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What changed in Clene Inc.'s 10-K — 2024 vs 2025

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Paragraph-level year-over-year comparison of Clene Inc.'s 2024 and 2025 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2025 report.

+526 added−536 removedSource: 10-K (2026-03-17) vs 10-K (2025-03-24)

Top changes in Clene Inc.'s 2025 10-K

526 paragraphs added · 536 removed · 413 edited across 6 sections

Item 1. Business

Business — how the company describes what it does

214 edited+66 added−45 removed346 unchanged
Biggest changePending: BR March 30, 2011 July 12, 2016 Expiration dates for these patents will occur in 2030 in the U.S. and in 2032 in the applicable foreign jurisdictions* Methods and treatment for certain demyelination and dysmyelination-based disorders and/or promoting remyelination (these patents relate to CNM-Au8) Issued: AU, BR, CA, ID, IL, JP, KR, MX, NZ (2), PH, RU, SG (2); BE, DK, FI, FR, DE, HU, IE, IT, NL, NO, PT, SE, ES, SI, CH, TR, GB Pending: IN NA NA Expiration dates for these patents will occur in 2033 in the U.S. and the applicable foreign jurisdictions* * Expiration dates do not include possible patent extensions for certain countries.
Biggest change(2), MX July 8, 2009 March 28, 2017 October 22, 2019 April 20, 2021 Expiration dates for these patents will occur in 2030 in the U.S. and the applicable foreign jurisdictions* Novel gold-platinum based bi-metallic nanocrystal suspensions, electrochemical manufacturing processes therefor and uses for the same (these patents do not relate to any specifically named product candidates herein) Issued: U.S., AU, CA, CH, CN, DE, DK, ES, FI, FR, GB, ID, IE, IL, IN, IT, JP, KR (2), MX, NL, NO, NZ, PH, RU, SE, SG, UAE March 30, 2011 July 12, 2016 Expiration dates for these patents will occur in 2030 in the U.S. and in 2032 in the applicable foreign jurisdictions* Methods and treatment for certain demyelination and dysmyelination-based disorders and/or promoting remyelination (these patents relate to CNM-Au8) Issued: AU, BE, BR, CA, CH, DE, DK, ES, FI, FR, GB, HU, ID, IE, IL, IT, JP, KR, MX, NL, NO, NZ (2), PH, PT, RU, SE, SG (2), SI, TR NA NA Expiration dates for these patents will occur in 2033 in the U.S. and the applicable foreign jurisdictions* * Expiration dates do not include possible patent extensions for certain countries.
For example, the conversion of NADH to NAD + is usually very slow at room temperature, but upon addition of our gold nanocrystal suspension, CNM-Au8, we have observed the very rapid conversion of NADH into NAD + . Importantly, the NAD reaction drives ATP production in both the mitochondrion as well as the in the cytoplasm through glycolysis.
For example, the conversion of NADH to NAD + is usually very slow at room temperature, but upon addition of our gold nanocrystal suspension, CNM-Au8, we have observed the very rapid conversion of NADH into NAD + . Importantly, the NAD reaction drives ATP production in both the mitochondrion as well as in the cytoplasm through glycolysis.
Panel C-D, Neurotoxin (MPP + ) induced mitochondrial stress and death of dopaminergic neurons in primary E15 rat co-cultures is prevented by CNM-Au8 (green), as determined by TH + cell number (not shown), reduction of ROS as measured as by the fraction of dopaminergic ( “ TH ” ) cells fluorescing with CELLROX Green signal, a marker of cytosolic oxidizing environment (C), and increased mitochondrial membrane potential (Mitotracker Red CMXRos) (D).
Panel C-D, Neurotoxin (MPP + ) induced mitochondrial stress and death of dopaminergic neurons in primary E15 rat co-cultures is prevented by CNM-Au8 (green), as determined by TH + cell number (not shown), reduction of ROS as measured by the fraction of dopaminergic ( “ TH ” ) cells fluorescing with CELLROX Green signal, a marker of cytosolic oxidizing environment (C), and increased mitochondrial membrane potential (Mitotracker Red CMXRos) (D).
These proteins were apolipoproteins A-I, A-II, C-II, C-III, and E. These apolipoproteins are known to bind to specific receptors on the blood-brain barrier and promote the transport of substances across the blood-brain barrier. (Ashkarran A. A., et al . “Protein Corona Composition of Gold Nanocatalysts.” ACS Pharmacology and Translational Science (2024), 7 (4),1169-1177).
These proteins were apolipoproteins A-I, A-II, C-II, C-III, and E. These apolipoproteins are known to bind to specific receptors on the blood-brain barrier and promote the transport of substances across the blood-brain barrier. (Ashkarran, et al . “Protein Corona Composition of Gold Nanocatalysts.” ACS Pharmacology and Translational Science , 7 (4), 1169-1177 (2024)).
The estimate incorporated the prespecified covariates for survival analyses from the HEALEY ALS Platform Trial (i.e., months from symptom onset, pre-treatment ALSFRS-R slope, age, background riluzole treatment, background edaravone treatment); and ● Sensitivity analyses, which included additional covariate models such as baseline serum NfL levels, use of ALS background therapy, and the TRICALS risk score, confirmed the robustness and statistical significance of the findings.
The estimate incorporated the prespecified covariates for survival analyses from the HEALEY ALS Platform Trial (i.e., months from symptom onset, pre-treatment ALSFRS-R slope, age, background riluzole treatment, background edaravone treatment). ● Sensitivity analyses, which included additional covariate models such as baseline serum NfL levels, use of ALS background therapy, and the TRICALS risk score, confirmed the robustness and statistical significance of the findings.
Remyelination Summary Figure 9. A summary of myelinating activities of CNM-Au8 . Top row: Left: illustration of the demyelination (red) of a neuron ’ s axon (yellow) that occurs in MS; Right: Illustration of restored myelination along the axon (blue) provided by the OL (blue cell).
Figure 9. Remyelination Summary Figure 9. A summary of myelinating activities of CNM-Au8 . Top row: Left: illustration of the demyelination (red) of a neuron ’ s axon (yellow) that occurs in MS; Right: Illustration of restored myelination along the axon (blue) provided by the OL (blue cell).
Key secondary endpoints for the integrated analyses, mean change from baseline in the in the NAD + and NADH fractions of the total NAD pool, were concordant with the primary endpoint, demonstrating the NAD + fraction increased and the NADH fraction decreased (p=0.0264, paired t-test).
Key secondary endpoints for the integrated analyses, mean change from baseline in the NAD + and NADH fractions of the total NAD pool, were concordant with the primary endpoint, demonstrating the NAD + fraction increased and the NADH fraction decreased (p=0.0264, paired t-test).
A full volume head coil was used to collect whole brain spectral waveforms in ~600 voxels with a spatial resolution of 2 cm 3 for the following metabolites: NAD pool (both NAD + and NADH together), α-ATP, ß-ATP, γ-ATP, phosphocreatine, extracellular and cellular inorganic phosphate, uridine diphosphate glucose, phosphocholine, phosphoethanolamine, glycerophosphocholine, and glycerophosphoethanolamine.
A full volume head coil was used to collect whole brain spectral waveforms in ~600 voxels with a spatial resolution of 2 cm 3 for the following metabolites: NAD pool (both NAD + and NADH together), α-ATP, ß-ATP, γ-ATP, phosphocreatine, extracellular and cellular inorganic phosphate, uridine diphosphate glucose, phosphocholine, phosphoethanolamine, glycerophosphocholine, and glycerophosphoethanolamine.
Our nonclinical development team collaborates with our biological science discovery and clinical development teams to translate our findings into animals and prepare for eventual studies in patients. Our nonclinical development team also leads our external collaboration research activities with universities and academic experts.
Our nonclinical development team collaborates with our biological science discovery and clinical development teams to translate our findings into animals and prepare for eventual studies in patients. Our nonclinical development team also leads our external collaboration research activities with universities and academic experts. Clinical Development.
(3), AU, CA, CN, IL, IN, IS, JP, KR; CH, DE, DK, FI, FR, IE, NL, NO, SE, GB Pending: EP January 15, 2009 June 30, 2015 July 31, 2018 May 18, 2021 Expiration dates for these patents will occur in 2030 in the U.S. and the applicable foreign jurisdictions* Novel gold-based nanocrystals for medical treatments and electrochemical manufacturing processes therefor (these patents relate to CNM-Au8) Issued: U.S.
(3), AU, CA, CH, CN, DE, DK, FI, FR, GB, IE, IL, IN, IS, JP, KR, NL, NO, SE Pending: EP January 15, 2009 June 30, 2015 July 31, 2018 May 18, 2021 Expiration dates for these patents will occur in 2030 in the U.S. and the applicable foreign jurisdictions* Novel gold-based nanocrystals for medical treatments and electrochemical manufacturing processes therefor (these patents relate to CNM-Au8) Issued: U.S.
In response to Biden’s executive order, on September 9, 2021, HHS released a Comprehensive Plan for Addressing High Drug Prices that outlines principles for drug pricing reform and sets out a variety of potential legislative policies that Congress could pursue to as well as potential administrative actions HHS can take to advance these principles.
In response to Biden’s executive order, on September 9, 2021, HHS released a Comprehensive Plan for Addressing High Drug Prices that outlines principles for drug pricing reform and sets out a variety of potential legislative policies that Congress could pursue as well as potential administrative actions HHS can take to advance these principles.
Additional sensitivity analyses showed consistent reduction in plasma NfL levels versus placebo in specific populations generally considered at greater risk of ALS disease progression, including: ● Faster progressors (baseline pre-treatment ALSFRS-R slope >0.45 points/month ( post hoc , n=107) with the NfL difference of LS means on a Ln scale (SE) = -0.144 (0.058), p=0.014; ● Definite or probable ALS diagnosis per El Escorial criteria ( post hoc , n=125) with the NfL difference of LS means on a Ln scale (SE) = -0.124 (0.054), p=0.023; and ● Higher mortality risk (baseline plasma NfL > median, post hoc , n=79) with the NfL difference of LS means on a Ln scale (SE) = -0.150 (0.068), p=0.031.
Additional sensitivity analyses showed consistent reduction in plasma NfL levels versus placebo in specific populations generally considered at greater risk of ALS disease progression, including: ● Faster progressors (baseline pre-treatment ALSFRS-R slope >0.45 points/month ( post hoc , n=107) with the NfL difference of LS means on a Ln scale (SE) = -0.144 (0.058), p=0.014. ● Definite or probable ALS diagnosis per El Escorial criteria ( post hoc , n=125) with the NfL difference of LS means on a Ln scale (SE) = -0.124 (0.054), p=0.023. ● Higher mortality risk (baseline plasma NfL > median, post hoc , n=79) with the NfL difference of LS means on a Ln scale (SE) = -0.150 (0.068), p=0.031.
We have filed and obtained patents in the United States (U.S.); Australia (AU); Brazil (BR); Canada (CA); China (CN); European Patent Office (EP), including Belgium (BE), Switzerland (CH), Germany (DE), Denmark (DK), Finland (FI), France (FR), Great Britain (GB), Iceland (IS), Ireland (IE), Italy (IT), Hungary (HU), Netherlands (NL), Norway (NO), Poland (PL), Portugal (PT), Spain (ES), Sweden (SE), Slovenia (SI), and Turkey (TR); Egypt (EG); India (IN); Indonesia (ID); Israel (IL); Japan (JP); Korea (KR); Mexico (MX); New Zealand (NZ); Philippines (PH); Russia (RU); Seychelles (SC), Singapore (SG); and the United Arab Emirates (AE); with multiple fundamental patent families protecting our CSN therapeutics.
We have filed and obtained patents in the United States (U.S.), Australia (AU), Brazil (BR), Canada (CA), China (CN), Egypt (EG), Indonesia (ID), Israel (IL), India (IN), Japan (JP), Korea (KR), Mexico (MX), New Zealand (NZ), Philippines (PH), Russia (RU), Seychelles (SC), Singapore (SG), the United Arab Emirates (UAE), and the European Patent Office (EP) including Belgium (BE), Switzerland (CH), Germany (DE), Denmark (DK), Spain (ES), Finland (FI), France (FR), Great Britain (GB), Hungary (HU), Ireland (IE), Iceland (IS), Italy (IT), Netherlands (NL), Norway (NO), Poland (PL), Portugal (PT), Sweden (SE), Slovenia (SI), and Turkey (TR), with multiple fundamental patent families protecting our CSN therapeutics.
CNM-Au8 was well-tolerated and no drug-related SAEs or significant safety findings were reported. Based on these findings, Clene selected CNM-Au8 30 mg for continued development in ALS. In March 2023, we announced exploratory results for time to clinical worsening events based on prespecified risk-adjusted Cox proportional hazard analyses.
CNM-Au8 was well-tolerated and no drug-related SAEs or significant safety findings were reported. Based on these findings, we selected CNM-Au8 30 mg for continued development in ALS. In March 2023, we announced exploratory results for time to clinical worsening events based on prespecified risk-adjusted Cox proportional hazard analyses.
We produce a gold nanocrystal suspension, the active pharmaceutical ingredient (“API”) for CNM-Au8, on an ongoing basis. We believe our current production capabilities are sufficient to meet our needs for both research and development and to supply our ongoing and planned clinical trials and EAPs, and we believe our processes can be scaled to achieve early commercially viable quantities.
We produce a gold nanocrystal suspension, the active pharmaceutical ingredient for CNM-Au8, on an ongoing basis. We believe our current production capabilities are sufficient to meet our needs for both research and development and to supply our ongoing and planned clinical trials and EAPs, and we believe our processes can be scaled to achieve early commercially viable quantities.
Our human capital resources objectives include, as applicable, identifying, recruiting, retaining, incentivizing, and integrating our existing and additional employees. The principal purposes of our equity incentive plans are to attract, retain, and motivate selected employees, consultants and directors through the granting of stock-based compensation awards and cash-based performance bonus awards.
Our human capital resources objectives include, as applicable, identifying, recruiting, retaining, incentivizing, and integrating our existing and additional employees. The principal purposes of our equity incentive plans are to attract, retain, and motivate selected employees, consultants, and directors through the granting of equity compensation awards and cash-based performance bonus awards.
In addition, exclusive marketing rights in the U.S. may be lost if the FDA later determines that the request for designation was materially defective or if the manufacturer is unable to assure sufficient quantities of the product to meet the needs of patients with the rare disease or condition. 42 Table of Contents Post-Approval Requirements Any products manufactured or distributed by us pursuant to FDA approvals are subject to pervasive and continuing regulation by the FDA and certain state agencies, including, among other things, requirements relating to quality control and quality assurance, record-keeping, reporting of adverse events, periodic reporting, product sampling, distribution, and advertising and promotion of the product.
In addition, exclusive marketing rights in the U.S. may be lost if the FDA later determines that the request for designation was materially defective or if the manufacturer is unable to assure sufficient quantities of the product to meet the needs of patients with the rare disease or condition. 44 Table of Contents Post-Approval Requirements Any products manufactured or distributed by us pursuant to FDA approvals are subject to pervasive and continuing regulation by the FDA and certain state agencies, including, among other things, requirements relating to quality control and quality assurance, record-keeping, reporting of adverse events, periodic reporting, product sampling, distribution, and advertising and promotion of the product.
(4), AU (3), CA (2), CN, ID, IL, IN, JP (2), KR, MX, PH; BE, DK, ES, FI, FR, DE, HU, IE, IT, NL, NO, PL, PT, SE, SI, CH, TR, GB Pending: U.S., EP July 11, 2007 December 31, 2013 August 29, 2017 October 9, 2018 May 11, 2021 Expiration dates for these patents will occur in 2028 in the applicable foreign jurisdictions and in 2030 in the U.S.* Continuous methods for treating liquids and manufacturing certain constituents (e.g., nanoparticles) in liquids, apparatuses and nanoparticles and nanoparticle/ liquid solution(s) therefrom Issued: U.S.
(5), AU (3), BE, CA (2), CH, CN, DE, DK, ES, FI, FR, GB, HU, ID, IE, IL, IN, IT, JP (2), KR, MX, NL, NO, PH, PL, PT, SE, SI, TR Pending: EP July 11, 2007 December 31, 2013 August 29, 2017 October 9, 2018 May 11, 2021 Expiration dates for these patents will occur in 2028 in the applicable foreign jurisdictions and in 2030 in the U.S.* Continuous methods for treating liquids and manufacturing certain constituents (e.g., nanoparticles) in liquids, apparatuses and nanoparticles and nanoparticle/ liquid solution(s) therefrom Issued: U.S.
In August 2024, we announced new post-hoc combined analyses from the independent HEALEY ALS Platform Trial and RESCUE-ALS trials: CNM-Au8 NfL Responders demonstrated a 28% mean reduction in NfL levels compared to baseline, while NfL levels continued to increase in CNM-Au8 NfL non-responders (all doses; GMR difference at week 76 post-baseline: 0.57, 95% CI: 0.50 to 0.64, p ● All-cause mortality: ○ Improved survival of CNM-Au8 NfL Responders compared to propensity matched controls from the PRO-ACT database: HR: 0.504, 95% Wald CI: 0.28 to 0.904, covariate adjusted, p=0.022. ○ Improved survival of CNM-Au8 NfL Responders compared to CNM-Au8 NfL non-responders: HR: 0.350, 95% CI: 0.188 to 0.649, covariate adjusted, p=0.0009. ● ALS Functional Improvement: ○ Significantly less decline in ALSFRS-R total score of CNM-Au8 NfL Responders compared to CNM-Au8 NfL non-responders: p ○ Significantly less decline in the respiratory subdomain score of the ALSFRS-R of CNM-Au8 NfL Responders compared to CNM-Au8 NfL non-responders: p ● Improvements in CAFS: ○ CNM-Au8 NfL Responders demonstrated improvements compared to CNM-Au8 NfL non-responders starting at week 48 (p 21 Table of Contents Independent of NfL responder status, long-term treatment with CNM-Au8 30 mg was associated with improved survival in participants from the RESCUE-ALS and HEALEY ALS Platform Trials using updated long-term follow-up of survival status compared to propensity matched controls from the clinical trial data registry PRO-ACT, the ALS/MND Natural History Consortium (“NHC”), and the Australian MiNDAUS registry.
In August 2024, we announced new post-hoc combined analyses from the independent HEALEY ALS Platform Trial and RESCUE-ALS trials: CNM-Au8 NfL Responders demonstrated a 28% mean reduction in NfL levels compared to baseline, while NfL levels continued to increase in CNM-Au8 NfL non-responders (all doses; GMR difference at week 76 post-baseline: 0.57, 95% CI: 0.50 to 0.64, p ● All-cause mortality: ○ Improved survival of CNM-Au8 NfL Responders compared to propensity matched controls from the PRO-ACT database: HR: 0.504, 95% Wald CI: 0.28 to 0.904, covariate adjusted, p=0.022. ○ Improved survival of CNM-Au8 NfL Responders compared to CNM-Au8 NfL non-responders: HR: 0.350, 95% CI: 0.188 to 0.649, covariate adjusted, p=0.0009. ● ALS Functional Improvement: ○ Significantly less decline in ALSFRS-R total score of CNM-Au8 NfL Responders compared to CNM-Au8 NfL non-responders: p ○ Significantly less decline in the respiratory subdomain score of the ALSFRS-R of CNM-Au8 NfL Responders compared to CNM-Au8 NfL non-responders: p ● Improvements in CAFS: ○ CNM-Au8 NfL Responders demonstrated improvements compared to CNM-Au8 NfL non-responders starting at week 48 (p Independent of NfL responder status, long-term treatment with CNM-Au8 30 mg was associated with improved survival in participants from RESCUE-ALS and HEALEY ALS Platform Trial using updated long-term follow-up of survival status compared to propensity matched controls from the clinical trial data registry PRO-ACT, the ALS/MND Natural History Consortium (“NHC”), and the Australian MiNDAUS registry.
We plan to work closely with regulatory health authorities from the FDA, European Medicines Agency, and other international regulatory bodies, MS experts, and patient representatives to determine the proper path to advance CNM-Au8 into Phase 3 and potential future approval.
We plan to work closely with regulatory health authorities from the FDA, European Medicines Agency (“EMA”) and other international regulatory bodies, MS experts, and patient representatives to determine the proper path to advance CNM-Au8 into Phase 3 and potential future approval.
In similar studies, minipigs and rodents administered with CNM-Au8 also showed levels of gold in the brain and spinal cord exceeding the LOD more frequently than in placebo groups. CNM-Au8 is therefore blood brain barrier penetrant, albeit at low levels.
In similar studies, minipigs and rodents administered with CNM-Au8 also showed levels of gold in the brain and spinal cord exceeding the LOD more frequently than in placebo groups. CNM-Au8 is therefore a blood-brain barrier penetrant, albeit at low levels.
These boards are often called “institutional review boards” (“IRBs”); ● performance of adequate and well-controlled human clinical trials to establish the safety and efficacy of the proposed drug candidate for its intended purpose; ● preparation of and submission to the FDA of an NDA after completion of all pivotal clinical trials that includes substantial evidence of safety and efficacy from results of nonclinical testing and clinical trials; ● a determination by the FDA within 60 days of its receipt of an NDA to file the application for review; 39 Table of Contents ● satisfactory completion of an FDA pre-approval inspection of the manufacturing facility or facilities at which the proposed product is produced to assess compliance with GMP and to assure that the facilities, methods, and controls are adequate to preserve the drug candidate’s continued safety, purity and potency, and of selected clinical investigation sites to assess compliance with Good Clinical Practices (“GCP”); ● satisfactory completion of an FDA Advisory Committee review, if applicable; and ● FDA review and approval of the NDA to permit commercial marketing of the product for particular indications for use in the U.S.
These boards are often called “institutional review boards” (“IRBs”); ● performance of adequate and well-controlled human clinical trials to establish the safety and efficacy of the proposed drug candidate for its intended purpose; ● preparation of and submission to the FDA of an NDA after completion of all pivotal clinical trials that includes substantial evidence of safety and efficacy from results of nonclinical testing and clinical trials; ● a determination by the FDA within 60 days of its receipt of an NDA to file the application for review; ● satisfactory completion of an FDA pre-approval inspection of the manufacturing facility or facilities at which the proposed product is produced to assess compliance with GMP and to assure that the facilities, methods, and controls are adequate to preserve the drug candidate’s continued safety, purity and potency, and of selected clinical investigation sites to assess compliance with Good Clinical Practices (“GCP”); ● satisfactory completion of an FDA Advisory Committee review, if applicable; and ● FDA review and approval of the NDA to permit commercial marketing of the product for particular indications for use in the U.S.
The MRI endpoints included all participants with advanced MRI data collection (n=68) and demonstrated: ● Fractional anisotropy change within the whole brain (cerebrum) (week 48 LS mean difference, 0.0029, 95% CI: 0.0048 to 0.0054, p=0.0199). ● Fractional anisotropy change within total cerebral white matter (week 48 LS mean difference, 0.0026, 95% CI: -0.0003 to 0.0055, p=0.0805). ● Fractional anisotropy change within total cerebral normal appearing white matter (week 48 LS mean difference, 0.0025, 95% CI: -0.00034 to 0.0054, p=0.0823). 29 Table of Contents We believe these results support CNM-Au8’s potential to drive meaningful neurological improvements in MS patients.
The MRI endpoints included all participants with advanced MRI data collection (n=68) and demonstrated: ● Fractional anisotropy change within the whole brain (cerebrum) (week 48 LS mean difference, 0.0029, 95% CI: 0.0048 to 0.0054, p=0.0199). ● Fractional anisotropy change within total cerebral white matter (week 48 LS mean difference, 0.0026, 95% CI: -0.0003 to 0.0055, p=0.0805). ● Fractional anisotropy change within total cerebral normal appearing white matter (week 48 LS mean difference, 0.0025, 95% CI: -0.00034 to 0.0054, p=0.0823). 30 Table of Contents We believe these results support CNM-Au8’s potential to drive meaningful neurological improvements in MS patients.
The independent results for REPAIR-MS also demonstrated consistent trends toward improvement in the primary and secondary endpoints, although neither REPAIR-PD nor REPAIR-MS independently reached a level of statistical significance: the mean change in the brain NAD + /NADH ratio was 0.830 units (+14.3%) following 12 weeks of treatment with CNM-Au8 (p=0.145, paired t-test), and the secondary endpoint of mean change from baseline in the NAD + fraction of the total NAD pool increased and the NADH fraction decreased (p=0.1157, paired t-test).
