3 unchanged sentences
Risks Related to Financial Position and Need for Additional Capital
+Added: We have identified conditions and events that raise substantial doubt regarding our ability to continue as a going concern.
+Added: As of December 31, 2025, we had $28.8 million in cash, cash equivalents and restricted cash.
+Added: Based on our existing cash, cash equivalents and lack of current availability under our funding facilities, we do not believe we have sufficient cash on hand to support current operations and service our debt obligations for at least one year from the date of issuance of the audited consolidated financial statements appearing in this Annual Report on Form 10-K (this “Annual Report”).
+Added: This condition raises substantial doubt about our ability to continue as a going concern for at least one year from the date that our financial statements for the year ended December 31, 2025 are issued.
+Added: In order to mitigate liquidity issues, we have undertaken the Clinical Reprioritization and other restructuring actions, and may, among other things, seek to raise capital through the issuance of common stock, or by restructuring, refinancing, and/or amending the terms of the Credit Agreement (including with respect to regulatory related events of default that do not contain a cure period) or pursue other strategic alternatives.
+Added: However, such transactions may not be successful and we may not be able to raise additional equity and/or financing necessary to meet our obligations.
+Added: Our Credit Agreement (as defined below) contains, among other things, a covenant requiring that our audited annual financial statements be delivered without a "going concern" or like qualification or exception.
+Added: On March 27, 2026, we entered into the Ninth Amendment to the Credit Agreement (the “Ninth Amendment”), which included, among other things, (i) a waiver of the “going concern” qualification for our audited annual financial statements for the year ended December 31, 2025 and (ii) a $2.5 million reduction in the Credit Agreement’s minimum liquidity covenant.
+Added: In connection with the Ninth Amendment we agreed to (i) make a one-time prepayment of the principal amount of $2.5 million, together with accrued and unpaid interest thereon, by March 31, 2026, (ii) on or prior to April 15, 2026, at the Company’s option either (A) pay the Lenders (as defined below) an amendment fee of approximately $2.0 million or (B) grant warrants to the Lenders to purchase up to 1,353,729 shares of our common stock, at an exercise price of $0.01 per share and (iii) following receipt of aggregated gross proceeds following the effective date of the Ninth Amendment from (a) the issuance of the Company’s common stock, warrants and/or pre-funded warrants, (b) non-refundable cash consideration from partnering transactions, (c) the issuance of the Company’s subordinated debt and/or (d) sales by the Company of its assets, in each case ((a) through (d)), in transactions permitted under the Credit Agreement (“Capital Raise Activities”), make a prepayment of the loans under the Credit Agreement in an aggregate principal amount equal to 50% of such gross cash proceeds, together with accrued interest thereon and any fees or premia (including prepayment premium) payable in connection therewith;
+Added: provided that such prepayment requirement shall not be applicable (A) with respect to the first $2.5 million gross proceeds received from Capital Raise Activities and (B) once the aggregate principal amount of the prepaid pursuant to one or more of such prepayments equals $2.5 million.
+Added: Even with the Ninth Amendment, we face short term financing pressure and there is no assurance that we will be able to raise sufficient capital to fund our continuing operations and remain in compliance with our minimum liquidity covenant.
+Added: For additional cost-saving and other strategic initiatives we may be compelled to pursue, see the risk factor entitled, “We will need substantial additional funding, and if we are unable to raise capital when needed, we could be forced to delay, reduce or eliminate our product development programs or commercialization efforts or otherwise seek strategic alternatives.”
We have a limited operating history and have not generated substantial product revenues to date, which may make it difficult to evaluate the success of our business and to assess our future viability.
We were incorporated in March 2017 and our operations to date have been largely focused on staffing our Company, raising capital, advancing the development of our product candidates, including conducting clinical and preclinical studies and establishing our commercial organization.
−Removed: We have only one product approved for commercial sale, and have limited experience in obtaining marketing approvals, manufacturing products on a commercial scale, and conducting sales and marketing activities necessary for successful commercialization.
+Added: We have only one product approved for commercial
+Added: sale, and have limited experience in obtaining marketing approvals, manufacturing products on a commercial scale, and conducting sales and marketing activities necessary for successful commercialization.
Consequently, predictions about our future success or viability may not be as accurate as they could be if we had a longer operating history or a history of successfully commercializing products.
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If we are required by the FDA, or other regulatory authorities such as the European Medicines Agency (“EMA”) to perform studies and trials in addition to those currently expected, or if there are any delays in the development, or in the completion of any planned or future preclinical studies or clinical trials of our current or future product candidates, our expenses could increase and profitability could be further delayed.
−Removed: For example, developments with respect to our TRANQUILITY program evaluating BXCL501 in patients with dementia due to probable Alzheimer’s disease may increase the likelihood that we experience such costs or delays, as discussed in the risk factor below entitled:
+Added: For example, developments with respect to our TRANQUILITY program evaluating BXCL501 in patients with dementia due to probable Alzheimer’s disease may increase the likelihood that we
+Added: experience such costs or delays, as discussed in the risk factor below entitled:
“ Developments relating to our TRANQUILITY II Phase 3 trial may impact the timing of our development plans for, and prospects for seeking or obtaining regulatory approval of, BXCL501 for the acute treatment of agitation (non-daily) associated with dementia in patients with probable Alzheimer’s disease .”
2 unchanged sentences
A decline in the value of our Company also could cause you to lose all or part of your investment.
−Removed: Our strategic reprioritization and other workforce reductions may not achieve our intended outcome.
−Removed: In August 2023, we announced a broad-based strategic reprioritization (the “Reprioritization”) and have taken further restructuring actions since then.
−Removed: As part of these efforts, we have taken actions to reduce certain operational and workforce expenses that are no longer deemed core to our ongoing operations in order to extend our cash runway and drive innovation and growth in high potential clinical development and value creating opportunities.
−Removed: These actions include a shift in commercial strategy for IGALMI ® in the institutional setting, a reduction of in-hospital commercialization expenses, a suspension of programs no longer determined to be core to ongoing operations, and a prioritization on at-home treatment setting opportunities for BXCL501.
−Removed: As part of this strategy, we reduced our workforce in 2023 by approximately 60%.
−Removed: In May and September 2024, we initiated further workforce reductions, and we may undertake further similar cost-saving initiatives, which may include additional restructuring or workforce reductions.
−Removed: These types of cost-reduction activities can be complex and result in unintended consequences and costs, including decreased employee morale, loss of institutional knowledge and expertise and adversely impact our business.
−Removed: We completed these additional restructuring actions to further reduce the workforce by 50%, ending the year ended December 31, 2024 with 37 full-time employees.
−Removed: The reduction in force may result in unintended consequences and costs, such as the loss of institutional knowledge and expertise, attrition beyond the intended number of employees, decreased morale among our remaining employees, and the risk that we may not achieve the anticipated benefits of the reduction in force.
−Removed: In addition, while positions have been eliminated, certain functions necessary to our operations remain, and we may be unsuccessful in distributing the duties and obligations of departed employees among our remaining employees.
−Removed: The reduction in workforce could also make it difficult for us to pursue, or prevent us from pursuing, new opportunities and initiatives due to insufficient personnel, or require us to incur additional and unanticipated costs to hire new personnel to pursue such opportunities or initiatives.
−Removed: The workforce reduction could also harm our reputation, making our ability to recruit skilled personnel difficult.
−Removed: If we are unable to realize the anticipated benefits from the reduction in force, or if we experience significant adverse consequences from the reduction in force, our business, financial condition, and results of operations may be materially adversely affected.
−Removed: In addition, we may not realize the benefits of or there may be unanticipated costs associated with our Reprioritization.
−Removed: As a result of the Reprioritization, including our strategic refocus, we may not generate material revenues from IGALMI ® in the near term because our commercial force will be significantly reduced.
−Removed: If we are unable to commercialize IGALMI ® in a different setting or unable to develop, receive marketing approval for and successfully commercialize BXCL501, BXCL701 and any of our other product candidates on our own or with any future collaborator, or experience delays because of any of these factors or otherwise, our business could be materially and substantially harmed.
