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

You should carefully consider the risk factors set forth below as may be updated by our subsequent filings under the Exchange Act together with all the other information in this Annual Report, including our consolidated financial statements and the related notes included in Part II, Item 8 – Financial Statements and Supplementary Data of this Annual Report and the information set forth in Part II, Item 7A -- Management’s Discussion and Analysis of Financial Condition and Results of Operations, as well as in our other filings with the SEC, before making any investment decisions. Furthermore, the risks and uncertainties described below and in the other information mentioned above are not the only ones thewe Company faces.face. Additional risks and uncertainties not presently known to the Companyus or that we currently believe to be immaterial could, nevertheless, adversely affect the Company’sour business, operating results and financial condition, as well as adversely affect the value of an investment in the Company’sour securities, and the occurrence of any of these risks might cause you to lose all or part of your investment.

Risks Related to the Company’sOur Limited Operating History, Financial Condition and Need for Additional Capital

TheWe Company isare a clinical stage biopharmaceutical company and hashave incurred significant losses since itsour inception. TheWe Companyexpect expects itsour net losses to continue for the foreseeable future. TheWe Company isare not currently profitable and may never achieve or sustain profitability. TheWe Company isare unable to predict the extent of future losses or when itwe might become profitable, if ever. This raises substantial doubt regarding our ability to continue as a going concern.

Investment in pharmaceutical product development is highly speculative because it entails substantial upfront capital expenditures and significant risk that any potential product candidate will fail to demonstrate adequate effect or an acceptable safety profile, gain regulatory approval, and become commercially viable. TheWe Company hashave incurred net losses in each fiscal year since itsour inception, and as of December 31, 2024,2025, itwe had an accumulated deficit of approximately $70.7$97.7 million. TheWe Company expectsexpect to incur net losses for the foreseeable future as itwe incursincur significant clinical development costs related to the advancement of neflamapimod. TheWe Company hashave not commercialized any products and hashave never generated revenue from neflamapimod or any other product. In order to obtain revenues from any product candidate, the Companywe must succeed, either alone or in collaboration with others, in developing, obtaining regulatory approval for, and manufacturing and marketing drugs with significant market potential. The CompanyWe may never succeed in these activities and may never generate revenues that are significant enough to achieve profitability.

TheWe Company expectsexpect to incur significant additional operating losses for at least the next several years as itwe advancesadvance neflamapimod through clinical development, conductsconduct clinical trials, seeksseek regulatory approvalapproval, and commercializescommercialize neflamapimod, if it is ultimately approved for marketing. The costs of advancing product candidates into each successive clinical phase of the clinical development process tend to increase substantially. Therefore, the total costs to advance neflamapimod to marketing approval in even a single jurisdiction will be substantial. Due to the numerous risks and uncertainties associated with pharmaceutical product development, thewe Company isare unable to accurately predict the timing or amount of increased expenses, or when or if itwe will be able to begin generating revenue from the commercialization of neflamapimod, let alone achieve or maintain profitability.

The amount of the Company’sour future net losses will depend, in part, on the rate of future growth of itsour expenses, if and when neflamapimod is approved for marketing in various jurisdictions and itsour ability to generate revenues from any drug candidate that may ultimately be approved. If thewe Company isare unable to develop and commercialize one or more product candidates, either alone or through collaborations, or if revenues from any product that receives marketing approval are insufficient, itwe will not achieve profitability. Even if thewe Company doesdo achieve profitability, itwe may not be able to sustain it, which could materially and adversely affect itsour business.

The CompanyWe will require additional capital to fund itsour operations. If thewe Company failsfail to obtain necessary financing on acceptable terms, or at all, itwe may not be able to complete the development and commercialization of neflamapimod.

TheWe Company expectsexpect to spend substantial amounts to complete the development of, seek regulatory approvals for, and commercialize neflamapimod, if it is ultimately approved for marketing. These expenditures will include costs related to itsour planned clinical trials and costs associated with itsour license agreement with Vertex, under which thewe Company isare obligated to make certain payments in connection with the achievement of specified events.

Until such time, if ever, that the Companywe can generate sufficient product revenue and achieve profitability, itwe expectsexpect to seek to finance future cash needs through equity or debt financings and/or corporate collaboration, licensing arrangements and grants. Based upon the Company’sour current operating plan, thewe Company believesbelieve that the Company’sour cash and cash equivalents as of December 31, 2024,2025, will not be sufficient to enable the Companyus to fund itsour operating expenses and capital expenditure requirements for a period of at least 12 months following the issuance of the consolidated financial statements included elsewhere in this Annual Report without an additional equity or debt financing.

However, the Company’sour estimates and expectations regarding itsour cash runway are based on assumptions that may prove to be incorrect, and changing circumstances could cause itus to consume capital faster or in different ways than the Companywe currently expects.expect. For example, the Company’sour planned clinical trials may be more expensive, time-consuming, or difficult to implement than the Companywe currently anticipates.anticipate. Because the length of time and activities associated with the successful development of neflamapimod are highly uncertain, thewe Company isare unable to estimate the actual funds itwe will require to complete research and development and ultimately commercialize itsour drug candidate for one or more indications.

The Company’sOur future capital requirements will depend on, and could increase significantly as a result of, many factors, including:

The CompanyWe may raise additional capital in the future through a variety of sources, including public or private equity offerings, debt financings, grant funding, or strategic collaborations and licensing arrangements. However, adequate additional financing may not be available to the Companyus on acceptable terms, or at all. The Company’sOur failure to raise capital as and when needed would have a negative effect on itsour financial condition and itsour ability to pursue itsour business strategy. If thewe Company isare unable to secure additional capital in sufficient amounts or on terms acceptable to theus, Company, itwe may have to delay, scale back or discontinue itsour development or commercialization activities for neflamapimod.