The independent results for REPAIR-MS Cohort 1 also demonstrated consistent trends toward improvement in the primary and secondary endpoints, although neither REPAIR-PD nor REPAIR-MS Cohort 1 independently reached a level of statistical significance: the mean change in the brain NAD + /NADH ratio was 0.830 units (+14.3%) following 12 weeks of treatment with CNM-Au8 (p=0.145, paired t-test), and the secondary endpoint of mean change from baseline in the NAD + fraction of the total NAD pool increased and the NADH fraction decreased (p=0.1157, paired t-test).
At each visit, the overall trial population (randomized 2:1 active CNM-Au8 to placebo) showed notable, exposure-related improvements in mean overall (m)MSFC scores and key (m)MSFC sub-scales compared to the comparator group (mixed-effects model; p Consistent improvements favoring CNM-Au8 were observed across multiple paraclinical biomarker exploratory endpoints, including mf-VEP amplitude and latency, OCT, and MRI endpoints, including magnetization transfer ratio and diffusion tensor imaging metrics.
At each visit, the overall trial population (randomized 2:1 active CNM-Au8 to placebo) showed notable, exposure-related improvements in mean overall (m)MSFC scores and key (m)MSFC sub-scales compared to the comparator group (mixed-effects model; p Consistent improvements favoring CNM-Au8 were observed across multiple paraclinical biomarker exploratory endpoints, including mf-VEP amplitude and latency, OCT, and MRI endpoints, including magnetization transfer ratio (“MTR”) and diffusion tensor imaging (“DTI”) metrics.
For example, in August 2011, President Obama signed into law the Budget Control Act of 2011, which, among other things, included aggregate reductions to Medicare payments to providers of 2% per fiscal year, which went into effect beginning on April 1, 2013 and will stay in effect through 2030 unless additional Congressional action is taken, with COVID-19 relief legislation suspending the 2% Medicare sequester from May 1, 2020 through December 31, 2021.
For example, in August 2011, President Obama signed into law the Budget Control Act of 2011, which, among other things, included aggregate reductions to Medicare payments to providers of 2% per fiscal year, which went into effect beginning on April 1, 2013 and will stay in effect through 2032 unless additional Congressional action is taken, with COVID-19 relief legislation suspending the 2% Medicare sequester from May 1, 2020 through December 31, 2021.
This method provides a comparison of CNM-Au8 treatment versus placebo across the entire study period; ● Using RPSFTM, there was a 75% decreased risk of long-term all-cause mortality in participants originally randomized to treatment with CNM-Au8 compared to those originally randomized to placebo (hazard ratio (“HR”): 0.252, 95% CI: 0.106 to 0.597; bootstrap log-rank p ● Unadjusted median survival, which was not adjusted for the benefit received in ex-placebo participants, was 10.1 months (CNM-Au8 median survival of 34.2 months; placebo median survival of 24.1 months); ● Unadjusted decreased risk of long-term all-cause mortality, which was not adjusted for the benefit received in ex-placebo participants, was 46% (HR: 0.54, 95% CI: 0.25 to 1.1, log-rank p=0.09); ● Using propensity score matching, there was a 70% decreased risk of long-term mortality (Cox adjusted HR: 0.30, 95% CI: 0.09 to 0.79; p=0.03) in participants originally randomized to CNM-Au8 treatment compared to matched untreated participants derived from the PRO-ACT database, which contains approximately 12,000 ALS patient records from multiple completed clinical trials; and ● A 52% decreased risk of ALS clinical worsening events (the first occurrence of death, tracheostomy, assisted ventilation, or feeding tube placement) in the participants originally randomized to CNM-Au8 treatment versus original placebo (HR: 0.48, 95% CI: 0.23 to 1.0, log-rank p=0.049).
This method provides a comparison of CNM-Au8 treatment versus placebo across the entire study period. ● Using RPSFTM, there was a 75% decreased risk of long-term all-cause mortality in participants originally randomized to treatment with CNM-Au8 compared to those originally randomized to placebo (hazard ratio (“HR”): 0.252, 95% CI: 0.106 to 0.597; bootstrap log-rank p 17 Table of Contents ● Unadjusted median survival, which was not adjusted for the benefit received in ex-placebo participants, was 10.1 months (CNM-Au8 median survival of 34.2 months; placebo median survival of 24.1 months). ● Unadjusted decreased risk of long-term all-cause mortality, which was not adjusted for the benefit received in ex-placebo participants, was 46% (HR: 0.54, 95% CI: 0.25 to 1.1, log-rank p=0.09). ● Using propensity score matching, there was a 70% decreased risk of long-term mortality (Cox adjusted HR: 0.30, 95% CI: 0.09 to 0.79; p=0.03) in participants originally randomized to CNM-Au8 treatment compared to matched untreated participants derived from the PRO-ACT database, which contains approximately 12,000 ALS patient records from multiple completed clinical trials. ● A 52% decreased risk of ALS clinical worsening events (the first occurrence of death, tracheostomy, assisted ventilation, or feeding tube placement) in the participants originally randomized to CNM-Au8 treatment versus original placebo (HR: 0.48, 95% CI: 0.23 to 1.0, log-rank p=0.049).
Our CSN Therapeutics Platform By uniting concepts from electrochemistry, nanotechnology, plasma and quantum physics, material science, and biochemistry, we have created and refined a proprietary electrocrystallization method that results in single component or multiple component nanocrystals of the transition elements that are clean-surfaced, highly faceted, and biologically catalytically active (see Figure 1 for example nanocrystals).
Our CSN Therapeutics Platform By uniting concepts from electrochemistry, nanotechnology, plasma and quantum physics, materials science, and biochemistry, we have created and refined a proprietary electrocrystallization method that results in single component or multiple component nanocrystals of the transition elements that are clean-surfaced, highly faceted, and biologically catalytically active (see Figure 1 for example nanocrystals).
The process required by the FDA before drug candidates may be marketed in the U.S. generally involves the following: ● completion of preclinical laboratory tests and animal studies performed in accordance with the FDA’s current Good Laboratory Practices regulations; ● submission to the FDA of an IND application, which must become effective before clinical trials may begin and must be updated annually or when significant changes are made; ● approval by an independent review board whose role is to review the research before the trial commences and continuously throughout the trial to assure the protection of the rights and welfare of the human subjects.
The process required by the FDA before drug candidates may be marketed in the U.S. generally involves the following: ● completion of preclinical laboratory tests and animal studies performed in accordance with the FDA’s current Good Laboratory Practices regulations; 40 Table of Contents ● submission to the FDA of an IND application, which must become effective before clinical trials may begin and must be updated annually or when significant changes are made; ● approval by an independent review board whose role is to review the research before the trial commences and continuously throughout the trial to assure the protection of the rights and welfare of the human subjects.
Competition While the treatment for central nervous system diseases is quite competitive and subject to frequent changes, there are currently no existing FDA-approved therapies that have mechanisms supporting remyelination and neuroprotection in patients. CNM-Au8’s core effects of remyelination and neuroprotection provide us a globally unique first-mover-advantage for the treatment of central nervous system diseases.
Competition While the treatment for central nervous system diseases is quite competitive and subject to frequent changes, there are currently no existing FDA-approved therapies that have mechanisms supporting remyelination and neuroprotection in patients. We believe that CNM-Au8’s core effects of remyelination and neuroprotection provide us a globally unique first-mover advantage for the treatment of central nervous system diseases.
Additionally, we currently lease a 74,210 square foot production facility in Elkton, Maryland (the “Elkton Facility”), a few miles from our North East Facility. Contingent upon successful future commercialization and funding, we plan to redevelop the Elkton Facility to support our unique manufacturing needs and to enable us to materially increase our manufacturing capacity post-commercialization, if achieved.
Additionally, we currently lease a 74,210 square foot production facility in Elkton, Maryland (the “Elkton Facility”), a few miles from our North East Facility. Contingent upon successful future commercialization and funding, we plan to develop the Elkton Facility to support our unique manufacturing needs and to enable us to materially increase our manufacturing capacity post-commercialization, if achieved.
This platform affords us the ability to make new drug modalities targeting a wide range of diseases that have eluded intervention using traditional approaches. ● Scientifically driven . Clear scientific rationale and sound experimental design drive our discoveries, from basic science to clinical trials.
We believe that this platform affords us the ability to make new drug modalities targeting a wide range of diseases that have eluded intervention using traditional approaches. ● Scientifically driven . Clear scientific rationale and sound experimental design drive our discoveries, from basic science to clinical trials.
REPAIR-MS is being conducted at the University of Texas Southwestern, a center with specialized capabilities for conducting and analyzing 7T 31 P-MRS imaging studies, and was conducted in conjunction with our REPAIR-PD trial (discussed below), with a pre-specified integrated analyses of both REPAIR-MS Cohort 1 and REPAIR-PD trials performed.
REPAIR-MS was conducted at the University of Texas Southwestern, a center with specialized capabilities for conducting and analyzing 7T 31 P-MRS imaging studies, and was conducted in conjunction with our REPAIR-PD trial (discussed below), with pre-specified integrated analyses of both REPAIR-MS Cohort 1 and REPAIR-PD trials performed.
The pre-specified integrated analyses of REPAIR-MS and REPAIR-PD demonstrated a statistically significant increase in the primary endpoint, the mean change in the brain NAD + /NADH ratio, of 0.589 units (+10.4%) following 12 weeks of treatment with CNM-Au8 (p=0.037, paired t-test).
The pre-specified integrated analyses of REPAIR-MS Cohort 1 and REPAIR-PD demonstrated a statistically significant increase in the primary endpoint, the mean change in the brain NAD + /NADH ratio, of 0.589 units (+10.4%) following 12 weeks of treatment with CNM-Au8 (p=0.037, paired t-test).
The information contained in or accessible from any website referred to in this Form 10-K is not incorporated into this Annual Report, and you should not consider it part of this Annual Report. We have included our website address in this Annual Report solely as an inactive textual reference. 49 Table of Contents
The information contained in or accessible from any website referred to in this Form 10-K is not incorporated into this Annual Report, and you should not consider it part of this Annual Report. We have included our website address in this Annual Report solely as an inactive textual reference. 51 Table of Contents
We innovated an electro-crystal-chemistry drug development platform that draws from advances in nanotechnology, plasma and quantum physics, material science, and biochemistry. Our platform process results in nanocrystals with faceted structures and surfaces that are free of the chemical surface modifications that accompany other production methods.
We innovated an electro-crystal-chemistry drug development platform that draws from advances in nanotechnology, plasma and quantum physics, materials science, and biochemistry. Our platform process results in nanocrystals with faceted structures and surfaces that are free of the chemical surface modifications that accompany other production methods.
Overall survival improvement (all-cause mortality) was observed across the full analysis set as follows: ● Median Survival— CNM-Au8 30 mg group (Regimen C, n=59) achieved 951 days versus 753 days in the Regimen A comparator group (n=162), a gain of 198 days (6.5 months); 19 Table of Contents ● Restricted Mean Survival Time (“RMST”) Benefit— covariate-adjusted RMST improvement of 124 days (4.1 months) was observed (95% CI: 3 to 245 days, p=0.045).
Overall survival improvement (all-cause mortality) was observed across the full analysis set as follows: ● Median Survival— CNM-Au8 30 mg group (Regimen C, n=59) achieved 951 days versus 753 days in the Regimen A comparator group (n=162), a gain of 198 days (6.5 months). ● Restricted Mean Survival Time (“RMST”) Benefit— covariate-adjusted RMST improvement of 124 days (4.1 months) was observed (95% CI: 3 to 245 days, p=0.045).
One-way analysis of variance (“ANOVA”), corrected for multiple comparisons, was used to compare the mean of each treatment group to the mean of the vehicle control; a statistically significant difference between treatment and vehicle is denoted by asterisks: *p 11 Table of Contents A significant stressor shared by many neurodegenerative diseases is the accumulation of harmful ROS within neurons as their energetic demands begin to exceed their ability to produce enough ATP to carry out normal functions.
One-way analysis of variance (“ANOVA”), corrected for multiple comparisons, was used to compare the mean of each treatment group to the mean of the vehicle control; a statistically significant difference between treatment and vehicle is denoted by asterisks: *p A significant stressor shared by many neurodegenerative diseases is the accumulation of harmful ROS within neurons as their energetic demands begin to exceed their ability to produce enough ATP to carry out normal functions.
We believe our studies, discussed below, show that CSN therapeutics support central nervous system cells with the basic building blocks of energy required for normal function, thereby replenishing cellular energetic deficiencies. 9 Table of Contents CNM-Au8 and Restoration of Energetic Metabolism in ALS, MS, and PD CNM-Au8 is a concentrated, orally-delivered suspension of pure gold nanocrystals in pharmaceutical grade water buffered with sodium bicarbonate.
We believe our studies, discussed below, show that CSN therapeutics support central nervous system cells with the basic building blocks of energy required for normal function, thereby replenishing cellular energetic deficiencies. CNM-Au8 and Restoration of Energetic Metabolism in ALS, MS, and PD CNM-Au8 is a concentrated, orally-delivered suspension of pure gold nanocrystals in pharmaceutical grade water buffered with sodium bicarbonate.
Analyses of the full dataset of 256 participants compared to the 220 matched controls also showed statistically significant survival benefits with log-rank p-values of p National Institutes of Health In October 2023, we were awarded a four-year grant to support the ACT-EAP for CNM-Au8 treatment of ALS, in collaboration with Columbia University, the prime awardee, and Synapticure, a neurology specialty health clinic.
Analyses of the full dataset of 256 participants compared to the 220 matched controls also showed statistically significant survival benefits with log-rank p-values of p National Institutes of Health In October 2023, we were awarded a four-year grant to support the ACT-EAP for CNM-Au8 treatment of ALS, in collaboration with NYU as prime awardee (formerly Columbia University), and Synapticure, a neurology specialty health clinic.
The analyses of (m)MSFC sub-scales (LCLA, SDMT, 9HPT, and T25FW) was conducted by comparing changes in (m)MSFC scores over the trial treatment period to the baseline values of trial participants with mild disease, as defined by Baseline EDSS scores of 1.5 or less.
The analyses of (m)MSFC sub-scales (LCLA, SDMT, 9HPT, and T25FW) were conducted by comparing changes in (m)MSFC scores over the trial treatment period to the baseline values of trial participants with mild disease, as defined by Baseline EDSS scores of 1.5 or less.
Previous drug development efforts for neurodegenerative diseases have included numerous antioxidants, all of which failed to show disease-modifying effects. We believe CNM-Au8 remains in a different class from standard antioxidants because, to our knowledge, no other antioxidant demonstrates catalytic ability to increase energetic metabolites NAD + and ATP, while independently catalytically decreasing ROS. Figure 5.
Previous drug development efforts for neurodegenerative diseases have included numerous antioxidants, all of which failed to show disease-modifying effects. We believe CNM-Au8 remains in a different class from standard antioxidants because, to our knowledge, no other antioxidant demonstrates catalytic ability to increase energetic metabolites NAD + and ATP, while independently catalytically decreasing ROS. 11 Table of Contents Figure 5.
Used alternately or in conjunction with standard immunomodulatory DMTs, CNM-Au8 treatment may improve patients’ quality of life and potentially reverse disease progression, even in patients whose inflammatory attacks are well-controlled. Summary of Nonclinical Pharmacology Myelination Studies for MS Myelination is a complex process resulting in the wrapping of axons by OL membranes containing specialized proteins and lipids.
Used alternately or in conjunction with standard immunomodulatory DMTs, CNM-Au8 treatment may improve patients’ quality of life and potentially reverse disease progression, even in patients whose inflammatory attacks are well-controlled. 25 Table of Contents Summary of Nonclinical Pharmacology Myelination Studies for MS Myelination is a complex process resulting in the wrapping of axons by OL membranes containing specialized proteins and lipids.
OL precursor cells are known to be present near MS lesions and can play a role in remyelination, but studies have shown that these cells are energetically compromised and remyelination is suboptimal in most central nervous system lesions. 25 Table of Contents Energetic deficits have been noted in the brains of patients living with MS using 31 phosphorus magnetic resonance spectroscopy (“ 31 P-MRS”).
OL precursor cells are known to be present near MS lesions and can play a role in remyelination, but studies have shown that these cells are energetically compromised and remyelination is suboptimal in most central nervous system lesions. Energetic deficits have been noted in the brains of patients living with MS using 31 phosphorus magnetic resonance spectroscopy (“ 31 P-MRS”).
This relationship was observed both on an integrated basis across the two trials and independently in both REPAIR-PD and REPAIR-MS. No SAEs were reported, TEAEs were rated as mild and transient, and no participants experienced clinically significant laboratory abnormalities.
This relationship was observed both on an integrated basis across the two trials and independently in both REPAIR-PD and REPAIR-MS Cohort 1. No SAEs were reported, TEAEs were rated as mild and transient, and no participants experienced clinically significant laboratory abnormalities.
Exploratory endpoints included time to clinical worsening events, voice pathology measurements, and biofluid-based pharmacodynamic and metabolic markers. 18 Table of Contents In October 2022, we announced topline results for CNM-Au8: the primary endpoint of rate of change in ALSFRS-R adjusted for mortality was not statistically significant at 24 weeks (2% slowing, 95% CI: -20% to +19%).
Exploratory endpoints included time to clinical worsening events, voice pathology measurements, and biofluid-based pharmacodynamic and metabolic markers. In October 2022, we announced topline results for CNM-Au8: the primary endpoint of rate of change in ALSFRS-R adjusted for mortality was not statistically significant at 24 weeks (2% slowing, 95% CI: -20% to +19%).
Supportive sensitivity analyses incorporating baseline neurofilament light chain (“NfL”) levels were similarly robust and resulted in increased effect sizes and smaller nominal p-values in the same “within regimen” analyses. In June 2023, we announced a statistically significant reduction of plasma NfL across all CNM-Au8 participants compared to placebo (CNM-Au8 or placebo, n=161).
Supportive sensitivity analyses incorporating baseline neurofilament light chain (“NfL”) levels were similarly robust and resulted in increased effect sizes and smaller nominal p-values in the same “within regimen” analyses. 18 Table of Contents In June 2023, we announced a statistically significant reduction of plasma NfL across all CNM-Au8 participants compared to placebo (CNM-Au8 or placebo, n=161).
Remyelination of the corpus callosum or spinal cord using either technique requires the migration of surviving OL precursor cells to the sites of demyelination, differentiation of these cells into mature myelinating OLs, and rapid generation of specialized proteins and lipids for formation of new myelin membrane wraps around axons in this energetically demanding process (Robinson et al . 2020).
Remyelination of the corpus callosum or spinal cord using either technique requires the migration of surviving OL precursor cells to the sites of demyelination, differentiation of these cells into mature myelinating OLs, and rapid generation of specialized proteins and lipids for formation of new myelin membrane wraps around axons in this energetically demanding process (Robinson et al . 2020). 26 Table of Contents In Robinson et al .
Reimbursement may impact the demand for, or the price of, any product for which we obtain regulatory approval. Third-party payors are increasingly challenging the price, negotiating discounts and rebates, examining the medical necessity, imposing hurdles to coverage such as prior authorizations, and reviewing the cost-effectiveness of medical products, therapies and services, in addition to questioning their safety and efficacy.
Reimbursement may impact the demand for, or the price of, any product for which we obtain regulatory approval. 48 Table of Contents Third-party payors are increasingly challenging the price, negotiating discounts and rebates, examining the medical necessity, imposing hurdles to coverage such as prior authorizations, and reviewing the cost-effectiveness of medical products, therapies and services, in addition to questioning their safety and efficacy.
These include: ● rMetx ™ (ZnAg Immune Boost) by dOrbital, is an aqueous zinc-silver ion dietary (mineral) supplement made using our electrochemistry manufacturing platform with bioactive immune-supporting properties. rMetx is sold through dOrbital and a substantially similar product, under the tradename Zinc Factor™, is sold by 4Life under a supply agreement. ● KHC46 (Gold Factor™) by 4Life is an aqueous gold dietary (mineral) supplement of very low-concentration gold nanoparticles produced using our electrochemistry manufacturing platform.
These include: ● rMetx ™ (ZnAg Immune Boost) by dOrbital is an aqueous zinc-silver ion dietary (mineral) supplement made using our electrochemistry manufacturing platform with bioactive immune-supporting properties. rMetx is sold through dOrbital and a substantially similar product, under the trade name Zinc Factor™, is sold by 4Life under a supply agreement. ● KHC46 (Gold Factor™) by 4Life is an aqueous gold dietary (mineral) supplement of very low-concentration gold nanoparticles produced using our electrochemistry manufacturing platform.
The analysis showed: ○ CNM-Au8 NfL Responders demonstrated an average NfL reduction of 28%, indicating a neuroprotective effect; geometric mean ratio (“GMR”) at week 76 change vs. baseline: 0.72, (95% CI: 0.67 to 0.79), p ○ Long-term treatment with CNM-Au8 30 mg resulted in continued significant decline of plasma NfL levels.
The analysis showed: ○ CNM-Au8 NfL Responders demonstrated an average NfL reduction of 28%, indicating a neuroprotective effect; geometric mean ratio (“GMR”) at week 76 change vs. baseline: 0.72, (95% CI: 0.67 to 0.79), p 19 Table of Contents ○ Long-term treatment with CNM-Au8 30 mg resulted in continued significant decline of plasma NfL levels.
(3), AE, AU (6), BR, CA, CN, ID, IN, IL, JP (4), KR (3), MX (2), PH, RU, SG (3); CH, DE, DK, ES, FI, FR, GB, IE, IT, NL, NO, SE Pending: MX, PH, U.S.
(3), AU (6), BR, CA, CH, CN, DE, DK, ES, FI, FR, GB, ID, IE, IL, IN, IT, JP (4), KR (3), MX (2), NL, NO, PH (2), RU, SE, SG (3), UAE Pending: U.S.
Biomarkers of oxidative stress, including the GSH/GSSG ratio, demonstrated consistent improvement following CNM-Au8 treatment with increased activity associated with the duration of treatment. These data are consistent with CNM-Au8’s mechanism of action of neuronal metabolic support and decreased oxidative stress.
Biomarkers of oxidative stress, including the GSH/GGSG ratio, demonstrated consistent improvement following CNM-Au8 treatment with increased activity associated with the duration of treatment. These data are consistent with CNM-Au8’s mechanism of action of neuronal metabolic support and decreased oxidative stress.
We will own all intellectual property rights from grant related activities. 35 Table of Contents ● The Michael J. Fox Foundation . We received a grant of $0.5 million in January 2021 for preclinical iPSC and animal model studies to assess CNM-Au8 for the treatment of PD. Funding was based upon the achievement of certain analytical milestones.
We will own all intellectual property rights from grant related activities. ● The Michael J. Fox Foundation . We received a grant of $0.5 million in January 2021 for preclinical iPSC and animal model studies to assess CNM-Au8 for the treatment of PD. Funding was based upon the achievement of certain analytical milestones.
These catalytic activities drive, support, and maintain beneficial metabolic and energetic cellular reactions within diseased, stressed, and damaged cells. Our patent-protected, proprietary position affords us the potential to develop a broad and deep pipeline of novel CSN therapeutics to address a range of diseases with high impact on human health.
These catalytic activities drive, support, and maintain beneficial metabolic and energetic cellular reactions within diseased, stressed, and damaged cells. We believe that our patent-protected, proprietary position affords us the potential to develop a broad and deep pipeline of novel CSN therapeutics to address a range of diseases with high impact on human health.
Once inside the body, CSN therapeutic nanocrystals pass into the blood stream and accumulate in organs such as the liver, kidneys, and spleen, with lower amounts crossing the blood-brain barrier and reaching the brain, spinal cord, and cerebrospinal fluid.
Once inside the body, CSN therapeutic nanocrystals pass into the bloodstream and accumulate in organs such as the liver, kidneys, and spleen, with lower amounts crossing the blood-brain barrier and reaching the brain, spinal cord, and cerebrospinal fluid.
A pink and blue mitochondrion on the left can use available NAD for the generation of ATP (illustrated by Ella Maru). Our Focus on Central Nervous System Disorders Over the past several decades, traditional small molecule and biologic drug development approaches have suffered serious setbacks in attempts to address nervous system disorders.
A pink and blue mitochondrion on the left can use available NAD for the generation of ATP (illustrated by Ella Maru). 8 Table of Contents Our Focus on Central Nervous System Disorders Over the past several decades, traditional small molecule and biologic drug development approaches have suffered serious setbacks in attempts to address nervous system disorders.