−Removed: In addition, because we have limited financial and managerial resources, under our Reprioritization, we intend to focus on specific product candidates, indications and development programs.
−Removed: We may also conduct several clinical trials for our product candidates in parallel over the next several years, which may make our decision as to which product candidates to focus on more difficult.
−Removed: As a result, we may forgo or delay pursuit of opportunities with other product candidates or other indications that could have had greater commercial potential or likelihood of success.
−Removed: Our resource allocation decisions may cause us to fail to capitalize on viable commercial products or profitable market opportunities.
−Removed: Our spending on current and future research and development programs and product candidates for specific indications may not yield any commercially viable products.
−Removed: If we do not accurately evaluate the commercial potential or target market for a particular product candidate, we may relinquish valuable rights to that product candidate through future collaborations, licenses and other similar arrangements in cases in which it would have been more advantageous for us to retain sole development and commercialization rights to such product candidate.
−Removed: If we are not successful in increasing our efficiency as a result of this Reprioritization, our efforts to develop and commercialize our product candidates may be delayed or halted and our business could be materially adversely impacted.
We will need substantial additional funding, and if we are unable to raise capital when needed, we could be forced to delay, reduce or eliminate our product development programs or commercialization efforts or otherwise seek strategic alternatives.
−Removed: In addition, the failure to raise additional financing in accordance with the minimum capital raising requirements of our Credit Agreement (as defined herein) would trigger an event of default thereunder.
We will require additional future funding to support current and anticipated future expenses.
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If such institutions were to close, we may not be able to recover all of our cash or cash equivalents held at such institutions.
−Removed: Moreover, market volatility, credit crises, adverse macroeconomic conditions, such as high interest or inflation rates, or other factors, as well as Company-specific factors such as the progress of our development pipeline, adverse clinical events or results, regulatory investigations, or ongoing or potential legal proceedings, could also adversely impact our ability to access capital as and
+Added: Moreover, market volatility, credit crises, adverse macroeconomic conditions, such as high interest or inflation rates, or other factors, as well as Company-specific factors such as the progress of our development pipeline, adverse clinical events or results, regulatory investigations, or ongoing or potential legal proceedings, could also adversely impact our ability to access capital as and when needed.
Our failure to raise capital as and when needed would have a negative impact on our financial condition and our ability to pursue our business strategy.
−Removed: Management believes that the Company’s cash and cash equivalents of $29.8 million as of December 31, 2024, together with approximately $14.0 million gross proceeds received from the registered direct offering in March 2025, will allow the Company to fund its operations and meet its liquidity requirements into the third quarter of 2025.
−Removed: However, there can be no assurance that we will be able to extend our cash runway by meeting the conditions for additional funding under the terms of our Credit Agreement (defined below) or otherwise.
−Removed: In addition, the failure to raise additional financing in accordance with the minimum capital raising requirements of our Credit Agreement would trigger an event of default thereunder.
−Removed: The Fifth Amendment to our Credit Agreement included a new capital raising covenant requiring that the Company receive (A) after the effective date of the Fifth Amendment and on or prior to November 27, 2024, at least $7.0 million in gross cash proceeds from the issuance of the Company’s common stock, warrants and/or pre- funded warrants (“Raise 1”), (B) after the effective date of the Fifth Amendment and on or before March 15, 2025 (provided that the Company was required to use its commercially reasonable efforts to satisfy the requirement by February 15, 2025), at least $18.0 million in net cash proceeds (including the proceeds of Raise 1) from (i) the issuance of the Company’s common stock, warrants and/or pre-funded warrants, (ii) non-refundable cash consideration from partnering transactions entered into after the effective date of the Fifth Amendment (so long as such partnering transactions would not require the Company or any of its subsidiaries to make any cash investments in connection with the partnering transactions and no such cash investments are made), (iii) the issuance of the Company’s subordinated debt (subject to terms set forth in the Fifth Amendment), and/or (iv) asset sales permitted pursuant to the Credit Agreement or consented to by the Lenders (such capital raise, “Raise 2”), and (C) after the effective date of the Fifth Amendment and on or prior to the earlier of (x) August 15, 2025 and (y) the date that is 30 days after the final data readout of the SERENITY At-Home Phase 3 trial, at least $29.0 million in net cash proceeds (“Raise 3”) (including the proceeds from Raise 1 and Raise 2) from the same permitted capital raising activities listed in the preceding clause (B).The Company has met the requirements of Raise 1 and Raise 2, but has not met the requirements of Raise 3.
−Removed: In connection with the Fifth Amendment and the required capital raises described in the preceding paragraph, the Lenders agreed to modify the Credit Agreement’s minimum liquidity covenant to require minimum cash liquidity of $7.5 million (instead of $25.0 million) from and after the closing of Raise 1 until March 30, 2025.
−Removed: On March 31, 2025, the minimum liquidity amount will increase to $10.0 million, and on September 30, 2025, the minimum liquidity amount will further increase to $15.0 million.
+Added: Management believes that the Company’s cash, cash equivalents and restricted cash of $28.8 million as of December 31, 2025, plus the $0.5 million of gross proceeds from sales pursuant to the Company ATM Program after December 31, 2025, as well as the $8.0 million of gross proceeds received by the Company in its registered direct offering in March 2026, will allow the Company to fund its operations and meet its liquidity requirements into the second quarter of 2026.
+Added: There can be no assurance that we will be able to extend our cash runway.
Furthermore, our estimate as to how long we expect our existing cash to be able to continue to fund our operations is based on assumptions that may prove to be wrong, and we could use our available capital resources sooner than we currently expect.
−Removed: Further, changing circumstances, some of which may be beyond our control, could cause us to consume capital significantly faster than we currently anticipate, and we may need to seek additional funds sooner than planned.
+Added: Further, changing circumstances, some of which may be beyond our control, could cause us to
+Added: consume capital significantly faster than we currently anticipate, and we may need to seek additional funds sooner than planned.
Our future funding requirements, both short-term and long-term, will depend on many factors, including:
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Restrictive covenants in the Credit Agreement place limits on our ability to conduct our business.
−Removed: The Credit Agreement contains customary representations and warranties and customary affirmative and negative covenants, including, among other things, restrictions on indebtedness, liens, investments, mergers, dispositions, prepayment of other indebtedness, and dividends and other distributions, subject to certain exceptions, including specific exceptions with respect to product commercialization and development activities.
+Added: The Credit Agreement contains customary representations and warranties and customary affirmative and negative covenants, including, among other things, restrictions on indebtedness, liens, investments, mergers, dispositions, prepayment of
+Added: other indebtedness, and dividends and other distributions, subject to certain exceptions, including specific exceptions with respect to product commercialization and development activities.
In addition, certain events, including receipt of a warning letter from the FDA, may constitute an event of default.
We must also comply with certain covenants under the Credit Agreement, including a financial covenant that requires we maintain certain minimum cash liquidity amounts.
−Removed: In addition, certain events, including certain regulatory events and any “going concern” or similar qualification in a report of the Company’s independent registered public accountants relating to the Company’s annual financial statements (except for the years ended December 31, 2024 and 2023, respectively), constitute an event of default under the Credit Agreement.
−Removed: The report of our independent registered public accounting firm included in this Annual Report on Form 10-K contains a “going concern” explanatory paragraph.
+Added: In addition, certain events, including certain regulatory events and any “going concern” or similar qualification in a report of the Company’s independent registered public accountants relating to the Company’s annual financial statements (except for the years ended December 31, 2023, 2024 and 2025, which have been waived pursuant to the Ninth Amendment), constitute an event of default under the Credit Agreement.
The Credit Agreement also includes other covenants relating to certain change of control events can also trigger an event of default under the Credit Agreement, including control by any entity or group of entities, other than BioXcel LLC and its affiliates, that acquires 35% or more of our voting capital stock.
+Added: The Credit Agreement also contains a minimum liquidity covenant that, as of September 30, 2025, requires us to maintain at all times at least $15.0 million of unrestricted cash and cash equivalents, which was reduced to $12.5 million of unrestricted cash and cash equivalents in the Ninth Amendment.
