FLNA 10-K

Filana Therapeutics, Inc. (FLNA)

10-K 2026-03-12 For: 2025-12-31

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Added on April 06, 2026

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Delaware	91-1911336
(State or other jurisdiction of	(I.R.S. Employer
incorporation or organization)	Identification Number)

Large accelerated filer ☐	Accelerated filer ☐
Non-accelerated filer ☑	Smaller reporting company ☑
	Emerging growth company ☐

		Page
PART I
Item 1.	Business	6
Item 1A.	Risk Factors	20
Item 1B.	Unresolved Staff Comments	63
Item 1C.	Cybersecurity	63
Item 2.	Properties	63
Item 3.	Legal Proceedings	64
Item 4.	Mine Safety Disclosures	64

PART II
Item 5.	Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities	64
Item 6.	[Reserved]	64
Item 7.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	65
Item 7A.	Quantitative and Qualitative Disclosures About Market Risk	74
Item 8.	Consolidated Financial Statements and Supplementary Data	74
Item 9.	Changes in and Disagreements with Accountants on Accounting and Financial Disclosure	101
Item 9A.	Controls and Procedures	101
Item 9B.	Other Information	102
Item 9C.	Disclosure Regarding Foreign Jurisdiction that Prevent Inspection	102

PART III
Item 10.	Directors and Executive Officers and Corporate Governance	102
Item 11.	Executive Compensation	104
Item 12.	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters	104
Item 13.	Certain Relationships and Related Transactions, and Director Independence	105
Item 14.	Principal Accountant Fees and Services	105

PART IV
Item 15.	Exhibits and Consolidated Financial Statement Schedules	105
Item 16.	Form 10-K Summary	107
Signatures		108

	●	the timing and conduct of our planned and future potential clinical trials and studies for Simufilam in Tuberous Sclerosis Complex (TSC) and additional indications, including the timing of initiation, enrollment and completion of the trials and the period during which the results of the trials will become available;
	●	the safety profile or treatment benefits, if any, of simufilam;
	●	our ability to conduct planned preclinical studies of simufilam relating to epilepsy in TSC;
	●	our ability to initiate, conduct or analyze additional clinical and non-clinical studies with our product candidates targeted at central nervous system disorders, including TSC-related epilepsy;
	●	our ability to successfully carry out our obligations under our license agreement with Yale, for which we have assumed all responsibility for global development and commercialization for simufilam for the treatment of TSC-related epilepsy;
	●	our plans or ability to expand therapeutic indications for simufilam outside of TSC-related epilepsy;
	●	our reliance on third-party contractors to conduct all of our clinical and non-clinical trials and to make drug supply, or their ability to do so on-time or on-budget;
	●	the interpretation of data from our pre-clinical or early clinical studies, such as Phase 1 and Phase 2 studies, and any studies that are not randomized controlled trials;
	●	the impact of pre-clinical findings on our ability to develop our product candidates;
	●	our use of exploratory ‘research use only’ non-safety related biomarkers in our clinical studies;
	●	our ability to file for and obtain regulatory approval of our product candidates;
	●	our strategy and ability to establish an infrastructure to commercialize any product candidates, if approved;
	●	the potential future revenues of our product candidates, if approved and commercialized;
	●	the market acceptance of our product candidates, if approved and commercialized;
	●	the pricing and reimbursement of our product candidates, if approved and commercialized;
	●	the utility of protection, or the sufficiency, of our intellectual property;
	●	our potential competitors or competitive products for therapeutic areas we may elect to pursue;
	●	our need to raise new capital from time to time to finance our operations and the impact of macroeconomic conditions on our ability to effectively raise capital;
	●	expectations regarding trade secrets, technological innovations, licensing agreements and outsourcing of certain business functions;
	●	our expenses or incurred costs increasing by material amounts in excess of budgeted amounts due to unexpected cost overruns, imperfect forecasting, increased scope of activities or other causes;
	●	fluctuations in our financial or operating results;
	●	our operating losses, anticipated operating and capital expenditures and legal expenses;
	●	expectations regarding the issuance of shares of common stock, options or other equity to employees or directors pursuant to equity compensation awards, net of employment taxes;
	●	the development and maintenance of our internal information systems and infrastructure;
	●	our ability to minimize the likelihood and impact of adverse cybersecurity incidents in our information systems and infrastructure;