Notwithstanding the submission of any requested additional information, the FDA ultimately may decide that the application does not satisfy the regulatory criteria for approval. After the FDA evaluates an NDA and conducts inspections of manufacturing facilities where the investigational product and/or its drug substance will be produced, the FDA may issue an approval letter or a Complete Response Letter.
Notwithstanding the submission of any requested additional information, the FDA ultimately may decide that the application does not satisfy the regulatory criteria for approval. 42 Table of Contents After the FDA evaluates an NDA and conducts inspections of manufacturing facilities where the investigational product and/or its drug substance will be produced, the FDA may issue an approval letter or a Complete Response Letter.
We will own all intellectual property rights from grant related activities. ● National Institute of Neurological Disorders and Stroke / National Institutes of Health . A grant of $45.1 million was awarded to us, in collaboration with Columbia University and Synapticure, in October 2023 to support the ACT-EAP for CNM-Au8 treatment of ALS.
We will own all intellectual property rights from grant related activities. ● National Institute of Neurological Disorders and Stroke / National Institutes of Health . A grant of $45.1 million was awarded to us, in collaboration with NYU (formerly Columbia) and Synapticure, in October 2023 to support the ACT-EAP for CNM-Au8 treatment of ALS.
The Company may permanently convert 4Life’s exclusive rights to purchase Licensed Products to non-exclusive rights if: (i) 4Life fails to achieve the Minimum Sales Commitment for any two consecutive years, and (ii) 4Life fails to pay additional royalty fees to maintain exclusivity (as set forth under “License Agreement” below) (the “Exclusivity Provision”). ● Supply Agreement. License Agreement.
We may permanently convert 4Life’s exclusive rights to purchase Licensed Products to non-exclusive rights if: (i) 4Life fails to achieve the Minimum Sales Commitment for any two consecutive years, and (ii) 4Life fails to pay additional royalty fees to maintain exclusivity (as set forth under “License Agreement” below) (the “Exclusivity Provision”). ● License Agreement .
Analyses of pre-specified exploratory endpoints demonstrated that homeostatic equilibrium was achieved across essential energetic metabolites, including ATP, cellular phosphorous (“Pi(in)”), phosphocholine, and phosphorylation potential index (“ß-ATP/ADP*Pi(in)”).
Analyses of pre-specified exploratory endpoints demonstrated that homeostatic equilibrium was achieved across essential energetic metabolites, including ATP, cellular phosphorus (“Pi(in)”), phosphocholine, and phosphorylation potential index (“ß-ATP/ADP*Pi(in)”).
Pharmacokinetics analyses of the Phase 1 results demonstrated that CNM-Au8 has a half-life of 14 to 21 days. The end-of-trial drug exposure levels in humans either matched or exceeded the equivalent exposure that demonstrated neuroprotection and remyelination efficacy in animal models. 15 Table of Contents Safety assessments revealed no significant findings.
Pharmacokinetics analyses of the Phase 1 results demonstrated that CNM-Au8 has a half-life of 14 to 21 days. The end-of-trial drug exposure levels in humans either matched or exceeded the equivalent exposure that demonstrated neuroprotection and remyelination efficacy in animal models. Safety assessments revealed no significant findings.
Smaller Reporting Company Status We are a “smaller reporting company” because the market value of our stock held by non-affiliates was less than $250 million as of June 30, 2024.
Smaller Reporting Company Status We are a “smaller reporting company” because the market value of our stock held by non-affiliates was less than $250 million as of June 30, 2025.
One additional therapeutic, sodium phenylbutyrate and taurursodiol, was approved under an accelerated pathway by the FDA but subsequently withdrawn from the market following negative results from a confirmatory Phase 3 trial. An urgent unmet need clearly exists for the development of safe and effective treatments, including DMTs, for ALS.
One additional therapeutic, sodium phenylbutyrate and taurursodiol, was approved by the FDA but subsequently withdrawn from the market following negative results from a confirmatory Phase 3 trial. An urgent unmet need clearly exists for the development of safe and effective treatments, including DMTs, for ALS.
Together with our expanded intellectual property portfolio, we believe it would be challenging for any potential competitors entering into the market of remyelination and neuroprotection focused therapeutics to replicate our efforts without violating our intellectual property protections. 37 Table of Contents Intellectual Property We are the sole inventors of our manufacturing processes, devices, and drugs.
Together with our expanded intellectual property portfolio, we believe it would be challenging for any potential competitors entering into the market of remyelination and neuroprotection focused therapeutics to replicate our efforts without violating our intellectual property protections. Intellectual Property We are the sole inventors of our manufacturing processes, devices, and drugs.
The table below sets forth our employees by role: Department Count of Employees Percent of Total Manufacturing 16 22 % Clinical 7 9 % Quality Control & Bioanalytics 10 13 % Microbiology Lab 8 11 % Research and Development 11 14 % Senior Management 6 8 % Quality Assurance 6 8 % Finance 4 5 % Human Resources & Operations 5 7 % Information Technology 1 1 % Regulatory 1 1 % Medical Affairs 1 1 % Total 76 100 % None of our employees are represented by a labor union or are covered by a collective bargaining agreement, and we believe that we have good relations with our employees.
The table below sets forth our employees by role: Department Count of Employees Percent of Total Manufacturing 16 21 % Clinical 7 9 % Quality Control & Bioanalytics 11 14 % Microbiology Lab 7 9 % Research and Development 13 16 % Senior Management 6 8 % Quality Assurance 7 9 % Finance 4 5 % Human Resources & Operations 5 6 % Information Technology 1 1 % Regulatory 1 1 % Medical Affairs 1 1 % Total 79 100 % None of our employees are represented by a labor union or are covered by a collective bargaining agreement, and we believe that we have good relations with our employees.
The results in the EAP participants versus the matched controls demonstrated a significant survival benefit: ● CNM-Au8 EAP vs. PRO-ACT matched controls —a 68% decreased risk of all-cause mortality with CNM-Au8 treatment (baseline risk-adjusted HR: 0.320, 95% CI: 0.178 to 0.575, p=0.0001). ● CNM-Au8 EAP vs.
The results in the EAP participants versus the matched controls demonstrated a significant survival benefit: ● CNM-Au8 EAP vs. PRO-ACT matched controls —a 68% decreased risk of all-cause mortality with CNM-Au8 treatment (baseline risk-adjusted HR: 0.320, 95% CI: 0.178 to 0.575, p=0.0001). 23 Table of Contents ● CNM-Au8 EAP vs.
To date, we have not licensed our electro-crystal-chemistry platform, CSN therapeutics, or drug candidates to any other parties. Sources and Availability of Raw Materials Certain critical raw materials are available from a limited number of suppliers in the market.
To date, we have not licensed our electro-crystal-chemistry platform, CSN therapeutics, or drug candidates to any other parties. 38 Table of Contents Sources and Availability of Raw Materials Certain critical raw materials are available from a limited number of suppliers in the market.
Panel C, the rate of decay of the NADH absorbance peak is greater for CNM-Au8 than it is for citrate-reduced gold, nanoparticles of 10 nm (orange) and 30 nm (red) diameters (purchased from the National Institute of Standards and Technology), indicating that CNM-Au8 has a catalytic rate at least three-fold higher than National Institute of Standards and Technology comparators under the same reaction conditions.
Panel C, the rate of decay of the NADH absorbance peak is greater for CNM-Au8 than it is for citrate-reduced gold, nanoparticles of 10 nm (orange) and 30 nm (red) diameters (purchased from the National Institute of Standards and Technology), indicating that CNM-Au8 has a catalytic rate at least three-fold higher than National Institute of Standards and Technology comparators under the same reaction conditions. 10 Table of Contents Figure 4.
These studies are generally designed to test the safety, dosage tolerance, absorption, metabolism, distribution, and elimination of the investigational product in humans, the side effects associated with increasing doses, and, if possible, to gain early evidence on effectiveness. ● Phase 2.
These studies are generally designed to test the safety, dosage tolerance, absorption, metabolism, distribution, and elimination of the investigational product in humans, the side effects associated with increasing doses, and, if possible, to gain early evidence on effectiveness. 41 Table of Contents ● Phase 2.
For example, quantitation of the number of myelinated versus unmyelinated axons in 587 transmission electron microscope images, averaging 84 images per treatment group (with 15 mice per treatment group, 7 treatment groups total), demonstrated a statistically significant recovery of remyelinated axons in therapeutically treated animals who were dosed with CNM-Au8 by gavage compared to vehicle treated, cuprizone-fed controls (p in vitro and in vivo experiments reported in Robinson et al (2020). 26 Table of Contents Figure 9.
For example, quantitation of the number of myelinated versus unmyelinated axons in 587 transmission electron microscope images, averaging 84 images per treatment group (with 15 mice per treatment group, 7 treatment groups total), demonstrated a statistically significant recovery of remyelinated axons in therapeutically treated animals who were dosed with CNM-Au8 by gavage compared to vehicle treated, cuprizone-fed controls (p in vitro and in vivo experiments reported in Robinson et al (2020).
In December 2023, we announced a statistically significant reduction of plasma NfL levels from baseline to 76 weeks in patients randomized to CNM-Au8 30 mg compared to patients treated with placebo for 24 weeks prior to crossing over to CNM-Au8 treatment.
In December 2023, we announced a statistically significant reduction of plasma NfL levels from baseline to 76 weeks in OLE patients originally randomized to CNM-Au8 30 mg compared to patients treated with placebo for 24 weeks prior to crossing over to CNM-Au8 treatment in the OLE.
The LCLA tests low-contrast vision using an eye chart with gray letters presented on a low-contrast background at a specified distance that may be particularly affected by damage to specific inter-neural connections in an individual’s complex visual pathway. We announced results from VISIONARY-MS in August 2022.
The LCLA tests low-contrast vision using an eye chart with gray letters presented on a low-contrast background at a specified distance that may be particularly affected by damage to specific inter-neural connections in an individual’s complex visual pathway. 29 Table of Contents We announced results from VISIONARY-MS in August 2022.
Clearly, there is an increasing demand for better treatment strategies. Potential Advantages of CNM-Au8 for MS We believe CNM-Au8 has the potential to be a first-in-class remyelinating and neuroprotective disease-modifying nanotherapeutic for MS. CNM-Au8 supports neurologic functions by enhancing energetic activities in neurons and OLs that have been attacked by MS.
Given these factors, we believe there is an increasing demand for better treatment strategies. Potential Advantages of CNM-Au8 for MS We believe CNM-Au8 has the potential to be a first-in-class remyelinating and neuroprotective disease-modifying nanotherapeutic for MS. CNM-Au8 supports neurologic functions by enhancing energetic activities in neurons and OLs that have been attacked by MS.
These energetic metabolites are measured non-invasively and semi-quantitatively by utilizing 31 P-MRS imaging with a 7 Tesla (“7T”) MRI scanner.
These energetic metabolites were measured non-invasively and semi-quantitatively by utilizing 31 P-MRS imaging with a 7 Tesla (“7T”) MRI scanner.
These dietary supplements can vary greatly and include nanocrystals of varying composition, shapes and sizes, as well as ionic solutions with diverse metallic constituents. 5 Table of Contents Dietary supplements are marketed and distributed through our wholly owned subsidiary, dOrbital, Inc.
These dietary supplements can vary greatly and include nanocrystals of varying composition, shapes and sizes, as well as ionic solutions with diverse metallic constituents. Dietary supplements are marketed and distributed through our wholly-owned subsidiary, dOrbital, Inc.
We have also shown enhanced wound healing benefits in animal models of diabetic wound healing and decreased scar formation following burns. We are presently completing a standard toxicology program in animals to demonstrate safety in order to advance to first-in-human dosing studies. We have progressed to GLP dermal toxicity studies for topical applications.
We have also shown enhanced wound healing benefits in animal models of diabetic wound healing and decreased scar formation following burns. We are planning to complete a standard toxicology program in animals to demonstrate safety in order to advance to first-in-human dosing studies. We have progressed to GLP dermal toxicity studies for topical applications.
These catalytic activities enhance mitochondrial function and lead to a cascade of enhanced disease responses in neurons, OLs, and astrocytes—cell types that are extremely vulnerable to energetic deficiencies. CNM-Au8 thereby mediates remyelination and neuroprotective effects in neurodegenerative diseases such as ALS, MS, and PD.
These catalytic activities enhance mitochondrial function and lead to a cascade of enhanced disease responses in neurons, OLs, and astrocytes—cell types that are extremely vulnerable to energetic deficiencies. CNM-Au8 is thereby expected to mediate remyelination and neuroprotective effects in neurodegenerative diseases such as ALS, MS, and PD.
HEALEY ALS Platform Trial—Open Label Extension In September 2023, we announced long-term survival data from the HEALEY ALS Platform Trial OLE for patients treated with CNM-Au8 30 mg for up to 133 weeks (n=59).
In September 2023, we announced long-term survival data from the HEALEY ALS Platform Trial OLE for patients treated with CNM-Au8 30 mg for up to 133 weeks (n=59).
Section 335a, 335b, or 335c, 42 U.S.C. Section 1320a-7, in connection with, among other things, making materially false or fraudulent statements to FDA or other governmental entity in connection with federal health care programs (as defined at 42 U.S.C.
Section 1320a-7, in connection with, among other things, making materially false or fraudulent statements to FDA or other governmental entity in connection with federal health care programs (as defined at 42 U.S.C.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeThe price of our Common Stock may fluctuate due to a variety of factors, including: ● changes in the industries in which we operate; ● variations in our operating performance and the performance of our competitors in general; ● material and adverse impact of health epidemics or pandemics on the markets and the broader global economy; ● actual or anticipated fluctuations in our quarterly or annual operating results; ● publication of research reports by securities analysts about us or our competitors or our industry; ● the public’s reaction to our press releases, our other public announcements and our filings with the SEC; ● our failure or the failure of our competitors to meet analysts’ projections or guidance that we or our competitors may give to the market; ● additions and departures of key personnel; ● changes in laws and regulations affecting our business; ● commencement of, or involvement in, litigation involving us; ● changes in our capital structure, such as future issuances of securities or the incurrence of additional debt; ● the volume of shares of our Common Stock available for public sale; and ● general economic, political, industry, and market conditions such as recessions, interest rates, fuel prices, foreign currency fluctuations, international tariffs, social, political and economic risks, epidemics and pandemics, and acts of terrorism or war.
Biggest changeThe market for the common stock of smaller companies such as ours is characterized by significant price volatility when compared to the shares of larger, more established companies that trade on a national securities exchange and have large public floats, and the share price of our Common Stock is more volatile than the price of the shares of such larger, more established companies and will continue to be for the indefinite future. 86 Table of Contents The price of our Common Stock may fluctuate due to a variety of factors, including: ● changes in the industries in which we operate; ● variations in our operating performance and the performance of our competitors in general; ● material and adverse impact of health epidemics or pandemics on the markets and the broader global economy; ● actual or anticipated fluctuations in our quarterly or annual operating results; ● publication of research reports by securities analysts about us or our competitors or our industry; ● the public’s reaction to our press releases, our other public announcements and our filings with the SEC; ● our failure or the failure of our competitors to meet analysts’ projections or guidance that we or our competitors may give to the market; ● additions and departures of key personnel; ● changes in laws and regulations affecting our business; ● commencement of, or involvement in, litigation involving us; ● changes in our capital structure, such as future issuances of securities or the incurrence of additional debt; ● the volume of shares of our Common Stock available for public sale; and ● general economic, political, industry, and market conditions such as recessions, interest rates, fuel prices, foreign currency fluctuations, international tariffs, social, political and economic risks, epidemics and pandemics, and acts of terrorism or war.
If Nasdaq delists our shares of Common Stock or warrants from trading on its exchange for failure to meet Nasdaq’s listing requirements, we and our stockholders could face significant material adverse consequences including: ● a limited availability of market quotations for our securities; ● reduced liquidity for our securities; ● a determination that our Common Stock is a “penny stock” which will require brokers trading in our Common Stock to adhere to more stringent rules and possibly result in a reduced level of trading activity in the secondary trading market for our securities; ● a limited amount of news and analyst coverage; and ● a decreased ability to issue additional securities or obtain additional financing in the future.
If Nasdaq delists our shares of Common Stock from trading on its exchange for failure to meet Nasdaq’s listing requirements, we and our stockholders could face significant material adverse consequences including: ● a limited availability of market quotations for our securities; ● reduced liquidity for our securities; ● a determination that our Common Stock is a “penny stock” which will require brokers trading in our Common Stock to adhere to more stringent rules and possibly result in a reduced level of trading activity in the secondary trading market for our securities; ● a limited amount of news and analyst coverage; and ● a decreased ability to issue additional securities or obtain additional financing in the future.
Moreover, international business relationships subject us to additional risks that may materially adversely affect our ability to attain or sustain profitable operations, including: ● efforts to enter into collaboration or licensing arrangements with third parties in connection with our international sales, marketing, and distribution efforts may increase our expenses or divert our management’s attention from the development of our drug candidates; ● difficulty of effective enforcement of contractual provisions in foreign jurisdictions; ● differing regulatory requirements for drug approvals and marketing internationally, including differing product reimbursement regimes; ● changes in a specific market’s political and cultural climate or economic condition; ● potential third-party patent rights or potentially reduced protection for intellectual property rights; ● unexpected changes in tariffs, trade barriers, and regulatory requirements; ● economic weakness, including inflation; ● compliance with tax, employment, immigration, and labor laws for employees traveling abroad; ● the effects of applicable non-U.S. tax structures and potentially adverse tax consequences; ● currency fluctuations, which could result in increased operating expenses and reduced revenue; ● production shortages resulting from any events affecting raw material supply or manufacturing capabilities abroad; ● workforce uncertainty and labor unrest; ● failure of our employees and contracted third parties to comply with Office of Foreign Assets Control rules and regulations and the Foreign Corrupt Practices Act; and ● business interruptions resulting from geo-political actions, including war and terrorism, or natural disasters, including earthquakes, volcanoes, typhoons, floods, hurricanes, and fires.
Moreover, international business relationships subject us to additional risks that may materially adversely affect our ability to attain or sustain profitable operations, including: ● efforts to enter into collaboration or licensing arrangements with third parties in connection with our international sales, marketing, and distribution efforts may increase our expenses or divert our management’s attention from the development of our drug candidates; ● difficulty of effective enforcement of contractual provisions in foreign jurisdictions; ● differing regulatory requirements for drug approvals and marketing internationally, including differing product reimbursement regimes; 75 Table of Contents ● changes in a specific market’s political and cultural climate or economic condition; ● potential third-party patent rights or potentially reduced protection for intellectual property rights; ● unexpected changes in tariffs, trade barriers, and regulatory requirements; ● economic weakness, including inflation; ● compliance with tax, employment, immigration, and labor laws for employees traveling abroad; ● the effects of applicable non-U.S. tax structures and potentially adverse tax consequences; ● currency fluctuations, which could result in increased operating expenses and reduced revenue; ● production shortages resulting from any events affecting raw material supply or manufacturing capabilities abroad; ● workforce uncertainty and labor unrest; ● failure of our employees and contracted third parties to comply with Office of Foreign Assets Control rules and regulations and the Foreign Corrupt Practices Act; and ● business interruptions resulting from geo-political actions, including war and terrorism, or natural disasters, including earthquakes, volcanoes, typhoons, floods, hurricanes, and fires.
Our drug candidates could fail to receive regulatory approval for many reasons, including: ● failure to begin or complete clinical trials due to disagreements with regulatory authorities; ● failure to begin or complete clinical trials due to inability to recruit sufficient numbers of study participants; ● failure to demonstrate that a drug candidate is safe and effective or is safe, pure and potent for our proposed indication; ● failure of clinical trial results to meet the level of statistical significance required for approval; ● data integrity issues related to our clinical trials; ● disagreement with our interpretation of data from preclinical studies or clinical trials; 59 Table of Contents ● changes in approval policies or regulations that render our preclinical and clinical data insufficient for approval or require us to amend our clinical trial protocols; ● regulatory requests for additional analysis, reports, data, nonclinical studies and clinical trials, or questions regarding interpretations of data and results and the emergence of new information regarding our drug candidates; ● insufficient data from the clinical trials of our drug candidates to obtain regulatory approval; ● failure by us or our investigators to conduct a clinical trial in accordance with regulatory requirements or our clinical trial protocols; and ● clinical sites, investigators or other participants in our clinical trials deviating from a trial protocol, failing to conduct the trial in accordance with regulatory requirements, or dropping out of a trial.
Our drug candidates could fail to receive regulatory approval for many reasons, including: ● failure to begin or complete clinical trials due to disagreements with regulatory authorities; ● failure to begin or complete clinical trials due to inability to recruit sufficient numbers of study participants; ● failure to demonstrate that a drug candidate is safe and effective or is safe, pure and potent for our proposed indication; ● failure of clinical trial results to meet the level of statistical significance required for approval; ● data integrity issues related to our clinical trials; ● disagreement with our interpretation of data from preclinical studies or clinical trials; 62 Table of Contents ● changes in approval policies or regulations that render our preclinical and clinical data insufficient for approval or require us to amend our clinical trial protocols; ● regulatory requests for additional analysis, reports, data, nonclinical studies and clinical trials, or questions regarding interpretations of data and results and the emergence of new information regarding our drug candidates; ● insufficient data from the clinical trials of our drug candidates to obtain regulatory approval; ● failure by us or our investigators to conduct a clinical trial in accordance with regulatory requirements or our clinical trial protocols; and ● clinical sites, investigators or other participants in our clinical trials deviating from a trial protocol, failing to conduct the trial in accordance with regulatory requirements, or dropping out of a trial.
We have not had any product approved for commercial sale and have not generated any revenue from product sales. In addition, as a business with a limited operating history, we may encounter unforeseen expenses, difficulties, complications, delays and other known and unknown factors and risks frequently experienced by early-stage biopharmaceutical companies in rapidly evolving fields.
We have not had any product approved for commercial sale and have not generated any revenue from pharmaceutical product sales. In addition, as a business with a limited operating history, we may encounter unforeseen expenses, difficulties, complications, delays and other known and unknown factors and risks frequently experienced by early-stage biopharmaceutical companies in rapidly evolving fields.
Similarly, efforts by the new administration to substantially reduce research funding by the NIH of medical research could have substantial direct or indirect impacts on our research activities. Favorable designations may not be granted, or if granted, may be withdrawn later, for any of our drug candidates, and may not lead to faster development or regulatory review or approval.
Similarly, efforts by the administration to substantially reduce research funding by the NIH of medical research could have substantial direct or indirect impacts on our research activities. Favorable designations may not be granted, or if granted, may be withdrawn later, for any of our drug candidates, and may not lead to faster development or regulatory review or approval.
If our drug candidates receive regulatory approval and we or others discover undesirable side effects caused by such drugs (or any other similar drugs) or that such drug candidates are less effective than previously believed, a number of potentially significant negative consequences could result, including: ● the FDA, NMPA, TGA, Health Canada, EMA or other comparable regulatory authorities may withdraw or limit their approval of such drug candidates; ● the FDA, NMPA, TGA, Health Canada, EMA or other comparable regulatory authorities may require the addition of labeling statements, such as a “boxed” warning or a contra-indication; 67 Table of Contents ● we may be required to create a medication guide outlining the risks of such side effects for distribution to patients; ● we may be required to change the way such drug candidates are distributed or administered, conduct additional clinical trials or change the labeling of our drug candidates; ● the FDA, NMPA, TGA, Health Canada, EMA or other comparable regulatory authorities may require the development of risk evaluation and mitigation strategies and plans to mitigate risks, which could include medication guides, physician communication plans, or elements to assure safe use, such as restricted distribution methods, patient registries and other risk minimization tools; ● we may be subject to regulatory investigations and government enforcement actions; ● we may decide to, or be required to, remove such drug candidates from the marketplace; ● we could be sued and held liable for injury caused to individuals exposed to or taking our drugs; and ● our reputation may suffer.
If our drug candidates receive regulatory approval and we or others discover undesirable side effects caused by such drugs (or any other similar drugs) or that such drug candidates are less effective than previously believed, a number of potentially significant negative consequences could result, including: ● the FDA, NMPA, TGA, Health Canada, EMA or other comparable regulatory authorities may withdraw or limit their approval of such drug candidates; ● the FDA, NMPA, TGA, Health Canada, EMA or other comparable regulatory authorities may require the addition of labeling statements, such as a “boxed” warning or a contra-indication; ● we may be required to create a medication guide outlining the risks of such side effects for distribution to patients; ● we may be required to change the way such drug candidates are distributed or administered, conduct additional clinical trials or change the labeling of our drug candidates; ● the FDA, NMPA, TGA, Health Canada, EMA or other comparable regulatory authorities may require the development of risk evaluation and mitigation strategies and plans to mitigate risks, which could include medication guides, physician communication plans, or elements to assure safe use, such as restricted distribution methods, patient registries and other risk minimization tools; ● we may be subject to regulatory investigations and government enforcement actions; ● we may decide to, or be required to, remove such drug candidates from the marketplace; ● we could be sued and held liable for injury caused to individuals exposed to or taking our drugs; and ● our reputation may suffer.