+Added: Additionally, pursuant to the Fifth Amendment to our Credit Agreement, we are required to make quarterly amortization payments equal to 5.0% of the principal amount outstanding under the Credit Agreement, together with applicable prepayment fees, beginning on March 31, 2026.
+Added: These covenants may limit our flexibility in operating our business and our ability to take actions that might be advantageous to us and our shareholders.
Our ability to make scheduled payments or payments to maintain compliance with covenants or to restructure or refinance these and other outstanding debt obligations depends on our financial and operating performance, including growth in revenue from IGALMI ® and BXCL501, which will be affected by prevailing economic, industry and competitive conditions and by financial, business and other factors beyond our control.
−Removed: A failure to pay our debt, fixed costs and other obligations or a breach of our contractual obligations or other event of default could result in a variety of adverse consequences, including the acceleration of our obligations or the exercise of remedies by our creditors and lessors.
−Removed: In such a situation, it is unlikely that we would be able to cure our breach, fulfill our obligations, make required
−Removed: payments or otherwise cover our fixed costs, which would have a material adverse effect on our business, results of operations and financial condition.
+Added: A failure to pay our debt, fixed costs and other obligations or a breach of our contractual obligations or other event of default could result in a variety of adverse consequences, including the acceleration of our obligations or the exercise of remedies by our creditors and lessors or otherwise exercise the rights of a secured creditor.
+Added: In such a situation, it is unlikely that we would be able to cure our breach, fulfill our obligations, make required payments or otherwise cover our fixed costs, which would have a material adverse effect on our business, results of operations and financial condition.
In addition, historically we have relied on debt and equity financings as our primary sources of liquidity.
If our future cash flows and capital resources are insufficient to fund our debt service obligations, we may be forced to reduce or delay expenditures, sell assets, seek additional capital or seek to restructure or refinance our indebtedness.
+Added: Additionally, under the terms of the Ninth Amendment, following receipt of aggregated gross proceeds from Capital Raise Activities, we have agreed to make a prepayment of the loans under the Credit Agreement in an aggregate principal amount equal to 50% of such gross cash proceeds, together with accrued interest thereon and any fees or premia (including prepayment premium) payable in connection therewith;
+Added: provided that such prepayment requirement shall not be applicable (A) with respect to the first $2.5 million gross proceeds received from Capital Raise Activities and (B) once the aggregate principal amount of the prepaid pursuant to one or more of such prepayments equals $2.5 million.
Any refinancing or restructuring of our indebtedness could be at higher interest rates and may require us to comply with more onerous covenants.
1 unchanged sentence
In the absence of such cash flows and resources, we could face substantial liquidity problems and might be required to sell material assets or pursue other strategic alternatives to attempt to meet our debt service obligations.
−Removed: We have identified conditions and events that raise substantial doubt regarding our ability to continue as a going concern.
−Removed: As of December 31, 2024, we had $29.8 million in cash and cash equivalents.
−Removed: Based on our existing cash, cash equivalents and lack of current availability under our funding facilities, we do not believe we have sufficient cash on hand to support current operations and service our debt obligations for at least one year from the date of issuance of the audited consolidated financial statements appearing in this Annual Report on Form 10-K.
−Removed: This condition raises substantial doubt about our ability to continue as a going concern for at least one year from the date that our financial statements for the year ended December 31, 2024 are issued.
−Removed: In order to mitigate the current and potential future liquidity issues, we have undertaken the Reprioritization and other restructuring actions, and may, among other things, seek to raise capital through the issuance of common stock, or by restructuring, refinancing, and/or amending the terms of the Credit Agreement (including with respect to regulatory related events of default that do not contain a cure period) or pursue other strategic alternatives.
−Removed: However, such transactions may not be successful and we may not be able to raise additional equity and/or financing necessary to meet our obligations.
−Removed: Moreover, our Credit Agreement contains covenants that we may be unable to comply with and which could result in the acceleration of our debt service obligations, further reducing our capital resources and ability to fund our operations.
−Removed: As such, there can be no assurance that we will be able to continue as a going concern and we may be forced to delay, reduce or discontinue our product development programs or commercialization efforts in order to preserve cash.
−Removed: For additional cost-saving and other strategic initiatives we may be compelled to pursue, see the risk factor entitled, “We will need substantial additional funding, and if we are unable to raise capital when needed, we could be forced to delay, reduce or eliminate our product development programs or commercialization efforts or otherwise seek strategic alternatives.”
−Removed: We could be delisted from The Nasdaq Capital Market, which could seriously harm the liquidity of our stock and our ability to raise capital or complete a strategic transaction.
−Removed: As previously reported, on September 20, 2024, we received a letter from Nasdaq Staff notifying us that for the 30 consecutive business days prior to the date of the letter, the Company’s market value of listed securities closed below the minimum $35 million requirement for continued listing on The Nasdaq Capital Market under Nasdaq Listing Rule 5550(b)(2).
−Removed: In accordance with Nasdaq Listing Rule 5810(c)(3)(C), the Company was granted a period of 180 calendar days, or until March 19, 2025, to regain compliance.
−Removed: As anticipated, on March 20, 2025, the Company received another letter from the Staff stating that, as a result of the Company’s continued non-compliance with the MVLS Requirement, its securities would be delisted from Nasdaq unless the Company appeals the Staff’s delisting determination by requesting a hearing before the Nasdaq Panel.
−Removed: The Company made timely request for a hearing before the Panel to appeal the Staff’s determination.
−Removed: The Company’s common stock will remain listed and eligible for trading on Nasdaq at least pending the ultimate conclusion of the hearing process;
−Removed: however, there can be no assurance that the Company will ultimately regain compliance and remain listed on Nasdaq.
−Removed: If our common stock is delisted by Nasdaq, the price of our common stock may decline and our common stock may be eligible to be quoted on the OTC Bulletin Board, another over-the-counter quotation system, or on the pink sheets, which would negatively affect the liquidity of our common stock and an investor may find it more difficult to dispose of
−Removed: their common stock or obtain accurate quotations as to the market value of our common stock.
−Removed: Any such delisting action may materially adversely affect our ability to raise capital or pursue strategic transactions on acceptable terms, or at all.
−Removed: In addition, if our common stock is delisted from the Nasdaq Capital Market and the trading price remains below $5.00 per share, trading in our common stock might also become subject to the requirements of certain rules promulgated under the Exchange Act, which require additional disclosure by broker-dealers in connection with any trade involving a stock defined as a “penny stock” (generally, any equity security not listed on a national securities exchange that has a market price of less than $5.00 per share, subject to certain exceptions).
−Removed: We continue to actively monitor our performance with respect to the listing standards and will consider available options to resolve any deficiency and maintain compliance with the Nasdaq rules.
−Removed: There can be no assurance that we will be able to maintain compliance or, if we fall out of compliance, regain compliance with any deficiency, or if we implement an option that regains our compliance, maintain compliance thereafter.
+Added: Our Clinical Reprioritization and other workforce reductions may not achieve our intended outcome.
+Added: In August 2023, we announced a broad-based strategic clinical reprioritization (the “Clinical Reprioritization”) and have taken further restructuring actions since then.
+Added: As part of these efforts, we have taken actions to reduce certain operational and workforce expenses that are no longer deemed core to our ongoing operations in order to extend our cash runway and drive innovation and growth in high potential clinical development and value creating opportunities.
+Added: These actions include a shift in commercial strategy for IGALMI ® in the institutional setting, a reduction of in-hospital commercialization expenses, a suspension of programs no longer determined to be core to ongoing operations, and a prioritization on at-home treatment setting opportunities for BXCL501.
+Added: As part of this strategy, we reduced our workforce in 2023 by approximately 60%.
+Added: In May and September 2024, we initiated further workforce reductions, and we may undertake further similar cost-saving initiatives, which may include additional restructuring or workforce reductions.
+Added: These types of cost-reduction activities can be complex and result in unintended consequences and costs, including decreased employee morale, loss of institutional knowledge and expertise and adversely impact our business.
+Added: We completed these additional restructuring actions to further reduce the workforce by 50%, ending the year ended December 31, 2024 with 37 full-time employees.