Further, to the extent that thewe Company raisesraise additional capital through the sale of common stock or securities convertible or exchangeable into common stock, current stockholder’s ownership interest in the Companyus will be diluted. In addition, any debt financing may subject the Companyus to fixed payment obligations and covenants limiting or restricting itsour ability to take specific actions, such as incurring additional debt, making capital expenditures or declaring dividends. If thewe Company raisesraise additional capital through collaborations, strategic alliances or licensing arrangements with third parties, the Companywe may have to relinquish certain valuable intellectual property or other rights to itsour product candidates, technologies, future revenue streams or research programs or grant licenses on terms that may not be favorable to it.us. Even if the Companywe were to obtain sufficient funding, there can be no assurance that it will be available on terms acceptable to the Companyus or itsour stockholders.

The CompanyWe currently doesdo not have, and may never have, any products that generate significant revenues.

TheWe Company isare a clinical-stage biopharmaceutical company focused on developing treatments for age-related neurologicbrain disorders, currently hashave no products that are approved for commercial sale, and it is possible itwe may never be able to develop a marketable product. To date, thewe Company hashave not generated any revenues from itsour lead product candidate, neflamapimod, or from any other product candidate. The CompanyWe cannot guarantee that neflamapimod, or any other product candidate that itwe may develop or acquire in the future, will ever become a marketable product.

The research, testing, manufacturing, labeling, approval, sale, marketing and distribution of drug products are subject to extensive regulation in the U.S.US and in other countries. Before the FDA and other regulatory authorities in the European Union and elsewhere will approve neflamapimod (or any other drug candidate) for commercialization, the Companywe must demonstrate that it satisfies rigorous standards of safety and efficacy for each of its intended uses. If approved, in order to compete effectively in the commercial marketplace, drugs must be easy to administer, cost-effective and economical to manufacture on a commercial scale. The CompanyWe may not achieve any of these objectives.

The CompanyWe cannot be certain that itsour ongoing trials or any future clinical development of neflamapimod will be successful, or that it will receive the regulatory approvals required to commercialize neflamapimod for any intended use, or that any future research and drug discovery programs undertaken by the Companyus will yield a drug candidate suitable for investigation through clinical trials. Even if thewe Company isare able to successfully develop neflamapimod through approval and commercialization, any revenues from sales of the drug may not materialize for several years, if at all.

The CompanyWe may be required to make significant payments to Vertex in connection with the Company’sour license agreement.

Pursuant to the Vertex Agreement, the Companywe previously acquired an exclusive license to develop and commercialize neflamapimod for the diagnosis, treatment, and prevention of AD and other CNS disorders. Under the Vertex Agreement, thewe Company isare subject to significant potential future obligations, including payment of development milestones and royalties on net product sales, as well as other material obligations. The Vertex Agreement sets forth specific regulatory and product approval events and the related payments that the Companywe would be obligated to make to Vertex, if and when such events occur.

Among other obligations, the Vertex Agreement provides that the Companywe will make royalty payments to Vertex in the event aggregate net sales for a commercialized licensed product meet specified thresholds, subject to adjustment in the event of certain events, such as the absence of a valid patent claim or if fees are due to a third party for a license necessary for the development, manufacture, sale or use of a licensed product. Such royalties will be on a sliding scale as a percentage of net sales, depending on the amount of net sales in the applicable years. TheWe Company isare also obligated to make a milestone payment to Vertex upon net sales reaching a certain specified amount in any 12-month period.

The first expected milestone events concern filing of an NDA with the FDA for marketing approval of a licensed product in the U.S.,US, or a similar filing for a non-U.S.non-US major market. Thus, although thewe Company doesdo not expect any milestone or royalty payments to be due until such time, these potential obligations represent significant cash amounts that itwe may ultimately be obligated to pay. The CompanyWe cannot guarantee that itwe will have sufficient funds available to meet itsour obligations if and when these payments become due. The obligation to pay some or all of these milestone and royalty amounts may materially harm the Company’sour development efforts, as well as itsour overall financial condition.

The CompanyWe may expend itsour limited resources to pursue a particular product candidate or indication and fail to capitalize on product candidates or indications that may be more profitable or for which there is a greater likelihood of success.

TheWe Company intendsintend to focus itsour limited financial and other resources on developing neflamapimod and future product candidates for specific indications that thewe Company identifiesidentify as most likely to succeed, in terms of both regulatory approval and commercialization. As a result, the Companywe may forego or delay pursuit of opportunities with other product candidates or for other indications that may prove to have greater commercial potential. The Company’sOur resource allocation decisions may cause the Companyus to fail to capitalize on viable commercial products or profitable market opportunities. Spending on current and future research and development programs and on product candidates for specific indications may not yield any commercially viable products. If thewe Company doesdo not accurately evaluate the commercial potential or target market for a particular product candidate, itwe may relinquish valuable rights to that product candidate through collaboration, licensing or other royalty arrangements in cases in which it would have been more advantageous for the Companyus to retain sole development and commercialization rights to such product candidate.

The Company’sOur business may be impacted by macroeconomic conditions, including fears concerning the financial services industry, inflation, volatility in interest rates and volatile market conditions, and other uncertainties beyond the Company’sour control.

Actual events involving limited liquidity, defaults, non-performance or other adverse developments that affect financial institutions, transactional counterparties or other companies in the financial services industry or the financial services industry generally, or concerns or rumors about any events of these kinds or other similar risks, have in the past and may in the future lead to market-wide liquidity problems. The Company’sOur ability to effectively run itsour business could be adversely affected by general conditions in the global economy and in the financial services industry. Various macroeconomic factors could adversely affect the Company’sour business, including fears concerning the banking sector, volatility in inflation and interest rates and overall changes in economic conditions and uncertainties. A severe or prolonged economic downturn could result in a variety of risks, including the Company’sour ability to raise additional funding on a timely basis or on acceptable terms, or at all. A weak or declining economy could also impact third parties upon whom thewe Company dependsdepend to run itsour business. Concerns over bank failures and bailouts and their potential broader effects and potential systemic risk on the banking sector generally and on the biotechnology industry and its participants may adversely affect the Company’sour access to capital and itsour business and operations more generally. Although thewe Companyassess assesses itsour banking relationships as itwe believesbelieve necessary or appropriate, itsour access to funding sources in amounts adequate to finance or capitalize the Company’sour current and projected future business operations could be significantly impaired by factors that affect the Company,us, the financial institutions with which thewe Company hashave arrangements directly, or the financial services industry or economy in general.