Similar to the federal Anti-Kickback Statute, a person or entity does not need to have actual knowledge of the statute or specific intent to violate it in order to have committed a violation; ● HIPAA, as amended by HITECH, and their implementing regulations, also imposes obligations, including mandatory contractual terms, certain covered healthcare providers, health plans, and healthcare clearinghouses and their respective business associates and covered subcontractors that perform services for them that involve the use, or disclosure of, individually identifiable health information with respect to safeguarding the privacy, security and transmission of certain individually identifiable health information; and 69 Table of Contents ● the federal Physician Payments Sunshine Act requires applicable manufacturers of covered drugs, devices, biologics and medical supplies for which payment is available under Medicare, Medicaid or the Children’s Health Insurance Program, with specific exceptions, to annually report to the CMS information regarding payments and other transfers of value to physicians (defined to include doctors, dentists, optometrists, podiatrists and chiropractors) and teaching hospitals, as well as information regarding ownership and investment interests held by physicians and their immediate family members.
Similar to the federal Anti-Kickback Statute, a person or entity does not need to have actual knowledge of the statute or specific intent to violate it in order to have committed a violation; ● HIPAA, as amended by HITECH, and their implementing regulations, also imposes obligations, including mandatory contractual terms, certain covered healthcare providers, health plans, and healthcare clearinghouses and their respective business associates and covered subcontractors that perform services for them that involve the use, or disclosure of, individually identifiable health information with respect to safeguarding the privacy, security and transmission of certain individually identifiable health information; and ● the federal Physician Payments Sunshine Act requires applicable manufacturers of covered drugs, devices, biologics and medical supplies for which payment is available under Medicare, Medicaid or the Children’s Health Insurance Program, with specific exceptions, to annually report to the CMS information regarding payments and other transfers of value to physicians (defined to include doctors, dentists, optometrists, podiatrists and chiropractors) and teaching hospitals, as well as information regarding ownership and investment interests held by physicians and their immediate family members.
Such provisions include the following: ● a classified board of directors with three-year staggered terms, which could delay the ability of stockholders to change the membership of a majority of our Board; ● the ability of our Board to approve the issuance shares of preferred stock and to determine the price and other terms of those shares, including preferences and voting rights, without stockholder approval, which could be used to significantly dilute the ownership of a hostile acquiror and/or existing stockholders; ● the requirement for the affirmative vote of holders of at least 66⅔% of the voting power of all of the then-outstanding shares of the Common Stock, voting together as a single class, to amend certain provisions of our amended and restated certificate of incorporation or our amended and restated bylaws, which may inhibit the ability of an acquiror to effect such amendments to facilitate an unsolicited takeover attempt; ● the exclusive right of our Board to elect a director to fill a vacancy created by the expansion of our Board or the resignation, retirement death, disqualification or removal of a director, which prevents stockholders from being able to fill vacancies on our Board for a period of time; and ● the requirement that a special meeting of stockholders may be called only by our Board, the chairman of our Board or our CEO, which could delay the ability of our stockholders to force consideration of a proposal or to take action, including the removal of directors.
Such provisions include the following: ● a classified board of directors with three-year staggered terms, which could delay the ability of stockholders to change the membership of a majority of our Board; ● the ability of our Board to approve the issuance shares of preferred stock and to determine the price and other terms of those shares, including preferences and voting rights, without stockholder approval, which could be used to significantly dilute the ownership of a hostile acquiror and/or existing stockholders; ● the requirement for the affirmative vote of holders of at least 66⅔% of the voting power of all of the then-outstanding shares of Common Stock, voting together as a single class, to amend certain provisions of our amended and restated certificate of incorporation or our amended and restated bylaws, which may inhibit the ability of an acquiror to effect such amendments to facilitate an unsolicited takeover attempt; 85 Table of Contents ● the exclusive right of our Board to elect a director to fill a vacancy created by the expansion of our Board or the resignation, retirement death, disqualification or removal of a director, which prevents stockholders from being able to fill vacancies on our Board for a period of time; and ● the requirement that a special meeting of stockholders may be called only by our Board, the chairman of our Board or our CEO, which could delay the ability of our stockholders to force consideration of a proposal or to take action, including the removal of directors.
If a material breach of our information technology systems or those of our vendors occurs, the market perception of the effectiveness of our security measures could be harmed and our reputation and credibility could be damaged. We could be required to expend significant amounts of money and other resources to repair or replace information systems or networks.
If a material breach of our information technology (“IT”) systems or those of our vendors occurs, the market perception of the effectiveness of our security measures could be harmed and our reputation and credibility could be damaged. We could be required to expend significant amounts of money and other resources to repair or replace information systems or networks.
If we fail to enter into collaborations and do not have sufficient funds or expertise to undertake the necessary development and commercialization activities, we may not be able to further develop our drug candidates or, if approved, bring them to market and generate product sales revenue, which would harm our business, financial condition, results of operations, and prospects. 74 Table of Contents Our business depends on the use of raw materials, and a decrease in the supply or an increase in the cost of these raw materials or any quality issues in such raw materials could materially and adversely affect our business, financial condition, results of operations, and prospects.
If we fail to enter into collaborations and do not have sufficient funds or expertise to undertake the necessary development and commercialization activities, we may not be able to further develop our drug candidates or, if approved, bring them to market and generate product sales revenue, which would harm our business, financial condition, results of operations, and prospects. 78 Table of Contents Our business depends on the use of raw materials, and a decrease in the supply or an increase in the cost of these raw materials or any quality issues in such raw materials could materially and adversely affect our business, financial condition, results of operations, and prospects.
Our main business is research and development, and if successful, sales of drug candidates. As all of our drug candidates are still in the research and development stage, we currently do not generate revenue from the sale of drug candidates, and we have recorded continued significant net losses.
Our main business is research and development, and, if our research and development activities are successful, sales of drug candidates. As all of our drug candidates are still in the research and development stage, we currently do not generate revenue from the sale of drug candidates, and we have recorded continued significant net losses.
Any of these changes could make the results of planned clinical trials or other future clinical trials we may initiate less predictable and could cause our drug candidates to perform differently, which could delay completion of clinical trials, delay approval of our drug candidates, and/or jeopardize our ability to commence commercialization of our drug candidates. 61 Table of Contents Clinical trials of our drug candidates may fail to demonstrate safety and efficacy to the satisfaction of regulatory authorities, or may not otherwise produce positive results, which may cause us to incur additional costs or experience delays in completing, or ultimately be unable to complete, the development and commercialization of our drug candidates.
Any of these changes could make the results of planned clinical trials or other future clinical trials we may initiate less predictable and could cause our drug candidates to perform differently, which could delay completion of clinical trials, delay approval of our drug candidates, and/or jeopardize our ability to commence commercialization of our drug candidates. 64 Table of Contents Clinical trials of our drug candidates may fail to demonstrate safety and efficacy to the satisfaction of regulatory authorities, or may not otherwise produce positive results, which may cause us to incur additional costs or experience delays in completing, or ultimately be unable to complete, the development and commercialization of our drug candidates.
Our failure to become and remain profitable would decrease our value significantly and could impair our ability to raise capital, expand our business or continue our operations, which in turn may adversely affect our business, financial condition, and results of operations. 50 Table of Contents We currently do not generate any revenue from the commercial sales of drug candidates and we may not become profitable when expected, or at all.
Our failure to become and remain profitable would decrease our value significantly and could impair our ability to raise capital, expand our business, or continue our operations, which in turn may adversely affect our business, financial condition, and results of operations. 52 Table of Contents We currently do not generate any revenue from the commercial sales of drug candidates and we may not become profitable when expected, or at all.
This deficiency in our control environment contributed to the following additional material weaknesses related to control activities and information and communication within our internal control over financial reporting: ● we did not design and maintain controls over the preparation and review of account reconciliations and the review and segregation of duties over manual journal entries, including controls over the completeness and accuracy of information; and ● we did not design and maintain information technology (“IT”) general controls for IT systems that are relevant to the preparation of the financial statements.
This deficiency in our control environment contributed to the following additional material weaknesses related to control activities and information and communication within our internal control over financial reporting: ● we did not design and maintain controls over the preparation and review of account reconciliations and the review and segregation of duties over manual journal entries, including controls over the completeness and accuracy of information; and ● we did not design and maintain IT general controls for IT systems that are relevant to the preparation of the financial statements.
We may focus our efforts and resources on potential drug candidates or other potential programs that ultimately prove to be unsuccessful. 60 Table of Contents Preclinical and clinical development of drug candidates involves a lengthy and expensive process with an uncertain outcome, and we are unable to predict if or when we will successfully develop or commercialize any of our drug candidates.
We may focus our efforts and resources on potential drug candidates or other potential programs that ultimately prove to be unsuccessful. 63 Table of Contents Preclinical and clinical development of drug candidates involves a lengthy and expensive process with an uncertain outcome, and we are unable to predict if or when we will successfully develop or commercialize any of our drug candidates.
Risks Relating to Our Business and Industry We depend substantially on the successful commercialization of our drug candidates in the future, which may fail to materialize or may experience significant delays. We currently do not have any drugs available for commercial sales nor do we have any drugs that have been approved for sale by the regulatory authorities.
Risks Relating to Our Business and Industry We depend substantially on the successful commercialization of our drug candidates in the future, which may fail to materialize or may experience significant delays. We currently do not have any drugs available for commercial sale, nor do we have any drugs that have been approved for sale by applicable regulatory authorities.
Such “march-in” rights can apply to new subject matter arising from the use of such government funding or grants and should not extend to pre-existing subject matter or subject matter arising from funds unrelated to the government funding or grants If the U.S. government exercised its march-in rights in our future intellectual property rights that are generated through the use of U.S. government funding or grants, we could be forced to license or sublicense intellectual property developed by us or that we license on terms unfavorable to us, and there can be no assurance that we would receive compensation from the U.S. government for the exercise of such rights.
Such “march-in” rights can apply to new subject matter arising from the use of such government funding or grants and should not extend to pre-existing subject matter or subject matter arising from funds unrelated to the government funding or grants. 80 Table of Contents If the U.S. government exercised its march-in rights in our future intellectual property rights that are generated through the use of U.S. government funding or grants, we could be forced to license or sublicense intellectual property developed by us or that we license on terms unfavorable to us, and there can be no assurance that we would receive compensation from the U.S. government for the exercise of such rights.
Such disclosures are costly, could lead to negative publicity, may cause our customer or collaborators or other relevant stakeholders to lose confidence in the effectiveness of our security measures and require us to expend significant capital and other resources to respond to and/or alleviate problems caused by the actual or perceived security incident.
Such disclosures are costly, could lead to negative publicity, may cause our customers or collaborators or other relevant stakeholders to lose confidence in the effectiveness of our security measures and require us to expend significant capital and other resources to respond to and/or alleviate problems caused by the actual or perceived security incident.
For all of these reasons, we may not obtain non-U.S. regulatory approvals on a timely basis, if at all. 63 Table of Contents The process to develop, obtain regulatory approval for and commercialize drug candidates is long, complex and costly both inside and outside the U.S., and approval is never guaranteed.
For all of these reasons, we may not obtain non-U.S. regulatory approvals on a timely basis, if at all. 66 Table of Contents The process to develop, obtain regulatory approval for and commercialize drug candidates is long, complex and costly both inside and outside the U.S., and approval is never guaranteed.
As a result, the issuance, scope, validity, enforceability and commercial value of our patent rights are highly uncertain. 75 Table of Contents The issuance of a patent is not conclusive as to our inventorship, scope, validity, or enforceability, and our patents may be challenged in the courts or patent offices in any country.
As a result, the issuance, scope, validity, enforceability and commercial value of our patent rights are highly uncertain. 79 Table of Contents The issuance of a patent is not conclusive as to our inventorship, scope, validity, or enforceability, and our patents may be challenged in the courts or patent offices in any country.
In addition, theft of inventory at warehouses, plants or while in-transit, which are not properly stored and which are sold through unauthorized channels, could adversely impact patient safety, as well as our reputation and business. We rely on third parties to conduct our preclinical studies and clinical trials and we must work effectively with collaborators to develop our drug candidates.
In addition, theft of inventory at warehouses, plants or while in-transit, which are not properly stored and which are sold through unauthorized channels, could adversely impact patient safety, as well as our reputation and business. 76 Table of Contents We rely on third parties to conduct our preclinical studies and clinical trials and we must work effectively with collaborators to develop our drug candidates.
This could impair our ability to commercialize our drug candidates and may harm our business and results of operations. 62 Table of Contents If we encounter difficulties enrolling patients in clinical trials, clinical trials of our drug candidates may be delayed or otherwise adversely affected.
This could impair our ability to commercialize our drug candidates and may harm our business and results of operations. 65 Table of Contents If we encounter difficulties enrolling patients in clinical trials, clinical trials of our drug candidates may be delayed or otherwise adversely affected.
This could adversely affect investor confidence in us and, as a result, the value of our Common Stock. 58 Table of Contents There is significant uncertainty associated with our drug candidates and their viability as a commercial product.
This could adversely affect investor confidence in us and, as a result, the value of our Common Stock. 61 Table of Contents There is significant uncertainty associated with our drug candidates and their viability as a commercial product.
We do not maintain insurance for environmental liability or toxic tort claims that may be asserted against us in connection with our storage, use or disposal of biological or hazardous materials. In addition, the environmental, health and safety laws and regulations applicable to us and our third-party contractors may change and impose stricter requirements in the future.
We do not maintain insurance for environmental liability or toxic tort claims that may be asserted against us in connection with our storage, use or disposal of biological or hazardous materials. 55 Table of Contents In addition, the environmental, health and safety laws and regulations applicable to us and our third-party contractors may change and impose stricter requirements in the future.
Our decision to issue securities in any future offering will depend on market conditions and other factors beyond our control, which may adversely affect the amount, timing and nature of our future offerings. 81 Table of Contents General Risk Factors There can be no assurance that we will be able to comply with the continued listing requirements of Nasdaq.
Our decision to issue securities in any future offering will depend on market conditions and other factors beyond our control, which may adversely affect the amount, timing and nature of our future offerings. General Risk Factors There can be no assurance that we will be able to comply with the continued listing requirements of Nasdaq.
If we are not able to obtain, or experiences delays in obtaining, required regulatory approvals, we will not be able to commercialize our drug candidates, and our ability to generate revenue will be materially impaired.
If we are not able to obtain, or experience delays in obtaining, required regulatory approvals, we will not be able to commercialize our drug candidates, and our ability to generate revenue will be materially impaired.
These market and industry factors may materially reduce the market price of our Common Stock regardless of our operating performance. 82 Table of Contents SEC regulations limit the amount of funds we can raise during any 12-month period pursuant to our shelf registration statement on Form S-3.
These market and industry factors may materially reduce the market price of our Common Stock regardless of our operating performance. SEC regulations limit the amount of funds we can raise during any 12-month period pursuant to our shelf registration statement on Form S-3.
Additionally, pursuant to our senior secured convertible promissory notes (the “2024 SSCP Notes”), we are required to maintain unrestricted cash and cash equivalents of at least $2.0 million to avoid acceleration of the full balance of the 2024 SSCP Notes (see Note 8 to the consolidated financial statements).
Additionally, pursuant to our senior secured convertible promissory notes issued in December 2024 (the “2024 SSCP Notes”), we are required to maintain unrestricted cash and cash equivalents of at least $2.0 million to avoid acceleration of the full balance of the 2024 SSCP Notes (see Note 8 to the consolidated financial statements).
These occurrences may also expose us to liability and cause, or lead to, a delay in the progress of our clinical trials and may also ultimately result in failure to obtain regulatory approval for our drug candidates. Off-label use of our products could expose us to government investigation or prosecution.
These occurrences may also expose us to liability and cause, or lead to, a delay in the progress of our clinical trials and may also ultimately result in failure to obtain regulatory approval for our drug candidates. 71 Table of Contents Off-label use of our products could expose us to government investigation or prosecution.
Any future legislation or regulations that increase consumer access to lower-priced medicines from outside the countries where we operate could have a material adverse effect on our business. 72 Table of Contents Certain products distributed or sold in the pharmaceutical market may be manufactured without proper licenses or approvals, or may be fraudulently mislabeled with respect to their content or manufacturers.
Any future legislation or regulations that increase consumer access to lower-priced medicines from outside the countries where we operate could have a material adverse effect on our business. Certain products distributed or sold in the pharmaceutical market may be manufactured without proper licenses or approvals, or may be fraudulently mislabeled with respect to their content or manufacturers.
We are a “smaller reporting company” because the market value of our stock held by non-affiliates was less than $250 million as of June 30, 2024.
We are a “smaller reporting company” because the market value of our stock held by non-affiliates was less than $250 million as of June 30, 2025.
Moreover, the applicable time period or the scope of patent protection afforded could be less than we request. 78 Table of Contents In addition, no patent term extension system has been established in China beyond the new pilot program, and implementation of the pilot program may not occur quickly.
Moreover, the applicable time period or the scope of patent protection afforded could be less than we request. In addition, no patent term extension system has been established in China beyond the new pilot program, and implementation of the pilot program may not occur quickly.
For drugs that have been designated as Breakthrough Therapies, interaction and communication between the FDA and the sponsor can help to identify the most efficient path for development. 64 Table of Contents Designation as a Breakthrough Therapy is within the discretion of the FDA.
For drugs that have been designated as Breakthrough Therapies, interaction and communication between the FDA and the sponsor can help to identify the most efficient path for development. Designation as a Breakthrough Therapy is within the discretion of the FDA.
The following examples are illustrative: ● others may be able to make compounds that are similar to our drug candidates but that are not covered by the claims of the patents that we own or may in the future exclusively license; ● we might not have been the first to make the inventions covered by the issued patents or pending patent applications that we own or may in the future exclusively license, which could result in the patent applications not issuing or being invalidated after issuing; ● we might not have been the first to file patent applications covering certain of our inventions, which could prevent the issuance of the patent applications or cause them to be invalidated after issuance; ● others may independently develop similar or alternative technologies or duplicate any of our technologies without infringing our intellectual property rights; ● it is possible that our pending patent applications will not lead to issued patents; 79 Table of Contents ● issued patents that we own or have exclusively licensed may not provide us with any competitive advantages, or may be held invalid or unenforceable, as a result of legal challenges by our competitors; ● we may obtain patents for certain drug candidates many years before we receive NDA approval for these drugs, and because patents have a limited life, which may begin to run prior to the commercial sale of the related drugs, limiting the commercial value of our patents; ● our competitors might conduct research and development activities in countries where we do not have patent rights and then use the information learned from such activities to develop competitive drugs for commercialization in our major markets; ● we may fail to develop additional proprietary technologies that are patentable; ● we may fail to apply for or obtain adequate intellectual property protection in all the jurisdictions in which we operate; ● the patents of others may have an adverse effect on our business, for example by preventing us from commercializing one or more of our drug candidates for one or more indications; and ● any of the aforementioned threats to our competitive advantage could have a material adverse effect on our business.
The following examples are illustrative: ● others may be able to make compounds that are similar to our drug candidates but that are not covered by the claims of the patents that we own or may in the future exclusively license; ● we might not have been the first to make the inventions covered by the issued patents or pending patent applications that we own or may in the future exclusively license, which could result in the patent applications not issuing or being invalidated after issuing; ● we might not have been the first to file patent applications covering certain of our inventions, which could prevent the issuance of the patent applications or cause them to be invalidated after issuance; ● others may independently develop similar or alternative technologies or duplicate any of our technologies without infringing our intellectual property rights; ● it is possible that our pending patent applications will not lead to issued patents; ● issued patents that we own or have exclusively licensed may not provide us with any competitive advantages, or may be held invalid or unenforceable, as a result of legal challenges by our competitors; ● we may obtain patents for certain drug candidates many years before we receive NDA approval for these drugs, and because patents have a limited life, which may begin to run prior to the commercial sale of the related drugs, limiting the commercial value of our patents; ● our competitors might conduct research and development activities in countries where we do not have patent rights and then use the information learned from such activities to develop competitive drugs for commercialization in our major markets; ● we may fail to develop additional proprietary technologies that are patentable; ● we may fail to apply for or obtain adequate intellectual property protection in all the jurisdictions in which we operate; ● the patents of others may have an adverse effect on our business, for example by preventing us from commercializing one or more of our drug candidates for one or more indications; and ● any of the aforementioned threats to our competitive advantage could have a material adverse effect on our business. 84 Table of Contents Risks Related to Our Common Stock We incur significant expenses and administrative burdens as a public company, which could have an adverse effect on our business, financial condition and results of operations.
This preference for U.S. industry may limit our ability to contract with non-U.S. product manufacturers for products covered by such intellectual property. 76 Table of Contents We may not be able to protect our intellectual property rights throughout the world or prevent unfair competition by third parties.
This preference for U.S. industry may limit our ability to contract with non-U.S. product manufacturers for products covered by such intellectual property. We may not be able to protect our intellectual property rights throughout the world or prevent unfair competition by third parties.
The remaining balance of $12.9 million will begin to expire after 2032. As of December 31, 2024, we had research and development tax credit carryforwards of $6.4 million, which may be available to reduce future tax liabilities and expire at various dates beginning after 2032.
The remaining balance of $12.9 million will begin to expire after 2032. As of December 31, 2025, we had research and development tax credit carryforwards of $6.7 million, which may be available to reduce future tax liabilities and expire at various dates beginning after 2032.
Risks Related to Our Common Stock Provisions in our amended and restated certificate of incorporation and amended and restated bylaws could make a merger, tender offer or proxy contest difficult, thereby depressing the trading price of our Common Stock.
Provisions in our amended and restated certificate of incorporation and amended and restated bylaws could make a merger, tender offer or proxy contest difficult, thereby depressing the trading price of our Common Stock.
Significant inflation is often accompanied by higher interest rates. Any sustained inflation or significant increases in inflation and interest rates could have a material adverse effect on our business, financial condition and results of operations. Our future success depends on our ability to retain key executives and to attract, train, retain, develop, and motivate qualified and highly skilled personnel.
Any sustained inflation or significant increases in inflation and interest rates could have a material adverse effect on our business, financial condition and results of operations. Our future success depends on our ability to retain key executives and to attract, train, retain, develop, and motivate qualified and highly skilled personnel.
These effects could have a material impact on our business and operations, or the businesses and operations of third parties on which we rely. 57 Table of Contents We have identified material weaknesses in our internal control over financial reporting.
These effects could have a material adverse impact on our business and operations, or the businesses and operations of third parties on which we rely. We have identified material weaknesses in our internal control over financial reporting.
Among the Affordable Care Act provisions of importance to the pharmaceutical and biotechnology industries are the following: among other things, subjected biological products to potential competition by lower-cost biosimilars, created a new methodology by which rebates owed by manufacturers under the Medicaid Drug Rebate Program are calculated for drugs that are inhaled, infused, instilled, implanted or injected, increased the minimum Medicaid rebates owed by manufacturers under the Medicaid Drug Rebate Program and extended the rebate program to individuals enrolled in Medicaid managed care organizations, established annual fees and taxes on manufacturers of certain branded prescription drugs, and created a new Medicare Part D coverage gap discount program, in which manufacturers must agree to offer 70% point-of-sale discounts off negotiated prices of applicable brand drugs to eligible beneficiaries during their coverage gap period, as a condition for the manufacturer’s outpatient drugs to be covered under Medicare Part D. 70 Table of Contents Further legislation or regulation could be passed that could harm our business, financial condition and results of operations.
Among the Affordable Care Act provisions of importance to the pharmaceutical and biotechnology industries are the following: among other things, subjected biological products to potential competition by lower-cost biosimilars, created a new methodology by which rebates owed by manufacturers under the Medicaid Drug Rebate Program are calculated for drugs that are inhaled, infused, instilled, implanted or injected, increased the minimum Medicaid rebates owed by manufacturers under the Medicaid Drug Rebate Program and extended the rebate program to individuals enrolled in Medicaid managed care organizations, established annual fees and taxes on manufacturers of certain branded prescription drugs, and created a new Medicare Part D coverage gap discount program, in which manufacturers must agree to offer 70% point-of-sale discounts off negotiated prices of applicable brand drugs to eligible beneficiaries during their coverage gap period, as a condition for the manufacturer’s outpatient drugs to be covered under Medicare Part D.
