our current supply agreement with Sopharma expires on July 28, 2037, unless extended by agreement between us and Sopharma. While Sopharma has been subject to oversight by regulators in Europe and Bulgaria, they have never been inspected by the FDA and there is no assurance that their quality systems will be satisfactory to pass a pre-approval inspection by the FDA in a timely manner or at all. We have concerns regarding Sopharma’s ability to meet the requirements of and pass an FDA pre-approval inspection and if our concerns regarding Sopharma are not resolved, we plan to engageutilize third-party manufacturers until such time that Sopharma is able to pass an FDA inspection. Sopharma has alleged that our engagementplanned utilization of third-party manufacturers is a breach of our agreement, which we have disputed and havein proposedJuly steps2026, Sopharma filed an arbitration demand alleging breach of the Sopharma Supply Agreement. Sopharma seeks actual, compensatory, incidental, and consequential damages; costs and attorneys’ fees; restitution; declaratory relief; and an order requiring us to resolveinclude Sopharma as our designated manufacturer in any future NDA submission. We dispute these claims and intend to defend the parties’matter dispute.vigorously. In the event we are unable to resolve our ongoingthe dispute with Sopharma,Sopharma suchduring arbitration proceedings or if the arbitration is resolved unfavorably to us, the dispute may result in litigation, additional costs or delays in activities relating to our NDA or ultimate commercialization.

Our transition of cytisiniclinefinished drug product manufacturing to a new third-party manufacturer could result in delays, supply disruptions, increased costs, and regulatory risk.

We are transitioning the manufacturing of cytisiniclineour finished drug product to a new third-party manufacturer, Adare. Although we believe this transition will enhance our supply chain capabilities, including providing redundancy and U.S.-based manufacturing, transferring manufacturing to a new facility is complex and entails significant risks, including the risk that the new manufacturer may be unable to reliably or timely manufacture cytisinicline at the required quality standards, in the necessary quantities, or at an acceptable cost, particularly as we progress to validation and commercial-scale production. The process of qualifying a new manufacturing site and implementing or scaling manufacturing processes may result in unanticipated technical challenges, deviations, failed batches, delays in release testing, capacity constraints, supply interruptions, or the need to repeat manufacturing activities, any of which could delay our planned regulatory submissions or resubmissions, delay or prevent commercial launch (if approved), or otherwise adversely affect our business and prospects. In addition, our reliance on third parties for manufacturing subjects us to risks outside our control, including changes in the manufacturer’s priorities, performance issues, shortages of raw materials or components, labor or transportation disruptions, and compliance risk, including the risk of adverse inspectional findings or other regulatory actions affecting the manufacturing site. If we are unable to successfully complete this manufacturing transition and establish a consistent commercial supply chain on a timely basis, we may be required to identify and qualify alternative manufacturers, which could be time-consuming and costly, and could have a material adverse effect on our business, financial condition, results of operations, and prospects.

We plan to establish necessary internal commercial infrastructure and engage third parties to build certain commercial capabilities to market cytisinicline. There are risks involved with entering into arrangements with third parties to perform these services. Furthermore, we have entered into a partnership with Omnicom to support the commercial launch of cytisinicline in the United States, which requires financial commitments in advance of approval and may result in disruption of our commercialization efforts if disputes or other issues arise in our relationship with Omnicom. If the commercial launch of cytisinicline is delayed or does not occur for any reason, including failure to receive marketing approval from the FDA, we would have prematurely or unnecessarily incurred these commercialization expenses.

Cytisinicline is not eligible for composition of matter patents in the United States as it is a naturally occurring substance. As such, third parties are able to manufacture, sell or distribute cytisinicline without royalties or other payments to us and compete with our products in the United States and potentially worldwide and negatively impact our commercialization efforts of our products. We are aware of additional cytisinicline products approved in several European countries and we may not be able to block other third parties from launching generic versions of cytisinicline. Third parties may also sell or distribute cytisinicline as an herbal or homeopathic product.product, which could compete with our products without the same regulatory oversight or clinical rigor applied to our development program. Other than regulatory exclusivity or other limitations, there may be little to nothing to stop these third parties from manufacturing, selling or distributing cytisinicline. Because we have no ability to set rigorous safety standards or control processes over CMOs, sellers or distributors of cytisinicline, excluding Sopharma, these formulations of cytisinicline may be unsafe or cause adverse effects to patients and negatively impact the reputation of cytisinicline as a safe and effective smoking cessation aid.