If the Company’sour public float as measured pursuant to General Instruction I.B.6 to Form S-3 falls below $75 million, the Companywe will be subject to the restrictions set forth in General Instruction I.B.6 to Form S-3 that limit itsour ability to conduct primary offerings under a Form S-3 registration statement to one-third of the Company’sour public float in any 12 calendar months – often referred to as the “baby shelf rules.” As of March 14,11, 2025,2026, the Company’sour public float calculated in accordance with General Instruction I.B.6 of Form S-3 was approximately $37.3$47.5 million and, accordingly, we will be limited by the “baby shelf rules” unless and until itsour public float as measured pursuant to General Instruction I.B.6 to Form S-3 exceeds $75 million.

Risks Related to the Company’sOur Product Development and Regulatory Approval

TheWe Company isare heavily dependent on the success of itsour lead product candidate, neflamapimod, which is still under clinical development. If neflamapimod does not receive regulatory approval or is not successfully commercialized, the Company’sour business will be materially harmed.

TheWe Company hashave invested almost all of itsour efforts and financial resources to date in the development of neflamapimod. To date, thewe Company hashave not initiated or completed a pivotal clinical trial, obtained marketing approval for any product candidate, manufactured a commercial scale product or arranged for a third party to do so on itsour behalf, or conducted sales and marketing activities necessary for successful product commercialization. The Company’sOur future success is substantially dependent on itsour ability to successfully complete clinical development of, obtain regulatory approval for, and successfully commercialize neflamapimod as a treatment for DLB and additional indications, which may never occur.

TheWe Company expectsexpect a substantial portion of itsour efforts and expenditures over the next few years will be devoted to the advancement of neflamapimod’s clinical development. In order to be successful, the Companywe will need to successfully manage clinical and manufacturing activities, the pursuit of regulatory approval in multiple jurisdictions, securing manufacturing supply, building a commercial organization, and significant marketing efforts, among other requirements, before itwe can generate any revenues from commercial sales. The CompanyWe cannot be certain that itwe will be able to successfully complete any or all of these activities.

Furthermore, thewe Company hashave not submitted an NDA to the FDA or comparable applications to other regulatory authorities for neflamapimod, and itwe doesdo not expect to be in a position to do so in the near future, if ever. Significant additional clinical testing and research will be required before itwe can file an NDA or any other application seeking approval of neflamapimod for the treatment of DLB, or any other indication. If thewe Company isare unable to obtain the necessary regulatory approvals for and commercialize neflamapimod, it would materially adversely affect the Company’sour financial position, and the Companywe may not be able to generate sufficient revenue to continue itsour business.

The development and commercialization of drug products is subject to extensive regulation, and the regulatory approval processes of the FDA and comparable foreign authorities are lengthy, time-consuming, and inherently unpredictable. There is no guarantee that the Company’sour planned clinical trials for neflamapimod to treat patients with DLB, or in any other indications that the Companywe may pursue, will be successful. If thewe Company isare ultimately unable to obtain regulatory approval for neflamapimod on a timely basis, or at all, itsour business will be substantially harmed.

Clinical trials are expensive and can be difficult to design and implement. Such trials can take many years to complete, and their outcomes are inherently uncertain. Failure can occur at any stage during the clinical development process. The CompanyWe may experience difficulties in initiating and completing the clinical trials that itwe intendsintend to conduct, and thewe Company doesdo not know whether such trials will enroll patients on time, need to be redesigned, or be completed on schedule, if at all. In connection with designing and conducting itsour clinical trials, thewe Company facesface significant risks, including that itsour product candidate may not prove to be efficacious, patients may suffer adverse effects for reasons that may or may not be related to the product candidate being tested, the results may not confirm the positive results of itsour earlier preclinicalnonclinical studies and clinical trials, the FDA may disagree with the Company’sour interpretation of the clinical trial data or how those data inform the design of future clinical trials, and the results may not meet the level of statistical significance required by the FDA or other regulatory agencies to support approval.

The CompanyWe cannot predict with any certainty if or when itwe might complete itsour development efforts and submit an NDA for regulatory approval of neflamapimod, or whether any such NDA will be approved by the FDA. An NDA or comparable foreign submission seeking marketing approval for neflamapimod also may not be accepted by FDA or foreign regulatory authorities due to, among other reasons, the content or formatting of the submission.

This lengthy approval process, as well as the unpredictability of future clinical trial results, may result in the Company’sour failure to obtain regulatory approval to market neflamapimod as a treatment for DLB or any other indication, which would significantly harm the Company’sour business, results of operations, and prospects. The FDA and comparable foreign regulatory authorities have substantial discretion in the approval process and determining when or whether regulatory approval will be obtained for any new product candidate. Accordingly, even if thewe Company believesbelieve the data collected from itsour clinical trials are promising, such data may not be sufficient to support approval by the FDA or any comparable foreign regulatory authority. As a result, the Companywe may be required to conduct additional nonclinical studies, alter itsour proposed clinical trial designs, or conduct additional clinical trials to satisfy the regulatory authorities in each of the jurisdictions in which itwe hopeshope to conduct clinical trials and develop and market neflamapimod or any of other product candidates, if approved.

TheWe Company isare also generally required to register certain clinical trials and post the results of completed clinical trials on a government-sponsored database, such as ClinicalTrials.gov in the U.S.,US, within certain timeframes. Failure to do so can result in fines, adverse publicity and civil and criminal sanctions.

Clinical drug development involves a lengthy and expensive process, with an uncertain outcome. The CompanyWe may incur additional costs or experience delays in completing, or ultimately be unable to complete, the development and commercialization of neflamapimod or any other product candidates the Companywe may develop or acquire.

The risk of failure in drug development is high. Before obtaining marketing approval from regulatory authorities for the sale of any product candidate, a company must complete nonclinical development and conduct extensive clinical trials to demonstrate the safety and efficacy of itsour product candidates in humans. Clinical trials are expensive, difficult to design and implement and can take several years to complete, and their outcomes are inherently uncertain with the potential for failure at any time during the clinical development process. PreclinicalNonclinical and clinical data are often susceptible to varying interpretations and analyses, and many companies that have believed their product candidates performed satisfactorily in preclinicalnonclinical studies and early-stage clinical trials have nonetheless failed to obtain marketing approval of their products. It is impossible to predict when or if neflamapimod will receive marketing approval.