Further, with the change in presidential administrations in 2025, there is substantial uncertainty as to how, if at all, the new administration will seek to modify or revise the requirements and policies of the FDA and other regulatory agencies with jurisdiction over our product candidates.
Further, with the change in presidential administrations in 2025, there remains substantial uncertainty as to how, if at all, the second Trump administration will seek to modify or revise the requirements and policies of the FDA and other regulatory agencies with jurisdiction over our product candidates.
Our manufacturing facilities will be subject to ongoing, periodic inspection by various regulatory authorities, including the FDA, EMA, China’s National Medical Products Administration (“NMPA”), Health Canada, and the Australian Therapeutics Goods Administration (“TGA”) or other comparable regulatory agencies to ensure compliance with GMP.
Our manufacturing facilities will be subject to ongoing, periodic inspection by various regulatory authorities, including the FDA, EMA, China’s National Medical Products Administration (“NMPA”), Health Canada, and the TGA or other comparable regulatory agencies to ensure compliance with GMP.
The existence of these provisions could negatively affect the price of our Common Stock and limit opportunities for stockholders to realize value in a corporate transaction. Future offerings of debt or equity securities by us may adversely affect the market price of our Common Stock.
The existence of these provisions could negatively affect the price of our Common Stock and limit opportunities for stockholders to realize value in a corporate transaction. Future offerings of debt or equity securities by us may dilute the economic and voting rights of our existing stockholders or adversely affect the market price of our Common Stock.
In recent years, the U.S. Congress, the President, executive branch agencies, and state legislatures have considered various types of healthcare reform to control growing healthcare costs. Similar reform movements have occurred in parts of Europe and Asia.
Congress, the President, executive branch agencies, and state legislatures have considered various types of healthcare reform to control growing healthcare costs. Similar reform movements have occurred in parts of Europe and Asia.
Securities and Exchange Commission (“SEC”), the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 and the rules and regulations promulgated and to be promulgated thereunder, the Public Company Accounting Oversight Board and the securities exchanges, impose additional reporting and other obligations on public companies. Compliance with public company requirements has increased costs and made certain activities more time-consuming.
Securities and Exchange Commission (“SEC”), the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 and the rules and regulations promulgated and to be promulgated thereunder, the Public Company Accounting Oversight Board and the securities exchanges, impose additional reporting and other obligations on public companies. Compliance with public company requirements is costly and makes certain activities more time-consuming.
As of December 31, 2024, we had U.S. federal net operating loss (“NOL”) carryforwards of $170.1 million, of which $136.7 million may be carried forward indefinitely to reduce future taxable income but utilization is limited to 80% of our annual taxable income in any given year based on current federal tax laws.
As of December 31, 2025, we had U.S. federal net operating loss (“NOL”) carryforwards of $195.7 million, of which $162.3 million may be carried forward indefinitely to reduce future taxable income but utilization is limited to 80% of our annual taxable income in any given year based on current federal tax laws.
Further, we expect to incur significant costs in the future, in particular for research and development and the commercialization of our drug candidates. Research and development expenses totaled $20.1 million and $26.7 million for the years ended December 31, 2024 and 2023, respectively.
Further, we expect to incur significant costs in the future, in particular for research and development and the commercialization of our drug candidates. Research and development expenses totaled $14.0 million and $20.1 million for the years ended December 31, 2025 and 2024, respectively.
In addition, quality issues may arise during scale-up activities. If we are unable to successfully ensure consistent and high quality of our products during large-volume production, the sales of our products may not be able to be promoted, which could have a material adverse effect on our business and financial results.
If we are unable to successfully ensure consistent and high quality of our products during large-volume production, the sales of our products may not be able to be promoted, which could have a material adverse effect on our business and financial results.
The remaining balance of $33.4 million will begin to expire after 2034. As of December 31, 2024, we had state NOL carryforwards of $116.1 million, of which $103.2 million may be carried forward indefinitely to reduce future taxable income but utilization is limited to 80% of our taxable income in any given tax year based on current tax laws.
The remaining balance of $33.4 million will begin to expire after 2034. As of December 31, 2025, we had state NOL carryforwards of $136.3 million, of which $123.4 million may be carried forward indefinitely to reduce future taxable income but utilization is limited to 80% of our taxable income in any given tax year based on current tax laws.
As a smaller reporting company, we are eligible for and may take advantage of certain exemptions from various reporting requirements applicable to other public companies for as long as we continue to be a smaller reporting company, including: (i) the choice of presenting only the two most recent fiscal years of audited financial statements in our Annual Report on Form 10-K, (ii) the exemption from the auditor attestation requirements with respect to internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act, and (iii) reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements. 80 Table of Contents We cannot predict if investors will find our Common Stock less attractive because we rely on these exemptions.
As a smaller reporting company, we are eligible for and may take advantage of certain exemptions from various reporting requirements applicable to other public companies for as long as we continue to be a smaller reporting company, including: (i) the choice of presenting only the two most recent fiscal years of audited financial statements in our Annual Report on Form 10-K, (ii) the exemption from the auditor attestation requirements with respect to internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act, and (iii) reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements.
We do not currently have Fast Track Designation or Breakthrough Therapy Designation, but may seek one or more of such designations in the future.
We do not currently have Fast Track Designation or Breakthrough Therapy Designation for any of our drug candidates, but may seek one or more of such designations in the future.
In addition, if the FDA, NMPA, TGA, Health Canada, EMA or a comparable regulatory authority approves our drug candidates, we will have to comply with requirements, including, for example, submissions of safety and other post-market information and reports, registration, as well as continued compliance with GMP and GCP, for any clinical trials that we conduct post-approval. 65 Table of Contents The FDA and other regulatory authorities strictly regulate the marketing, labeling, advertising and promotion of products that are placed on the market.
In addition, if the FDA, NMPA, TGA, Health Canada, EMA or a comparable regulatory authority approves our drug candidates, we will have to comply with requirements, including, for example, submissions of safety and other post-market information and reports, registration, as well as continued compliance with GMP and GCP, for any clinical trials that we conduct post-approval.
A Breakthrough Therapy is defined as a drug that is intended, alone or in combination with one or more other drugs, to treat a serious or life-threatening disease or condition, and preliminary clinical evidence indicates that the drug may demonstrate substantial improvement over existing therapies on one or more clinically significant endpoints, such as substantial treatment effects observed early in clinical development.
Many drugs that have received Fast Track Designation have failed to obtain approval from the FDA. 67 Table of Contents A Breakthrough Therapy is defined as a drug that is intended, alone or in combination with one or more other drugs, to treat a serious or life-threatening disease or condition, and preliminary clinical evidence indicates that the drug may demonstrate substantial improvement over existing therapies on one or more clinically significant endpoints, such as substantial treatment effects observed early in clinical development.
The FDA may withdraw a Fast Track Designation if it believes that the designation is no longer supported by data from our clinical development program. Many drugs that have received Fast Track Designation have failed to obtain approval from the FDA.
The FDA may withdraw a Fast Track Designation if it believes that the designation is no longer supported by data from our clinical development program.
In addition to other relevant provisions, the Inflation Reduction Act of 2022 allows the Medicare program to directly negotiate the price of certain high-expenditure prescription drugs covered under Medicare Parts B and D, starting in the year 2028 and 2026, respectively, by setting certain “maximum fair prices.” Moreover, the Inflation Reduction Act of 2022 requires manufacturers to pay rebates to the federal government if prices of certain drugs covered under the Medicare program rise faster than the rate of inflation.
In addition to other relevant provisions, the Inflation Reduction Act of 2022 allows the Medicare program to directly negotiate the price of certain high-expenditure prescription drugs covered under Medicare Parts B and D, starting in the year 2028 and 2026, respectively, by setting certain “maximum fair prices.” Moreover, the Inflation Reduction Act of 2022 requires manufacturers to pay rebates to the federal government if prices of certain drugs covered under the Medicare program rise faster than the rate of inflation. 74 Table of Contents Additionally, there has been increasing legislative and enforcement interest in the U.S. with respect to specialty drug pricing practices.
We would have little or no control over the marketing and sales efforts of such third parties, and our revenue from product sales, if approved, may be lower than if we had commercialized any approved drugs by ourselves or we may fail to generate any product sales revenue in the future at all. 68 Table of Contents We face substantial competition from other pharmaceutical and biotechnology companies, and our operating results may suffer if we fail to compete effectively.
We would have little or no control over the marketing and sales efforts of such third parties, and our revenue from product sales, if approved, may be lower than if we had commercialized any approved drugs by ourselves or we may fail to generate any product sales revenue in the future at all.
Furthermore, if any issues in complying with those requirements are identified (for example, if the auditors identify a material weakness or significant deficiency in the internal control over financial reporting), we could incur additional costs rectifying those issues, and the existence of those issues could adversely affect our reputation or investor perceptions of it.
Furthermore, if any noncompliance is identified (for example, if our auditors identify a material weakness or significant deficiency in our internal control over financial reporting), we could incur additional costs to correct issues, and the existence of noncompliance could adversely affect our reputation.
If any of our trade secrets were to be lawfully obtained or independently developed by a competitor, we would have no right to prevent the competitor from using that technology or information to compete with us and our competitive position would be harmed.
If any of our trade secrets were to be lawfully obtained or independently developed by a competitor, we would have no right to prevent the competitor from using that technology or information to compete with us and our competitive position would be harmed. 83 Table of Contents We may be subject to claims that our employees have wrongfully used or disclosed the alleged trade secrets of their former employers.
If some investors find our Common Stock less attractive as a result, there may be a less active trading market for our Common Stock and our stock price may be more volatile.
We cannot predict if investors will find our Common Stock less attractive because we rely on these exemptions. If some investors find our Common Stock less attractive as a result, there may be a less active trading market for our Common Stock and our stock price may be more volatile.
These conditions raise substantial doubt about the Company’s ability to continue as a going concern. 51 Table of Contents To mitigate our funding needs, we plan to raise additional funding, including exploring equity financing and offerings, debt financing, licensing or collaboration arrangements with third parties, as well as utilizing our existing at-the-market facility and equity purchase agreement and potential proceeds from the exercise of outstanding warrants and stock options.
To mitigate our funding needs, we plan to raise additional funding, including exploring equity financing and offerings, debt financing, licensing or collaboration arrangements with third parties, as well as utilizing our existing at-the-market facility and potential proceeds from the exercise of outstanding warrants and stock options.
In addition, our efforts to contain or remediate a security incident or any vulnerability exploited to cause an incident may be unsuccessful, and efforts and any related failures to contain or remediate them could result in interruptions, delays, harm to our reputation, and increases to our insurance coverage.
In addition, our efforts to contain or remediate a security incident or any vulnerability exploited to cause an incident may be unsuccessful, and efforts and any related failures to contain or remediate them could result in interruptions, delays, harm to our reputation, and increases to our insurance coverage. 56 Table of Contents In addition, regulatory response or litigation resulting from security breaches may adversely affect our business.
We may face difficulties from changes to current regulations and future legislation.
We may face difficulties from changes to current regulations and future legislation, including relating to healthcare reform efforts.
We incurred a loss from operations of $33.1 million and $40.5 million for the years ended December 31, 2024 and 2023, respectively, and a net loss of $39.4 million and $49.5 million for the years ended December 31, 2024 and 2023, respectively. Our accumulated deficit was $282.1 million and $242.7 million as of December 31, 2024 and 2023, respectively.
We incurred a loss from operations of $23.1 million and $33.1 million for the years ended December 31, 2025 and 2024, respectively, and a net loss of $26.2 million and $39.4 million for the years ended December 31, 2025 and 2024, respectively. Our accumulated deficit was $308.3 million and $282.1 million as of December 31, 2025 and 2024, respectively.
As a company, we have no experience in launching and marketing drugs. If we are unable to develop sales, marketing and distribution capabilities or enter into sales, marketing and distribution agreements or arrangements with third parties, we may not be successful in commercializing any drugs, if approved, or generating drug candidate sales revenue.
If we are unable to develop sales, marketing and distribution capabilities or enter into sales, marketing and distribution agreements or arrangements with third parties, we may not be successful in commercializing any drugs, if approved, or generating drug candidate sales revenue. We have not yet demonstrated an ability to launch and commercialize any of our drug candidates, if approved.
We are also unable to predict how changing global economic or political conditions or potential global health concerns, such as future health epidemics or pandemics, may impact our CROs, clinical investigators, third-party vendors, and other collaborators.
We are also unable to predict how changing global economic or political conditions or potential global health concerns, such as future health epidemics or pandemics, may impact our CROs, clinical investigators, third-party vendors, and other collaborators. Any negative impact could have a material adverse effect on our business, financial condition, results of operations, and prospects.
Some of these employees, including each member of our senior management, executed proprietary rights, non-disclosure and non-competition agreements in connection with such previous employment.
Many of our employees, including our senior management, were previously employed at other biotechnology or pharmaceutical companies, including our competitors or potential competitors. Some of these employees, including each member of our senior management, executed proprietary rights, non-disclosure and non-competition agreements in connection with such previous employment.
In addition, we may not have adequate insurance coverage to compensate for any losses associated with such events. 53 Table of Contents We could be subject to risks caused by misappropriation, misuse, leakage, falsification or intentional or accidental release or loss of information maintained in our information systems and networks and those of our vendors, including personal information of our employees and patients, and company and vendor confidential data.
We could be subject to risks caused by misappropriation, misuse, leakage, falsification or intentional or accidental release or loss of information maintained in our information systems and networks and those of our vendors, including personal information of our employees and patients, and company and vendor confidential data.
Market acceptance and sales of any of our future approved drug candidates will depend significantly on the availability of adequate coverage and reimbursement from third-party payors for drugs and may be affected by existing and future healthcare reform measures. 66 Table of Contents Our drug candidates, if approved in the future, may fail to achieve the degree of market acceptance by physicians, patients, third-party payors and others in the medical community necessary for commercial success and the market opportunity for the drug candidate may be smaller than we estimate.
Our drug candidates, if approved in the future, may fail to achieve the degree of market acceptance by physicians, patients, third-party payors and others in the medical community necessary for commercial success and the market opportunity for the drug candidate may be smaller than we estimate.
Any approvals that we receive for our drug candidates may be subject to limitations on the approved indicated uses for which the drug may be marketed or to the conditions of approval, which could adversely affect the drug’s commercial potential or contain requirements for potentially costly post-market testing and surveillance to monitor the safety and efficacy of the drug candidate.
Accordingly, we and others with whom we work must continue to expend time, money and effort in all areas of regulatory compliance, including manufacturing, production, and quality control. 68 Table of Contents Any approvals that we receive for our drug candidates may be subject to limitations on the approved indicated uses for which the drug may be marketed or to the conditions of approval, which could adversely affect the drug’s commercial potential or contain requirements for potentially costly post-market testing and surveillance to monitor the safety and efficacy of the drug candidate.
Violations of fraud and abuse laws may be punishable by criminal and/or civil sanctions, including penalties, fines and/or exclusion or suspension from federal and state healthcare programs such as Medicare and Medicaid and debarment from contracting with the U.S. government.
Violations of fraud and abuse laws may be punishable by criminal and/or civil sanctions, including penalties, fines and/or exclusion or suspension from federal and state healthcare programs such as Medicare and Medicaid and debarment from contracting with the U.S. government. 73 Table of Contents Neither the U.S. government nor the U.S. courts have provided definitive guidance on limitations to potential liability under the fraud and abuse laws as they may apply to our business.
There may be significant delays in obtaining reimbursement for approved drug candidates, and coverage may be more limited than the purposes for which the drug candidates are approved by the FDA, NMPA, TGA, Health Canada, EMA or other comparable regulatory authorities.
If reimbursement is not available or is available only to limited levels, we may not be able to successfully commercialize any drug candidate that we successfully develop. 69 Table of Contents There may be significant delays in obtaining reimbursement for approved drug candidates, and coverage may be more limited than the purposes for which the drug candidates are approved by the FDA, NMPA, TGA, Health Canada, EMA or other comparable regulatory authorities.
We will have to compete with other pharmaceutical and biopharmaceutical companies to recruit, hire, train and retain marketing and sales personnel. We must either develop internal sales, marketing, and commercial distribution capabilities for any or all of our approved drugs or pursue collaborative arrangements regarding the sales and marketing of our approved drugs.
We must either develop internal sales, marketing, and commercial distribution capabilities for any or all of our approved drugs or pursue collaborative arrangements regarding the sales and marketing of our approved drugs.
In addition, current or future tax treatments, tax concessions, tax allowances and financial incentives applicable to us may be changed, terminated, or otherwise become unavailable due to many factors, including changes in government policy or administrative decisions by the relevant government authorities.
We also receive a tax exemption in Maryland for state personal property and sales tax, as well certain tax credits. 58 Table of Contents Current or future tax treatments, tax concessions, tax allowances and financial incentives applicable to us may be changed, terminated, or otherwise become unavailable due to many factors, including changes in government policy or administrative decisions by the relevant government authorities.
The development and commercialization of new drugs is highly competitive. We face competition from major pharmaceutical companies, specialty pharmaceutical companies, and biotechnology companies worldwide.
We face substantial competition from other pharmaceutical and biotechnology companies, and our operating results may suffer if we fail to compete effectively. The development and commercialization of new drugs is highly competitive. We face competition from major pharmaceutical companies, specialty pharmaceutical companies, and biotechnology companies worldwide.
Our commercial success depends in part on our avoiding infringement of the patents and other intellectual property rights of third parties. We are aware of other issued patents belonging to third parties that exist in fields in which we are developing our drug candidates.
We are aware of other issued patents belonging to third parties that exist in fields in which we are developing our drug candidates.
We have not yet demonstrated an ability to launch and commercialize any of our drug candidates, if approved. As a result, our ability to successfully commercialize any approved drugs may involve more inherent risk, take longer, and cost more than it would if we were a company with prior experience launching and marketing drugs.
As a result, our ability to successfully commercialize any approved drugs may involve more inherent risk, take longer, and cost more than it would if we were a company with prior experience launching and marketing drugs. We will have to compete with other pharmaceutical and biopharmaceutical companies to recruit, hire, train and retain marketing and sales personnel.
Investment in biopharmaceutical product development is highly speculative because it entails substantial upfront capital expenditures and significant risk that any potential drug candidate will fail to demonstrate adequate efficacy or an acceptable safety profile, gain regulatory approval and become commercially viable.
Our limited operating history, particularly in light of the rapidly evolving nanocrystal therapies field, may make it difficult to evaluate our current business and predict our future performance. 54 Table of Contents Investment in biopharmaceutical product development is highly speculative because it entails substantial upfront capital expenditures and significant risk that any potential drug candidate will fail to demonstrate adequate efficacy or an acceptable safety profile, gain regulatory approval and become commercially viable.
Congressional inquiries and proposed federal legislation designed to, among other things, bring more transparency to drug pricing, reduce the cost of prescription drugs under Medicare, review the relationship between pricing and manufacturer patient programs, and reform government program reimbursement methodologies for drugs. Congress has indicated that it will continue to seek new legislative and/or administrative measures to control drug costs.
Specifically, there have been several recent U.S. Congressional inquiries and proposed federal legislation designed to, among other things, bring more transparency to drug pricing, reduce the cost of prescription drugs under Medicare, review the relationship between pricing and manufacturer patient programs, and reform government program reimbursement methodologies for drugs.
There is also uncertainty as to how other measures being implemented by the new administration across the government will impact our activities and those of the FDA and its operations. For example, the potential loss of FDA personnel could lead to further disruptions and delays in FDA review of our product candidates.
There is also uncertainty as to how other measures being implemented by the second Trump administration across the government will impact our activities and those of the FDA and its operations.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeOur Information Assets include business information, customer information and external business partner information, including, without limitation, classified information, information relating to research, intellectual property, personally identifiable information, business and product development, clinical test and evaluation data, and business plans, customer and supplier information, supply chain, manufacturing, distribution, finance, human resources, consulting, partnerships, contracts, and corporate transactions, maintained in any form or format or location, including audio, video, paper, magnetic, electronic and optical.
Biggest changeOur Information Assets include business information, customer information and external business partner information, including, without limitation, classified information, information relating to research, intellectual property, personally identifiable information, business and product development, clinical test and evaluation data, and business plans, customer and supplier information, supply chain, manufacturing, distribution, finance, human resources, consulting, partnerships, contracts, and corporate transactions, maintained in any form or format or location, including audio, video, paper, magnetic, electronic and optical. 87 Table of Contents Device and Network Security Our device and network security policies and procedures are designed to mitigate risk by ensuring our network and computing devices (“Computer Equipment”), electronic systems, and resources used in our business (“Information Systems”), whether owned or leased by us, our employees, or third parties, and the Information Assets contained therein, are protected from security threats.
These officers have more than 24 years of combined experience in managing IT, operations, and information risk and security. Our VP of Quality has experience developing comprehensive information security programs for organizations, and brings extensive experience in the private sector and is a specialist in IT governance strategies, risk management protocols, and compliance frameworks.
These officers have more than 27 years of combined experience in managing IT, operations, and information risk and security. Our VP of Quality has experience developing comprehensive information security programs for organizations, and brings extensive experience in the private sector and is a specialist in IT governance strategies, risk management protocols, and compliance frameworks.
We use the following approach to manage risks related to Information Asset protection: (i) identification and classification of Information Assets, (ii) identification and assessment of the threats to those Information Assets and the associated risk based upon impact to the business and the likelihood of their occurrence, (iii) assessment and analysis of risk, and determination of the actions required to lower risks to an acceptable level, (iv) implementation of appropriate controls or management acknowledgment or risk where controls cannot be implemented, (v) continuous monitoring and measuring of risk, (vi) ongoing communication of risks and mitigating actions, and (vii) auditing for compliance.
We use the following approach to manage risks related to Information Asset protection: (i) identification and classification of Information Assets, (ii) identification and assessment of the threats to those Information Assets and the associated risk based upon impact to the business and the likelihood of their occurrence, (iii) assessment and analysis of risk, and determination of the actions required to lower risks to an acceptable level, (iv) implementation of appropriate controls or management acknowledgment of risk where controls cannot be implemented, (v) continuous monitoring and measuring of risk, (vi) ongoing communication of risks and mitigating actions, and (vii) auditing for compliance. 88 Table of Contents Governance Assessing, identifying, and managing cybersecurity related risks are integrated into our overall risk management program.
To mitigate risk, we utilize (i) firewalls to protect our network and Computing Equipment, (ii) anti-malware software to protect our Computer Equipment, (iii) device monitoring, (iv) physical security, (v) security and application lifecycle security, (vi) security updates and backups, and (vii) vulnerability and risk assessments. Firewalls.
To mitigate risk, we utilize (i) firewalls, (ii) anti-malware software, (iii) device and environment monitoring, (iv) device scanning, alerts, and reporting, (v) identity and access management, (vi) physical security, (vii) security and application lifecycle security, (viii) security updates and backups, and (ix) vulnerability and risk assessments.
The policies and procedures apply to all changes to Information Systems managed by the Company or its IT external business partners.
The policies and procedures apply to all changes to Information Systems managed by the Company or its IT external business partners. Our change and configuration management includes: (i) authorization, (ii) impact assessments, (iii) the use of test environments, (iv) quality and user-acceptance testing, (v) documentation, and (vi) error resolution.
Removed
Device and Network Security Our device and network security policies and procedures are designed to mitigate risk by ensuring our network and computing devices (“Computer Equipment”), electronic systems, and resources used in our business (“Information Systems”), whether owned or leased by us, our employees, or third parties, and the Information Assets contained therein, are protected from security threats.
Removed
Our network and Computer Equipment is protected by one or more authorized firewalls, with any changes requiring approval from authorized personnel including the review and approval of an information technology (“IT”) change control document. Administration of firewalls is restricted to a minimum number of authorized personnel as necessary. We also employ intrusion detection at critical points of our network.
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All external access to our network, or to any computing resource on our network connected to a non-Clene network (including, but not limited to the internet) must pass through a hardware firewall, appliance, or equivalent device, where all traffic between our network and external networks can be continuously controlled, monitored, and examined for any access violations. Anti-Malware Software.
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Our Computer Equipment is protected by anti-malware software. The management and administration of anti-malware software is restricted to a minimum number of authorized personnel as necessary. Real-Time Monitoring. We engage a third -party security operations center that actively monitors our environment and detects and remediates security threats in real-time. Device Scanning, Alerts, and Reporting.
