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

The Company has limited capital and substantial accumulated deficit as of the date of this Report. We do not have sufficient working capital and cash flows for continued operations for at least the next 12 months,months. which raisesAs a riskresult, ofmanagement has concluded, and our potentialindependent inabilityregistered public accounting firm has agreed with our conclusion that there is substantial doubt regarding our ability to continue as a going concern.concern for a period of at least 12 months beyond the filing of this Annual Report on Form 10-K. Our continued existence is dependent upon our obtaining the necessary capital to meet our expenditures, and we can provide no assurance that we will be able to raise adequate capital to meet our future working capital needs.

We have never generated revenue from product salessales, and all of our product candidates are currently in the preclinical and early clinical stage, and we may continue to incur significant losses for the foreseeable future and never generate revenue from product sales.

We had an accumulated deficit of $333,418,000$342.2 million from inception through December 31, 20242025 and expect to continue losing money in the future. We may never achieve income from operations or have positive cash flow from operations.

As an early-stage drug development company, our focus is on developing product candidates, obtaining regulatory approvals and commercializing pharmaceutical products. As a result, we have accumulated losses of $333,418,000$342.2 million from inception through December 31, 2024,2025, expect losses to continue, and have never generated revenue from product sales. We will need to raise additional capital in the near future to fund our operations and research and development programs for the next 12 months. There can be no assurance that we will ever generate income from operations or have positive cash flow from operations.

We are still in the early stages of preclinical and clinical development of our product candidates and have no products approved for commercial sale or presently in clinical trials. However, our ability to conduct clinical trials in a cost-effective manner and within the desired timeframes remains subject to uncertainties, supply chain shortages, and potential difficulties in obtaining adequate participant enrollments, infection rates or other study criteria. For example, in December 2024,see the Companyrisk announcedfactor plansbelow toentitled extend“We enrollmentface forsignificant therisks oraland uncertainties CDI-42344surrounding our Influenza A program following an initial Phase 2a study duewhich failed to unexpectedlyyield lowscientifically influenzaviable infectionresults among study participants. Specifically, management determined thatrelating the low infectivity obtained in this study hindered antiviral data analysis. The Company is currently in continuing discussions with the CRO to address this study and determine a course forward with respect thereto, including potentially by preparing a protocol amendment for approval by the Unitedproduct Kingdomcandidate’s MHRA in order to seek to extend enrollment in this study and to ensure necessary infection rates among enrolled study subjects in the study. While we cannot predict the ultimate outcome of these developments, we expect that we will need to incur additional expenses to proceed with trial and obtain data that can be used to continue our development of our CDI-42344 Influenza candidate, which development will also be delayed as a result. Further, our investments in the initial Phase 2s trial process could prove to be all or partially lost as a result.efficacy.” These and other challenges or events that may arise in the future with respect to our research research and development efforts could materially adversely effect our operations and financial position, cause reputational harm or damage our relationships with key or prospective collaborators or have other adverse consequences on us and our business.

We do not expect to independently conduct all aspects of our drug discovery activities, compound formulation research or preclinical testing of product candidates. We rely and expect to continue to rely on third parties to conduct some aspects of our preclinical testing and on third-party CROs to conduct clinical trials. This reliance can materially delay our research and developments efforts, and increase the costs of undertaking them. For example, beginning in 2021,the past certain of our CROs began experiencingexperienced staffing shortages and other issues due to the outbreak of Omicron cases,variant cases of COVID-19, resulting in delays and increased costs in researching our product candidates. We have also experienced material delays and cost increases in general throughout the pandemic caused by pandemic-related difficulties faced by our CROs and CMOs. Further, any disputes that may arise from our arrangements with CROs or CMOs may result in additional unexpected expenses and force our management to allocate their limited time to seeking a resolution to the problem, which could materially adversely affect our operations.

These events could lead to clinical study delays or failure to obtain regulatory approval or impact our ability to successfully commercialize future products. Some of these events could be the basis for regulatory actions,actions or litigation, including injunction, recall, seizure or total or partial suspension of production.

Part of our business plan envisions establishing manufacturing relationships with a limited number of suppliers to manufacture raw materials, drug substances, and the drug product of any product candidate for which we are responsible for preclinical or clinical development. Each supplier may require licenses to manufacture such components if such processes are not owned by the supplier or in the public domain. As part of any marketing approval, a manufacturer and its processes must be qualified by the FDA or foreign regulatory authorities prior to commercialization. If supply from the approved vendor is interrupted, there could be a significant disruption in commercial supply. An alternative vendor would need to be qualified through a New Drug Application (“NDA”) or marketing authorization supplement, which could cause further delay.delay or increased costs. The FDA or other regulatory agencies outside of the United States may also require additional studies if a new supplier is relied upon for commercial production.