The CompanyWe may experience numerous unforeseen events during, or as a result of, itsour clinical trials that could delay or prevent itsour ability to receive marketing approval or commercialize neflamapimod for DLB or any other indication. Clinical trials may be delayed, suspended or prematurely terminated because costs are greater than thewe Company anticipatesanticipate or for a variety of other reasons, such as:

Many of the factors that cause, or lead to, a delay in the commencement or completion of clinical trials may also ultimately lead to the denial of marketing approval for neflamapimod or any other future product candidates. Further, the FDA or comparable foreign regulatory authorities may disagree with the Company’sour clinical trial design and the Company’sour interpretation of data from clinical trials or may change the requirements for approval even after the FDA has reviewed and commented on the design for the Company’sour clinical trials.

If thewe Company isare required to conduct additional clinical trials or other preclinicalnonclinical studies of neflamapimod in various disease conditions beyond those that the Companywe currently contemplates, ifor itwe isare unable to successfully complete clinical trials of the Company’sour product candidates or other studies, or if the results of these trials or tests are not positive or are only modestly positive or if there are safety concerns, the Companywe may:

Any failure or delay in commencing or completing clinical trials or obtaining regulatory approvals for neflamapimod would delay the Company’sour commercialization prospects, substantially increase the costs of commercializing neflamapimod, and severely harm the Company’sour business and financial condition.

TheWe Company hashave concentrated itsour recent research and development efforts on the treatment of DLB, a disease that has seen limited success in drug development. The ability to successfully develop drugs for DLB and other age-related neurologicbrain disorders is extremely difficult and is subject to a number of unique challenges. In addition, itsour rationale for neflamapimod in the treatment of DLB is based on a scientific understanding of the disease that may be wrong.

Drug development in the field of brain diseases, including age-related neurologicbrain disorders and other neurodegenerative diseases in particular, has seen very limited success historically. There have been limited efforts by biopharmaceutical and pharmaceutical companies to develop treatments for DLB and there are no therapies available for patients that have been approved with a specific indication to treat DLB. Only symptomatic therapies that are approved for other diseases, generally either AD or PD, are currently utilized to manage patients with DLB. In addition, many potential disease-modifying therapies have been evaluated in other neurodegenerative diseases, particularly in AD, and these have encountered challenges in their development and, as a result, only recently two disease-modifying treatments to treat AD have been approved in the U.S.US Developing a product candidate for treatment of these brain diseases is extremely difficult and subjects the Companyus to a number of challenges, including obtaining regulatory approval from the FDA and other regulatory authorities who have only a limited set of precedents to rely on.

The Company’sOur approach to the treatment of DLB focuses in large part on neflamapimod’s ability to inhibit the intra-cellular enzyme p38α. The expression of p38α is considered to be a critical contributor in the toxicity of inflammation, alpha-synuclein, amyloid-beta and tau to neurons and synapses, which the Companywe and other scientific experts believe leads to synaptic dysfunction. Synaptic dysfunction, specifically impaired synaptic plasticity, leads to disruption of episodic memory and is a significant event in the development and symptomatology of DLB.

However, the Companywe cannot be certain that itsour approach will lead to the development of approvable or marketable products. To date, the only drugs approved by the FDA to treat DLB have addressed the disease’s symptoms. In addition, there has never been an approval of a drug in DLB and therefore, there are no regulatory precedents for endpoints in that indication. Consequently, the FDA has a limited set of products to rely upon in evaluating neflamapimod. This could result in a longer than expected regulatory review process, increased expected development costs or the delay or prevention of commercialization of neflamapimod for the treatment of DLB.

Moreover, given the history of clinical failures in this field, future clinical or regulatory failures by the Companyus or others may result in further negative perception of the likelihood of success in this field, which may significantly and adversely affect the Company’sour business and the market price of itsour common stock.

Clinical results observed in the Company'sour Phase 1, Phase 2 and open-label clinical trials, including the 16-week Extension phase data from the RewinD-LB Trial, evaluating neflamapimod are not regulatory evidence of drug safety or efficacy.

We are a clinical-stage biotechnology company focused on developing treatments for age-related neurologicbrain disorders. We are currently focused on the development of ourOur lead drug candidate, neflamapimod, is an investigational, orally administered,administered smallsmall-molecule molecule brain penetrantdrug that readily crosses the blood–brain barrier and selectively inhibits the enzyme p38α, ina key driver of neuroinflammation and synaptic dysfunction. By targeting the neuronscritical disease processes underlying degenerative disorders of peoplethe with neurodegenerative diseases. We believebrain, neflamapimod has the potential to treatreverse synaptic dysfunction, theimprove reversibleneuron aspecthealth, ofand theslow underlyingor prevent disease processes in DLB and certain other major neurological disorders.progression. Neflamapimod is currently beingin evaluatedclinical indevelopment for the treatment of DLB, our ongoinglead RewinD-LBindication, Trial,as awell Phaseas 2bnfvPPA, studyRAS, inand patients with DLB funded primarily by a $21.3 million grant from the NIA.ALS.

Our novel approach focuses on reducing the impact of inflammation in the brain, or neuroinflammation, which we believe is a key factor in the manifestation of degenerative diseases of the brain, including DLB.brain. Chronic activation of the enzyme p38α in the brains of people with certain neurodegenerative diseases is believed to impair how neurons communicate through synapses. This impairment, termed synaptic dysfunction,dysfunction leads to deterioration of cognitive and motor abilities. Left untreated, synaptic dysfunction can result in irreversible neuronal loss that leads to devastating disabilities, significant reliance on a caretaker, long term care living, and, ultimately, death. However, before neuronal loss commences, disease progression in many major neurodegenerative disorders, including DLB, initially involves a protracted period of reversible functional loss, particularly with respect to the synapses. We believe that inhibiting p38α activity in the brain, by interfering with key pathogenic drivers of disease,brain has the potential to reverse the clinical progression observed in the early-stages of certain neurodegenerative diseases, as well as slow further progression by delaying permanent synaptic dysfunction and neuron death.death, by interfering with key pathogenic drivers of disease.