	●	our ability to attract and retain personnel;
	●	existing or emerging regulations and regulatory developments in the United States and other jurisdictions in which we operate;
	●	our expectations regarding the appropriate size and scope of our operations;
	●	the sufficiency of our cash resources to continue to fund our operations;
	●	potential future agreements with third parties in connection with the commercialization of our product candidates;
	●	the accuracy of our estimates regarding expenses, loss contingency reserves, capital requirements, and needs for additional financing;
	●	assumptions and estimates used for our disclosures regarding stock-based compensation;
	●	the expense, timing and outcome of pending or future litigation or other legal proceedings and claims (including U.S. government inquiries) including the potential for negotiated settlements of such matters; and
	●	litigation, claims or other uncertainties that may arise from allegations made against us or our former employees or collaborators and the potential resolution of same.

	●	a 12-month, open-label treatment phase, followed by
	●	a 6-month randomized, placebo-controlled withdrawal phase, followed by
	●	6 additional months of open-label treatment.

	●	building a lean company that is narrowly focused on developing innovative product candidates for central nervous system disorders such as TSC-related epilepsy;
	●	publishing scientific data in peer-reviewed journals;
	●	applying development capabilities to advance our product candidates through clinical proof-of-concept studies and beyond;
	●	using our expertise and experience to continue to focus on discovering new indications and product candidates, validated by experimental evidence and leading experts in the field; and
	●	continuing to outsource preclinical studies, clinical studies and formulation development activities in order to allow more efficient deployment of our resources

	●	Completion of extensive preclinical studies in accordance with applicable regulations, including studies conducted in accordance with good laboratory practice;
	●	Submission to FDA of an IND, which must become effective before human clinical studies may begin;
	●	Approval by an independent institutional review board (IRB) or ethics committee before each study may be initiated;
	●	Performance of adequate and well-controlled human clinical studies in accordance with applicable IND regulations, code of cGCP, requirements and other clinical trial-related regulations to establish the safety and efficacy of the investigational product for each proposed indication;
	●	Submission to FDA of a new drug application (NDA);
	●	A determination by FDA within 60 days of its receipt of an NDA to accept the filing for review;
	●	Satisfactory completion of an FDA pre-approval inspection of the manufacturing facility or facilities where the drug will be produced to assess compliance with cGMP, requirements to assure that the facilities, methods and controls are adequate to preserve the drug’s identity, strength, quality and purity;
	●	Potential FDA audit of the preclinical study and/or clinical study sites that generated the data in support of the NDA;
	●	FDA review and approval of the NDA, including consideration of the views of any FDA advisory committee, prior to any commercial marketing or sale of the drug in the U.S.; and
	●	Compliance with any post-approval requirements, including the potential requirement to conduct post-approval studies.

	●	Phase 1 clinical studies generally involve a small number of healthy volunteers or disease-affected patients who are initially exposed to a single dose and then multiple doses of the product candidate. The primary purpose of these clinical studies is to assess the absorption, metabolism, pharmacologic action, tolerability and safety of a drug candidate.
	●	Phase 2 clinical studies involve studies in disease-affected patients to determine the proper dose required to produce the desired benefits. At the same time, safety and further pharmacokinetic and pharmacodynamic information is collected, possible adverse effects and safety risks are identified, and a preliminary evaluation of efficacy may be observed.
	●	Phase 3 clinical studies generally involve enrolling many patients at multiple sites and are designed to provide the data necessary to demonstrate the effectiveness of the product candidate for its intended use, its safety in use and to establish the overall benefit/risk relationship of the product candidate and provide an adequate basis for product approval. These studies may include comparisons with placebo and/or other comparator treatments. The duration of treatment is often extended to mimic the actual use of a product during marketing.