We also expect to rely on other third parties to store and distribute drug products for any clinical trials we may conduct. Any performance failure by our distributors could delay clinical development or marketing approval of our product candidates or commercialization of our products, if approved, producing additional losses and depriving us of potential product revenue.revenue or incur losses.

Because our future commercial success depends on gaining regulatory approval for our products, we cannot generate revenue without obtaining approvals.approvals, which is a lengthy and uncertain process.

Our efforts to develop our product candidates are limited to a small number of product candidates aimed at treating a small number of viral diseases. To date, we have only entered a limited number of compounds into human clinical trials, including our influenza A product candidate to a Phase 2a trial and our norovirus / coronaviruses product candidate to a Phase 1 trial.trials. We may be unable to progress our product candidates undergoing preclinical testing into clinical trials. Success in preclinical testing and early clinical trials does not ensure that later clinical trials will succeed, and favorable initial results from a clinical trial do not determine outcomes in subsequent clinical trials. The indications of use for which we are pursuing development may have clinical effectiveness endpoints not previously reviewed or validated by the FDA or foreign regulatory authorities, which may complicate or delay our effort to obtain marketing approval. We cannot guarantee that our clinical trials will succeed. In fact, most compounds fail in clinical trials, even at companies far larger and more experienced than us. If any preclinical or clinical trials yield adverse results, it could delay the development of the product candidate, force us to cease pursuing the product candidate, or render it impossible or impracticable to proceed towards commercialization.

In addition to patent protection, we rely on trade secret protection and confidentiality agreements to protect proprietary know-how that is not patentable, processes for which patents are difficult to enforce and any other elements of our drug discovery and development processes that involve proprietary know-how, information or technology not covered by patents. Each of our employees agrees to assign their inventions to us through an employee inventions agreement. In addition, as a general practice, our employees, consultants, advisors and any third parties who have access to our proprietary know-how, information or technology enter into confidentiality agreements. Nonetheless, our trade secrets and other confidential proprietary information may be disclosed and competitors may otherwise gain access to our trade secrets or independently develop substantially equivalent information and techniques. In addition, in January 2018 the FDA as part of its Transparency Initiative, launched a voluntary pilot program calling on biopharmaceutical research companies to release clinical study reports summarizing clinical trial data. Based on these trends, the FDA may consider making release of clinical study reports mandatory and may consider making additional information publicly available on a routine basis in response to concerns expressed by the academic community emphasized by the COVID-19 pandemic, including information we may consider to be trade secrets or other proprietary information. If the FDA takes these measures, we may be forced to disclose proprietyproprietary information about our product candidates and research, which could materially harm our business.

The laws of some foreign countries do not protect proprietary rights to the same extent or in the same manner as the laws of the United States. We may encounter significant problems in protecting and defending our intellectual property both in the United States and abroad. Further, governments may in the future alter intellectual property rights in a manner adverse to us or to our third-party collaborators, including actions taken at the international level. For example, in June 2022 member countries of the World Trade Organization (“WTO”) agreed to implement a multi-jurisdictional five-year waiver of patent protection with respect to vaccines that target COVID-19 in an effort to fight the pandemic and allow for a more equal distribution of resources, particularly for developing countries,resources towards that goal. ThisFuture resultedactions fromsuch ongoingas discussions amongthe WTO member countries which began in 2020 with a proposal for a more extensive waiver that would have covered patents for COVID-19 related diagnostics and therapeutics as well as vaccines. The WTO waiver, together with similar actions that may be taken by the U.S. or foreign governments with respect to COVID-19-related products or other products in which we are or may become involved could materially diminish or eliminate our ability to protect the underlying intellectual property rights we rely on for such products, including those licensed from third parties, and as a result any potential competitive advantage would be lost. If we are unable to prevent material disclosure of the non-patented intellectual property related to our technologies to third parties, and there is no guarantee we will have any such enforceable trade secret protection, we may not be able to establish or maintain a competitive advantage in our market, which could materially adversely affect our business, results of operations and financial condition.