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We reserve the right to monitor, scan, screen, and quarantine/confiscate all Computer Equipment that accesses our network, in compliance with applicable laws and government regulations.
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We also reserve the right to scan information systems, monitor or screen content and traffic patterns, block e-mail, quarantine and/or confiscate any Information Systems that may post a threat to us, and if such activities reveal possible evidence of criminal activity, to take any appropriate action which may include providing evidence to law enforcement officials. 83 Table of Contents Physical Security.
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We control physical access to our facilities, areas within our facilities, data centers, server rooms, and equipment. Installation, maintenance, and repair of equipment is restricted to authorized personnel. We protect our Computer Equipment from power failure, surges, and other electrical anomalies, and cabling is protected from unauthorized access or damage.
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Access to our network services is restricted to authorized individuals and granted only following individual identification and authentication. Local wireless access is limited to authorized entry points, with various forms of authentication required before access is granted to authorized individuals. Security and Application Lifecycle Security.
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We perform analysis of security requirements for all systems and applications throughout their lifecycle, including for new systems and applications and significant upgrades to existing systems and applications. All new or upgraded systems and applications are tested for stability, compatibility, and security integrity in a separate environment prior to introduction into our production environment. Security Updates and Backups.
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We monitor security bulletins, software updates/patches, and functional software updates/patches and apply them in accordance with the timeline prescribed in our policies and based upon recommendations from third -party vendors, as applicable. Systems that no longer provide security updates/patches are discontinued. We research, test, and verify functional software updates/patches before installation.
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We perform data backups periodically based on business requirements to maximize data availability and prevent information loss, including before any system upgrade or maintenance. Encrypted data remains encrypted throughout our backup processes. Data backups are stored in geographically separate facilities. Vulnerability Assessments. We conduct assessments over potential vulnerabilities for all new and existing network-connected assets on an annual basis.
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Any potential vulnerabilities that we identify are remediated.
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We rate vulnerabilities based on the following criteria: (i) High: A vulnerability exists that could potentially allow an attacker to gain elevated access of the host, divulge system information, and/or lead to system or network compromise; (ii) Medium: A vulnerability exists that could potentially allow an attacker limited access to file contents, security settings or ability to conduct a denial-of-service attack; (iii) Low: A vulnerability exists that could potentially allow an attacker limited access to sensitive host system data, such as installed software version giving the ability to exploit application vulnerabilities; and (iv) Info: An attacker could collect basic host information such as open ports and services.
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Changes must be approved by authorized personnel prior to (i) performance of any work related to a Change, (ii) migration of any Change-related work from the quality environment to the production environment, to ensure the Change was adequately tested and performs properly, and (iii) closing of the Change, to ensure the Change was implemented in the production environment and correctly solves the issue that prompted the Change request.
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Changes are tracked and documented in a change tracking system, and we retain past versions of source components and supporting documentation. Testing is performed in an environment other than the production environment, and user acceptance testing is performed by an independent person not responsible for development, modification, or configuration of applications, programs, or system code.
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Errors are identified, logged, and resolved. 84 Table of Contents Additionally, for Changes that may impact our manufacturing process, we perform impact assessments prior to performing a Change to understand the (i) level of financial, technical, and compliance risk, (ii) impact on business operations, (iii) impact of configuration and user access security, (iv) impact on connected Information Systems and interfaces, and (v) need for user training.
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The extent and documentation of impact assessments are commensurate with the level of risk associated with the Change, and the level of testing performed shall be determined by the results of the impact assessment.
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Identity and Access Management Our identity and access management policies and procedures define the access control measures to our Information Systems to protect the privacy, security, and confidentiality of Computer Equipment, Information Systems, and Information Assets.
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Unique identification is assigned to all individuals with a defined relationship (e.g., employees, vendors, suppliers, etc.), and if a relationship changes, a new identifier is created to reflect the new relationship. Passwords must be changed upon first logon and all privileged account passwords (e.g., root, super user, and administrator passwords) must follow our password guidelines.
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Identification and authentication are required every time Medium or High Risk Information Assets are accessed or elevated privileges are exercised, and use of elevated privileges is temporary and is revoked upon implementation of a change.
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Our data access procedures require completion and authorization of access request forms to request, change, or delete access privileges to Information Systems containing Medium or High Risk Information Assets. We perform checks for segregation of duties conflicts and only grant the minimum necessary and least privilege access to users based upon their role.
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When users are reassigned, promoted, or separated, their access privileges are reviewed and, if necessary, updated in a timely manner. We also perform periodic reviews of user privileges and require training for users with access to Medium or High Risk Information Assets.
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Once a risk is identified, we analyze the risk and assign a risk classification based upon a combination of factors, including data volume, legal and regulatory requirements, privacy considerations, and intellectual property considerations.
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Risks are classified as (i) Low Risk, where unauthorized disclosure could be expected to have a limited adverse effect on operations, assets, or individuals; ( 2 ) Medium Risk, where unauthorized disclosure could be expected to have a serious adverse effect on operations, assets, or individuals; or ( 3 ) High Risk, where unauthorized disclosure could be expected to have a severe or catastrophic adverse effect on operations, assets, or individuals.
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Before granting access to Information Assets, we assess the relationship of the user and associated risks of the Information Assets to determine if access is appropriate, and we periodically review access rights to ensure compliance and prevent unauthorized access. 85 Table of Contents Governance Assessing, identifying, and managing cybersecurity related risks are integrated into our overall risk management program.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeAs of the date of this Annual Report, we are not aware of any pending or threatened litigation or administrative proceedings against us, our officers or our directors which may have a material and adverse impact on our business, financial condition or results of operations. Item 4. Mine Safety Disclosures Not Applicable. 86 Table of Contents PART II
Biggest changeAs of the date of this Annual Report, we are not aware of any pending or threatened litigation or administrative proceedings against us, our officers or our directors which may have a material and adverse impact on our business, financial condition or results of operations. Item 4. Mine Safety Disclosures Not Applicable. 89 Table of Contents PART II

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeItem 5. Market for Registrant ’ s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Market Information Our Common Stock and publicly-traded warrants are traded on Nasdaq under the symbols “CLNN” and “CLNNW,” respectively. Holders As of March 19, 2025, there were 8,586,460 issued and outstanding shares of our Common Stock held by 68 stockholders of record.
Biggest changeItem 5. Market for Registrant ’ s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Market Information Our Common Stock is traded on Nasdaq under the symbol “CLNN.” Holders As of March 13, 2026, there were 11,778,307 issued and outstanding shares of our Common Stock held by 59 stockholders of record.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Biggest change(vi) an increase in grant revenue, which is recorded as a reduction to research and development expense, due to reimbursements received for expenses incurred for the ACT-EAP and conditional grant revenue recognized related to the second dosing cohort of our REPAIR-MS clinical trial. 94 Table of Contents General and Administrative Expenses General and administrative expense during the years ended December 31, 2024 and 2023 was as follows: Year Ended December 31, (in thousands) 2024 2023 Change Insurance $ 822 $ 1,593 (48 )% Legal 822 404 103 % Finance and accounting 761 1,317 (42 )% Public and investor relations 662 614 8 % Facilities 119 142 (16 )% Depreciation 266 267 (0 )% Information technology 300 326 (8 )% Personnel 4,177 4,239 (1 )% Stock-based compensation 4,407 5,056 (13 )% Other 971 460 111 % Total general and administrative $ 13,307 $ 14,418 (8 )% The change in general and administrative expense was primarily due to the following: (i) a decrease in insurance fees, primarily due to our directors’ and officers’ insurance; (ii) an increase in legal fees, primarily due to an increase in legal fees related to regulatory activities, the ACT-EAP, intellectual property, and other general corporate legal fees; (iii) a decrease in finance and accounting fees, primarily due to a decrease in fees from consultants, advisors, and other financial vendors; partially offset by increased tax fees; (iv) a decrease in stock-based compensation expense, primarily due to the timing of award grants, vesting, and forfeitures for general and administrative personnel; and (v) an increase in other expenses, primarily due to an increase in expenses related to lobbying activities; partially offset by a decrease in expenses related to travel, meals, and other miscellaneous expenses. 95 Table of Contents Total Other Income (Expense), Net Total other income (expense), net, during the years ended December 31, 2024 and 2023 was as follows: Year Ended December 31, (in thousands) 2024 2023 Change Interest income $ 865 $ 1,389 (38 )% Interest expense (4,064 ) (4,558 ) (11 )% Loss on extinguishment of notes payable (214 ) — * Commitment share expense — (402 ) * Issuance costs for common stock warrant liabilities (157 ) (333 ) (53 )% Loss on initial issuance of equity (2,097 ) (14,840 ) (86 )% Change in fair value of common stock warrant liabilities (702 ) 6,337 * Change in fair value of derivative liabilities (379 ) — * Change in fair value of Clene Nanomedicine contingent earn-out liability 75 2,189 (97 )% Change in fair value of Initial Stockholders contingent earn-out liability 10 281 (96 )% Research and development tax credits and unrestricted grants 357 963 (63 )% Other income (expense), net (1 ) 10 * Total other income (expense), net $ (6,307 ) $ (8,964 ) (30 )% * Not meaningful.
Biggest changeThe change in research and development expenses was primarily due to the following: (i) an increase in expenses related to our lead drug candidate, CNM-Au8, primarily due to (A) an increase in expenses related to our ALS clinical programs, including our ACT-EAP due to higher enrollment in the EAP, and an increase in expenses for planning activities for our RESTORE ALS clinical trial; partially offset by a decrease in expenses related to the HEALEY ALS Platform Trial and RESCUE-ALS due to the previous completion of the blinded portion and open-label extensions of each trial, and a decrease in expenses related to our two ongoing EAPs with Massachusetts General Hospital; (B) an increase in expenses related to our MS clinical programs due to full enrollment of the second dosing cohort of REPAIR-MS, which concluded in September 2025, and an increase in expenses for our MS EAP which began enrollment in September 2024, partially offset by a decrease in expenses related to VISIONARY-MS and its long-term extension due to the completion of the studies; (C) a decrease in expenses for regulatory activities primarily driven by lower expenses related to our ongoing FDA discussions and NDA submission-related activities; and (D) a decrease in preclinical, nonclinical, and other general CNM-Au8-related expenses; (ii) a decrease in unallocated expenses, primarily due to: (A) a decrease in manufacturing expenses due to the conclusion of various clinical programs, partially offset by increased manufacturing expenses to support higher enrollment in our ongoing EAPs, (B) a decrease in expenses related to general research activities with external vendors and consultants, and (C) a decrease in maintenance expenses related to equipment and facilities; partially offset by (D) an increase in facility costs such as rent and utilities and (E) an increase in information technology-related expenses; (iii) a decrease in personnel expenses, primarily due to cost-saving initiatives and a decrease in expenses for manufacturing personnel due to the conclusion of various clinical programs; (iv) a decrease in stock-based compensation expense, primarily due to the timing of award grants, vesting, and forfeitures for research and development personnel; and (v) an increase in grant revenue, which is recorded as a reduction to research and development expense, due to an increase in enrollment and study operations in the ACT-EAP which resulted in higher reimbursable expenses, partially offset by a decrease in grant revenue related to our REPAIR-MS clinical trial due to the conclusion of the second dosing cohort. 97 Table of Contents General and Administrative Expenses General and administrative expense during the years ended December 31, 2025 and 2024 was as follows: Year Ended December 31, (in thousands) 2025 2024 Change Insurance $ 725 $ 822 (12 )% Legal 504 822 (39 )% Finance and accounting 1,013 761 33 % Public and investor relations 343 662 (48 )% Facilities 119 119 0 % Depreciation 144 266 (46 )% Information technology 152 300 (49 )% Personnel 2,874 4,177 (31 )% Stock-based compensation 3,395 4,407 (23 )% Grant revenue as a reduction of general and administrative expense (358 ) (147 ) 144 % Other 318 1,118 (72 )% Total general and administrative $ 9,229 $ 13,307 (31 )% The change in general and administrative expense was primarily due to the following: (i) a decrease in insurance fees, primarily due to our directors’ and officers’ insurance; (ii) a decrease in legal fees, primarily due to a decrease in fees related to intellectual property, regulatory activities, and other general corporate legal fees; partially offset by an increase in legal fees related to financing and fundraising; (iii) an increase in finance and accounting fees, primarily due to an increase in audit and tax fees and fees from consultants, advisors, and other financial vendors; (iv) a decrease in fees related to our public and investor relations efforts; (v) a decrease in depreciation expense due to certain assets reaching the end of their depreciable life; (vi) a decrease in information technology-related expenses, primarily due to a decrease in software license fees; partially offset by an increase in expenses related to maintenance, subscriptions, security services; (vii) a decrease in personnel expenses, primarily due to cost-saving initiatives; (viii) a decrease in stock-based compensation expense, primarily due to the timing of award grants, vesting, and forfeitures for general and administrative personnel; (ix) an increase in grant revenue, recorded as a reduction to general and administrative expense, due to an increase in enrollment and study operations in the ACT-EAP which resulted in higher reimbursable expenses; and (x) a decrease in other expenses due to a decrease in expenses related to lobbying activities, consulting, postage, office equipment and supplies, and other miscellaneous expenses; partially offset by an increase in continuing education and travel expenses. 98 Table of Contents Total Other Income (Expense), Net Total other income (expense), net, during the years ended December 31, 2025 and 2024 was as follows: Year Ended December 31, (in thousands) 2025 2024 Change Interest income $ 223 $ 865 (74 )% Interest expense (2,682 ) (4,064 ) (34 )% Loss on extinguishment of notes payable — (214 ) * Issuance costs for common stock warrant liabilities — (157 ) * Loss on initial issuance of equity — (2,097 ) * Change in fair value of common stock warrant liabilities (522 ) (702 ) (26 )% Change in fair value of derivative liabilities (363 ) (379 ) (4 )% Change in fair value of Clene Nanomedicine contingent earn-out liability — 75 * Change in fair value of Initial Stockholders contingent earn-out liability — 10 * Research and development tax credits and unrestricted grants 254 357 (29 )% Other expense, net — (1 ) * Total other income (expense), net $ (3,090 ) $ (6,307 ) (51 )% * Not meaningful.
If we are able to file an NDA with the FDA under an accelerated pathway, we anticipate our general and administrative expenses would increase in future periods to support increases in our drug development activities and as we build our commercial capabilities in advance of receiving regulatory approval.
If we are able to file an NDA with the FDA under an accelerated approval pathway, we anticipate our general and administrative expenses would increase in future periods to support increases in our drug development activities and as we build our commercial capabilities in advance of receiving regulatory approval.
Financing Activities Net cash used in financing activities was $1.5 million for the year ended December 31, 2024, which consisted of payments of finance lease obligations of $27,000 and payments of notes payable principal of $20.8 million due to principal repayments and the ultimate payoff of the 2021 Avenue Loan, partially offset by proceeds from the exercise of stock options of $0.1 million, proceeds from the issuance of common stock, warrants, and pre-funded warrants, net of offering costs, of $9.2 million, and proceeds from the issuance of notes payable and convertible notes payable of $9.9 million.
Net cash used in financing activities was $1.5 million for the year ended December 31, 2024, which consisted of payments of notes payable principal of $20.8 million due to principal repayments and the ultimate payoff of the 2021 Avenue Loan and payments of finance lease obligations of $27,000, partially offset by proceeds from the exercise of stock options of $0.1 million, proceeds from the issuance of common stock, warrants, and pre-funded warrants, net of offering costs, of $9.2 million, and proceeds from the issuance of notes payable and convertible notes payable of $9.9 million.
Significant non-cash items included: (i) depreciation expense of $1.7 million relating to laboratory and office equipment and leasehold improvements, (ii) non-cash lease expense of $0.5 million, (iii) issuance costs of $0.2 million from a public equity offering allocated to liability-classified warrants, (iv) a loss on initial issuance of equity of $2.1 million from the fair value in excess of proceeds from a public equity offering, (v) stock-based compensation expense of $8.0 million, (vi) a loss on extinguishment of notes payable of $0.2 million from the repayment in full of the 2021 Avenue Loan, (vii) a loss on disposal of property and equipment of $0.2 million, (viii) accretion of debt discount of $1.1 million, (ix) non-cash interest income on marketable securities of $0.2 million, (x) non-cash interest expense on notes payable of $0.1 million due to amortization of debt discounts on notes payable, (xi) a change in fair value of our common stock warrant liabilities of $0.7 million due to changes in the price of our Common Stock on Nasdaq and changes in valuation model inputs, (xii) a change in fair value of our derivative liabilities of $0.4 million due to changes in the price of our Common Stock on Nasdaq and changes in valuation model inputs, and (xiii) a change in fair value of the Clene Nanomedicine and Initial Stockholders Contingent Earn-outs of $0.1 million and $10,000, respectively, due to changes in the price of our Common Stock on Nasdaq and changes in valuation model inputs.
Significant non-cash items included: (i) depreciation expense of $1.6 million relating to laboratory and office equipment and leasehold improvements, (ii) non-cash lease expense of $0.5 million, (iii) issuance costs of $0.2 million from a public equity offering allocated to liability-classified warrants, (iv) a loss on initial issuance of equity of $2.1 million from the fair value in excess of proceeds from a public equity offering, (v) stock-based compensation expense of $8.0 million, (vi) a loss on extinguishment of notes payable of $0.2 million from the repayment in full of the 2021 Avenue Loan, (vii) a loss on disposal of property and equipment of $0.2 million, (viii) accretion of debt discount of $1.1 million, (ix) non-cash interest income on marketable securities of $0.2 million, (x) non-cash interest expense on notes payable of $0.1 million due to amortization of debt discounts on notes payable, (xi) a change in fair value of our common stock warrant liabilities of $0.7 million due to changes in the price of our Common Stock on Nasdaq and changes in valuation model inputs, (xii) a change in fair value of our derivative liabilities of $0.4 million due to changes in the price of our Common Stock on Nasdaq and changes in valuation model inputs, and (xiii) a change in fair value of the Clene Nanomedicine and Initial Stockholders Contingent Earn-outs of $0.1 million and $10,000, respectively, due to the changes in the price of our Common Stock on Nasdaq and changes in valuation model inputs.
The aggregate gross proceeds were approximately $3.5 million, excluding the proceeds, of any, from the exercise of the pre-funded warrants and before deducting placement agent fees and expenses and other expenses payable by us. We paid Canaccord a placement agent fee of 6.00% of the aggregate gross proceeds of the offering.
The aggregate gross proceeds were approximately $3.5 million, excluding the proceeds, if any, from the exercise of the pre-funded warrants and before deducting placement agent fees and expenses and other expenses payable by us. We paid Canaccord a placement agent fee of 6.00% of the aggregate gross proceeds of the offering.
We have never been profitable and have incurred operating losses in each year since inception. We generate revenue from sales of dietary supplements through our wholly owned subsidiary, dOrbital, Inc., or through an exclusive license with 4Life Research LLC (“4Life”), an international supplier of health supplements, stockholder, and related party.
We have never been profitable and have incurred operating losses in each year since inception. We generate revenue from sales of dietary supplements through our wholly-owned subsidiary, dOrbital, Inc., or through an exclusive license with 4Life Research LLC (“4Life”), an international supplier of health supplements, stockholder, debt holder, and related party.
As of December 31, 2024 and 2023, we recorded a full valuation allowance against our net deferred tax assets due to the uncertainty as to whether such assets will be realized resulting from our three-year cumulative loss position and the uncertainty surrounding our ability to generate pre-tax income in the foreseeable future.
As of December 31, 2025 and 2024, we recorded a full valuation allowance against our net deferred tax assets due to the uncertainty as to whether such assets will be realized resulting from our three-year cumulative loss position and the uncertainty surrounding our ability to generate pre-tax income in the foreseeable future.
Australia Our wholly-owned subsidiary, Clene Australia Pty Ltd (“Clene Australia”), was established in Australia in March 2018 and is subject to corporate income tax at a rate of 30.00%. Clene Australia had no taxable income or provision for income taxes for the years ended December 31, 2024 and 2023.
Australia Our wholly-owned subsidiary, Clene Australia Pty Ltd (“Clene Australia”), was established in Australia in March 2018 and is subject to corporate income tax at a rate of 30.00%. Clene Australia had no taxable income or provision for income taxes for the years ended December 31, 2025 and 2024.
We innovated an electro-crystal-chemistry drug development platform that draws from advances in nanotechnology, plasma and quantum physics, material science, and biochemistry. Our platform process results in nanocrystals with faceted structures and surfaces that are free of the chemical surface modifications that accompany other production methods.
We innovated an electro-crystal-chemistry drug development platform that draws from advances in nanotechnology, plasma and quantum physics, materials science, and biochemistry. Our platform process results in nanocrystals with faceted structures and surfaces that are free of the chemical surface modifications that accompany other production methods.
To mitigate our funding needs, we plan to raise additional funding, including exploring equity financing and offerings, debt financing, licensing or collaboration arrangements with third parties, as well as utilizing our existing at-the-market facility and equity purchase agreement and potential proceeds from the exercise of outstanding warrants and stock options.
To mitigate our funding needs, we plan to raise additional funding, including exploring equity financing and offerings, debt financing, licensing or collaboration arrangements with third parties, as well as utilizing our existing at-the-market facility and potential proceeds from the exercise of outstanding warrants and stock options.
We estimate the fair value of the 2024 SSCP Notes with and without the SSCPN Derivative Liabilities and calculate the difference as the implied fair value of the SSCPN Derivative Liabilities.
We estimate the fair value of the SSCP Notes with and without the SSCPN Derivative Liabilities and calculate the difference as the implied fair value of the SSCPN Derivative Liabilities.
(“Clene Netherlands”), was established in the Netherlands in April 2021 and is subject to corporate income tax at a rate of 19.00% up to €200,000 of taxable income and 25.80% for taxable income in excess of €200,000 for the years ended December 31, 2024 and 2023.
(“Clene Netherlands”), was established in the Netherlands in April 2021 and is subject to corporate income tax at a rate of 19.00% up to €200,000 of taxable income and 25.80% for taxable income in excess of €200,000 for the years ended December 31, 2025 and 2024.
Clene Netherlands had no taxable income or provision for income taxes for the years ended December 31, 2024 and 2023. Liquidity and Capital Resources Sources of Capital We have incurred significant losses and negative cash flows from operations since our inception.
Clene Netherlands had no taxable income or provision for income taxes for the years ended December 31, 2025 and 2024. Liquidity and Capital Resources Sources of Capital We have incurred significant losses and negative cash flows from operations since our inception.
We account for the convertible note as a single liability measured at its amortized cost as of December 31, 2024 and 2023, with a carrying value of $5.3 million and $5.3 million, respectively.
We account for the convertible note as a single liability measured at its amortized cost as of December 31, 2025 and 2024, with a carrying value of $5.3 million and $5.3 million, respectively.
The Reverse Stock Split did not reduce the total number of authorized shares of Common Stock or preferred stock, par value $0.0001 per share (“Preferred Stock”), or change the par values of the Company’s Common Stock or Preferred Stock.
The Reverse Stock Split did not reduce the total number of authorized shares of Common Stock or preferred stock, par value $0.0001 per share (“Preferred Stock”), or change the par values of our Common Stock or Preferred Stock.
We recorded other income of $0.1 million and $1.0 million for the years ended December 31, 2024 and 2023, respectively, for research and development tax credits pertaining to Clene Australia for the 2024 and 2023 tax years, respectively. Netherlands Our wholly-owned subsidiary, Clene Netherlands B.V.
We recorded other income of $0.1 million and $0.4 million for the years ended December 31, 2025 and 2024, respectively, for research and development tax credits pertaining to Clene Australia for the 2025 and 2024 tax years, respectively. Netherlands Our wholly-owned subsidiary, Clene Netherlands B.V.
We classified a portion of the 2024 SSCP Notes as convertible notes payable in the consolidated balance sheets and separated three features from the host contract as derivative instruments measured at fair value: (i) the conversion option (the “SSCPN Conversion Feature”), (ii) the redemption option upon a change of control or any bankruptcy, liquidation, or other restructuring process consisting of a cash payment equal to 115% of the outstanding principal (the “SSCPN Redemption Feature”), and (iii) the acceleration option plus a penalty equal to 10% of all outstanding principal and accrued and unpaid interest upon the occurrence and continuation of certain events of default (the “SSCPN Default Feature,” collectively with the SSCPN Conversion Feature and SSCPN Redemption Feature, the “SSCPN Derivative Liabilities”).