	●	We have no approved products. Our product candidates are subject to significant development risks, and we may never achieve regulatory approval or commercial success.
	●	The FDA has placed a full clinical hold on our planned clinical studies, which may delay our drug development efforts and cause our business to suffer.
	●	Our product candidates are based on new scientific approaches and novel technology, which makes it difficult to predict the time and cost of product candidate development and likelihood of success.
	●	The drug development process, the clinical trial process and the enrollment and retention of patients in clinical trials could be challenging, expensive and time-consuming for the indications that we are targeting.
	●	We are heavily dependent on the success of simufilam, our lead product candidate which is under development. If this product candidate is unsuccessful in clinical development, or does not receive regulatory approval, we will be unable to generate product revenue and our business will be harmed.
	●	We have a limited operating history in our business targeting TSC-related epilepsy and no history of product approvals for commercial sale, which may make it difficult to evaluate our current business and predict our future success and viability.
	●	We may not be able to obtain orphan drug exclusivity for our product candidates in either the United States or the EU.
	●	Our inability to develop formulations of simufilam appropriate for pediatric patients under the age of 12 could delay or prevent clinical trials of simufilam in that population.
	●	We cannot give any assurance that we will file for regulatory approval for any of our product candidates, or that if we file for approval, our product candidates will receive regulatory approval, which is necessary before they can be commercialized.
	●	Results observed in preclinical studies and early stage clinical trials for simufilam are not sufficient evidence of drug safety or efficacy for purposes of regulatory approval.
	●	We may encounter substantial delays in clinical studies that we conduct or may not be able to conduct or complete clinical studies on the timelines we expect, if at all.
	●	Governmental actions with respect to U.S. drug prices could negatively impact our business.
	●	If physicians and patients do not accept and use our drugs, we will not achieve sufficient product revenues and our business will suffer.
	●	We currently do not have the in-house capabilities to manufacture or commercialize our product candidates, and we rely on a third-party commercial drug manufacturing organization for supplies of simufilam. If we are unable to develop our own manufacturing, sales, marketing and distribution capabilities, or if we are not successful in contracting with third parties for these services on favorable terms, or at all, our product revenues could be adversely impacted.
	●	Clinical studies that we conduct may fail to demonstrate substantial evidence of the safety and efficacy of our product candidates, which would prevent, delay, or limit the scope of regulatory approval and commercialization.

	●	Our financial condition and operating results could be adversely impacted by unfavorable results of legal proceedings, government investigations or allegations and other claims.
	●	If we are ultimately unable to file for and obtain regulatory approval for our product candidates, we will be unable to generate product revenue and our business will be substantially harmed.

	●	Our ability to market and promote our product candidates will be determined and limited by FDA-approved labeling.
	●	If we fail to comply or stay in compliance with the complex set of federal, state, local and foreign laws and regulations that apply to our business, we could suffer severe consequences that could materially and adversely affect our operating results and financial condition.
	●	Government agencies may establish and promulgate usage guidelines that could limit the use of our product candidates.

	●	If we are unable to obtain and maintain sufficient patent protection for any product candidates we develop, our competitors could develop and commercialize products similar or identical to ours, and our ability to successfully commercialize any product candidates we may develop may be adversely affected.
	●	Issued patents covering our product candidates and other technologies could be found invalid or unenforceable if challenged in court or before administrative bodies in the U.S. or abroad.
	●	If we do not obtain patent term extension and data exclusivity for any product candidates we may develop, our business may be materially harmed.
	●	If we are unable to protect the confidentiality of our trade secrets, our business and competitive position would be materially harmed.

	●	We are subject to lawsuits and governmental investigations and inquiries.
	●	Our ability to operate without any significant disruptions will, in part, depend on our ability to source materials and clinical supplies via our product supply chains.
	●	Our reliance on third parties for both the supply and manufacture of materials for our product candidates carries the risk that we will not have sufficient quality or quantities of such materials or product candidates, or that such supply will not be available to us at an acceptable cost, which could delay, prevent, or impair our development or commercialization efforts.
	●	Our internal computer systems, or those used by third parties on whom we rely, may fail or suffer other breakdowns, cyberattacks, or information security breaches that could compromise the confidentiality, integrity, and availability of such systems and data, result in material disruptions of our development programs and business operations, risk disclosure of confidential, financial, or proprietary information, and affect our reputation.
	●	Business disruptions and lack of appropriate levels of commercial insurance could seriously harm our future revenue and financial condition and increase our costs and expenses.
	●	Social media platforms have significantly altered the dynamics of corporate communications and present risks and challenges, some of which are and may continue to be unknown to us.