The availability of our competitors’ products could limit the demand, and the price we can charge, for any products we may develop and commercialize. We will not achieve our business plan if the acceptance of our products is inhibited by price competitioncompetition, coverage limitations by third party healthcare payors, or the reluctance of physicians to switch from existing drug products to our products, or if physicians switch to other new drug products or reserve our products for use in limited circumstances. Additionally, the biopharmaceutical industry is characterized by rapid technological and scientific change, and we may not be able to adapt to these rapid changes to the extent necessary to keep up with competitors or at all. The inability to compete with existing or subsequently introduced drug products would have a material adverse impact on our business, financial condition and prospects.

Because our business relies on proprietary technology and computer systems, we face certain security threats, including threats to our information technology infrastructure, attempts to gain access to our proprietary or confidential information, threats to physical security, and domestic terrorism events. Our information technology networks and related systems are critical to the operation of our business and our research and development efforts. We are also involved with information technology systems for certain third parties, which generally face similar security threats. Cybersecurity threats in particular, are persistent, evolve quickly and include, but are not limited to, computer viruses, attempts to access information, denial of service and other electronic securitysecurity. While we breaches believe that we have implemented appropriate measures and controls and invested in skilled information technology resources to appropriately identify threats and mitigate potential risks, but there can be no assurance that such actions will be sufficient to prevent disruptions to critical systems, the unauthorized release of confidential information or corruption of data. A security breach or other significant disruption involving these types of information and information technology networks and related systems could:

Any or all of the foregoing could have a material negative impact on itsour business, financial condition and prospects.

We depend on information technology infrastructure to pursue our business objectives and development efforts with respect to our product candidates. If a problem occurs that impairs this infrastructure, including as a result of an outage or malfunctioning of the hardware and software comprising or contributing to the information technology, the resulting disruption could impede our ability to proceed with research objectives in a timely manner, or otherwise carry on business in the normal course. Any such events could cause us to lose opportunities or progress with respect to product candidates or strategic alliances, and could require us to incur significant resources and expense to remediate.

Obtaining coverage and reimbursement approval of a product from a government or other third-party payor is a time-consuming and costly process, and no uniform policy of coverage and reimbursement for products exists among third-party payors in the United States. A primary trend in the U.S. healthcare industry is cost containment. Third-party payors have attempted to control costs by limiting coverage and the amount of reimbursement for particular products. Further, third-party payors are increasingly challenging prices charged for pharmaceutical products, and many third-party payors may refuse to provide coverage and reimbursement for particular drugs when an equivalent generic drug or a less expensive therapy is available. There can be no assurance that coverage and reimbursement will be available for any product we commercialize. Even if we obtain coverage for a given product, the resulting reimbursement payment rates might not be adequate for us to achieve or sustain profitability or may require co-payments that patients find unacceptable. If reimbursement is not available, or is available at limited levels, we may not be able to successfully commercialize product candidates we develop. For example, the U.S. Congress enacted the One Big Beautiful Bill (“OBBB”) Act, which made several changes to the Medicaid program, such as imposing Medicaid work requirements and imposing stricter eligibility and enrollment standards. Most of these policies will take effect in 2027. In addition, the OBBB Act did not extend the availability of enhanced premium subsidies, which subsidize patient premiums for Affordable Care Act (“ACA”) health insurance exchange plans and expired at the end of 2025. If these subsidies are not reinstated, it is possible that patient enrollment in ACA exchange plans could substantially decrease.

Due to the recent2025 changeinauguration inof a new presidential administration in the U.S., we and our industry face uncertainty including the potential for reduced government funding of research programs and staff and resource reductions at the FDA and other government agencies, which may adversely affect our business.

Since taking office in January 2025, President Trump and his cabinet have expressed an intention of and undertaken efforts to reduce the size and spending of the federal government. AsFor example, as part of this initiative, President Trump established the Department of Government Efficiency Efficiency (“DOGE”), which iswas tasked with reducing government spending and increasing efficiency of the federal government and its component agencies. SinceAlthough disbanded in late 2025, its establishment,charter DOGEis hasactive takenuntil actionJuly 4, 2026 and many of its functions were integrated into the broader federal administration, demonstrating the continuing principles and objectives aimed at reducing the workforce of the federal government and eliminating other expenditures, such as facility leases, used by the federal government and its component agencies. While these and other actions taken by the Trump Administration could be viewed as a part of a larger goal of de-regulation, a consequence of these developments and other actions taken by DOGE or the Trump Administration generally could be reduced resources, employees and contractors at the FDA and other federal agencies on which our operations depend or through which regulatory approvals are or will be required for us and our product candidates and programs. For example, less staff and resources at the FDA could result in the approval process for clinical trials or product candidates having a longer duration or being more costly to expedite. Additionally, government funding for research and development programs such as those we are pursuing could be significantly reduced, which could have the effect of limiting or eliminating our ability to access the capital needed to fund our programs. Any of these or other outcomes of President Trump’s term and government action generally, which remain uncertain, could materially adversely affect us.