We classified a portion of the senior secured convertible promissory notes (the “SSCP Notes”) as convertible notes payable in the consolidated balance sheets and separated three features from the host contract as derivative instruments measured at fair value: (i) the conversion option (the “SSCPN Conversion Feature”), (ii) the redemption option upon a change of control or any bankruptcy, liquidation, or other restructuring process consisting of a cash payment equal to 115% of the outstanding principal (the “SSCPN Redemption Feature”), and (iii) the acceleration option plus a penalty equal to 10% of all outstanding principal and accrued and unpaid interest upon the occurrence and continuation of certain events of default (the “SSCPN Default Feature,” collectively with the SSCPN Conversion Feature and SSCPN Redemption Feature, the “SSCPN Derivative Liabilities”).
During the years ended December 31, 2024 and 2023, changes in product and royalty revenues were due to the timing of purchases of Zinc Factor and Gold Factor by 4Life under the supply and license agreements.
During the years ended December 31, 2025 and 2024, changes in product and royalty revenues were due to the timing of purchases and sales of Zinc Factor and Gold Factor by 4Life under the supply and license agreements.
Firm commitments for funds include approximately $1.4 million of payments under operating lease obligations, payment of principal and interest on notes payable totaling $1.9 million, and a commitment for capital expenditures totaling $0.2 million related to the construction of our manufacturing facilities. We expect to meet our short-term liquidity requirements primarily through cash on hand.
Firm commitments for funds include approximately $1.2 million of payments under operating lease obligations, payment of principal and interest on notes payable and convertible notes payable totaling $5.3 million, and a commitment for capital expenditures totaling $0.2 million related to the construction of our manufacturing facilities. We expect to meet our short-term liquidity requirements primarily through cash on hand.
We also received indirect financial support for the HEALEY ALS Platform Trial, administered by Massachusetts General Hospital, which conducted an ALS platform trial of CNM-Au8 alongside multiple other drug candidates, at significantly lower costs than we would have otherwise incurred if we had conducted a comparably designed clinical trial at reasonable market rates. 97 Table of Contents Going Concern We incurred a loss from operations of $33.1 million and $40.5 million for the years ended December 31, 2024 and 2023, respectively.
We also received indirect financial support for the HEALEY ALS Platform Trial, administered by Massachusetts General Hospital, which conducted an ALS platform trial of CNM-Au8 alongside multiple other drug candidates, at significantly lower costs than we would have otherwise incurred if we had conducted a comparably designed clinical trial at reasonable market rates. 100 Table of Contents Going Concern We incurred a loss from operations of $23.1 million and $33.1 million for the years ended December 31, 2025 and 2024, respectively.
Generally Accepted Accounting Principles. The preparation of these consolidated financial statements requires us to make estimates, assumptions, and judgments that affect the reported amounts of assets, liabilities, revenues, costs, and expenses. We evaluate our estimates and judgments on an ongoing basis, and our actual results may differ from these estimates.
The preparation of these consolidated financial statements requires us to make estimates, assumptions, and judgments that affect the reported amounts of assets, liabilities, revenues, costs, and expenses. We evaluate our estimates and judgments on an ongoing basis, and our actual results may differ from these estimates.
The net change in operating assets and liabilities was primarily attributable to: (A) a decrease in accounts receivable of $0.1 million and a decrease in accounts payable of $0.3 million due to the timing of vendor invoicing and payments, (B) an increase in prepaid expenses and other current assets of $0.2 million due to the timing of vendor invoicing and payments, the timing of receipt of metals to be used in research and development, and an increase in prepaid ACT-EAP expenses, partially offset by a decrease in research and development tax credits receivable, (C) an increase in accrued liabilities of $4.1 million primarily due to increased accrued compensation and benefits, increased deferred grants, and an increase in accrued CRO and clinical fees, partially offset by a decrease in other miscellaneous accrued liabilities, and (D) a decrease in operating lease obligations of $0.4 million.
The net change in operating assets and liabilities was primarily attributable to: (I) a decrease in accounts receivable of $0.1 million and a decrease in accounts payable of $0.3 million due to the timing of vendor invoicing and payments, (ii) an increase in prepaid expenses and other current assets of $0.2 million due to the timing of vendor invoicing and payments, the timing of receipt of metals to be used in research and development, and an increase in prepaid ACT-EAP expenses, partially offset by a decrease in research and development tax credits receivable, (iii) an increase in accrued liabilities of $4.0 million primarily due to increased accrued compensation and benefits, increased deferred grants, and an increase in accrued CRO and clinical fees, partially offset by a decrease in other miscellaneous accrued liabilities, and (iv) a decrease in operating lease obligations of $0.4 million.
We have financed our operations principally through the following sources: ● gross proceeds of $187.6 million from equity financing, including sales of common stock, preferred stock, common stock warrants, and pre-funded common stock warrants; ● gross proceeds of $69.6 million from borrowings under notes payable, convertible notes payable, and convertible promissory notes; ● gross proceeds of $9.4 million from the Reverse Recapitalization; ● gross proceeds of $10.1 million from refundable research and development tax credits; ● gross proceeds of $8.1 million from grants from various organizations; and ● gross proceeds of $1.1 million from stock option and warrant exercises.
We have financed our operations principally through the following sources: ● gross proceeds of $195.7 million from equity financing, including sales of common stock, preferred stock, common stock warrants, and pre-funded common stock warrants; ● gross proceeds of $71.1 million from borrowings under notes payable, convertible notes payable, and convertible promissory notes; ● gross proceeds of $9.4 million from the Reverse Recapitalization; ● gross proceeds of $10.1 million from refundable research and development tax credits; ● gross proceeds of $15.8 million from grants from various organizations; and ● gross proceeds of $1.1 million from stock option and warrant exercises.
In October 2024, pursuant to a placement agency agreement with Canaccord, we sold 725,000 shares of Common Stock and pre-funded warrants to purchase up to 17,626 shares of Common Stock at an exercise price of $0.001 per share.
Public Offerings In October 2024, pursuant to a placement agency agreement with Canaccord Genuity LLC (“Canaccord”), we sold 725,000 shares of Common Stock and pre-funded warrants to purchase up to 17,626 shares of Common Stock at an exercise price of $0.001 per share.
Short-Term Material Cash Requirements For at least the next twelve months, our primary capital requirements are to fund our operations, including research and development, personnel, regulatory, and other clinical trial costs related to development of our lead drug candidate, CNM-Au8; and general and administrative costs to support our drug development and pre-commercial activities in advance of receiving regulatory approval for our drug candidates.
Short-Term Material Cash Requirements For at least the next twelve months, our primary capital requirements are to fund our operations, including research and development, personnel, regulatory, and other clinical trial costs related to development of our lead drug candidate, CNM-Au8; general and administrative costs to support our drug development and pre-commercial activities in advance of receiving regulatory approval for our drug candidates; and principal and interest payments on our notes payable and convertible notes payable.
Convertible Notes In accordance with ASU 2020-06, Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity , we classified a portion of the 2021 Avenue Loan as convertible notes payable in the consolidated balance sheets as of December 31, 2023 and did not separate the conversion option from the host contract as it did not meet the requirements for accounting as a derivative instrument.
Convertible Notes In accordance with ASU 2020-06, Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity , we classified the 2022 DHCD Loan as convertible notes payable in the consolidated balance sheets and did not separate the conversion option from the host contract as it did not meet the requirements for accounting as a derivative instrument.
General and Administrative Expense General and administrative expenses consist primarily of payroll and personnel expenses for salaries, benefits, and stock-based compensation; fees for legal, finance, accounting, tax, and information technology services; insurance costs; expenses for public and investor relations; rent, utilities, depreciation, and facility costs.
General and Administrative Expense General and administrative expenses consist primarily of payroll and personnel expenses for salaries, benefits, and stock-based compensation; fees for legal, finance, accounting, tax, and information technology services; insurance costs; expenses for public and investor relations; rent, utilities, depreciation, and other costs related to our facilities.
As a result of this commitment, our pipeline of drug candidates has been advancing, with substantially all our research and development expenses relating to CNM-Au8, our lead asset, with the remainder spent on our CNM-ZnAg asset. Our research and development expenses are affected by the scope and advancement of our existing product pipeline and the commencement of new drug programs.
As a result of this commitment, our pipeline of drug candidates has been advancing, with substantially all our research and development expenses relating to our lead asset, CNM-Au8. 94 Table of Contents Our research and development expenses are affected by the scope and advancement of our existing product pipeline and the commencement of new drug programs.
The changes were due to the price of our Common Stock on Nasdaq and updates in the valuation model assumptions (see “Critical Accounting Estimates” ); and (x) a decrease in research and development tax credits and unrestricted grants due to changes in the amount of qualifying research and development expenses incurred. 96 Table of Contents Taxation United States We are incorporated in the state of Delaware and subject to statutory U.S. federal corporate income tax at a rate of 21.00%.
The changes in fair value were due to changes in price of our Common Stock on Nasdaq and updates in valuation model assumptions; and (ix) a decrease in research and development tax credits and unrestricted grants due to changes in the amount of qualifying research and development expenses incurred. 99 Table of Contents Taxation United States We are incorporated in the state of Delaware and subject to statutory U.S. federal corporate income tax at a rate of 21.00%.
We estimate the fair value using a Black-Scholes option-pricing model with probability weights for the occurrence of the following events: (i) FDA acceptance of an NDA for CNM-Au8, (ii) settlement upon a fundamental transaction, (iii) dissolution of the Company, and (iv) another outcome outside of (i)-(iii). These estimates require significant judgment.
We estimate the fair value using a Black-Scholes option-pricing model with probability weights for the occurrence of (i) FDA acceptance of an NDA for CNM-Au8, (ii) settlement upon a fundamental transaction, (iii) dissolution of the Company, and (iv) held to maturity. These estimates require significant judgment.
The changes in fair value of common stock warrant liabilities were due to the change in price of our Common Stock on Nasdaq and updates in the valuation model assumptions (see “Critical Accounting Estimates” ); (viii) a loss from the change in fair value of the derivative liabilities separated from our senior secured convertible promissory notes (the “2024 SSCP Notes”) during the year ended December 31, 2024.
The changes in fair value were due to changes in price of our Common Stock on Nasdaq and updates in valuation model assumptions (see “Critical Accounting Estimates” ); (vii) a loss from the change in fair value of derivative liabilities separated from our senior secured convertible promissory notes during the years ended December 31, 2025 and 2024.
The change in fair value of the Tranche A Warrants resulted in a gain of $0.6 million and a gain of $5.8 million during the years ended December 31, 2024 and 2023, respectively.
The change in fair value of the Tranche A Warrants resulted in a gain of $0.3 million and a gain of $0.6 million during the years ended December 31, 2025 and 2024, respectively.
We estimate the fair value using a Black-Scholes option-pricing model with probability weights for the occurrence of the following events: (i) settlement of the instrument upon a change of control transaction, (ii) dissolution of the Company, or (iii) another outcome outside of (i)-(ii). These estimates require significant judgment.
We estimate the fair value using a Black-Scholes option-pricing model with probability weights for the occurrence of (i) settlement of the instrument upon a change of control transaction, (ii) dissolution of the Company, or (iii) held to expiration. These estimates require significant judgment.
Additional funds may be spent to initiate new clinical trials, at our discretion. Known obligations beyond the next twelve months include $5.2 million of payments under operating lease obligations, and interest and principal repayment of notes payable of $18.0 million.
Additional funds may be spent to initiate new clinical trials, at our discretion. Known obligations beyond the next twelve months include $3.9 million of payments under operating lease obligations, and interest and principal repayment of notes payable and convertible notes payable of $15.9 million.
The valuation model consists of a discounted cash flow model and a Black-Scholes option-pricing model with probability weights for the occurrence of the following events: (i) a change of control transaction, (ii) dissolution of the Company, or (iii) another outcome outside of (i)-(ii). These estimates require significant judgment.
The valuation model consists of a discounted cash flow model and a Black-Scholes option-pricing model with probability weights for the occurrence of (i) a change of control transaction, (ii) dissolution of the Company, or (iii) held to maturity. These estimates require significant judgment.
The offering was made pursuant to our registration statement on Form S-3 (file number 333-264299), declared effective on April 26, 2022, and a related prospectus supplement.
The offering was made pursuant to our registration statement on Form S-3 (file number 333-264299), declared effective by the Securities and Exchange Commission (“SEC”) on April 26, 2022 (the ”2022 S-3”), and a related prospectus supplement.
The change in fair value of the 2023 Avenue Warrant resulted in a loss of $49,000 and a gain of $0.5 million during the years ended December 31, 2024 and 2023, respectively.
The change in fair value of the 2023 Avenue Warrant resulted in a loss of $51,000 and a loss of $49,000 during the years ended December 31, 2025 and 2024, respectively.
The unobservable valuation inputs were as follows: December 31, December 31, 2024 2023 Expected stock price volatility 100.20% –101.40 % 105.00% –110.00 % Risk-free interest rate 4.20% –4.30 % 3.88% –5.03 % Expected dividend yield 0.00 % 0.00 % Expected term (in years) 0.75 –3.50 0.75 –4.50 Probability of change of control 10.00 % 25.00 % Probability of dissolution 45.00 % 50.00 % Probability of other outcome 45.00 % 25.00 % Pursuant to an underwritten public offering in June 2023, we issued the Tranche A Warrants to purchase 2,500,000 shares of Common Stock at $22.00 per share.
The unobservable valuation inputs were as follows: December 31, December 31, 2025 2024 Expected stock price volatility 104.40% – 119.00 % 100.20% – 101.40 % Risk-free interest rate 3.50% – 3.60 % 4.20% – 4.30 % Expected dividend yield 0.00 % 0.00 % Expected term (in years) 0.50 – 2.50 0.75 – 3.50 Probability of change of control 20.00 % 10.00 % Probability of dissolution 35.00 % 45.00 % Probability of held to expiration 45.00 % 45.00 % 105 Table of Contents Pursuant to an underwritten public offering in June 2023, we issued warrants to purchase 2,500,000 shares of Common Stock at $22.00 per share (the “Tranche A Warrants”).
Net cash used in operating activities was $30.2 million for the year ended December 31, 2023, which resulted from a net loss of $49.5 million, adjusted for non-cash items totaling $19.5 million and a net change in operating assets and liabilities of $0.2 million.
Operating Activities Net cash used in operating activities was $18.5 million for the year ended December 31, 2025, which resulted from a net loss of $26.2 million, adjusted for non-cash items totaling $11.0 million and a net change in operating assets and liabilities of $3.4 million.
Net cash used in investing activities was $1.5 million for year ended December 31, 2023, which consisted of purchases of marketable securities of $6.2 million and purchases of property and equipment of $0.3 million, partially offset by proceeds from maturities of marketable securities of $5.0 million.
Net cash provided by investing activities was $6.3 million for year ended December 31, 2024, which consisted of proceeds from maturities of marketable securities of $12.5 million, partially offset by purchases of marketable securities of $6.2 million and purchases of property and equipment of $15,000.
Long-Term Material Cash Requirements Beyond the next twelve months, our primary capital requirements are to fund our operations, including research and development, personnel, regulatory, and other clinical trial costs related to development of our lead drug candidate, CNM-Au8; and general and administrative costs to support our drug development activities in advance of receiving regulatory approval for our drug candidates.
These commitments are not deemed significant. 101 Table of Contents Long-Term Material Cash Requirements Beyond the next twelve months, our primary capital requirements are to fund our operations, including research and development, personnel, regulatory, and other clinical trial costs related to development of our lead drug candidate, CNM-Au8; general and administrative costs to support our drug development activities in advance of receiving regulatory approval for our drug candidates; and principal and interest payments on our notes payable and convertible notes payable.
The change was due to the price of our Common Stock on Nasdaq and updates in the valuation model assumptions (see “Critical Accounting Estimates” ); (ix) a gain from a change in fair value of the Clene Nanomedicine Contingent Earn-out liability and Initial Stockholders Contingent Earn-out liability during the years ended December 31, 2024 and 2023.
The changes in fair value were due to changes in price of our Common Stock on Nasdaq and updates in valuation model assumptions (see “Critical Accounting Estimates” ); (viii) a gain from the change in fair value of the Clene Nanomedicine Contingent Earn-out liability and Initial Stockholders Contingent Earn-out liability.
The unobservable valuation inputs were as follows: December 31, December 31, 2024 2023 Expected stock price volatility 97.80% –101.90 % 100.00% –110.00 % Risk-free interest rate 4.20 % 4.13% –4.74 % Expected dividend yield 0.00 % 0.00 % Expected term (in years) 0.71 –1.46 1.08 –2.46 Probability of NDA acceptance 20.00 % 20.00 % Probability of fundamental transaction 10.00 % 25.00 % Probability of dissolution 45.00 % 50.00 % Probability of other outcome 25.00 % 5.00 % Pursuant to a registered direct public offering in October 2024, we issued the 2024 Common Warrants to purchase 1,546,914 shares of Common Stock at $4.82 per share.
The unobservable valuation inputs were as follows: December 31, December 31, 2025 2024 Expected stock price volatility 124.00 % 97.80% – 101.90 % Risk-free interest rate 3.60 % 4.20 % Expected dividend yield 0.00 % 0.00 % Expected term (in years) 0.46 0.71 – 1.46 Probability of NDA acceptance before warrant expiration 0.00 % 20.00 % Probability of fundamental transaction before warrant expiration 0.00 % 10.00 % Probability of dissolution before warrant expiration 35.00 % 45.00 % Probability of held to expiration 65.00 % 25.00 % Pursuant to a registered direct public offering in October 2024, we issued warrants to purchase 1,546,914 shares of Common Stock at $4.82 per share (the “2024 Common Warrants”).
We plan to work closely with regulatory health authorities from the FDA, European Medicines Agency and other international regulatory bodies, MS experts, and patient representatives to determine the proper path to advance CNM-Au8 into Phase 3 and potential future approval.
We plan to work closely with regulatory health authorities from the FDA, European Medicines Agency and other international regulatory bodies, MS experts, and patient representatives to determine the proper path to advance CNM-Au8 into Phase 3 and potential future approval. We also believe that once CNM-Au8 receives regulatory approval in another indication, licensing opportunities for the MS indication will improve.
The change in fair value of the 2024 Common Warrants resulted in a loss of $1.3 million during the year ended December 31, 2024. We estimate the fair value using a Black-Scholes option-pricing model with probability weights for the occurrence of the following events: (i) dissolution of the Company and (ii) another outcome outside of (i).
The change in fair value of the 2024 Common Warrants resulted in a loss of $0.8 million and a loss of $1.3 million during the years ended December 31, 2025 and 2024, respectively. We estimate the fair value using a Black-Scholes option-pricing model with probability weights for the occurrence of (i) dissolution of the Company and (ii) held to maturity.
Our accumulated deficit was $282.1 million and $242.7 million as of December 31, 2024 and 2023. Our cash, cash equivalents, and marketable securities totaled $12.2 million and $35.0 million as of December 31, 2024 and 2023, respectively, and net cash used in operating activities was $21.3 million and $30.2 million for the years ended December 31, 2024 and 2023, respectively.
Our accumulated deficit was $308.3 million and $282.1 million as of December 31, 2025 and 2024. Our cash and cash equivalents totaled $5.2 million and $12.2 million as of December 31, 2025 and 2024, respectively, and net cash used in operating activities was $18.5 million and $21.3 million for the years ended December 31, 2025 and 2024, respectively.
The change in total other income (expense), net, was primarily due to the following: (i) a decrease in interest income primarily due to lower average balances of cash, cash equivalents, and marketable securities in 2024; (ii) a decrease in interest expense primarily due to declining balances of notes payable following principal repayments and a decrease in non-cash interest expense on notes payable, partially offset by increasing variable interest rates on notes payable and increased amortization of debt discounts and issuance costs on notes payable; (iii) a loss on extinguishment of notes payable from the repayment in full of our term loan (the “2021 Avenue Loan”) with Avenue Venture Opportunities Fund, L.P.
The change in total other income (expense), net, was primarily due to the following: (i) a decrease in interest income primarily due to lower average balances of cash and cash equivalents and lower interest rates in 2025; (ii) a decrease in interest expense primarily due to (A) declining balances of notes payable following principal repayments, including repayment of notes payable with higher stated interest rates, and (B) a decrease in amortization of debt discounts due to repayment of notes payable with higher monthly amortization; partially offset by (C) an increase in non-cash interest expense due to the capitalization of interest on senior secured convertible promissory notes beginning in August 2025; (iii) a loss on extinguishment of notes payable from the repayment in full of our term loan (the “2021 Avenue Loan”) with Avenue Venture Opportunities Fund, L.P.
We expect to meet our long-term liquidity requirements primarily through equity financing, debt financing, or other capital sources. 98 Table of Contents Use of Funds Our cash flows for the years ended December 31, 2024 and 2023 were as follows: Year Ended December 31, (in thousands) 2024 2023 Net cash used in operating activities $ (21,326 ) $ (30,171 ) Net cash provided by (used in) investing activities 6,316 (1,499 ) Net cash provided by (used in) financing activities (1,529 ) 42,163 Effect of foreign exchange rate changes on cash (127 ) (4 ) Net increase (decrease) in cash, cash equivalents and restricted cash $ (16,666 ) $ 10,489 Our primary use of cash in all periods presented was to fund our research and development, regulatory and other clinical trial costs, and general corporate expenditures.
Use of Funds Our cash flows for the years ended December 31, 2025 and 2024 were as follows: Year Ended December 31, (in thousands) 2025 2024 Net cash used in operating activities $ (18,546 ) $ (21,326 ) Net cash provided by (used in) investing activities (39 ) 6,316 Net cash provided by (used in) financing activities 11,518 (1,529 ) Effect of foreign exchange rate changes on cash 101 (127 ) Net decrease in cash, cash equivalents and restricted cash $ (6,966 ) $ (16,666 ) Our primary use of cash in all periods presented was to fund our research and development, regulatory and other clinical trial costs, and general corporate expenditures.
Results of Operations Our results of operations for the years ended December 31, 2024 and 2023 were as follows: Year Ended December 31, (in thousands) 2024 2023 Change Revenue: Product revenue $ 237 $ 498 (52 )% Royalty revenue 105 156 (33 )% Total revenue 342 654 (48 )% Operating expenses: Cost of revenue 70 121 (42 )% Research and development 20,058 26,655 (25 )% General and administrative 13,307 14,418 (8 )% Total operating expenses 33,435 41,194 (19 )% Loss from operations (33,093 ) (40,540 ) (18 )% Total other income (expense), net (6,307 ) (8,964 ) (30 )% Net loss $ (39,400 ) $ (49,504 ) (20 )% Revenue Product revenue relates to our dietary supplement products and consists of (i) sales of an aqueous zinc-silver ion dietary (mineral) supplement sold by our wholly-owned subsidiary, dOrbital, Inc., under the trade name “rMetx™ ZnAg Immune Boost,” or under a supply agreement with 4Life under the trade name “Zinc Factor™,” and (ii) sales of KHC46, an aqueous gold dietary (mineral) supplement of very low-concentration, sold under a supply agreement with 4Life under the trade name “Gold Factor™.” Royalty revenue relates to our dietary supplement products and consists of proceeds under an exclusive and royalty-bearing license agreement with 4Life relating to the sale of Gold Factor.
Total Other Income (Expense), Net Total other income (expense), net, consists primarily of (i) interest income and interest expense, (ii) changes in the fair value of our common stock warrant liabilities and derivative liabilities, and (iii) research and development tax credits, unrestricted grants, and conditional grants for which applicable conditions have been met. 95 Table of Contents Results of Operations Our results of operations for the years ended December 31, 2025 and 2024 were as follows: Year Ended December 31, (in thousands) 2025 2024 Change Revenue: Product revenue $ 119 $ 237 (50 )% Royalty revenue 81 105 (23 )% Total revenue 200 342 (42 )% Operating expenses: Cost of revenue 43 70 (39 )% Research and development 14,011 20,058 (30 )% General and administrative 9,229 13,307 (31 )% Total operating expenses 23,283 33,435 (30 )% Loss from operations (23,083 ) (33,093 ) (30 )% Total other income (expense), net (3,090 ) (6,307 ) (51 )% Net loss $ (26,173 ) $ (39,400 ) (34 )% Revenue Product revenue relates to our dietary supplement products and consists of (i) sales of an aqueous zinc-silver ion dietary (mineral) supplement sold by our wholly-owned subsidiary, dOrbital, Inc., under the trade name “rMetx™ ZnAg Immune Boost,” or under a supply agreement with 4Life under the trade name “Zinc Factor™,” and (ii) sales of KHC46, an aqueous gold dietary (mineral) supplement of very low-concentration, sold under a supply agreement with 4Life under the trade name “Gold Factor™.” Royalty revenue relates to our dietary supplement products and consists of proceeds under an exclusive and royalty-bearing license agreement with 4Life relating to the sale of Gold Factor.