	●	We have incurred significant net losses in each period since our inception and anticipate that we will continue to incur net losses for the foreseeable future.
	●	We have broad discretion in the use of our capital resources, including the net proceeds from any of our financing transactions and may not use them effectively.
	●	We have no product revenues and may never achieve revenues or profitability based on product revenues.

	●	the Clinical Laboratory Improvement Amendments (CLIA) of 1988, which are United States federal regulatory standards that apply to all clinical laboratory testing performed on humans in the United States, requires that laboratories obtain certification from the federal government, and state licensure laws;
	●	FDA laws and regulations , including those relating to off-label marketing;
	●	the Health Insurance Portability and Accountability Act (HIPAA), which imposes comprehensive federal standards with respect to the privacy and security of protected health information and requirements for the use of certain standardized electronic transactions, including penalties for violators, enforcement authority to state attorneys general and requirements for breach notification;
	●	state laws regulating testing and protecting the privacy of test results, as well as state laws protecting the privacy and security of health information and personal data and mandating reporting of breaches to affected individuals and state regulators;
	●	the federal anti-kickback law, or the Anti-Kickback Statute, which prohibits knowingly and willfully offering, paying, soliciting, receiving, or providing remuneration, directly or indirectly, in exchange for or to induce either the referral of an individual, or the furnishing, arranging for, or recommending of an item or service that is reimbursable, in whole or in part, by a federal health care program;
	●	the federal False Claims Act (FCA), which imposes liability on any person or entity that, among other things, knowingly presents, or causes to be presented, a false or fraudulent claim for payment to the federal government and which, under its qui tam provisions, allows private litigants (relators) to file claims under seal on behalf of the government and to receive a percentage of recoveries obtained as a result;
	●	the federal Civil Monetary Penalties Law, which prohibits, among other things, the offering or transfer of remuneration to a Medicare or state health care program beneficiary if the person knows or should know it is likely to influence the beneficiary’s selection of a particular provider, practitioner, or supplier of services reimbursable by Medicare or a state health care program, unless an exception applies;
	●	other federal and state fraud and abuse laws, such as anti-kickback laws, prohibitions on self-referral, and false claims acts, which may extend to services reimbursable by any third-party payor, including private insurers;
	●	the Foreign Corrupt Practices Act (FCPA) and other worldwide anti-bribery laws, including those that prohibit companies and their intermediaries from making improper payments to government officials or other third parties for the purpose of obtaining or retaining business, and laws that prohibit commercial bribery;
	●	import, export control and economic sanctions laws and regulations in the U.S. and elsewhere;
	●	Federal securities laws, including provisions of the Exchange Act and Dodd-Frank Act under which whistleblowers that report alleged violations of wrongdoing can obtain up to 30% of related recoveries;
	●	the federal Physician Payments Sunshine Act, which requires manufacturers to track and report to the federal government certain payments and other transfers of value made to physicians and teaching hospitals and ownership or investment interests held by physicians and their immediate family members;
	●	section 216 of the federal Protecting Access to Medicare Act of 2014 (PAMA), which requires applicable laboratories to report private payer data in a timely and accurate manner every three years (and in some cases annually);