We believe we are a leader in the industry in developing a treatment for DLB, asa neflamapimoddisease with no approved therapies in the US or European Union despite being the second most common progressive dementia. Neflamapimod is the only clinical drug candidate ofthat, whichto weour are aware thatknowledge, has shown statistically significant improvements comparedon toclinical placeboendpoints and a biomarker of neurodegeneration in both a Phase 2a clinical trial (our AscenD-LB Trial) and improved outcomes (p < 0.001) on the trial’s primary endpoint in a Phase 2b evaluationclinical (16-weektrial. ExtensionDifferentiating dataour approach from ourpotential ongoingcompetitors, RewinD-LBwe Trial).believe Wewe are also the only company of which we are aware that is specifically targeting the treatment of DLB patients whowithout do not have concomitant AD-relatedAD co-pathology. Compared to patients with “pure” DLB – who may represent up to 50% of the total diagnosed DLB patient population at any given time –While DLB patients with AD co-pathology generally have significant, irreversible neuronal loss in the hippocampus, which may be assessed via imaging or biomarker evidence of amyloid and/or tau pathology.loss, DLB without AD co-pathology, however,co-pathology is primarily a disease of reversiblefunctional synapticdeficits dysfunctionof insynapses the BFC system and, based on available preclinical and clinical data,that we believe is more treatable. We believe if neflamapimod is given in the early stages of certain degenerative diseases of the brain,brain like DLB without AD co-pathology, it may reverse synaptic dysfunction, improve neuron health and function, and slow further progression by delaying synaptic dysfunction and neuronal death. We believe this approach enhances the alignment of our development path with neflamapimod’s mechanism of action, reduces the heterogeneity of our target patient population, and thereby hasprovides the potentialopportunity to improvedemonstrate outcomesheightened forclinical patients.effect in shorter duration trials.

As of December 31, 2024,2025, we had cash andcash, cash equivalents and marketable securities of approximately $38.9$20.9 million. To date, we have not had any products approved for sale and have not generated any revenue from product salessales, and our ability to do so in the future will depend on the successful development and eventual commercialization of neflamapimod (or another product candidate that we could acquire or develop in the future). We do not expect to generate revenue from product sales until such time, if ever.

Our accumulated deficit as of December 31, 2024,2025, was $70.7$97.7 million. We have never been profitable, and we will continue to require additional capital to develop neflamapimod and fund operations for the foreseeable future. We have historically incurred net losses in each year since inception. Our net losslosses waswere $16.3$27.0 million and $2.2$16.3 million in the years ended December 31, 20242025 and December 31, 2023,2024, respectively. We expect our expenses will increase in connection with our ongoing activities, as we:

Based on our current operating plan, we do not believe our existing cash andcash, cash equivalents and marketable securities on hand as of December 31, 20242025 will enable us to fund our operating expenses and capital expenditure requirements for at least twelve months from the issuance of the consolidated financial statements included in this Annual Report. The consolidated financial statements appearing elsewhere in this Annual Report have been prepared on a going concern basis, which contemplates the realization of assets and satisfaction of liabilities in the normal course of business and do not include any adjustments that might result from the outcome of this uncertainty.

To date, we have not generated any revenue from product sales and we do not expect to do so in the near future. In January 2023, we were awarded our $21.0 million NIA Grant and, in August 2024, we were awarded an additional $0.3 million under our NIA Grant. Funding from the NIA Grant iswas to be received in three annual installments and recognized as grant revenue as the qualifying expenses related thereto are incurred. During the year ended December 31, 2025, $4.0 million of grant funding was recognized as revenue, of which $3.6 million had been received and the remaining $0.4 million was recorded as grant receivable. During the year ended December 31, 2024, $9.7 million of grant funding was recognized as revenue, of which $7.4$7.5 million had been received and the remaining $2.3 million was recorded as grant receivable. DuringIn January 2026, we were informed that we will not receive the final 2% of year ended3 grant funding that remained unavailable as of December 31, 2023,2025, $7.1or millionapproximately $0.1 million, as a result of grantagency-wide fundingreductions wasin recognizedNIA as revenue, of which $6.2 million had been received at year-end and the remaining $0.9 million was recorded as grant receivable.funding.

Specific program expenses include expenses associated with the development of our lead product candidate, neflamapimod, including our ongoing Phase 2b RewinD-LB Trial in patients with DLB.neflamapimod. Personnel and other operating expenses incurred for our research and development programs primarily relate to salaries and benefits, stock-based compensation, and facility expenses.

Other Income (Expense)

Interest income was $1.9$1.3 million and $0.2$1.9 million for the years ended December 31, 20242025 and 2023,2024, respectively. The increasedecrease was primarily due to interestlower earnedinvestment onbalances our increasedas cash equivalentswas andused marketablefor securities balances in the current year period following the completion of the 2024 Private Placement in April 2024.operations.

From the date of our inception through December 31, 2024,2025, our operations hadhave primarily been financed through the issuance of common stock, convertible preferred stock and convertible debt financings. As of December 31, 2024,2025, we had approximately $38.9$20.9 million of cash andcash, cash equivalents and marketable securities. We have not generated positive cash flows from operations and as of December 31, 2024,2025, we had an accumulated deficit of approximately $70.7$97.7 million. In January 2023, we were awarded a $21.0 million grant from the NIA to support the RewinD-LB Trial, which is expected to bewas received over a three-year period. In August 2024, we received an additional $0.3 million from the NIA. As of December 31, 2024,2025, total cash funding of $14.8$20.5 million had been received from the NIA Grant.Grant and approximately $0.6 million in funding is remaining. In March 2025, the Companywe received access to 90% of the fullyear amount3 funding and, in June 2025, we received access to an additional 8% of currentthe year 3 funding provided for in the NIA Grant, due to currentthen-current NIA policy as a result of the U.S.US government currently being funded on the basis of a continuing resolution. TheAccordingly, timingas of December 31, 2025, we determined that the Company’s receipt of the remaining 10%2% of currentfunding was not probable and we would not account for the remaining 2% of funding unless and until received. In January 2026, we were informed that we will not receive the final 2% of year 3 grant funding isthat dependentremained uponunavailable and subject to U.S. congressional approvalas of December 31, 2025, or approximately $0.1 million, as a finalresult appropriationsof bill.agency-wide reductions in NIA funding.