We currently rely primarily on trade secret protection and on confidentiality agreements to protect proprietary know-how that is not patentable or that we elect not to patent, processes for which patents are difficult to enforce and any other elements of our product candidate discovery and development processes that involve proprietary know-how, information or technology that is not covered by patents. Trade secrets can be difficult to protect, however, and even where they are protected, they generally provide less intellectual property protection to the holder of the trade secret than to a holder of a patent. We seek to protect our proprietary technology and processes, in part, by entering into confidentiality agreements with our employees, consultants, scientific advisors, and contractors. We also seek to preserve the integrity and confidentiality of our data and trade secrets by maintaining physical security of our premises and physical and electronic security of our information technology systems. While we have confidence in these individuals, organizations and systems, agreements or security measures may be breached, and we may not have adequate remedies for any breach. In addition, our trade secrets may otherwise become known or be independently discovered by competitors.

failure of any of our product candidatescandidate to demonstrate safety and efficacy, receive regulatory approval and achieve commercial success;

As of MarchJune 31,30, 2026, there were 4,970,5119,299,447 shares of our common stock subject to outstanding options and 1,084,33014,479,065 subject to outstanding restricted stock units, almost all of which have been registered under the Securities Act on Form S-8. The shares so registered can be freely sold in the public market after being issued to the option holder upon exercise, except to the extent they are held by an affiliate of ours, in which case such shares will become eligible for sale in the public market as permitted by Rule 144 under the Securities Act. Furthermore, as of MarchJune 31,30, 2026, there were approximately 20,391,30769,909,876 shares of our common stock subject to outstanding warrants to purchase common stock, with a weighted average exercise price of $3.30$3.45 per share, and 142,857243,357 shares of our common stock subject to outstanding pre-funded warrants, with an exercise price of $0.001 per share. To the extent any of these warrants are exercised, the shares underlying these warrants may be immediately sold in the public market.

In the future, we plan tomay raise additional capital through private placements or public offerings of our equity or debt securities. We cannot be certain that additional funding will be available on acceptable terms, if at all. To the extent that we raise additional financing by issuing equity securities, we may do so at a price per share that represents a discount to the then-current per share trading price of our common stock and our stockholders may experience significant dilution. Any debt financing, if available, may involve restrictive covenants, such as limitations on our ability to incur additional indebtedness, limitations on our ability to acquire or license intellectual property rights and other operating restrictions that could adversely affect our ability to conduct our business.

We are a late-stage clinical specialty pharmaceutical company with the sole mission to address the global nicotine dependence epidemic through the development and commercialization of cytisinicline. There are approximately 25 million adults in the United States who smoke combustible cigarettes.cigarettes, Tobaccoand tobacco use is currently the leading cause of preventable death that is responsible for more than eight million deaths worldwide and nearly half a million deaths in the United States annually.death.

While nicotine e-cigarettes are thought to be less harmful than combustible cigarettes, they remain highly addictive and can deliver harmful chemicals which are associated with lung injury, cardiovascular disease and cancer. In 2024,2025, 1.61.4 million high school and middle school students reported using e-cigarettes. Research shows adolescents who have used e-cigarettes are seven times more likely to become smokers one year later compared to those who have never used e-cigarettes. In 2024, the FDAU.S. Food and Drug Administration, or FDA, granted Breakthrough Therapy designation for cytisinicline for nicotine e-cigarette, or vaping, cessation. Breakthrough Therapy designation is a process that expedites the development and review of new drugs and biologics that are intended to treat serious or life-threatening conditions and have preliminary clinical evidence indicating substantial improvement over existing therapies.

OneIn June 2026, we received a Complete Response Letter, or CRL, from the FDA regarding our NDA for cytisinicline relating to outstanding manufacturing-related observations from a current Good Manufacturing Practice, or cGMP, inspection of a third-party manufacturing facility and to final product labeling that was not completed by the FDA’s action date. The FDA identified no deficiencies regarding the clinical efficacy or safety of cytisinicline. The deficiencies cited in the CRL concern our prior third-party manufacturer named in our NDANDA, who underwent a non-Achieve related FDA current Good Manufacturing Practices, or cGMP,cGMP inspection and the FDA made observations, two of which were related to solid oral dose manufacturing. As a result, the third-party manufacturer's facility, where the FDA made the two observations, received an Official Action Indicated, or OAI, classification and a warning letter. The observations resulting in the OAI classification and warning letter at the third-party manufacturer's facility relate to general cGMP matters at the facility and are not specific to cytisinicline. We expect to receive a Complete Response Letter, or CRL, from the FDA on or before our June 20, 2026 PDUFA targeted action date, which would delay our NDA approval. We have partnered with a U.S.-based manufacturer, Adare Pharma Solutions, or Adare, to manufacture cytisiniclineour finished drug product for potential commercial launch and beyond (see Note 8 "Related Party Transactions" in the accompanying consolidated financial statements). We have completed the analytical method transfer to Adare's manufacturing facility in Vandalia, Ohio. In addition, we have completed our first cytisinicline engineering batch manufactured at Adare's facility.facility and fully qualified all testing procedures at the site. We anticipate the partnership with Adare will help to decrease risks related to our supply chain,chain and international importation of pharmaceuticalspharmaceuticals, and reduce costs, including with respect to potential tariffs. We intend to resubmit the NDA naming Adare as our finished drug product manufacturer for commercial supply in the fourth quarter of 2026 and anticipate the commercialpotential launchapproval of cytisinicline for smoking cessation in the first half of 2027.2027, followed by U.S. commercial launch.