+Added: The reduction in force may result in unintended consequences and costs, such as the loss of institutional knowledge and expertise, attrition beyond the intended number of employees, decreased morale among our remaining employees, and the risk that we may not achieve the anticipated benefits of the reduction in force.
+Added: In addition, while positions have been eliminated, certain functions necessary to our operations remain, and we may be unsuccessful in distributing the duties and obligations of departed employees among our remaining employees.
+Added: The reduction in workforce could also make it difficult for us to pursue, or prevent us from pursuing, new opportunities and initiatives due to insufficient personnel, or require us to incur additional and unanticipated costs to hire new personnel to pursue such opportunities or initiatives.
+Added: The workforce reduction could also harm our reputation, making our ability to recruit skilled personnel difficult.
+Added: If we are unable to realize the anticipated benefits from the reduction in force, or if we experience significant adverse consequences from the reduction in force, our business, financial condition, and results of operations may be materially adversely affected.
+Added: In addition, we may not realize the benefits of or there may be unanticipated costs associated with our Clinical Reprioritization.
+Added: As a result of the Clinical Reprioritization, including our strategic refocus, we may not generate material revenues from IGALMI ® in the near term because our commercial force will be significantly reduced.
+Added: If we are unable to commercialize IGALMI ® in a different setting or unable to develop, receive marketing approval for and successfully commercialize BXCL501, BXCL701 and any of our other product candidates on our own or with any future collaborator, or experience delays because of any of these factors or otherwise, our business could be materially and substantially harmed.
+Added: In addition, because we have limited financial and managerial resources, under our Clinical Reprioritization, we intend to focus on specific product candidates, indications and development programs.
+Added: We may also conduct several clinical trials for our product candidates in parallel over the next several years, which may make our decision as to which product candidates to focus on more difficult.
+Added: As a result, we may forgo or delay pursuit of opportunities with other product candidates or other indications that could have had greater commercial potential or likelihood of success.
+Added: Our resource allocation decisions may cause us to fail to capitalize on viable commercial products or profitable market opportunities.
+Added: Our spending on current and future research and development programs and product candidates for specific indications may not yield any commercially viable products.
+Added: If we do not accurately evaluate the commercial potential or target market for a particular product candidate, we may relinquish valuable rights to that product candidate through future collaborations, licenses and other similar arrangements in cases in which it would have been more advantageous for us to retain sole development and commercialization rights to such product candidate.
+Added: If we are not successful in increasing our efficiency as a result of this Clinical Reprioritization, our efforts to develop and commercialize our product candidates may be delayed or halted and our business could be materially adversely impacted.
Risks Related to the Discovery and Development of Product Candidates
11 unchanged sentences
The FDA concluded that the inspection of a single site in its TRANQUILITY II Phase 3 trial is closed under 21 C.F.R.20.64(d)(3) and released the Establishment Inspection Report.
−Removed: The FDA has designated “Voluntary Action Indicated” for the site.
+Added: The FDA has designated “Voluntary Action Indicated” for the site, which means objectionable conditions or practices were found without significant public health risks, but the agency is not prepared to take or recommend any administrative or regulatory action.
In May 2023, it came to our attention that this same principal investigator in the TRANQUILITY II clinical trial may have fabricated email correspondence around the time of the FDA inspection, purporting to demonstrate that the investigator timely submitted to our pharmacovigilance safety vendor a report of an SAE from a different subject than the one cited in the FDA Form-483, and purporting to show that the vendor had confirmed receipt.
11 unchanged sentences
While we believe that we have generated sufficient data to demonstrate such consistency, and we plan to submit these data and analyses to the FDA, if the FDA disagrees, it may require that we provide more information to demonstrate reliability in the measurement of PEC scores and/or may require that we generate additional data to support the reliability of PEC score measurements in our TRANQUILITY II trial.
−Removed: There can be no assurances that any information or and data we provide to FDA will sufficiently demonstrate the consistency and reliability of the PEC-score data from our TRANQUILITY II trial, or that our PEC-score data will not represent a potential review issue in connection with any application we may submit to FDA.
+Added: There can be no assurances that any information or data we provide to FDA will sufficiently demonstrate the consistency and reliability of the PEC-score data from our TRANQUILITY II trial, or that our PEC-score data will not represent a potential review issue in connection with any application we may submit to FDA.
In addition, we are continuing to seek feedback from the FDA with respect to our TRANQUILITY program.
12 unchanged sentences
Any new clinical trials conducted in our target patient populations may have different safety or efficacy results from the topline data the Company previously announced for the TRANQUILITY II clinical trial.
−Removed: Further, any government investigation, disqualification, or debarment of, or proceeding or action against the principal investigator, or any government investigation, proceeding or action against us, could further delay development
−Removed: and approval of BXCL501 for this indication, and otherwise have a material adverse effect on us, our financial condition (including triggering a potential event of default under our Credit Agreement), results of operations and prospects.
−Removed: We have limited clinical data supporting potential safety or efficacy of BXCL501 for use in the at-home setting in the acute treatment of agitation in patients with dementia due to probable Alzheimer’s disease.
−Removed: In August 2023, we announced our intention to pursue the Reprioritization, including among other things, a shift in focus to primarily develop BXCL501 for use in expanded settings, including the at-home setting and care facilities, for the acute treatment of agitation in patients with dementia due to probable Alzheimer’s disease and the acute treatment of agitation in schizophrenia and bipolar patients in the at-home setting.
−Removed: Although we have conducted several clinical trials that evaluated BXCL501 in the institutional setting, and we are conducting the SERENITY At-Home Phase 3 trial evaluating the safety of BXCL501 for the acute treatment of agitation associated with bipolar disorders or schizophrenia in the at-home setting, but we have not conducted a clinical trial evaluating the at-home use of BXCL501 in the acute treatment of agitation in patients with dementia due to probable Alzheimer’s disease.
−Removed: Although we will seek additional feedback from the FDA regarding the potential of its ongoing or completed clinical trials to support submission of one or more sNDAs and to support a label for use in the home, it is possible that the FDA may not consider our available data adequate to support such submissions.
+Added: Further, any government investigation, disqualification, or debarment of, or proceeding or action against the principal investigator, or any government investigation, proceeding or action against us, could further delay development and approval of BXCL501 for this indication, and otherwise have a material adverse effect on us, our financial condition (including triggering a potential event of default under our Credit Agreement), results of operations and prospects.
+Added: We have limited clinical data supporting potential safety or efficacy of BXCL501 for use in the at-home setting in the acute treatment of agitation in patients with dementia due to probable Alzheimer’s disease and patients with schizophrenia and bipolar patients.
+Added: In August 2023, we announced our intention to pursue the Clinical Reprioritization, including among other things, a shift in focus to primarily develop BXCL501 for use in expanded settings, including the at-home setting and care facilities, for the acute treatment of agitation in patients with dementia due to probable Alzheimer’s disease and the acute treatment of agitation in schizophrenia and bipolar patients in the at-home setting.
+Added: Although we have conducted several clinical trials that evaluated BXCL501 in the institutional setting, and we have conducted the SERENITY At-Home Phase 3 trial evaluating the safety of BXCL501 for the acute treatment of agitation associated with bipolar disorders or schizophrenia in the at-home setting, we have not conducted a clinical trial evaluating the at-home use of BXCL501 in the acute treatment of agitation in patients with dementia due to probable Alzheimer’s disease.
+Added: Although we intend to seek additional feedback from the FDA regarding the potential of our ongoing or completed clinical trials to support submission of one or more sNDAs and to support a label for use in the home setting for in patients with dementia due to probable Alzheimer’s disease, it is possible that the FDA may not consider our available data adequate to support such submissions.
+Added: On January 14, 2026, we submitted a supplemental New Drug Application (sNDA) to the FDA for IGALMI ® for the acute treatment of agitation associated with schizophrenia and bipolar disorders in the at-home setting.
+Added: This sNDA seeks to expand IGALMI ® ’s label to include the broader at-home patient population where there are no FDA-approved options currently available.