	●	the federal Anti-Kickback Statute, which prohibits, among other things, knowingly and willfully soliciting, offering, receiving or providing remuneration, directly or indirectly, in cash or in kind, to induce or reward either the referral of an individual for, or the purchase, order or recommendation of, any good or service, for which payment may be made under federal and state healthcare programs such as Medicare and Medicaid. 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;
	●	the FCA, which imposes criminal and civil penalties, including through civil whistleblower or qui tam actions, against individuals or entities for knowingly presenting, or causing to be presented, to the federal government, claims for payment that are false or fraudulent or making a false statement to avoid, decrease or conceal an obligation to pay money to the federal government. In addition, the government may assert that a claim including items and services resulting from a violation of the federal Anti-Kickback Statute constitutes a false or fraudulent claim for purposes of the FCA;
	●	HIPAA, which imposes criminal and civil liability for executing a scheme to defraud any healthcare benefit program or making false statements relating to healthcare matters. Similar to the federal Anti-Kickback Statute, a person or entity does not need to have actual knowledge of the statute to defraud any healthcare benefit program or specific intent to violate it in order to have committed a violation;
	●	HIPAA, as amended by the Health Information Technology for Economic and Clinical Health Act of 2009 and its implementing regulations, which also imposes obligations on certain covered entity healthcare providers, health plans, and healthcare clearinghouses as well as their business associates that perform certain services involving the use or disclosure of individually identifiable health information, including mandatory contractual terms, with respect to safeguarding the privacy, security and transmission of individually identifiable health information;
	●	federal laws requiring drug manufacturers to report information related to payments and other transfers of value made to physicians and other healthcare providers, as well as ownership or investment interests held by physicians and their immediate family members, including under the federal Open Payments program, commonly known as the Sunshine Act, as well as other state and foreign laws regulating marketing activities; and
	●	state and foreign equivalents of each of the above laws, including state anti-kickback and false claims laws, which may apply to sales or marketing arrangements and claims involving healthcare items or services reimbursed by non-governmental payors, including private insurers; state laws which require pharmaceutical companies to comply with the pharmaceutical industry's voluntary compliance guidelines and the relevant compliance guidance promulgated by the federal government or otherwise restricting payments that may be made to healthcare providers; and state and foreign laws governing the privacy and security of health information in certain circumstances, many of which differ from each other in significant ways and often are not preempted by HIPAA, thus complicating compliance efforts.

	●	The market price of our common stock has historically been highly volatile and we expect it to continue to be volatile, which could result in substantial losses for investors who purchase our shares.
	●	Changes in our ownership could limit our ability to utilize net operating loss carryforwards.

	●	our product candidates may not successfully complete preclinical studies or clinical studies;
	●	a product candidate may, on further study, be shown to have harmful side effects or other characteristics that indicate it is unlikely to be safe or effective or otherwise does not meet applicable regulatory criteria;
	●	our competitors may develop products or therapies that render our product candidates obsolete or less attractive;
	●	the product candidates that we develop may not be sufficiently covered by intellectual property;
	●	the product candidates that we develop may be challenged by third parties’ patents or other intellectual property or exclusive rights;
	●	the market for our product candidates may change so that the continued development of a product candidate is no longer reasonable or commercially attractive;
	●	our product candidates may not be capable of being produced in commercial quantities at an acceptable cost, or at all;
	●	if a product candidate obtains regulatory approval, we may be unable to establish sales and marketing capabilities, or successfully market such approved product candidate, to gain market acceptance; and
	●	a product candidate may not be accepted as safe, effective or useful by patients, the medical community or third-party payors, if applicable.

	●	inability to generate sufficient or necessary preclinical, toxicology, or other in vivo or in vitro data to support the initiation or continuation of clinical studies or to support the filing of a New Drug Application for simufilam;
	●	delays in confirming target engagement, patient selection, or other relevant biomarkers to be utilized in preclinical and clinical product candidate development;
	●	delays in reaching a consensus with regulatory agencies on study design;
	●	delays in reaching an agreement on acceptable terms with prospective clinical study sites, the terms of which can be subject to extensive negotiation and may vary significantly among different clinical study sites;
	●	delays in identifying and recruiting suitable clinical investigators;
	●	delays in obtaining required IRB approval for each clinical study site or adverse action by one or more IRBs;
	●	a new safety finding that presents unreasonable risk to clinical study participants;
	●	a negative finding from an inspection of our CRO, clinical study operations or study sites;
	●	the finding that the investigational protocol or plan is deficient to meet its stated objectives;
	●	delays in identifying, recruiting, and enrolling suitable patients to participate in our clinical studies, and delays caused by patients withdrawing from clinical studies, or failing to return for post-treatment follow-up;
	●	delays caused by disease epidemics, pandemics, or other health crises;
	●	difficulty collaborating with patient groups and investigators;
	●	failure by our CRO or other third parties, or us to adhere to clinical study requirements;
	●	failure to perform in accordance with FDA’s or any other regulatory authority’s Code of Good Clinical Practice (GCP) requirements, or other regulatory guidelines in other countries;
	●	occurrence of adverse events associated with the product candidate that are viewed to outweigh its potential benefits;
	●	changes in regulatory requirements and guidance that require amending or submitting new clinical protocols;
	●	changes in the standard of care on which a clinical development plan was based, which may require new or additional studies;
	●	the cost of clinical studies of our product candidates being greater than we anticipate;
	●	clinical studies of our product candidates producing negative or inconclusive results, which may result in our deciding, or regulators requiring us, to conduct additional clinical studies or abandon product development programs; and
	●	delays in manufacturing, testing, releasing, validating, or importing/exporting sufficient stable quantities of our product candidates for use in clinical studies or the inability to do any of the foregoing.