As of March 14,25, 2025,2026, we have 1110 full-time employees. As our Company matures, we expect to expand our employee base to increase our managerial, scientific and operational, commercial, financial and other resources and to hire more employees, consultants and contractors. Future growth would impose significant additional responsibilities on our management, including the need to identify, recruit, maintain, motivate and integrate additional employees, consultants and contractors. Also, our management may need to divert a disproportionate amount of its attention away from our day-to-day activities and to manage these growth activities. We may not be able to effectively manage the expansion of our operations, which may cause weaknesses in our infrastructure, and give rise to operational mistakes, loss of business opportunities, opportunities, loss of employees and reduced productivity among remaining employees. Our expected growth could require significant capital expenditures expenditures and may divert financial resources from other projects, such as developing additional product candidates. If our management cannot effectively manage our growth, our expenses may increase more than expected, our ability to generate and/or grow revenues could be reduced, andwe we may not be able to implement our business strategy.strategy and we may face reputational or operational harm. Our future financial performance and our ability to commercialize product candidates and compete effectively will depend, in part, on our ability to manage our future growth.

If our operations are found to violate any of the laws described above or any other governmental regulations that apply to us, we may be subject to penalties, including, without limitation, civil and criminal penalties, damages, fines, possible exclusion from Medicare, Medicaid and other government and private healthcare programs, and curtailment or restructuring of our operations, which could adversely affect our ability to operate our business and our results of operations.

Our principal offices are in Bothell, Washington where we conduct our scientific research. We also maintain a small finance and accounting office in Miami, Florida and an administrative office in Australia. In addition, we rely on Australian CROs for our coronaviruses and norovirus programs, and our Influenza A program will continue to depend on one or more CROs in the United Kingdom for its Phase 2a study for the furtherance of our research and development efforts as to that product. We and third parties on which we rely are vulnerable to natural disasters such as earthquakes, tornados, severe storms, hurricanes, tsunamis, and fires, as well as other events that could disrupt our operations and cause delays in research and development of our product candidates. We do not carry insurance for natural disasters or similar events, and we may not carry sufficient business interruption insurance to compensate us for losses that may occur. Any losses or damages we incur could have a material adverse effect on our operations.

Because of central bank actions to combat inflation, the imposition of and threatuncertainties ofsurrounding tariffstariffs, wars and geopolitical conflicts, and other major events, the effect on the capital markets and the economy is uncertain, and we may have to deal with a recessionary economy and economic uncertainty including possible material adverse effects upon our business.

FollowingThese President Trump’s inauguration in January 2025, certain trends and events have begun to unfold which appear to be affecting the global and United States capital markets and economies, including the continued high central bank interest rates, the imposition and threat of tariffs, trade wars among nations and ongoing geopolitical conflicts, and uncertain capital markets with significant declines in leading market indexes in March 2025. The duration of these events and their impact are at best uncertain, and their continuation may result in negative consequences on the U.S. or global economies. President Trump recently began imposing tariffs on certain foreign countries with which the U.S. engages in trades with frequently, including Canada, Mexico and China, and in response certain countries and jurisdictions have responded by imposing or threatening to impose tariffs on U.S. goods. These developments follow the increase in interest rates that began in 2022 as the Federal Reserve in U.S. and central banks in other jurisdictions have sought to combat inflation. While in the U.S. inflation has since declined, many economists view additional increases in inflation as a likely or possible consequence of tariffs andthese adevelopments. tradeUncertainty war,surrounding andrising inor addition central banks including the U.S. Federal Reserve have been reluctant to reduce interest rates until further evidence appears that inflation is under control. Risingelevated prices from tariffs could cause an increase in inflation. In the meantime, uncertainty in the markets and concerning the state and prospects for the U.S. and global economies and capital markets in the near term remains and has amplified due to the factors described above. If inflation does not fall low enough and/or the Federal Reserve declines to reduce interest rates in the near term, or tariffs and imposedrelated or threatened by President Trump are counteracted by retaliatory tariffs imposed by other countries or otherwisedevelopments adversely impact the economy, the result could be tipping the U.S. economy into a recession. In the wake of these events, the U.S. and global capital markets have demonstrated substantial volatility in the first quarter of 2025, 2026, as many investors consider economic outlooks to be uncertain and consider the risk of a recession and a decline in the marketplace to be increasingly probable or imminent. Ultimately the economy may turn into a recession with uncertain and potentially severe impacts upon the public capital markets and us. Among the potential consequences could be a substantial decline in stock prices including ours, a reduction in demand for securities of public companies (which may be more prevalent for smaller companies such as us) and more difficulty for us to raise capital we need and accessing capital on favorable terms or at all as a result. These and related consequences could also impact our vendors which could have negative impacts on us and our research programs. We cannot predict how this will affect our business, but the impact may be material and adverse.