+Added: Although we announced on August 18, 2025 that we had received positive pre-sNDA meeting responses from the FDA and believe that the planned sNDA regulatory package will be sufficient to support the sNDA submission, there are no assurance that the FDA will accept the
+Added: submission and it is possible that the FDA may not consider our available data adequate to support the submission.
+Added: Further, even if the FDA accepts the sNDA submission, there is no assurance that the FDA will approve our sNDA and authorize an expanded IGALMI ® ’s label to include the broader at-home patient population.
For example, on October 11, 2023, we received feedback from the FDA that TRANQUILITY I and TRANQUILITY II alone are not sufficient to support an sNDA submission for the use of BXCL501 to treat acute agitation (non-daily) in patients with dementia due to probable Alzheimer’s disease in either the at-home setting or care facilities, and the FDA indicated that we should, among other things, conduct a further clinical trial to evaluate safety and collect efficacy data of BXCL501 before we are able to submit an sNDA seeking approval of BXCL501 for use in such populations.
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See Part II, Item 1A, “Risk Factors—Risks Related to the Discovery and Development of Product Candidates— Developments relating to its TRANQUILITY II Phase 3 trial may impact the timing of its development plans for, and prospects for seeking or obtaining regulatory approval of, BXCL501 for the acute treatment of agitation (non-daily) associated with dementia in patients with probable Alzheimer’s disease ” for additional information.
−Removed: If the FDA does not accept the data from our prior TRANQUILITY II Phase 3 trial, we could be required to conduct additional
−Removed: clinical trials beyond those we currently contemplate, which would increase our costs and delay potential submission of an sNDA for BXCL501 which in turn would adversely affect our financial position and operations.
+Added: If the FDA does not accept the data from our prior TRANQUILITY II Phase 3 trial, we could be required to conduct additional clinical trials beyond those we currently contemplate, which would increase our costs and delay potential submission of an sNDA for BXCL501 which in turn would adversely affect our financial position and operations.
Accordingly, if the FDA reaches these conclusions or otherwise finds that our proposed clinical studies would not adequately evaluate the safety and efficacy of BXCL501 for the acute treatment of agitation associated with dementia due to probable Alzheimer’s disease in an at-home setting and/or care setting, we may need to evaluate more patients for a longer period of time to demonstrate the safety and efficacy of BXCL501.
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IGALMI ® is already approved at the 120 mcg dose based on efficacy data that we previously generated in treating a single episode of agitation.
−Removed: Consistent with the data generated to date, the label for IGALMI ® currently includes a limitation on use (“LOU”), noting the lack of efficacy or safety data beyond 24 hours following the first dose.
+Added: Consistent with the data generated to date, the label for IGALMI ® currently
+Added: includes a limitation on use (“LOU”), noting the lack of efficacy or safety data beyond 24 hours following the first dose.
During our March 6, 2024 Type C meeting with the FDA, we discussed, among other things, whether evaluating the at-home use of BXCL501 120 mcg, with safety as the primary objective and efficacy measures as exploratory endpoints, if successful, could support the submission of an sNDA seeking expansion of the current label for IGALMI ® 120 mcg to allow at-home use and labeling without the current LOU.
−Removed: Based on current FDA feedback, we have amended the Part 2 of the SERENITY III protocol to evaluate the safety and efficacy of the 120 mg dose in the at-home setting, and now refer to this revised trial as the SERENITY At-Home trial.
−Removed: We believe that our ability to seek labeling without the current LOU will depend, in part, on the number of agitation episodes we observe during our planned study period.
−Removed: Even if our planned SERENITY At-home trial is successful in demonstrating safety in the at-home setting, and even if the IGALMI ® 120 mcg label is expanded to allow outpatient use, there is no guarantee that we will observe and/or treat a sufficient number of agitation episodes during the study period to support removal of the current LOU.
+Added: Based on current FDA feedback, we amended the Part 2 of the SERENITY III protocol to evaluate the safety and efficacy of the 120 mg dose in the at-home setting, and now refer to this revised trial as the SERENITY At-Home trial.
+Added: On August 27, 2025, we announced that the SERENITY At-Home trial evaluating the safety of BXCL501, met its primary endpoint.
+Added: Additionally, on October 14, 2025, we announced positive results from the correlation study related to exploratory efficacy outcomes from the SERENITY At-Home trial.
+Added: The results from the correlation study along with that data from this successful study formed the basis of the supplemental New Drug Application (sNDA) submission for label expansion of IGALMI ® in the at-home setting, which was submitted to the FDA on January 14, 2026.
+Added: While we believe that the data from the SERENITY At-home trial supports our planned submission and that we have observed a sufficient number of agitation episodes during the study period to seek labeling without the current LOU and for approval in the at-home setting, there is no guarantee that the FDA will approve our submission and agree to expand of the current label for IGALMI ® 120 mcg to allow at-home use and labeling without the current LOU.
Any modifications to our proposed trial designs, whether by us or by the FDA would delay our initiation of such proposed trials, increase the costs of any trial that we do conduct and delay any potential submission of an sNDAs for BXCL501.
−Removed: Requirements to conduct additional clinical trials evaluating BXCL501 in support of our planned sNDAs seeking approvals for BXCL501 for our targeted patient populations in at-home settings would increase our costs, and in either case, such modifications or requirements could have a material adverse effect on our prospects and results of operations.
+Added: Requirements to conduct additional clinical trials evaluating BXCL501 in support of our sNDAs submission and any future sNDAs seeking approvals for BXCL501 for our targeted patient populations in at-home settings would increase our costs, and in either case, such modifications or requirements could have a material adverse effect on our prospects and results of operations.
In the near term, we are dependent on the success of IGALMI ® , and the development of four of our product candidates, BXCL501, BXCL502, BXCL701 and BXCL702.
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We are continuing to invest a significant portion of our efforts and financial resources in the commercialization of IGALMI ® and development of our four product candidates, BXCL501, BXCL502, BXCL701 and BXCL702, as well as other product candidates.
−Removed: In connection with the Reprioritization, we have significantly reduced the resources devoted to commercialization of IGALMI ® and it is possible that will have adverse consequences on the revenue that we are able to generate from IGALMI ® in the near term.
−Removed: As part of the Company’s Reprioritization, the IGALMI ® commercial team shifted focus to a hospital/Integrated Delivery Network (“IDN”) contracting strategy with a Corporate Account Director (CAD) team.
+Added: In connection with the Clinical Reprioritization, we have significantly reduced the resources devoted to commercialization of IGALMI ® and it is possible that will have adverse consequences on the revenue that we are able to generate from IGALMI ® in the near term.
+Added: As part of the Company’s Clinical Reprioritization, the IGALMI ® commercial team shifted focus to a hospital/Integrated Delivery Network (“IDN”) contracting strategy with a Corporate Account Director (CAD) team.
The goal of the realigned CAD team is to work with large IDNs and drive sales utilizing a top-down approach.
Over time, the revised commercial effort is expected to allow the Company to continue to make inroads into the institutional market in a more cost-efficient manner.
+Added: In January 2026, Mark Pavao joined the Company as Interim Chief Commercial Officer to support the potential launch of IGALMI ® in the at-home setting, pending FDA approval of our sNDA submission.
+Added: While this appointment strengthens our commercial readiness, we continue to have limited experience in marketing and selling drug products and may need to further expand our commercial team to successfully launch IGALMI for the at-home indication if approved.
However, we have limited experience in drug development and commercialization, and our prospects are substantially dependent on our ability, or that of any future collaborator, to develop, obtain marketing approval for and successfully commercialize product candidates in one or more additional disease indications.
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Any of the foregoing scenarios could materially harm the commercial prospects for our product candidates.
−Removed: We have only submitted one NDA to the FDA and have not submitted any similar marketing applications to comparable foreign authorities, for any product candidate, and we cannot be certain that our product candidates currently in development, or any than may be developed in the future, will be successful in clinical trials or receive regulatory approval.
+Added: We have only submitted one NDA to the FDA and have not submitted any similar marketing applications to comparable foreign authorities, for any product candidate.