	●	when the drug is launched into the market and related competition;
	●	approved label claims;
	●	perceptions by members of the healthcare community, including physicians, about the safety, side effects and effectiveness of our drugs;
	●	perceptions by physicians regarding the cost-benefit of our product candidates;
	●	published studies demonstrating the cost effectiveness of our drugs relative to competing products;
	●	availability of reimbursement for our products from government or healthcare payers;
	●	effectiveness of marketing and distribution efforts by us and other licensees and distributors.

	●	meets applicable regulatory standards, in a timely manner or at all;
	●	successfully competes with other technologies and tests;
	●	avoids infringing the proprietary rights of others;
	●	is adequately reimbursed by third-party payors;
	●	can be performed at commercial levels or at reasonable cost; or
	●	can be successfully marketed.

	●	hire and retain the necessary experienced personnel;
	●	build sales, marketing and distribution operations in a cost-effective manner which are capable of successfully launching new drugs;
	●	obtain access to adequate numbers of physicians to prescribe our products; or
	●	generate sufficient product revenues.

	●	FDA or comparable foreign regulatory authorities may disagree with the design, implementation, or results of our clinical studies;
	●	FDA or comparable foreign regulatory authorities may determine that our product candidates are not safe and effective, only moderately effective or have undesirable or unintended side effects, toxicities, or other characteristics that preclude our obtaining marketing approval or prevent or limit commercial use;
	●	the population studied in the clinical program may not be sufficiently broad or representative to assure efficacy and safety in the full population for which we seek approval;
	●	we may be unable to demonstrate to FDA or comparable foreign regulatory authorities that a product candidate’s risk-benefit ratio when compared to the standard of care is acceptable;
	●	FDA or comparable foreign regulatory authorities may disagree with our interpretation of data from preclinical studies or clinical studies;
	●	the data collected from clinical studies of our product candidates may not be sufficient to support the submission of a new drug application (NDA), or other submission or to obtain regulatory approval in the United States or elsewhere;
	●	FDA or comparable foreign regulatory authorities may fail to approve the manufacturing processes, test procedures, and specifications, or facilities of third-party manufacturers with which we contract for clinical and commercial supplies; and
	●	the approval policies or regulations of FDA or comparable foreign regulatory authorities may significantly change in a manner rendering our clinical data insufficient for approval.

	●	comply with the laws of FDA and other comparable foreign regulatory authorities;
	●	provide true, complete, and accurate information to FDA and other comparable foreign regulatory authorities;
	●	comply with manufacturing standards we have established;
	●	comply with healthcare fraud and abuse laws in the U.S. and similar foreign fraudulent misconduct laws;
	●	comply with laws governing the improper use of information obtained in the course of patient recruitment for clinical studies;
	●	report financial or clinical information or data accurately or to disclose unauthorized activities to us; or
	●	otherwise comply with applicable criminal, civil or regulatory laws governing their conduct.

	●	state laws that impose reporting and other compliance-related requirements; and
	●	similar foreign laws and regulations that will apply to us in foreign countries in which we may choose to operate in the future.

	●	others may be able to make products that are similar to our product candidates or utilize similar technology but that are not covered by the claims of the patents that we may own;
	●	we might not have been the first to make the inventions covered by the issued patent or pending patent application that we own now or in the future;
	●	we might not have been the first to file patent applications covering certain of our inventions;
	●	others may independently develop similar or alternative technologies or duplicate any of our technologies without infringing our owned intellectual property rights;
	●	it is possible that our current or future pending patent applications will not lead to issued patents;
	●	issued patents that we hold rights to may be held invalid or unenforceable, including as a result of legal challenges by our competitors or other third parties;
	●	our competitors or other third parties 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 products for sale in our major commercial markets;
	●	we may not develop additional proprietary technologies that are patentable;
	●	the patents of others may harm our business; and
	●	we may choose not to file a patent in order to maintain certain trade secrets or know-how, and a third party may subsequently file a patent covering such intellectual property.