As of March 28,24, 2025,2026, out of approximately 10.2 million13,785,759 shares of common stock outstanding, approximately 6.87,743,000 millionof which are either free trading trading or may be sold without volume or manner of sale limitations under Rule 144. The remainder of our shares, because they are held by our officers, directors and one 5% stockholder subject to a voting agreement, who we deem affiliates, are subject to additional restrictions as described below.

Additionally, as of December 31, 2024,2025, we had approximately 550,000537,000 options and 256,000230,000 RSUs outstanding that, if fully exercised, would result in the issuance of 806,000767,000 shares of common stock and approximately 27,000 shares of common stock remain available for future grants under the Cocrystal Pharma, Inc. 2015 Equity Incentive Plan.stock.

In accordance with the provisions of our Certificate of Incorporation and the Stockholder Rights Agreement described above,Incorporation, our Board may issue one or more additional series of preferred stock that have more than one vote per share, so long as the Board obtains the majority approval of the stockholders who formerly held our Series A Convertible Preferred Stock, which is no longer authorized. This could permit our Board to issue preferred stock to investors who support our management and give effective control of our business to our management. Issuance of preferred stock could block an acquisition resulting in both a drop in our stock price and a decline in interest of our common stock. This could make it more difficult for stockholders to sell their common stock. This could also cause the market price of our common stock shares to drop significantly, even if our business is performing well.

We develop novel medicines for use in the treatment of human viral diseases. Cocrystal has been developing novel technologies and approaches towith createthe first-in-classgoal andof best-in-classcreating viable antiviral drug candidates since 2008.candidates. Our focus is to pursue the development and commercialization of broad-spectrum antiviral drug candidates that will transform the treatment and prophylaxis of viral diseases in humans. By concentrating our research and development efforts on viral replication inhibitors, we plan to leverage our infrastructure and expertise in these areas.

General and administrative expenses were $5,341,000$3,964,000 for the year ended December 31, 2024,2025, compared with $5,990,000 $5,341,000 for the year ended December 31, 2023.2024. This decrease of $649,000$1,377,000 was primarily due to reduction of insuranceinsurance, costcompensation and other general and administrative expenses.

Total other incomeincome, net was $374,000$188,000 for the year ended December 31, 2024,2025, compared to total other expenseincome, net of $575,000$374,000 for the year ended December 31, 2023.2024. This decrease of $201,000$186,000 was primarily due to a decrease in interest income discussed below.income.

We also had foreign exchange gain (loss) of $163,000$54,000 and $65,000($163,000) for the years ended December 31, 20242025 and 2023,2024, respectively, related to currency exchange rate measurements with regards to our Australian operations.

As a result of the above factors, net loss for the years ended December 31, 20242025 and 20232024 was $ 17,504,000$8,831,000 and $17,984,000 (net of $2.6 million legal settlement received),$17,504,000, respectively.

For the year ended December 31, 2024,2025, net cash used in operating activities was $16,485,000,$8,192,000, compared to net cash used in operating activities of $14,666,000$16,485,000 for the year ended December 31, 2023.2024. This increasedecrease was primarily related to the prior period expenses of our Influenza A Phase 2a clinical trial and preparation for our anticipated Influenza A Phase 1 inhaler administer medicine2a clinical trial and completion of our COVID-19Norovirus/Coronaviruses Phase 1 clinical trial.

For the year ended December 31, 2024,2025, net cash used in investing activities netted to $8,000,$12,000, whichcompared to net cash used in investing activities of $8,000 for the year ended December 31, 2024. Investing activities consisted of capital expenditures for lab equipment, software, and networking for our Lab located in Bothell, Washington. For the year ended December 31, 2023, our net cash used in investing activities consisted of $118,000.