+Added: On January 14, 2026 we submitted a sNDA for label expansion of IGALMI ® in the at-home setting based on the data from the successful SERENITY At-Home trial, we cannot be certain that our submission will be approved, or that our other product candidates currently in development, or any than may be developed in the future, will be successful in clinical trials or receive regulatory approval.
Further, our product candidates currently in development, or any that may be developed in the future, may not receive regulatory approval even if we believe they are successful in clinical trials.
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The EU Clinical Trials Regulation (“CTR”), which was adopted in April 2014 and repeals the EU Clinical Trials Directive, became applicable on January 31, 2022.
−Removed: While the Clinical Trials Directive required a separate clinical trial application (“CTA”), to be submitted in each member state in which the clinical trial takes place, to both the competent national health authority and an independent ethics committee, the CTR introduces a centralized process and only requires the submission of a single application for multi-center trials.
−Removed: The CTR allows sponsors to make a single submission to both the competent authority and an ethics committee in each member state, leading to a single decision
−Removed: per member state.
+Added: While the Clinical Trials Directive required a separate clinical trial application (“CTA”), to be submitted in each member state in which the clinical trial takes place, to both the competent national health authority and an independent ethics committee, the CTR introduces a centralized process and
+Added: only requires the submission of a single application for multi-center trials.
+Added: The CTR allows sponsors to make a single submission to both the competent authority and an ethics committee in each member state, leading to a single decision per member state.
The assessment procedure of the CTA has been harmonized as well, including a joint assessment by all member states concerned, and a separate assessment by each member state with respect to specific requirements related to its own territory, including ethics rules.
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For clinical trials whose CTA was made under the Clinical Trials Directive before January 31, 2022, the Clinical Trials Directive will continue to apply on a transitional basis for three years.
−Removed: Additionally, sponsors could choose to submit a CTA under either the Clinical Trials Directive or the CTR until January 31, 2023 and, if authorized, those are governed by the Clinical Trials Directive until January 31, 2025.
−Removed: By that date, all ongoing trials will become subject to the provisions of the CTR.
+Added: The CTR transition period ended on January 31, 2025, and all clinical trials (and related applications) are now fully subject to the provisions of the CTR.
If we are slow or unable to adapt to changes in existing requirements or the adoption of new requirements or policies governing clinical trials, our development plans may be impacted.
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Failure can occur at any time during the clinical trial process.
−Removed: Although we are planning for certain clinical trials relating to BXCL501, BXCL701, BXCL502 and our other product candidates, there can be no assurance that the FDA, or other comparable foreign regulatory authorities, will accept our proposed trial designs as sufficient to establish the safety and/or efficacy of our product candidates.
+Added: We have completed the SERENITY At-Home trial evaluating the safety of BXCL501 and, on January 14, 2026, submitted an sNDA for label expansion of IGALMI ® in the at-home setting based on the data from the successful SERENITY At-Home trial and are planning for certain clinical trials relating to BXCL501, BXCL701, BXCL502 and our other product candidates, there can be no assurance that the FDA, or other comparable foreign regulatory authorities, will accept our submission or proposed trial designs as sufficient to establish the safety and/or efficacy of our product candidates.
We may experience delays in our clinical trials and we do not know whether planned clinical trials will begin on time, need to be redesigned, enroll patients on time or be completed on schedule, if at all.
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● manufacturing sufficient quantities of a product candidate for use in clinical trials;
−Removed: ● lack of adequate funding to continue the clinical trial;
+Added: ● lack of adequate funding to initiate or continue clinical trials;
● selection of clinical end points that require prolonged periods of clinical observation or analysis of the resulting data;
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Further, conducting clinical trials in foreign countries, as we may do for our current and future product candidates, presents additional risks that may delay completion of our clinical trials.
−Removed: These risks include the failure of enrolled patients in foreign countries to adhere to clinical protocol due to differences in health care services or cultural customs, managing additional administrative burdens associated with foreign regulatory schemes, as well as political and economic risks relevant to such foreign countries.
+Added: These risks include the failure of enrolled patients in foreign countries to adhere to clinical protocol due to differences in health care services or cultural customs,
+Added: managing additional administrative burdens associated with foreign regulatory schemes, as well as political and economic risks relevant to such foreign countries.
For example, current geopolitical conflicts in Eastern Europe and the Middle East may adversely impact our ability to conduct trials in those regions and elsewhere.
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For example, the FDA placed Point Therapeutics, Inc.’s IND for BXCL701 on clinical hold following an increase in observed mortality in patients receiving BXCL701 in a Phase 3 trial in patients with non-small cell lung cancer.
−Removed: Though we believe that this result was caused by, among other things, an imbalance in the disease severity of patients enrolled in the active arm of the clinical trial, there is no guarantee that excess mortality will not be observed in future clinical studies.
+Added: Though we believe that this result was caused by, among other things, an imbalance in
+Added: the disease severity of patients enrolled in the active arm of the clinical trial, there is no guarantee that excess mortality will not be observed in future clinical studies.
Treatment-related side effects could also affect patient recruitment or the ability of enrolled patients to complete the clinical trial or result in potential product liability claims.
In addition, these side effects may not be appropriately recognized or managed by the treating medical staff.
−Removed: We expect to have to train
−Removed: medical personnel using our product candidates to understand the side effect profiles observed in our clinical trials and upon commercialization of any of our product candidates that may receive regulatory approval.
+Added: We expect to have to train medical personnel using our product candidates to understand the side effect profiles observed in our clinical trials and upon commercialization of any of our product candidates that may receive regulatory approval.
Inadequate training in recognizing or managing the potential side effects of our product candidates could result in patient injury or death.
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Any of these events could prevent us from achieving or maintaining market acceptance of the particular product or product candidate, if approved, and could significantly harm our business, results of operations and prospects.
−Removed: The discovery and development of product candidates based on EvolverAI, BioXcel LLC’s proprietary pharmaceutical discovery and development engine, and our artificial intelligence (“AI”) platform is novel and unproven, and we do not know whether we will be able to develop any products of commercial value.
−Removed: We are leveraging our own AI platform and BioXcel LLC’s EvolverAI, a proprietary pharmaceutical discovery and development engine, to create a pipeline of neuroscience and immuno-oncology product candidates for patients whose diseases have not been adequately addressed to date by other approaches and to design and conduct efficient clinical trials with a higher likelihood of success.
+Added: The discovery and development of product candidates based on EvolverAI, BioXcel LLC’s proprietary pharmaceutical discovery and development engine, and our AI platform is novel and unproven, and we do not know whether we will be able to develop any products of commercial value.
+Added: Our drug discovery and development efforts depend on our own AI platform and BioXcel LLC’s EvolverAI, a proprietary pharmaceutical discovery and development engine, to create a pipeline of neuroscience and immuno-oncology product candidates for patients whose diseases have not been adequately addressed to date by other approaches and to design and conduct efficient clinical trials with a higher likelihood of success.
While we believe that applying our AI platform and BioXcel LLC’s EvolverAI to create medicines for defined patient populations may potentially enable drug research and clinical development that is more efficient than conventional drug research and development, our approach is novel.
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Issues in the development and use of artificial intelligence, combined with an uncertain regulatory environment, may result in reputational harm, liability, or other adverse consequences to our business operations.
−Removed: technological innovations, artificial intelligence presents risks and challenges that could impact our business.
+Added: As with many technological innovations, artificial intelligence presents risks and challenges that could impact our business.
We may adopt and integrate generative artificial intelligence tools into our systems for specific use cases reviewed by legal and information security.
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The Company’s AI platform and BioXcel LLC’s EvolverAI may fail to help us discover and develop additional potential product candidates.
−Removed: Any drug discovery that we are conducting using the Company’s AI platform and BioXcel LLC’s EvolverAI may not be successful in identifying compounds that have commercial value or therapeutic utility.
+Added: Any drug discovery that we conduct using the Company’s AI platform and BioXcel LLC’s EvolverAI may not be successful in identifying compounds that have commercial value or therapeutic utility.