We believe cytisinicline represents a unique opportunity to significantly impact global health by addressing the considerable unmet need among millions of smokers and e-cigarettese-cigarette users. We believe cytisinicline is differentiated from existing smoking cessation treatments given its combination of efficacy, well-tolerated safety profile and dosing flexibility with a 6 or 12-week regimen, as demonstrated in clinical trials.

We believe we will be able to commercialize independently in the U.S. market by focusing our marketing and salescommercial efforts on highlyareas targetedwhere prescriberpatient unmet needs are highest, while developing a framework to support broader adoption across payers, prescribers, and patienthealth audiences.systems. We are planningconducting market research to launch cytisinicline by utilizing a well-established marketing technology infrastructureinform and embeddingvalidate Artificialour Intelligence,go-to-market orstrategy. AI,This toolswork tocoincides enhancewith targeting,building decisionout making,internal andcommercial performanceinfrastructure. metrics.Commercial Launch planning and readinessleadership activities are underway, leveraging our integrated agency partnership with Omnicom,recruitment with teams established foracross key functional areas including market access, medical education, prescriberpatient advocacy and patientgovernment marketing,affairs, trade, and digitalcustomer infrastructure.strategy. Additionally, we are evaluating the use of field-based and virtual sales representatives willto supplement digital promotional efforts.

We have no products approved for commercial sale and have not generated any revenue from product sales to date. We have never been profitable and have incurred operating losses in each year since inception. Our net loss was $10.2$84.9 million for the threesix months ended MarchJune 31,30, 2026. As of MarchJune 31,30, 2026, we had an accumulated deficit of $270.4$345.2 million, cash, cash equivalents and marketable securities balance of $29.3$187.3 million and a positivenegative working capital balance of $19.2$9.4 million. For the threesix months ended MarchJune 31,30, 2026, net cash used in operating activities was $6.9$17.7 million. In April 2026, we entered into a securities purchase agreement with certain institutional and accredited investors for a private placement of our securities. We received gross proceeds of approximately $180.0 million from the private placement, before deducting placement agent fees and other expenses. We estimate net proceeds to be approximately $168.6 million after deducting estimated placement agent fees and other expenses of approximately $11.4 million. In connection with the private placement, our board of directors appointed Andrew D. Goldberg, MD to the position of Chief Executive Officer and President, and as a member of the board of directors, effective following the closing of the private placement. We also appointed two additional members of our board of directors, Lucian Iancovici, MD and Aaron Royston, MD.

We communicated to Sopharma that we had concerns regarding their ability to pass an FDA pre-approval inspection and that if those concerns were not resolved, we planned to engageutilize third-party manufacturers, and include such manufacturers in our NDA, until such time that Sopharma is able to pass an FDA inspection. In June 2025, we submitted our NDA, which included third-party manufacturers. Sopharma has alleged that our engagementplanned utilization of third-party manufacturers is a breach of our agreement, which we have disputeddisputed. In July 2026, Sopharma filed an arbitration demand alleging breach of the Sopharma Supply Agreement. We dispute these claims and have proposed stepsintend to resolve.defend the matter vigorously. For more information on this arbitration demand, see “Item 1. Legal Proceedings."

As of MarchJune 31,30, 2026, the fair value of the contingent consideration was estimated to be $1.3$1.4 million (see Note 5 “Fair Value Measurements, Fair Value of Sopharma Share Purchase Agreement Contingent Consideration” in the accompanying unaudited consolidated financial statements). We recognized a loss of $0.1 million and a gain of $0.3$0.2 million for the three and six months ended MarchJune 31,30, 20262026, respectively, and a loss of $0.1 million and $0.2 million for the three and six months ended MarchJune 31,30, 2025.2025, respectively.