For the year ended December 31, 2024,2025, net cash provided by financing activities was $0,$5,369,000, compared to net cash used by financing activities of $3,993,000$0 for the year ended December 31, 2023.2024. Net cash provided by financing activities in 20232025 was result of acapital raiseraises ofby $4,000,000 in a private placementthe sale of common stock.equity.

We expect that our reported cash balance is not be sufficient to support the Company’s working capital needs for the 12 months following the filing of this Report, taking into account our intended research and development efforts in 2025. As a result, we need to completeraise additional a financingcapital to providesupport theour neededongoing and anticipated working capital.capital needs.

The Company is party to the At-The-Market Offering Agreement, dated July 1, 2020 (“ATM Agreement”) with H.C. Wainwright & Co., LLC (“Wainwright”), pursuant to which the Company may issue and sell over time and from time to time, to or through Wainwright, up to $10,000,000 of shares of the Company’s common stock. InThe Company sold 85,076 shares at an average price of $1.88 Januaryunder 2021,the ATM agreement during the three and nine months ended September 30, 2025. As of the date of this Report, the Company has sold a 1,030,000total 1,200,152 shares of its common stock for total net proceeds of approximately $2,380,000 pursuant to the ATM Agreement. On September 12, 2025, the Company and Wainwright agreed to terminate the sales of shares under the ATM Agreement and the Company filed a prospectus supplement with the SEC to that effect. As a result of this, the at-the-market offering under the ATM Agreement is no longer ongoing as of September 12, 2025, and the Company will not make any sales of common stock pursuant to the ATM Agreement forunless netand proceedsuntil ofa approximatelynew prospectus $2.1 million.supplement Thereis havefiled beenwith nothe salesSEC; underhowever, the ATM Agreement sinceremains then.in full force and effect.

This Annual Report includes forward-looking statements within the meaning of The Private Securities Litigation Reform Act of 1995, including statements regarding our plans for the future development of preclinical and clinical drug candidates, our expectations regarding future characteristics of the product candidates we develop, the expected time of achieving certain value driving milestones in our programs, including, preparation, commencement and advancement of clinical studies for certain product candidates in 2025, our expectations with respect to market opportunities for certain product candidates and our plans regarding further clinical development of such product candidates, our search for collaboration partners, our expectations regarding future operating results, statement regarding the suitability and adequacy of our properties and capital resources, expectations with respect to our intellectual property rights, and our future liquidity.liquidity and efforts to raise additional capital.

The results anticipated by any or all of these forward-looking statements might not occur. Important factors, uncertainties and risks that may cause actual results to differ materially from these forward-looking statements include inflation, affordability, a deteriorating labor market, the possibility of recession, increases or other developments with respect to interest raterates, increases,uncertainty surrounding the impacts arising from imposed and threatened tariffs and developments with respect thereto, and wars and geopolitical conflicts including those in the conflictsMiddle in UkraineEast and IsraelUkraine on our Company, our collaboration partners, and on the U.S., U.K., AustraliaU.S. and global economy, economies, including manufacturing and research delays arising from raw materials and labor shortages, supply chain disruptions and other business interruptions including any adverse impacts on our ability to obtain raw materials and test animals as well as similar problems with our vendors and our current and any future CROs and CMOs, the progress and results of the studies for CC-42344 and CDI-988 including issues with the delay of theinitial Phase 2a study for CC-42344 which may requirewill usprolong tothe incurdevelopment substantialtimeline additionalof costs,such product candidate, the ability of our CROs to recruit volunteers for, and to proceed with, clinical studies, our and our collaboration partners’ technology and software performing as expected, financial difficulties experienced by certain partners, the results of future preclinical and clinical trials, general risks arising from clinical trials, receipt of regulatory approvals, regulatory changes including based on initiatives and actions taken by the Trump Administration which could, among other things, result in delays in regulatory approvals or limit access to federal funding for our programs, development of effective treatments and/or vaccines by competitors, including as part of the programs financed by the U.S. government, and potential mutations in a virus we are targeting which may result in variants that are resistant to a product candidate we develop. Further information on such uncertainties and risks is contained in the “Risk Factors” in Item 1A of this Annual Report. We undertake no obligation to publicly update or revise any forward-looking statements, whether as the result of new information, future events or otherwise. For more information regarding some of the ongoing risks and uncertainties of our business, see “Item 1A – Risk Factors” and our other filings with the SEC.

During the threesix months ended MarchJune 31,30, 2026 and more recently the Company continued to focus its research and development efforts primarily in in three areas of norovirus, influenza and coronavirus.