	●	the possible breach of the manufacturing agreement by the third party;
	●	the possible termination or nonrenewal of the agreement by the third party at a time that is costly or inconvenient for us;
	●	reliance on the third party for regulatory compliance, quality assurance, safety, and pharmacovigilance and related reporting; and
	●	the inability to produce required volume in a timely manner and to quality standards.

	●	continue our research and discovery activities;
	●	advance our current and any future product candidates through preclinical and clinical development;
	●	initiate and conduct additional preclinical, clinical, or other studies for our product candidates;
	●	work with our CDMO’s for the manufacture of our product candidates;
	●	seek regulatory approvals and marketing authorizations for our product candidates;
	●	obtain, maintain, protect, defend and enforce our intellectual property portfolio;
	●	attract, hire, and retain qualified personnel;
	●	provide additional internal infrastructure to support our continued research and development operations and any planned commercialization efforts in the future;
	●	experience any delays or encounter other issues related to our operations;
	●	meet the requirements and demands of being a public company; and
	●	defend against litigation, claims or other uncertainties that may arise from allegations made against us or our collaborators.

	●	completing research and preclinical and clinical development of our product candidates;
	●	obtaining regulatory approvals and marketing authorizations for product candidates for which we successfully complete clinical development;
	●	developing a sustainable and scalable manufacturing process for our product candidates, as well as establishing and maintaining commercially viable supply relationships with third parties that can provide adequate products and services to support clinical activities and commercial demand for our product candidates;
	●	identifying, assessing, acquiring, and/or developing new product candidates;
	●	negotiating favorable terms in any collaboration, licensing, or other arrangements into which we may enter;
	●	addressing any competing technological and market developments;
	●	maintaining, protecting, expanding, and enforcing our portfolio of intellectual property rights, including patents, trade secrets, and know-how; and
	●	attracting, hiring, and retaining qualified personnel.

	●	the success of existing or new competitive products or technologies;
	●	the timing and results of clinical studies for our current product candidates and any future product candidates that we may develop;
	●	failure or discontinuation of any of our product development and research programs;
	●	results of preclinical studies, clinical studies, or regulatory approvals of product candidates of our competitors, or announcements about new research programs or product candidates of our competitors;
	●	regulatory or legal developments in the United States and other countries;
	●	developments or disputes concerning patent applications, issued patents, or other proprietary rights;
	●	the recruitment or departure of key personnel;
	●	the level of expenses related to any of our research programs, clinical development programs, or product candidates that we may develop;
	●	the results of our efforts to develop additional product candidates or products;
	●	actual or anticipated changes in estimates as to financial results or development timelines;
	●	announcement or expectation of additional financing efforts;
	●	sales of our common stock by us, our insiders, or other stockholders;
	●	Short selling of our stock, in which a seller sells shares of our stock that the seller has borrowed from a third party, which often occurs when a short seller expects the price of our common stock to decline;
	●	variations in our financial results or those of companies that are perceived to be similar to us;
	●	changes in estimates or recommendations by securities analysts, if any, that cover our stock;
	●	market conditions in the pharmaceutical and biotechnology sectors;
	●	general economic, industry, and market conditions; and
	●	securities litigation, regardless of merit.

	●	engage with, and satisfactorily respond to, requests for additional information from the FDA concerning the clinical hold on our IND application for simufilam in TSC-related epilepsy;
	●	conduct other preclinical and clinical studies for our product candidates, including simufilam for TSC-related epilepsy;

	Years ended December 31,
	2025		2024		2023

Phase 2 and Phase 3 clinical trials	$	8,148	$	42,321	$	71,087
Pre-clinical and Phase 1 studies		2,485		5,109		6,425
Chemical, Manufacturing and Controls costs (“CMC costs”)		1,853		6,464		2,910
Personnel related		5,184		6,640		5,723
Stock-based compensation		7,159		6,492		2,050
Other		1,761		2,611		1,228
	$	26,590	$	69,637	$	89,423