General and administrative expenses consist primarily of personnel costs related to executive, finance and accounting, commercial and other administrative functions, as well as consulting costs, including commercial, corporate communications, market research, business consulting, human resources and intellectual property. Other costs include professional fees for legal and auditing services, insurance and facility costs.

For the three and six months ended MarchJune 31,30, 2026 and 2025

Our R&D expenses are devoted to our one ongoing clinical development program, cytisinicline. R&D expenses for the three and six months ended MarchJune 31,30, 2026 decreased to $3.3$3.8 million and $7.1 million, respectively, as compared to $7.1$6.7 million and $13.8 million, respectively, for the three and six months ended MarchJune 31,30, 2025. The decrease in R&D expense forwas the three months ended March 31, 2026, wasprimarily due to a decrease in clinical trial costs of $3.3$3.2 million inand 2026$6.4 million for the three and six months ended June 30, 2026, respectively, as compared to the same periods in 2025, which were associated with the ORCA-OL trial, which was completed in September 2025 and wound down through the first quarter of 2026, as compared to the same period in 2025, in which higher costs incurred were associated with the continued full enrollment of the ORCA-OL trial.2025. In addition, R&D expenses were lower due to a decrease in stock-based compensation expense of $1.0$0.3 million and $1.3 million for the three and six months ended MarchJune 31,30, 20262026, respectively, as compared to the same periodperiods in 2025, due to the revaluation of the probability onof the achievement ofachieving certain performance conditions of our outstanding performance basedperformance-based restricted stock unit awards, or PRSUs.awards. This was partially offset by higher manufacturing and supply chain costs of $0.6$0.4 million and $1.0 million during the three and six months ended MarchJune 31,30, 20262026, respectively, as compared to the same periodperiods in 2025, which waswere associated with commercial launch preparation, including purchase of raw cytisinicline inventory expensed to R&D prior to regulatory approval andapproval, completion of analytical method transfer to Adare and completion of an engineering batch manufactured at Adare's facility.

General and administrative expenses for the three and six months ended MarchJune 31,30, 2026 increased to $7.2$14.6 million and $21.8 million, respectively, from $5.8$5.9 million and $11.7 million, respectively, for the three and six months ended MarchJune 31,30, 2025. The increase in expenses was primarily due to an increase in commercial launch preparation costs of $0.4 million and $2.6 million for the three and six months ended MarchJune 31,30, 20262026, respectively, as compared to the same periodperiods in 2025 was primarily due toand higher commercialemployee launchexpenses preparationof costs,$7.7 whichmillion wereand $3.2$6.2 million for the three monthsand ended March 31, 2026 as compared to $1.2 million for the same period in 2025, higher employee expenses of $0.6 million for the threesix months ended MarchJune 31,30, 20262026, respectively, as compared to the same periodperiods in 2025, which waswere associated with increased headcount, and an increase in legal expenses of $0.4 million for the three months ended March 31, 2026 as compared to the same period in 2025, associated with patent activities. This was partially offset by a decrease in stock-based compensation expenseand ofseverance $1.9 million for the three months ended March 31, 2026 as compared to the same period in 2025, due to the revaluation of the probability on the achievement of certain performance conditions of our outstanding PRSUs.expenses.

Total interest expense for the three and six months ended MarchJune 31,30, 2026, was $0.3 million and $0.6 million, respectively, compared to $0.2 million and $0.4 million for the three and six months ended MarchJune 31,30, 2025.2025, respectively. The increase in interest expense for the three and six months ended MarchJune 31,30, 2026 as compared to the same periodperiods in 2025 was due to a higher average debt balance of $15.0 million in 2026 as compared to $10.0 million in 2025.

For the three and six months ended MarchJune 31,30, 2026, we recognized a loss of $0.1 million and a gain of $0.2 million, respectively, on the fair value of the contingent consideration of $0.3 million.consideration. For the three and six months ended MarchJune 31,30, 2025, we recognized a loss on the fair value of the contingent consideration of $0.1 million.million and $0.2 million, respectively.