In December 2023 we received authorization from the United Kingdom Medicines and Healthcare Products Regulatory Agency (MHRA) to conduct conduct a Phase 2a human challenge study with oral CC-42344 as a potential treatment for pandemic and seasonal influenza A. This randomized, randomized, double-blind, placebo-controlled study was designed to evaluate the safety, tolerability, viral and clinical measurements of healthy subjects infected with the influenza A virus dosed with oral CC-42344 treatment. While in the Phase 2a study CC-42344 demonstrated favorable safety and tolerability profile and no serious adverse events (“SAEs”) or drug-related discontinuations by study participants, due to unexpectedly low influenza infection among study participants, management determined that the low infectivity and virology readout obtained in this study hindered antiviralthe dataclinical analysis.endpoints of the study. A dispute has arisen with the United Kingdom clinical research organization (the “CRO”) that performed the Phase 2a study. The Company contends that the CRO breached its agreement in a number of respects and is requesting that the CRO refund the $6,309,000 it was paid or redo the study. The CRO has implicitly denied liability and is seeking to recover an additional approximately $600,000 from the Company. As of the date of this Report, it appears that the Company willis seekseeking to arbitrate resolve the dispute through arbitration as required under the agreement with the CRO and more recently has filed a demand letter reserving all of our rights and has initiated arbitration. See the risk factor entitled “We face significant risks and uncertainties surrounding our Influenza A program following an initial Phase 2a study which failed to yield scientifically viable results relating to the product candidate’s efficacy” beginning on page 14 of our Annual Report on Form 10-K for the year ended December 31, 2025. Subject to resolution of this issue or our raising capital to conduct another study, we plan to continue development of oral CC-42344 as a treatment for pandemic and and seasonal influenza A.

Results of Operations for the Three and Six Months Ended MarchJune 31,30, 2026 compared to the Three and Six Months Ended MarchJune 31,30, 2025

Grant income is earned by award program progress from Company services provided. Total grant income for the three and six months ended March 31,June 30, 2026, and 2025 were $225,000$105,000 and $0,$330,000, respectively. There was no grant income during the three and six months ended June 30, 2025.

Total research and development expenses for the three months ended MarchJune 31,30, 2026, and 2025 were $1,371,000$2,142,000 and $1,360,000,$1,122,000, respectively. The increase of $1,020,000 was primarily due to costs associated with our norovirus and coronavirus candidate CDI-988 entering into a norovirus Phase 1a clinical trial for in 2026.

General and administrative expenses for the three months ended MarchJune 31,30, 2026, and 2025 were $1,210,000$1,147,000 and $981,000,$986,000, respectively. The increase of $229,000$161,000 was predominantlyprimarily due to an increaseincreases in legalprofessional fees and consultantinsurance cost partially offset with a decrease of $76,000 on salary and wages.expense.

Interest income for the three months ended MarchJune 31,30, 2026 and 2025 was $22,000$10,000 and $37,000,$28,000, respectively, and for the six months ended June 30, 2026 and 2025 was $32,000 and $65,000, respectively. The interest income was primarily earned on cash held in interest bearing bank accounts.

In 2022, the Company established a wholly owned subsidiary in Australia, making it subject to foreign exchange rate fluctuations. ForeignThere was a foreign exchange gain of $35,000 and $3,000 was recorded forduring the threesix months ended MarchJune 31,30, 2026 of $45,000 and 2025,a respectively.foreign exchange loss of $28,000 during the six months ended June 30, 2025.

No income tax benefit or expense was recognized for the three and six months ended MarchJune 31,30, 2026 and 2025. The Company’s effective income income tax rate was 0.00% and 0.00% for the three and six months ended MarchJune 31,30, 2026 and 2025. As a result of the Company’s cumulative losses, management has concluded that a full valuation allowance against the Company’s net deferred tax assets is appropriate.

As a result of the above factors, net loss for the three and six months ended MarchJune 31,30, 2026 was $2,299,000$3,164,000 and $5,463,000, compared with a net loss of $2,301,000 $2,055,000 and $4,356,000 for the three and six months ended MarchJune 31,30, 2025, respectively, primarily as a result of developments related to our three months ended March 31, 2026operations grant income of $225,000 and expenses as described above.

Net cash used in operating activities was $2,340,000$4,856,000 for the threesix months ended MarchJune 31,30, 2026 compared with net cash used in operating activities of $2,939,000$5,094,000 for the same period in 2025. ThisThe decrease was primarily due to decreaseincreases in periodaccounts expensespayable relatedand toaccrued our Influenza A Phase 2a clinical trial.expenses.