Based on our evaluation of these factors, we have not recorded income tax benefits for the net operating losses or for research and development tax credits or other deferred tax assets due to uncertainty of realizing benefits from these items.
Based on our evaluation of these factors, we have not recorded income tax benefits for the net operating losses or for research and development tax credits or other deferred tax assets due to uncertainty of realizing benefits from these items. 106 Table of Contents Stock-Based Compensation We account for stock-based compensation arrangements using a fair value-based method for costs related to all share-based payments including stock options and stock awards.
Net cash provided by financing activities was $42.2 million for the year ended December 31, 2023, which consisted of proceeds from the issuance of common stock and warrants, net of offering costs, of $42.1 million, and proceeds from the issuance of notes payable of $0.4 million, partially offset by payments of finance lease obligations of $0.1 million and payments of notes payable modification fees of $0.2 million.
Financing Activities Net cash provided by financing activities was $11.5 million for the year ended December 31, 2025, which consisted of proceeds from the issuance of common stock of $10.4 million and proceeds from the issuance of debt and derivative liabilities of $1.5 million, partially offset by payments of notes payable principal of $0.4 million.
We are also subject to state income tax in Maryland at a rate of 8.25%, and in Utah at a rate of 4.55% and 4.65% for the years ended December 31, 2024 and 2023, respectively.
We are also subject to state income tax in Maryland at a rate of 8.25%, and in Utah at a rate of 4.50%.
We have concluded that our plans do not alleviate the substantial doubt about our ability to continue as a going concern beyond one year from the date the consolidated financial statements are issued.
While we have implemented cost-saving initiatives, including delaying and reducing certain research and development programs and commercialization efforts, reducing employee compensation, and eliminating certain staff positions, we have concluded that our plans do not alleviate the substantial doubt about our ability to continue as a going concern beyond one year from the date the consolidated financial statements are issued.
Cost of Revenue Cost of revenue related to production and distribution costs for the sales of Gold Factor, Zinc Factor, and rMetx dietary supplements. 93 Table of Contents Research and Development Expense Research and development expense during the years ended December 31, 2024 and 2023 was as follows: Year Ended December 31, (in thousands) 2024 2023 Change CNM-Au8 Amyotrophic lateral sclerosis $ 3,400 $ 3,867 (12 )% Multiple sclerosis 239 1,865 (87 )% Parkinsonʼs disease (18 ) 12 * Regulatory activities 928 495 87 % General/pre-clinical/non-clinical 375 734 (49 )% CNM-ZnAg 17 682 (98 )% Unallocated Facilities 1,560 1,567 (0 )% Depreciation 1,379 1,438 (4 )% Manufacturing 1,130 1,793 (37 )% Research 48 244 (80 )% Equipment 116 166 (30 )% Maintenance 264 114 132 % Information technology 160 159 1 % Other 85 91 (7 )% Personnel 10,114 9,545 6 % Stock-based compensation 3,546 4,061 (13 )% Grant revenue as a reduction of research and development expense (3,285 ) (178 ) 1,746 % Total research and development $ 20,058 $ 26,655 (25 )% * Not meaningful.
Cost of Revenue Cost of revenue related to production and distribution costs for the sales of Gold Factor, Zinc Factor, and rMetx dietary supplements. 96 Table of Contents Research and Development Expense Research and development expense during the years ended December 31, 2025 and 2024 was as follows: Year Ended December 31, (in thousands) 2025 2024 Change CNM-Au8: Amyotrophic lateral sclerosis $ 5,936 $ 3,400 75 % Multiple sclerosis 295 239 23 % Parkinsonʼs disease — (18 ) * Regulatory activities 484 928 (48 )% General/preclinical/nonclinical 95 375 (75 )% CNM-ZnAg — 17 * Unallocated: Facilities 1,662 1,560 7 % Depreciation 1,351 1,379 (2 )% Manufacturing 805 1,130 (29 )% Research 11 48 (77 )% Equipment 98 116 (16 )% Maintenance 144 264 (45 )% Information technology 324 160 103 % Other 132 85 55 % Personnel 8,210 10,114 (19 )% Stock-based compensation 2,987 3,546 (16 )% Grant revenue as a reduction of research and development expense (8,523 ) (3,285 ) 159 % Total research and development $ 14,011 $ 20,058 (30 )% * Not meaningful.
We did not effect any sales during any of the other periods presented herein. The sale of Common Stock under the Purchase Agreement was made pursuant to our registration statement on Form S-3 (file number 333-264299), declared effective by the SEC on April 26, 2022, and a related prospectus supplement.
The issuance and sale of Common Stock by us under the 2025 ATM Agreement was made pursuant to our registration statement on Form S-3 (file number 333-286058), declared effective by the SEC on April 25, 2025, and a related prospectus supplement.
Additionally, pursuant to our 2024 SSCP Notes, we are required to maintain unrestricted cash and cash equivalents of at least $2.0 million to avoid acceleration of the full balance of the 2024 SSCP Notes (see Note 8 to the consolidated financial statements). These conditions raise substantial doubt about the Company’s ability to continue as a going concern.
Additionally, pursuant to our senior secured convertible promissory notes issued in December 2024 (the “2024 SSCP Notes”), we are required to maintain unrestricted cash and cash equivalents of at least $2.0 million to avoid acceleration of the full balance of the 2024 SSCP Notes (see Note 8 to the consolidated financial statements).
The unobservable valuation inputs were as follows: Year Ended December 31, 2024 2023 Expected stock price volatility 97.78% –111.49 % 96.22% –103.31 % Risk-free interest rate 3.52% –4.58 % 3.26% –4.66 % Expected dividend yield 0.00 % 0.00 % Expected term of options (in years) 5.00 –10.00 5.00 –6.43 We estimate the fair value of restricted stock awards using a Monte Carlo valuation model to simulate the achievement of certain stock price milestones.
The unobservable valuation inputs were as follows: Year Ended December 31, 2025 2024 Expected stock price volatility 90.97% – 110.25 % 97.78% – 111.49 % Risk-free interest rate 3.66% – 4.24 % 3.52% – 4.58 % Expected dividend yield 0.00 % 0.00 % Expected term of options (in years) 5.00 – 6.25 5.00 – 10.00 Item 7A.
Additionally, sodium phenylbutyrate and taurursodiol, a drug from Amylyx Pharmaceuticals, Inc. that previously received approval from the FDA and conditional approval from Health Canada based on the results of a Phase 2 trial, was voluntarily withdrawn from the market in the U.S. and Canada following the negative outcome of a Phase 3 clinical trial. 91 Table of Contents Financial Overview Our financial condition, results of operations, and the period-to-period comparability of our financial results are principally affected by the following factors: Research and Development Expense The discovery and development of novel drug candidates requires a significant investment of resources over a prolonged period of time, and a core part of our strategy is to continue making sustained investments in this area.
Financial Overview Our financial condition, results of operations, and the period-to-period comparability of our financial results are principally affected by the following factors: Research and Development Expense The discovery and development of novel drug candidates requires a significant investment of resources over a prolonged period of time, and a core part of our strategy is to continue making sustained investments in this area.
The net change in operating assets and liabilities was primarily attributable to the following: (A) a decrease in accounts receivable of $46,000 and a decrease in accounts payable of $1.5 million due to the timing of vendor invoicing and payments, (B) a decrease in prepaid expenses and other current assets of $2.0 million due to the timing of vendor invoicing and payments, the timing of receipt of metals to be used in research and development, and a decrease in research and development tax credits receivable, (C) a decrease in accrued liabilities of $0.1 million primarily due to a decrease in accrued CRO and clinical fees, partially offset by an increase in accrued compensation and benefits and other miscellaneous accrued liabilities, and (D) a decrease in operating lease obligations of $0.6 million. 99 Table of Contents Investing Activities Net cash provided by investing activities was $6.3 million for the year ended December 31, 2024, which consisted of proceeds from maturities of marketable securities of $12.5 million, partially offset by purchases of marketable securities of $6.2 million and purchases of property and equipment of $15,000.
The net change in operating assets and liabilities was primarily attributable to: (i) a decrease in accounts receivable of $0.1 million and a decrease in accounts payable of $0.3 million due to the timing of vendor invoicing and payments, (ii) a decrease in prepaid expenses and other current assets of $0.1 million due to (A) a decrease in prepaid clinical and CRO expenses from the timing of ACT-EAP invoicing, payments, and reimbursements, partially offset by (B) an increase in metals to be used in research and development due to the timing of invoicing, payments, and deliveries from suppliers, and (C) an increase in research and development tax credits receivable due to the timing of refund payments, (iii) a decrease in accrued liabilities of $2.2 million primarily due to (A) a decrease in accrued compensation and benefits resulting from payments of deferred employee bonuses in cash and equity, (B) a decrease in deferred grants due to satisfaction of grant conditions or performance obligations, and (C) a decrease in accrued CRO and clinical fees due to the timing of invoicing and payments, and (iv) a decrease in operating lease obligations of $1.0 million. 102 Table of Contents Net cash used in operating activities was $21.3 million for the year ended December 31, 2024, which resulted from a net loss of $39.4 million, adjusted for non-cash items totaling $14.9 million and a net change in operating assets and liabilities of $3.2 million.
Other than the termination of the prospectus supplement related to the Purchase Agreement with respect to future sales by us, the Purchase Agreement remains in full force and effect. Critical Accounting Estimates Our discussion and analysis of our financial condition and results of operations is based on our consolidated financial statements, which have been prepared in accordance with U.S.
Critical Accounting Estimates Our discussion and analysis of our financial condition and results of operations is based on our consolidated financial statements, which have been prepared in accordance with U.S. Generally Accepted Accounting Principles.
We remeasure the SSCPN Derivative Liabilities at each reporting date and record the change in fair value as a component of other income (expense), net in the consolidated statements of operations and comprehensive loss. During the year ended December 31, 2024, the change in fair value of the SSCPN Derivative Liabilities resulted in a loss of $0.4 million.
We accounted for the remainder of the SSCP Notes as liabilities measured at their amortized cost, with carrying values of (i) $9.3 million and $8.6 million for the 2024 SSCP Notes as of December 31, 2025 and 2024, respectively, and (ii) $1.4 million for the 2025 SSCP Notes as of December 31, 2025. 104 Table of Contents We remeasure the SSCPN Derivative Liabilities at each reporting date and record the change in fair value as a component of other income (expense), net in the consolidated statements of operations and comprehensive loss.
(“Avenue”) during the year ended December 31, 2024; (iv) commitment share expense, due to the shares of Common Stock issued to Lincoln Park Capital Fund, LLC (“Lincoln Park”), as an initial fee for Lincoln Park’s commitment to purchase shares of Common Stock under a purchase agreement with the Company during the year ended December 31, 2023; (v) issuance costs from public equity offerings allocated to liability-classified warrants during the years ended December 31, 2024 and 2023; (vi) losses on initial issuance of equity from the fair value in excess of proceeds from public equity offerings during the years ended December 31, 2024 and 2023; (vii) a loss from the changes in fair value of the 2023 Avenue Warrant, Tranche A Warrants, and 2024 Common Warrants during the year ended December 31, 2024 and a gain from a change in fair value of the 2023 Avenue Warrant and Tranche A Warrants during the year ended December 31, 2023.
(“Avenue”) during the year ended December 31, 2024; (iv) issuance costs from public equity offerings allocated to liability-classified warrants during the year ended December 31, 2024; (v) a loss on initial issuance of equity from the fair value in excess of proceeds from a public equity offering during the year ended December 31, 2024; (vi) a loss from the changes in fair value of common stock warrant liabilities during the years ended December 31, 2025 and 2024.
The FDA noted that whether NfL can serve as a reasonably likely surrogate endpoint for the effects of CNM-Au8 in ALS and whether the magnitude of change observed on NfL in patients treated with CNM-Au8 is reasonably likely to predict clinical benefit for ALS would be a matter of review.
Among participants treated in the HEALEY ALS Platform Trial with CNM-Au8 30 mg, participants with the greatest declines across both NfL and GFAP biomarkers during the double-blind period had the largest long-term overall survival improvement relative to all participants treated with CNM-Au8 30 mg (NfL and GFAP average AUC decline The FDA noted that whether disease-specific biomarkers can serve as a reasonably likely surrogate endpoint for the effects of CNM-Au8 in ALS and whether the magnitude of change observed on NfL or other related disease-specific biomarkers in patients treated with CNM-Au8 can reasonably likely predict clinical benefit for ALS would be a matter of review.
The unobservable valuation inputs were as follows: December 31, December 20, 2024 2024 Expected stock price volatility 101.50 % 100.40 % Risk-free interest rate 4.20 % 4.30 % Expected dividend yield 0.00 % 0.00 % Expected term (in years) 0.50 – 1.47 0.53 – 1.50 Probability of change of control 10.00 % 10.00 % Probability of dissolution 45.00 % 45.00 % Probability of other outcome 45.00 % 45.00 % 101 Table of Contents Common Stock Warrant Liabilities In accordance with ASC 815, we recognized the below common stock warrants as derivative liabilities measured at fair value and will remeasure them at each reporting date and record the change in fair value as a component of other income (expense), net, in the consolidated statements of operations and comprehensive loss.
Common Stock Warrant Liabilities In accordance with ASC 815, we recognized the below common stock warrants as derivative liabilities measured at fair value and will remeasure them at each reporting date and record the change in fair value as a component of other income (expense), net, in the consolidated statements of operations and comprehensive loss.
Significant non-cash items included: (i) depreciation expense of $1.7 million relating to laboratory and office equipment and leasehold improvements, (ii) non-cash lease expense of $0.4 million, (iii) commitment share expense of $0.4 million related to the shares of Common Stock issued to Lincoln Park as an initial fee for Lincoln Park’s commitment to purchase Common Stock under a purchase agreement with the Company, (iv) issuance costs of $0.3 million from a public equity offering allocated to liability-classified warrants, (v) a loss on initial issuance of equity of $14.8 million from the fair value in excess of proceeds from a public equity offering, (vi) stock-based compensation expense of $9.1 million, (vii) accretion of debt discount of $1.2 million, (viii) non-cash interest expense of $0.4 million, and (ix) a change in fair value of the Clene Nanomedicine and Initial Stockholders Contingent Earn-outs of $2.2 million and $0.3 million, respectively, due to the decrease in price of our Common Stock on Nasdaq, and (x) a change in fair value of our common stock warrant liabilities of $6.3 million due to the decrease in price of our Common Stock on Nasdaq and changes in valuation model inputs.
Significant non-cash items included: (i) depreciation expense of $1.5 million related to laboratory and office equipment and leasehold improvements, (ii) non-cash lease expense of $0.6 million, (iii) stock-based compensation expense of $6.4 million, (iv) accretion of debt discount of $1.0 million, (v) non-cash interest expense on notes payable of $0.6 million, (vi) a change in fair value of our common stock warrant liabilities of $0.5 million due to changes in the price of our Common Stock on Nasdaq and changes in valuation model inputs, and (vii) a change in fair value of our derivative liabilities of $0.4 million due to changes in the price of our Common Stock on Nasdaq and changes in valuation model inputs.
The trial is designed to investigate the effects of CNM-Au8 on improved survival (primary endpoint) and delayed time to ALS clinical worsening events (secondary efficacy endpoint).
RESTORE-ALS is designed to investigate the effects of CNM-Au8 on improved survival (primary endpoint) and delayed time to ALS clinical worsening events (secondary efficacy endpoint). Across over 1,100 participant-years of CNM-Au8 exposure data, treatment with CNM-Au8 continues to demonstrate a safety profile without significant safety concerns or safety trends identified.
We expect to meet with the FDA in an end of Phase 2 meeting in the second half of 2025. 90 Table of Contents The chart below reflects the growing body of evidence for CSN therapeutics from our completed and ongoing clinical programs.
The chart below reflects the growing body of evidence for CSN therapeutics from our completed and ongoing clinical programs.
The unobservable inputs include the expected stock price volatility, risk-free interest rate, and expected term. No restricted stock awards were granted during the years ended December 31, 2024 and 2023. Item 7A. Quantitative and Qualitative Disclosures About Market Risk As a smaller reporting company, we are not required to provide information required by this Item. 103 Table of Contents
Quantitative and Qualitative Disclosures About Market Risk As a smaller reporting company, we are not required to provide information required by this Item. 107 Table of Contents
If we are unable to file an NDA with the FDA under an accelerated pathway, we would need to continue investing in clinical research activities and we anticipate our general and administrative expenses would decrease in future periods as we decrease commercial expansion projects, including at our Elkton, Maryland facility, and as we implement cost-saving initiatives, such as a reduction in compensation, a hiring freeze, and elimination of certain staff positions. 92 Table of Contents Total Other Income (Expense), Net Total other income (expense), net, consists primarily of (i) interest income and interest expense, (ii) commitment share expense from shares of Common Stock issued as a commitment fee, (iii) issuance costs for common stock warrant liabilities, (iv) a loss on initial issuance of equity from the fair value in excess of proceeds from public equity offerings, (v) changes in the fair value of our common stock warrant liabilities, derivative liabilities, and Contingent Earn-outs, (vi) research and development tax credits, unrestricted grants, and conditional grants for which applicable conditions have been met, and (vii) realized gains and losses on foreign currency transactions and other miscellaneous income and expense items.
If we are unable to file an NDA with the FDA under an accelerated approval pathway, we would need to continue investing in clinical research activities and we anticipate our general and administrative expenses would decrease in future periods as we decrease commercial manufacturing expansion projects, including at our Elkton, Maryland facility, and as we implement cost-saving initiatives, such as a reduction in compensation, a hiring freeze, and elimination of certain staff positions.
The unobservable valuation inputs were as follows: December 31, October 1, 2024 2024 Expected stock price volatility 107.50 % 110.00 % Risk-free interest rate 4.40 % 3.50 % Expected dividend yield 0.00 % 0.00 % Expected term (in years) 4.75 5.00 Probability of dissolution 45.00 % 55.00 % Probability of other outcome 55.00 % 45.00 % 102 Table of Contents Income Taxes We account for uncertainty in income taxes by applying a two-step process to determine the amount of tax benefit to be recognized in the consolidated financial statements.
The unobservable valuation inputs were as follows: December 31, December 31, 2025 2024 Expected stock price volatility 104.30 % 107.50 % Risk-free interest rate 3.60 % 4.40 % Expected dividend yield 0.00 % 0.00 % Expected term (in years) 3.75 4.75 Probability of dissolution 35.00 % 45.00 % Probability of held to expiration 65.00 % 55.00 % Income Taxes We record uncertain tax positions in accordance with ASC 740, Income Taxes , on the basis of a two-step process to (i) determine whether it is more likely than not that the tax positions will be sustained on the basis of the technical merits of the position, and (ii) for those tax positions that meet the more-likely-than-not recognition threshold, we recognize the largest amount of tax benefit that is more than 50% likely to be realized upon ultimate settlement with the related tax authority.
The aggregate gross proceeds from the private placements were approximately $3.8 million, of which $1.3 million was contributed by certain of our directors, executive officers and their affiliated entities, and excludes the proceeds, if any, from the exercise of the warrants and pre-funded warrants.
The aggregate gross proceeds from the private placements were approximately $3.8 million, of which $1.3 million was contributed by certain of our directors, executive officers and their affiliated entities, and excludes the proceeds, if any, from the exercise of the warrants and pre-funded warrants. 103 Table of Contents Common Stock Sales Agreement During the years ended December 31, 2025 and 2024, we sold 2,300,804 and 504,292 shares of Common Stock, respectively, under our April 2022 equity distribution agreement (the “2022 ATM Agreement”) and April 2025 equity distribution agreement (the “2025 ATM Agreement,” and collectively with the 2022 ATM Agreement, the “ATM Agreements”) with Canaccord, generated gross proceeds of $10.6 million and $2.7 million, respectively, and paid commissions of $0.2 million and $0.1 million, respectively.
On the Closing Date, Chelsea Worldwide Inc. changed its name to Clene Inc. and listed its shares of common stock, par value $0.0001 per share (“Common Stock”) on the Nasdaq Capital Market (“Nasdaq”) under the symbol “CLNN.” In connection with the Reverse Recapitalization, certain of Clene Nanomedicine’s common stockholders are entitled to receive earn-out payments (the “Clene Nanomedicine Contingent Earn-out”), and Tottenham’s former officers and directors and Norwich Investment Limited (collectively, the “Initial Stockholders”) are entitled to receive earn-out payments (the “Initial Stockholders Contingent Earn-out,” and both collectively the “Contingent Earn-outs”) based on achieving certain milestones. 88 Table of Contents Reverse Stock Split Effective July 11, 2024 (the “Effective Date”), we filed a Certificate of Amendment to our Fourth Amended and Restated Certificate of Incorporation with the Secretary of State of the State of Delaware, to effect a 1-for-20 reverse stock split (the “Reverse Stock Split”) of our Common Stock.
On the Closing Date, Chelsea Worldwide Inc. changed its name to Clene Inc. and listed its shares of common stock, par value $0.0001 per share (“Common Stock”) on the Nasdaq Capital Market (“Nasdaq”) under the symbol “CLNN.” The Reverse Recapitalization provided for earn-out payments in the form of shares of Common Stock to be paid if we had achieved certain market-based milestones within three to five years following the Reverse Recapitalization.
Operating Activities Net cash used in operating activities was $21.3 million for the year ended December 31, 2024, which resulted from a net loss of $39.4 million, adjusted for non-cash items totaling $14.9 million and a net change in operating assets and liabilities of $3.2 million.
Investing Activities Net cash used in investing activities was $39,000 for the year ended December 31, 2025, which consisted of purchases of property and equipment.
The sale of Common Stock under the ATM Agreement was made pursuant to our registration statement on Form S-3 (file number 333-264299), declared effective by the SEC on April 26, 2022, and a related prospectus supplement. 100 Table of Contents Common Stock Purchase Agreement During the year ended December 31, 2023, we sold 20,000 shares of Common Stock under our purchase agreement (the “Purchase Agreement”) with Lincoln Park, issued 145 Additional Commitment Shares, and generated proceeds of $0.4 million.
The issuance and sale of Common Stock by us under the 2022 ATM Agreement was made pursuant to our 2022 S-3, which expired on April 26, 2025, and a related prospectus supplement.
Recent Developments of Our Clinical Programs Amyotrophic Lateral Sclerosis In December 2024, we announced that we recently received written guidance from the Division of Neurology 1 (“DN1”) of the U.S. Food and Drug Administration (“FDA”) regarding a potential accelerated approval pathway for CNM-Au8 in ALS.
Recent Developments of Our Clinical Programs Amyotrophic Lateral Sclerosis In December 2025, we announced the completion of new biomarker analyses for CNM-Au8®.
Additionally, we assess the likelihood that our deferred tax assets will be recovered from future taxable income and, to the extent we believe, based upon the weight of available evidence, that it is more likely than not that all or a portion of the deferred tax assets will not be realized, a valuation allowance is established through a charge to income tax expense.
We recognize deferred tax assets to the extent we believe these assets are more likely than not to be realized. In making such a determination, we consider all available positive and negative evidence, including future reversals of existing taxable temporary differences, projected future taxable income, tax-planning strategies, and recent results of operations.
Removed
As announced previously in September 2024, we were initially advised that the data presented in our briefing package for CNM-Au8 was not adequate to support an NDA submission under the accelerated approval pathway.
Added
The earn-out payments were to be paid to certain Clene Nanomedicine stockholders (the “Clene Nanomedicine Contingent Earn-out”) and Tottenham’s sponsor and former officers and directors (the “Initial Stockholders,” and together with the Clene Nanomedicine Contingent Earn-out, the “Contingent Earn-outs”).
Removed
However, following our November 2024 meeting with DN1 and presentation of additional data and analyses, the FDA provided guidance on a potential path to meet the regulatory standard for substantial evidence of effectiveness supporting accelerated approval.
Added
As of December 31, 2025, the milestones had not been achieved and the Contingent Earn-outs were cancelled. 91 Table of Contents Reverse Stock Split Effective July 11, 2024 (the “Effective Date”), we filed a Certificate of Amendment to our Fourth Amended and Restated Certificate of Incorporation with the Secretary of State of the State of Delaware, to effect a 1-for-20 reverse stock split (the “Reverse Stock Split”) of our Common Stock.

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