Liquidity,Liquidity and Capital Resources

We have incurred an accumulated deficit of $270.4$345.2 million through MarchJune 31,30, 2026, and we expect to incur substantial additional losses in the future as we operate our business and continue or expand our regulatory, manufacturing, commercialization and other R&D activities and other operations. We have not generated any revenue from product sales to date, and we may not generate product sales revenue in the near future, if ever. As of MarchJune 31,30, 2026, we had a cash, cash equivalents and marketable securities balance of $29.3$187.3 million and a positivenegative working capital balance of $19.2$9.4 million. For the threesix months ended MarchJune 31,30, 2026, net cash used in operations was $6.9$17.7 million. In April 2026, we entered into a securities purchase agreement with certain institutional and accredited investors for a private placement of our securities. We received gross proceeds of approximately $180.0 million from the private placement, before deducting placement agent fees and other expenses. We estimate net proceeds to be approximately $168.6 million after deducting estimated placement agent fees and other expenses.

We have historically financed our operations through equity offerings, debt financings, and government grants. As a late-stage clinical specialty pharmaceutical company with no current sources of revenue, we are dependent on our ability to raise funds (through public or private securities offerings, debt financings, government funding or grants, or other sources, which may include licensing, collaborations or other strategic transactions or arrangements) to support the ongoing clinical development and commercialization activities. While we believe that we will be able to settle our commitments and liabilities in the normal course of business as they fall due during the next 12 months, as a development-stagelate-stage clinical specialty pharmaceutical company with no current sources of revenue, we are dependent on our ability to raise funds (through public or private securities offerings, debt financings, government funding or grants, or from other sources, which may include licensing, collaborations or other strategic transactions or arrangements) to fund our operations and finance the remaining development and commercialization of our product candidate.

Interest is calculated on the outstanding principal amount of the New Convertible Term Loan at a floating rate per annum equal to the greater of (i) 7.0% and (ii) the prime rate minus 1.0%, which interest shall be payable in cash monthly in arrears and shall be payable on the earlier to occur of (x) the first day of the first month following any extension of credit by the Lender for our credit, (y) the date of any prepayment pursuant to the New Debt Agreement, or (z) the maturity date. The New Convertible Term Loan will bewas “interest-only” untilthrough June 30, 2026 (see Note 6 "Convertible Debt" in the accompanying consolidated financial statements).

A holder of common warrants or pre-funded warrants may not exercise the warrant if the holder, together with its affiliates, would beneficially own more than 4.99%, 9.99% or 19.99%, at the election of the holder (provided that no holder may beneficially own more than 19.99%) (the “Ownership Limitation”), of the number of shares of our common stock outstanding immediately after giving effect to such exercise. A holder of common warrants or pre-funded warrants may generally increase or decrease the Ownership Limitation by providing at least 61 days’ prior notice to us. A holder of common warrants or pre-funded warrants also may not exercise the common warrants or pre-funded warrants, as applicable, for shares of our common stock if we do not have sufficient authorized and unissued shares of our common stock to issue such shares of our common stock upon exercise.

We received grossnet proceeds of approximately $180.0 million from the private placement, before deducting placement agent fees and other expenses.We estimate net proceeds to be approximately $168.6$168.2 million after deducting estimated placement agent fees and other expenses of approximately $11.4$11.8 million.

For the threesix months ended MarchJune 31,30, 2026, net cash used in operating activities was $6.9$17.7 million compared to $11.1$20.2 million for the threesix months ended MarchJune 31,30, 2025. The decrease in cash used in operations in the 2026 period as compared to the 2025 period was due mainly to higher compensation costs paid out in 2025 for the wind2024 down of the ORCA-OL trial, which was completed in September 2025, as compared to the same period in 2025, in which costs incurred werebonuses associated with the continued full enrollmentachievement of thecorporate ORCA-OLgoals trial.and cash upfront payments in 2025 for commercial launch preparation activities. This was partially offset by payment of severance in 2026.

For the threesix months ended MarchJune 31,30, 2026, net cash used in investing activities was $123.5 million, compared to net cash provided by investing activities wasof $14.3 million compared to $11.4$18.1 million for the threesix months ended MarchJune 31,30, 2025. Net cash used in investing activities for the six months ended June 30, 2026 and net cash provided by investing activities infor the threesix months ended MarchJune 31, 2026 and30, 2025, respectively, waswere due to transactions involving marketable securities in the normal course of business.

The preparation of financial statements in accordance with U.S. GAAP requires management to make estimates and assumptions that affect reported amounts and related disclosures. We have discussed those estimates that we believe are critical and require the use of complex judgment in their application in our audited financial statements for the year ended December 31, 2025 in our Annual Report on Form 10-K filed with the SEC, on March 2424, 2026. SinceSee Note 2, “Accounting Policies,” for new significant accounting polices since December 31, 2025, there have been no material changes to our critical accounting policies or the methodologies or assumptions we apply under them.2025.