On April 1, 2024, pursuant to and in accordance with the terms of a securities purchase agreement with certain purchasers named therein, we completed the private2024 placementPrivate Placement of an aggregate of 2,532,285 units, each comprised of (i) (A) one share of common stock or (B) one Pre-Funded Warrant and (ii) one Series A Warrant. The aggregate upfront gross proceeds from the 2024 Private Placement were approximately $50.0 million, before deducting offering fees and expenses, and additional gross proceeds of up to approximately $99.4 million may be received if the Series A Warrants are exercised in full for cash.

Based on our current operating plan, we do not believe our existing cash andcash, cash equivalents and marketable securities on hand as of December 31, 20242025, will enable us to fund our operating expenses and capital expenditure requirements for at least twelve months from the issuance of the consolidated financial statements included in this Annual Report. WeAccordingly, havesubstantial baseddoubt exists about our ability to continue as a going concern within one year after the date the consolidated financial statements included elsewhere in this estimateAnnual onReport assumptionsare that may prove to be wrong, and we could utilize our available capital resources sooner than we currently expect.issued. We will continue to require additional financing to advance our current product candidates through clinical development, to develop, acquire or in-license other potential product candidates and to fund operations for the foreseeable future. We will continue to seek funds through equity offerings, debt financingsfinancings, royalty arrangements, or other dilutive or non-dilutive capital sources, including potential collaborations, licenses and/or other similar arrangements. However, we may be unable to raise additional funds or enter into such other arrangements when needed on favorable terms or at all. If we do raise additional capital through public or private equity offerings, the ownership interest of our existing stockholders will be diluted, and the terms of these securities may include liquidation or other preferences that adversely affect our stockholders’ rights. If we raise additional capital through a debt financing, we may be subject to covenants limiting or restricting our ability to take specific actions, such as incurring additional debt, making capital expenditures or declaring dividends. Any failure to raise capital as and when needed could have a negative impact on our financial condition and on our ability to pursue our business plans and strategies. If we are unable to raise capital, we may need to delay, reduce or terminate planned activities to reduce costs, including our development or commercialization activities for neflamapimod. We might also be required to seek funds through arrangements with third parties that require us to relinquish certain of our rights to neflamapimod or otherwise agree to terms unfavorable to us.

Management’s discussion and analysis of our financial condition and results of operations is based on our financial statements, which have been prepared in accordance with U.S.US GAAP. The preparation of these financial statements requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements, as well as the reported revenue generated and expenses incurred during the reporting periods. Our estimates are based on our historical experience and on various other factors that we believe are reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions, and any such differences may be material. We believe that the accounting policies discussed below are critical to understanding our historical and future performance.

We believe research and development costs is a critical accounting policy and critical accounting estimate as it involves significant estimates and judgments in the preparation of our consolidated financial statements.estimate. Research and development costs are expensed as incurred and consist primarily of new product development. Research and development costs include salaries and benefits, consultants’ fees, process development costs and stock-based compensation, as well as fees paid to third parties that conduct certain research and development activities on our behalf.

A substantial portion of our ongoing research and development activities are conducted by third-party service providers. We record accruedan expensesestimate of expense for estimatednonclinical preclinical studystudies and clinical trialtrials expenses.in the period the expense is incurred. Estimates are based on the services performed pursuant to contracts with research institutions, CROs in connection with clinical studies, investigative sites in connection with clinical studies, vendors in connection with preclinicalnonclinical development activities, and CMOs in connection with the production of materials for clinical trials. Further, we accruerecord expenses related to clinical trials based on the level of subject enrollment and activity according to the related agreement. We monitor subject enrollment levels and related activity to the extent reasonably possible and make judgments and estimates in determining the accruedexpense balance in each reporting period. Payments for these activities are based on the terms of the individual arrangements, which may differ from the pattern of costs incurred, and are reflected in the consolidated financial statements as prepaid or accrued research and development.

If we underestimate or overestimate the level of services performed or the costs of these services, actual expenses could differ from estimates. To date, we have not experienced significant changes in our estimates of preclinicalnonclinical studies and clinical trial accruals.expenses.

We believe stock-based compensation is one of our criticalmore significant accounting policies used in the preparation of our consolidated financial statements. Stock-based compensation for employee and non-employee awards is measured on the grant date based on the fair value of the award and recognized on a straight-line basis over the requisite service period. The fair value of stock options to purchase common stock are measured using the Black-Scholes option pricing model. We account for forfeitures as they occur. The fair value of stock options is determined by us using the methods and assumptions discussed below. Each of these inputs is subjective and generally requires judgment and estimation by management.

Expected Volatility. We have limited information on the volatility of common stock as the shares were not actively traded on any public markets until recently.August 2023. As such, expected volatility is derived from the historical stock volatilities of comparable peer public companies within our industry. These companies are considered to be comparable to our business over a period equivalent to the expected term of the stock-based awards.

Risk-Free Interest Rate. The risk-free interest rate is based on the U.S.US Treasury yield curve in effect at the date of grant for zero-coupon U.S.US Treasury notes with maturities approximately equal to the stock options expected term.

Our novel approach focuses on reducing the impact of neuroinflammation, which we believe is a key factor in the manifestation of degenerative diseases of the brain. Chronic activation of p38α in the brains of people with certain neurodegenerative diseases is believed to impair how neurons communicate through synapses. This synaptic dysfunction leads to deterioration of cognitive and motor abilities. Left untreated, synaptic dysfunction can result in irreversible neuronal loss that leads to devastating disabilities, significant reliance on a caretaker, long term care living, and, ultimately, death. However, before neuronal loss commences, disease progression in many major neurodegenerative disorders, including DLB, initially involves a protracted period of reversible functional loss, particularly with respect to the synapses. We believe that inhibiting p38α activity in the brain has the potential to reverse the clinical progression observed in the early-stagesearly stages of certain neurodegenerative diseases, as well as slow further progression by delaying permanent synaptic dysfunction and neuron death, by interfering with key pathogenic drivers of disease.