The Company’s AI platform and BioXcel LLC’s EvolverAI may initially show promise in identifying potential product candidates, yet fail to yield viable additional product candidates for clinical development or potential commercialization for a number of reasons, including:
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Regulators may limit our ability to develop or implement our proprietary AI algorithms and/or may eliminate or restrict the confidentiality of our proprietary technology, which could have an adverse effect on our business, results of operations, and financial condition.
−Removed: Our future success depends on our ability to continue to develop and implement our proprietary AI algorithms and models, and to maintain the confidentiality of this technology.
−Removed: Changes to existing regulations, their interpretation or implementation, or new regulations could impede our use of this technology or require that we disclose our proprietary technology to our competitors, which could impair our competitive position and result in an adverse effect on our business, results of operations and financial condition.
+Added: Our future success in novel drug discovery and drug development projects depends on our ability to continue to develop and implement our proprietary AI algorithms and models, and to maintain the confidentiality of this technology.
+Added: In addition to the current pause in further developing our AI platform, changes to existing regulations, their interpretation or implementation, or new regulations could impede our use of this technology or require that we disclose our proprietary technology to our competitors, which could impair our competitive position and result in an adverse effect on our business, results of operations and financial condition.
We obtained Fast Track designation for certain of our product candidates, and we may seek Fast Track designation for other indications or for our other product candidates, but we might not receive such designations, and even if we do, such designations may not actually lead to a faster development or regulatory review or approval process.
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For product candidates that have been designated as Breakthrough Therapies, interaction and communication between the FDA and the sponsor of the trial can help to identify the most efficient path for clinical development while minimizing the number of patients placed in ineffective control regimens.
−Removed: Product candidates designated as Breakthrough Therapies by the FDA also receive the benefits associated with Fast Track designation, including the potential for rolling review of an NDA.
+Added: Product candidates
+Added: designated as Breakthrough Therapies by the FDA also receive the benefits associated with Fast Track designation, including the potential for rolling review of an NDA.
Designation as a Breakthrough Therapy is within the discretion of the FDA.
Accordingly, even if we believe one of our product candidates meets the criteria for designation as a Breakthrough Therapy, the FDA may disagree and instead determine not to make such designation.
−Removed: In any event, the receipt of a Breakthrough Therapy designation for a product
−Removed: candidate may not result in a faster development process, review or approval compared to drugs considered for approval under non-expedited FDA review procedures and does not assure ultimate approval by the FDA.
+Added: In any event, the receipt of a Breakthrough Therapy designation for a product candidate may not result in a faster development process, review or approval compared to drugs considered for approval under non-expedited FDA review procedures and does not assure ultimate approval by the FDA.
In addition, even if one or more of our product candidates qualify as breakthrough therapies, the FDA may later decide that the product no longer meets the conditions for qualification or decide that the period for FDA review or approval will not be shortened.
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The approval of a companion diagnostic as part of the therapeutic product’s labeling limits the use of the therapeutic product to only those patients who express the specific genetic alteration that the companion diagnostic was developed to detect.
−Removed: In January 2024, the FDA announced that it intends to initiate the process to reclassify most in vitro diagnostic tests (“IVDs”) that are currently Class III into Class II, including companion diagnostic IVDs.
+Added: In January 2024, the FDA announced that it intends to initiate the process to reclassify most in vitro diagnostic tests (“IVDs”) that are currently Class III into Class II, including companion
+Added: diagnostic IVDs.
If such reclassification efforts occur, any companion diagnostics that are the subject of the down-classification may no longer require premarket approval, but rather may be marketed pursuant to the generally less burdensome 510(k) clearance process.
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For example, the FDA-approved label for IGALMI ® includes certain warnings and precautions regarding hypotension, orthostatic hypotension, bradycardia, somnolence, and QT interval prolongation.
−Removed: The FDA may also require a REMS to approve a product candidate, which could entail requirements for a medication guide, physician training and communication plans or additional elements to ensure safe use, such as restricted distribution methods, patient registries and other risk minimization tools.
+Added: The FDA may also require a REMS to approve a product candidate, which could entail requirements for a medication guide, physician training and communication plans
+Added: or additional elements to ensure safe use, such as restricted distribution methods, patient registries and other risk minimization tools.
In addition, the manufacturing processes, labeling, packaging, distribution, AE reporting, storage, advertising, promotion, import, export and recordkeeping for IGALMI ® are and will remain subject to extensive and ongoing regulatory requirements.
−Removed: These requirements include submissions of safety and other post-marketing information and reports, registration, and on-going compliance with cGMPs, and GCPs for any clinical trials that we conduct post-
+Added: These requirements include submissions of safety and other post-marketing information and reports, registration, and on-going compliance with cGMPs, and GCPs for any clinical trials that we conduct post-approval.
In addition, manufacturers of drug products and their facilities are subject to continual review and periodic, unannounced inspections by the FDA and other regulatory authorities for compliance with cGMP regulations and standards.
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Any regulatory approval that the FDA or any other regulatory authority may grant is limited to those specific diseases and indications for which a product is deemed to be safe and effective.
−Removed: For example, the FDA-approved label for IGALMI ® is currently limited to the acute treatment of agitation associated with schizophrenia or bipolar I or II disorder in adults to be self-administrated by patients under the supervision of a health care provider.
+Added: For example, the FDA-approved label for IGALMI ®
+Added: is currently limited to the acute treatment of agitation associated with schizophrenia or bipolar I or II disorder in adults to be self-administrated by patients under the supervision of a health care provider.
While physicians in the U.S.
may choose, and are generally permitted, to prescribe drugs for uses that are not described in the product’s labeling and for uses that differ from those tested in clinical trials and approved by the regulatory authorities, our ability to promote the products is narrowly limited to those indications that are specifically approved by the FDA.
−Removed: These “off-label” uses are common across medical specialties and may constitute an appropriate
−Removed: treatment for some patients in varied circumstances.
+Added: These “off-label” uses are common across medical specialties and may constitute an appropriate treatment for some patients in varied circumstances.
For example, other formulations of Dex, the active ingredient in IGALMI ® , have been approved for uses beyond those authorized in IGALMI ® approved labeling, such as for use in sedation of surgical patients, and we are continuing to develop BXCL501 for potential use in patients with dementia, MDD, Alzheimer’s disease and other indications.
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Average review times at the FDA and foreign regulatory authorities have fluctuated in recent years as a result of some of these aforementioned issues.
−Removed: In addition, government funding of other government agencies that fund research and development activities is subject to the political process, which is inherently fluid and unpredictable.
−Removed: Disruptions at the FDA and other agencies, such as the EMA, following its relocation to Amsterdam and corresponding staff changes, may also slow the time necessary for new drug or modifications to approved drugs to be reviewed and/or approved by necessary government agencies, which would adversely affect our business.
−Removed: For example, over the last several years, the U.S.
−Removed: government has shut down several times and certain regulatory agencies, such as the FDA, have had to furlough critical FDA employees and stop critical activities.
−Removed: Additionally, recent actions by the United States federal government have caused concern in the industry that this may occur.
−Removed: For example, beginning on February 13, 2025, the Department of Health and Human Services began firing a large number of its probationary employees, a category that includes new federal employees and employees recently promoted or transferred to new positions or agencies.
−Removed: Larger layoffs may follow, according to a memorandum issued by the Office of Personnel Management on February 26, 2025.
−Removed: These terminations, if they withstand legal challenges, may significantly delay and impede our interactions with FDA.
−Removed: Similar results may stem from the recent confirmed resignations of some senior FDA employees with responsibility for regulation of drugs and biologics, as well as possible future layoffs and resignations.
−Removed: There are also reports that the United States federal government intends to request Congress to reduce FDA funding in upcoming budgets.
−Removed: Such funding cuts may also delay the development and approval of our product candidates.
+Added: In April 2025, the Trump administration conducted unprecedented layoffs at several U.S.
+Added: health agencies, including the FDA, the Department of Health and Human Services, the Centers for Disease Control and Prevention and the National Institutes of Health, which is expected to impact the FDA’s ability to review and approve new medicines and conduct necessary inspections.