The Company has not yet established an ongoing source of revenue sufficient to cover its operating costs. The Company had $4,685,000$2,169,000 unrestricted cash on MarchJune 30, 2026. On July 31, 2026.2026, Wethe expectCompany thatentered ourinto reporteda cashSecurities balancePurchase isAgreement not(“SPA”) bewith sufficientOPKO Health, Inc., an accredited investor (the “Purchaser”), pursuant to supportwhich the Company sold and issued to the Purchaser a total of 5,474,053 shares of the Company’s workingcommon capital needsstock forat a purchase price of $0.9134 per share, the 12Nasdaq monthsConsolidated followingBid Price on the filingtrading day of thisclosing, report,resulting takingin intogross accountproceeds our intended research and development efforts forto the remainder Company of 2026$5.0 and beyond.million.

The Company is party to the At-The-Market Offering Agreement, dated July 1, 2020 (“ATM Agreement”) with H.C. Wainwright & Co., LLC (“Wainwright”), pursuant to which the Company may issue and sell over time and from time to time, to or through Wainwright, up to $10,000,000 of shares of the Company’s common stock. During January 2021, the Company sold 1,030,000 shares of its common stock pursuant to the ATM Agreement for net proceeds of approximately $2,072,000. On May 24, 2023, the Company filed a prospectus supplement covering sales under the ATM Agreement under which we may offer and sell shares of our common stock having an aggregate offering price of up to $7,250,000 from time to time through Wainwright. There were no sales under the ATM Agreement during the threesix months ended MarchJune 31,30, 2026.

This report includes forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including statements statements regarding the future effectiveness of our product candidates, our expectations regarding future characteristics of the product candidates we develop, our plans for the future development of preclinical and clinical drug candidates, the progress and expected timeor potential timelines of achieving certain value driving milestones in our programs and programs, progressing our programs in the clinical development process generally, our expectations regarding future operating results and liquidity.liquidity and our ability to raise capital. The words “believe,” “may,” “estimate,” “continue,” “anticipate,” “intend,” “should,” “plan,” “could,” “target,” “potential,” “is likely,” “will,” “expect” and similar expressions, as they relate to us, are intended to identify forward-looking statements. We have based these forward-looking statements largely on our current expectations and projections about future events and financial trends that we believe may affect our financial condition, results of operations, business strategy and financial needs.

The results anticipated by any or all of these forward-looking statements might not occur. Important factors that could cause actual results to materially differ from those in the forward-looking statements include the risks and uncertainties arising from our need for additional capital to fund our ongoing operations and our ability to obtain such capital on favorable terms or at all, the risks arising from inflation, frominterest rate increases, the possibility of a recession, interest rate increases,recession and the economic impact of Unitedsuch Statesevents tariff policies geopolitical conflicts including inflation,and the wars in the Middle East and Ukraine on our Company, our collaboration partners, and on the U.S., U.K., Australia and global economies, including downturns in economic activity and capital markets, manufacturing and research delays arising from raw materials and labor shortages, supply chain disruptions and other business interruptions including any adverse impacts on our ability to obtain raw materials and test animals as well as similar problems with our vendors and our current and any future contract research organizations (CROs) and contract manufacturing organizations (CMOs), the progress and results of the studies for CC-42344 and CDI-988 including the delay of the Phase 2a study for CC-42344 which may require us to incur substantial additional costs, the results of the studies for CC-42344 and CDI-988 and any future preclinical and clinical trials, the ability of our CROs to recruit volunteers for, and to proceed with, clinical studies, and our collaboration partners’ technology and software performing as expected, financial difficulties experienced by certain partners, the results of the studies for CC-42344 and CDI-988 and any future preclinical and clinical trials we or our strategic partners undertake including any adverse findings or delays, general risks arising from clinical trials, receipt of regulatory approvals and changes including based on initiatives and actions taken by the Trump Administration which could, among other things, result in delays in regulatory approvals or limit access to federal funding for our programsapprovals, regulatory changes, development of effective treatments and/or vaccines by competitors, including as part of the programs financed by governmental authorities and potential mutations in a virus we are targeting which may result in variants that are resistant to a product candidate we develop. Further information on our risk factors is contained in our filings with the SEC, including our Annual Report on Form 10-K for the year ended December 31, 2025. We undertake no obligation to publicly update or revise any forward-looking statements, whether as the result of new information, future events or otherwise.