As of MarchJune 31,30, 2026, we had cash, cash equivalents,equivalents and marketable securities of approximately $12.9$24.9 million. To date, we have not had any products approved for sale and have not generated any revenue from product sales, and our ability to do so in the future will depend on the successful development and eventual commercialization of neflamapimod (or another product candidate that we could acquire or develop in the future). We do not expect to generate revenue from product sales until such time, if ever.

Our accumulated deficit as of MarchJune 31,30, 2026 was $105.7$112.2 million. We have never been profitable, and we will continue to require additional capital to develop neflamapimod and fund operations for the foreseeable future. We have historically incurred net losses in each year since inception. Our net loss was $8.0$14.5 million and $4.9$11.2 million in the six months ended June 30, 2026 and 2025, respectively. Our net loss was $6.6 million and $6.3 million in the three months ended MarchJune 31,30, 2026 and 2025, respectively. We anticipate that our operating expenses may decline in the second half of 2026 as compared to our recent historical operating expenses as the number of our ongoing clinical trials and CMC activities have declined and we are currently focused on establishing a strategic partnership to enable us to advance neflamapimiod into Phase 3 development in DLB. In the long-term, however, we expect our expenses will increase in connection with our ongoing activities, as we:

Based on our current operating plan, we do not believe our existing cash, cash equivalents,equivalents and marketable securities on hand as of MarchJune 31,30, 2026, will enable us to fund our operating expenses and capital expenditure requirements forthrough the third quarter of 2027, a date which is at least twelve months from the date of issuance of the unaudited condensed consolidated interim financial statements included in this Quarterly Report. The unaudited condensed consolidated interim financial statements appearing elsewhere in this Quarterly Report have been prepared on a going concern basis, which contemplates the realization of assets and satisfaction of liabilities in the normal course of business and do not include any adjustments that might result from the outcome of this uncertainty.

To date, we have not generated any revenue from product sales and we do not expect to do so in the near future. In January 2023, we were awarded our $21.0 million NIA Grant and, in August 2024, we were awarded an additional $0.3 million under our NIA Grant. Funding from the NIA Grant was to be received in three annual installments and recognized as grant revenue as the qualifying expenses related thereto are incurred. There was no revenue recognized from the NIA Grant for the three and six months ended MarchJune 31,30, 2026. The total revenue recognized from the NIA Grant was $1.9$1.8 million and $3.7 million for the three and six months ended MarchJune 31,30, 2025.

We anticipate that our general and administrative expenses will remain consistent in the short term as we pursue a strategic partnership and will increase in the future as we increase our headcount to support our continued research and development activities and as we continue development activities. We also anticipate that we will incur increased expenses as a result of operating as a public company, including expenses related to compliance with the rules and regulations of the SEC and those of any national securities exchange on which our securities are traded, legal, auditing, additional insurance expenses, investor relations activities, and other administrative and professional services.

Comparison of the Three Months Ended MarchJune 31,30, 2026 and 2025

Our net loss was $8.0$6.6 million for the three months ended MarchJune 31,30, 2026, compared to $4.9$6.3 million in the prior year period. The aggregate increase of $3.1$0.3 million was primarily due to a $1.9$1.8 million decrease in grant revenuerevenue, andpartially offset by a $0.9$1.7 million increasedecrease in total operating expenses, in each case, as further described below.

There was no revenue recognized from the NIA Grant for the three months ended MarchJune 31,30, 2026. The total revenue recognized from the NIA Grant was $1.9$1.8 million for the three months ended MarchJune 31,30, 2025. The decrease of $1.9$1.8 million wasis due to the completion of the RewinD-LB Trial in mid-2025 and, accordingly, there currently being no further funding available or expected under the NIA Grant.

The following table summarizes our research and development expenses for the three months ended MarchJune 31,30, 2026,2026 and 2025:

Research and development expenses were $4.3 million for the three months ended June 30, 2026, compared to $5.1 million for the three months ended MarchJune 31, 2026, compared to $4.8 million for the three months ended March 31,30, 2025. The aggregate $0.3$0.8 million increasedecrease in research and development expenses was primarily due to a $1.4 million decrease in costs related to our recently completed RewinD-LB Trial and a decrease of $0.1 million in other clinical and nonclinical costs. These decreases were offset by an increases of $0.8$0.3 million in other research and development costs and $0.4 million in other clinical and nonclinical costs, driven,driven in each case,primarily by increased CMC and otherrelated activities to develop and evaluate a stable crystal form of neflamapimod and a new, controlled manufacturing process, as well as increases of $0.3 million in costs related to FTD,our asongoing wetrial continuedin recovery after stroke, $0.1 million in costs related to progress our Phase 2aongoing trial in nfvPPA, and $0.2$0.1 million in personnel costs, driven by higher headcount and outsourced consulting costs. These increases were offset by $1.4 million decrease in costs related to our DLB program – including our recently completed RewinD-LB Trial.

The following table summarizes our general and administrative expenses for the three months ended MarchJune 31,30, 2026,2026 and 2025:

General and administrative expenses were $3.0 million for the three months ended March 31, 2026, compared to $2.4 million for the three months ended MarchJune 31,30, 2026, compared to $3.3 million for the three months ended June 30, 2025. The aggregate increasedecrease of $0.6$0.9 million was primarily due to a $0.4$0.6 million increasedecrease in personnel costs primarily driven by lower headcount in the current year period and severance costs in the prior year period, a $0.1 million decrease in professional fees,fees driven by reduced legal expenses for patent work, other corporate legal expenses, and consulting expenses, and a $0.2 million increasedecrease in personnelstock-based costs,compensation primarily driven by increased headcount.expense.

There was a de minimis amount of other expenses for the three months ended MarchJune 31,30, 2026 and 2025.