	Page
Report of Independent Registered Public Accounting Firm (PCAOB ID: 42)	75
Consolidated Balance Sheets	77
Consolidated Statements of Operations	78
Consolidated Statements of Stockholders’ Equity	79
Consolidated Statements of Cash Flows	80
Notes to Consolidated Financial Statements	81

	*Loss Contingencies*

Description of the Matter	The Company is subject to lawsuits, claims, allegations, and investigations regarding the Company’s terminated clinical trials related to simufilam and SavaDx. As described in Note 12 to the consolidated financial statements, such lawsuits, claims, allegations and investigations can have an adverse impact on the Company and its consolidated financial statements. During the year ended December 31, 2025, the Company recorded loss contingencies of $35.25 million, for certain of its legal matters described in Note 12. With respect to the remaining matters described in Note 12 regarding simufilam and SavaDx, the Company believes that the likelihood of an unfavorable outcome is not probable, however, it is reasonably possible that the Company may incur a loss. For those matters, the Company is unable to reasonably estimate the amount or range of potential loss at December 31, 2025. Auditing management’s accounting for, and disclosure of, loss contingencies related to the lawsuits, claims, allegations and investigations was challenging because management’s evaluation of the likelihood of loss required judgment.

How We Addressed the Matter in Our Audit	Our audit procedures included gaining an understanding of the status of ongoing lawsuits and investigations, reading the meeting minutes of the board of directors and of the committees of the board of directors, reading summaries of the proceedings and related correspondence. We also obtained executed and pending settlement agreements, requested letters from internal and external legal counsel, inquired of internal and external legal counsel for developments related to the lawsuits, claims, allegations and investigations, vouched payments to third party evidence and obtained written representations from the Company on these matters. We also evaluated the Company’s disclosures in relation to these matters.

	*December 31,*
	*2025*			*2024*

*ASSETS*
Current assets:
Cash and cash equivalents	$	95,502		$	128,574
Prepaid expenses and other current assets		2,207			7,958
Total current assets		97,709			136,532
Property and equipment, net		20,646			21,001
Total assets	$	118,355		$	157,533

*LIABILITIES AND STOCKHOLDERS' EQUITY*
Current liabilities:
Accounts payable and other accrued expenses	$	41,647		$	7,654
Accrued development expense		364			2,440
Accrued compensation and benefits		1,625			1,357
Other current liabilities		198			299
Total current liabilities		43,834			11,750
Other non-current liabilities		118			79
Total liabilities		43,952			11,829
Commitments and contingencies (Notes 10, 11 and 12)
Stockholders' equity:
Preferred stock, $0.001 par value; 10,000,000 shares authorized, none issued and outstanding		—			—
Common stock, $0.001 par value; 120,000,000 shares authorized; 48,307,896 and 48,203,179 shares issued and outstanding at December 31, 2025 and 2024, respectively		48			48
Additional paid-in capital		570,439			550,767
Accumulated deficit		(496,084	)		(405,111	)
Total stockholders' equity		74,403			145,704
Total liabilities and stockholders' equity	$	118,355		$	157,533

	*Years ended December 31,*
	*2025*			*2024*			*2023*
Operating expenses:
Research and development	$	26,590		$	69,637		$	89,423
General and administrative		68,800			71,809			16,534
Total operating expenses		95,390			141,446			105,957
Operating loss		(95,390	)		(141,446	)		(105,957	)
Interest income		4,620			8,510			7,833
Other income (loss), net		(203	)		411			907
Gain from change in fair value of warrant liabilities		—			108,183			—
Net loss	$	(90,973	)	$	(24,342	)	$	(97,217	)

Shares used in computing net loss per share, basic		48,297			46,329			41,932
Net loss per share, basic	$	(1.88	)	$	(0.53	)	$	(2.32	)
Numerator, diluted:
Net loss	$	(90,973	)	$	(24,342	)	$	(97,217	)
Adjustment for change in fair value of warrant liabilities		—			(43,793	)		—
Adjusted numerator, diluted	$	(90,973	)	$	(68,135	)	$	(97,217	)
Shares used in computing net loss per share, diluted		48,297			46,604			41,932
Net loss per share, diluted	$	(1.88	)	$	(1.46	)	$	(2.32	)