Interest income was $0.1 million for the three months ended MarchJune 31,30, 2026, compared to $0.4 million for the three months ended MarchJune 31,30, 2025. The decrease of $0.3 million was primarily due to a change in returns on investments driven by a lower investment balance due to cash used for operations.operations, as the proceeds from the 2026 Private Placement and 2026 Registered Direct Offering were not received until late in the quarter.

From the date of our inception through MarchJune 31,30, 2026, our operations have primarily been financed through the issuance of common stock, convertible preferred stock and convertible debt financings. As of MarchJune 31,30, 2026, we had approximately $12.9$24.9 million of cash, cash equivalents,equivalents and marketable securities. We have not generated positive cash flows from operations and as of MarchJune 31,30, 2026, we had an accumulated deficit of approximately $105.7$112.2 million. In January 2023, we were awarded a $21.0 million grant from the NIA to support the RewinD-LB Trial, which was expected to be received over a three-year period. In August 2024, we received an additional $0.3 million from the NIA. As of MarchJune 31,30, 2026, aggregate total cash funding of $20.9 million hashad been received from the NIA Grant. There is no further funding available under this grant and no receivable balance remaining as of MarchJune 31,30, 2026. During the threesix months ended MarchJune 31,30, 2026, we forfeited $0.2 million previously awarded under the NIA Grant due to underbilling on an agreement with a clinical trial site. During the year ended December 31, 2025, we received access to 98% of the year 3 funding provided for in the NIA Grant, due to then-current NIA policy. In January 2026, we were informed that we would not receive the final 2% of year 3 grant funding, or approximately $0.2 million, that remained unavailable as of December 31, 2025, as a result of agency-wide reductions in NIA funding.

On May 12, 2025, we entered into the Sales Agreement with Leerink PartnersPartners, LLC, as sales agent, pursuant to which we may offer and sell shares of common stock from time-to-time with an aggregate offering price of up to $50.0 million under an “at-the-market" offering program. InDuring the three and six months ended June 30, 2025, we sold 550,000 shares of common stock to an institutional investor in a block sale for gross proceeds of $4.7 million, net of $0.1 million of issuance costs. There was no activity related to the Sales Agreement in the three and six months ended MarchJune 31,30, 2026.

Based on our current operating plan, we do not believe our existing cash, cash equivalents,equivalents and marketable securities on hand as of MarchJune 31,30, 2026, will enable us to fund our operating expenses and capital expenditure requirements forthrough the third quarter of 2027, a date which is at least twelve months from the issuance of the unaudited condensed consolidated interim financial statements included in this Quarterly Report. Accordingly,We substantialhave doubtbased existsthis aboutestimate on assumptions that may prove to be wrong, and we could utilize our abilityavailable tocapital continueresources assooner athan goingwe concerncurrently within one year after the date the unaudited condensed consolidated interim financial statements included elsewhere in this Quarterly Report are issued. The accompanying unaudited interim condensed consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and satisfaction of liabilities in the normal course of business. The unaudited interim condensed consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.expect. We will continue to require additional financing to advance our current product candidates through clinical development, to develop, acquire or in-license other potential product candidates and to fund operations for the foreseeable future. We will continue to seek funds through equity offerings, debt financings, royalty arrangements, or other dilutive or non-dilutive capital sources, including potential collaborations, licenses and/or other similar arrangements. However, we may be unable to raise additional funds or enter into such other arrangements when needed on favorable terms or at all. If we do raise additional capital through public or private equity offerings, the ownership interest of our existing stockholders will be diluted, and the terms of these securities may include liquidation or other preferences that adversely affect our stockholders’ rights. If we raise additional capital through a debt financing, we may be subject to covenants limiting or restricting our ability to take specific actions, such as incurring additional debt, making capital expenditures or declaring dividends. Any failure to raise capital as and when needed could have a negative impact on our financial condition and on our ability to pursue our business plans and strategies. If we are unable to raise capital, we may need to delay, reduce or terminate planned activities to reduce costs, including our development or commercialization activities for neflamapimod. We might also be required to seek funds through arrangements with third parties that require us to relinquish certain of our rights to neflamapimod or otherwise agree to terms unfavorable to us.

For the threesix months ended MarchJune 31,30, 2026, cash used in operating activities was $8.0$14.9 million. The net cash outflow from operations primarily resulted from net loss of $8.0$14.5 million,million and accretion of discount on marketable securities of $0.1 million, and changes in operating assets and liabilities of $0.3$1.0 million, partially offset by a non-cash expense of $0.3$0.7 million for stock-based compensation.

For the threesix months ended MarchJune 31,30, 2025, cash used in operating activities was $3.9$10.4 million. The net cash outflow from operations primarily resulted from net loss of $4.9$11.2 million and accretion of discount on marketable securities of $0.3$0.5 million, partially offset by changes in operating assets and liabilities of $0.9$0.4 million and by a non-cash expense of $0.4$0.9 million for stock-based compensation.

For the threesix months ended MarchJune 31,30, 2026, cash provided by investing activities was $7.7$10.2 million due to the maturities of marketable securities, partially offset by the purchase of marketable securities.

For the threesix months ended MarchJune 31,30, 2025, cash provided by investing activities was $5.4$5.1 million due to the maturities of marketable securities, partially offset by the purchase of marketable securities.

For the threesix months ended MarchJune 31,30, 2026, cash provided by financing activities was $13,800$18.9 million primarily due to proceeds from the cash2026 exercisePrivate ofPlacement employeeand stockthe options.2026 Registered Direct Offering.

We enter into contracts in the normal course of business with third-party contract organizations for clinical trials, nonclinical studies and manufacturing, and other services for operating purposes. The amount and timing of contractual obligations may vary based on the timing of services. We can generally elect to discontinue the work under these agreements at any time. In the future, we could also enter into additional collaborative research, contract research, manufacturing,manufacturing and supplier agreements which may require upfront payments or long-term commitments of cash.

During the threesix months ended MarchJune 31,30, 2026, there were no material changes to our critical accounting policies and estimates from those described under the heading "Management's Discussion and Analysis of Financial Condition and Results of Operations" in our Annual Report.