+Added: In addition, government funding of the FDA, SEC, and other government agencies on which our operations may rely, including those that fund research and development activities is subject to the political process, which is inherently fluid and unpredictable.
+Added: For example, in the fourth quarter of 2025, the U.S.
+Added: government was on shutdown for a meaningful period of time and has previously shut down several times, and certain regulatory agencies, such as the FDA, had to furlough critical employees and stop critical activities.
+Added: To the extent the FDA’s normal operations are disrupted or delayed for a prolonged period of time, for example due to government shutdowns, travel restrictions, public health or geopolitical issues, staffing shortages, layoffs or lack of funding, the FDA may not be able to complete the necessary inspections or provide feedback in a timely manner during our clinical development or review period.
+Added: If any such delays or disruptions were to occur, it could significantly impact the ability of the FDA or other regulatory authorities to timely review and process our regulatory submissions, which could have a material adverse effect on our business.
+Added: Further, future government shutdowns could impact our ability to access the public markets and obtain necessary capital in order to properly capitalize and continue our operations.
We may conduct certain of or portions of our clinical trials for our product candidates outside of the U.S.
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The acceptance of study data from clinical trials conducted outside the U.S.
−Removed: or another jurisdiction by the FDA or comparable foreign regulatory authority may be subject to certain conditions or may not be accepted at all.
+Added: jurisdiction by the FDA or comparable foreign regulatory authority may be subject to certain conditions or may not be accepted at all.
In cases where data from foreign clinical trials are intended to serve as the sole basis for marketing approval in the U.S., the FDA will generally not approve the application on the basis of foreign data alone unless (i) the data are applicable to the U.S.
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and (iii) the data may be considered valid without the need for an on-site inspection by the FDA, or if the FDA considers such inspection to be necessary, the FDA is able to validate the data through an on-site inspection or other appropriate means.
−Removed: In addition, even where the foreign
−Removed: study data are not intended to serve as the sole basis for approval, if the clinical trial was not otherwise subject to an IND, the FDA will not accept the data as support for an application for marketing approval unless the study was conducted in accordance with GCP requirements and the FDA is able to validate the data from the study through an on-site inspection if deemed necessary.
+Added: In addition, even where the foreign study data are not intended to serve as the sole basis for approval, if the clinical trial was not otherwise subject to an IND, the FDA will not accept the data as support for an application for marketing approval unless the study was conducted in accordance with GCP requirements and the FDA is able to validate the data from the study through an on-site inspection if deemed necessary.
Many foreign regulatory authorities have similar approval requirements.
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If the FDA or any comparable foreign regulatory authority does not accept such data, it would result in the need for additional trials, which could be costly and time-consuming, and could result in current or future product candidates that we may develop not receiving approval for commercialization in the applicable jurisdiction.
+Added: Changes in U.S.
+Added: trade policy and the impact of tariffs may have a material adverse effect on our business, results of operations and financial condition.
+Added: Our business, results of operations and financial condition may be adversely affected by uncertainty and changes in U.S.
+Added: trade policies, including tariffs, quotas, trade agreements or other trade restrictions imposed by the U.S.
+Added: or other governments.
+Added: For example, in April 2025, the U.S.
+Added: government announced a 10% tariff on product imports from almost all countries and individualized higher tariffs on certain other countries.
+Added: On October 10, 2025, the U.S.
+Added: Government announced a 100% tariff on all product imports from China, bringing the total China tariff rate to 130% tariff effective November 1, 2025.
+Added: While several tariff announcements have been followed by announcements of limited exemptions and temporary pauses, in February 2026, the U.S.
+Added: Supreme Court issued a ruling striking down certain tariffs previously imposed under the International Emergency Economic Powers Act (“IEEPA”).
+Added: Following the Supreme Court’s decision, the U.S.
+Added: presidential administration announced its intention to invoke other laws to collect tariffs and announced new tariffs on imports from all countries, in addition to any existing non-IEEPA tariffs.
+Added: These actions have caused substantial uncertainty and volatility in financial markets and may result in retaliatory measures on U.S.
+Added: Our business requires access to materials to manufacture our products, some of which we source from suppliers located outside the United States.
+Added: Any imposition of or increase in tariffs or other restrictions on imports of materials on which our products rely, as well as corresponding price increases for such materials available domestically, if any, could increase our costs.
+Added: We would likely be unable to pass all or any such cost increases on to our customers and such cost increases could materially and adversely affect our business, results of operations and financial condition, including our gross margin.
+Added: Tariffs or other trade restrictions may lead to continuing uncertainty and volatility in U.S.
+Added: and global financial and economic conditions and commodity markets, declining consumer confidence, significant inflation and diminished expectations for the economy.
+Added: Such conditions could have a material adverse impact on our business, results of operations and financial position.
+Added: Also, disruptions and volatility in the financial markets may lead to adverse changes in the availability, terms and cost of capital.
+Added: Such adverse changes could increase our costs of capital and limit our access to external financing sources .
We may be subject to extensive regulations outside the U.S.
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In addition to regulations in the U.S., should we or our collaborators pursue marketing approvals for IGALMI ® , and for BXCL501, BXCL502, BXCL701, BXCL702 and our other product candidates internationally, we and our collaborators will be subject to a variety of regulations in other jurisdictions governing, among other things, clinical trials and any commercial sales and distribution of our products.
−Removed: Whether or not we, or our collaborators, obtain FDA approval for a product, we must obtain the requisite approvals from regulatory authorities in foreign countries prior to the commencement of clinical trials or marketing of the product in those countries.
+Added: Whether or not we, or our collaborators, obtain FDA approval for a product, we must obtain the requisite approvals from regulatory authorities in foreign countries prior to
+Added: the commencement of clinical trials or marketing of the product in those countries.
The requirements and process governing the conduct of clinical trials, product licensing, pricing and reimbursement vary from country to country.
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The MHRA responded to the consultation on March 21, 2023 and confirmed that it would bring forward changes to the legislation.
−Removed: The final legal texts introduced by the UK Government will ultimately
−Removed: determine the extent to which the UK clinical trials framework aligns with or diverges from the EU CTR.
+Added: The final legal texts introduced by the UK Government will ultimately determine the extent to which the UK clinical trials framework aligns with or diverges from the EU CTR.
A decision by the UK not to closely align its regulations with the new approach that will be adopted in the EU may have an effect on the cost of conducting clinical trials in the UK as opposed to other countries.
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state laws that require pharmaceutical companies to comply with the pharmaceutical industry’s voluntary compliance guidelines and the applicable compliance guidance promulgated by the federal government, or otherwise restrict payments that may be made to health care providers and other potential referral sources;
−Removed: and state laws that require drug manufacturers to report information related to payments and other transfers of value to physicians and other health care providers or marketing expenditures and pricing information;
+Added: and state laws that
+Added: require drug manufacturers to report information related to payments and other transfers of value to physicians and other health care providers or marketing expenditures and pricing information;
● European and other foreign law equivalents of each of the laws, including reporting requirements detailing interactions with and payments to health care providers.
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● our ability to fund our sales and marketing efforts;
−Removed: ● the effectiveness of our sales and marketing efforts, including our strategic refocus to hospital/IDNs as part of the Reprioritization.
+Added: ● the effectiveness of our sales and marketing efforts, including our strategic refocus to hospital/IDNs as part of the Clinical Reprioritization.
If our products do not gain market acceptance, we may not be able to fund future operations, including developing, testing and obtaining regulatory approval for new product candidates and expanding our sales and marketing efforts for our approved products, which would cause our business to suffer.
−Removed: We plan to continue to commercialize IGALMI ® sublingual film for the acute treatment of agitation associated with schizophrenia or bipolar I or II disorder, to be self-administered by patients under the supervision of a healthcare provider, which is our only approved product to date.
−Removed: However, in connection with the Reprioritization, we significantly reduced the resources devoted to commercialization of IGALMI ® and it is possible that will have adverse consequences on the revenue that we are able to generate from IGALMI ® .
+Added: We plan to continue to commercialize IGALMI ® sublingual film for the acute treatment of agitation associated with schizophrenia or bipolar I or II disorder, to be self-administered by patients under the supervision of a healthcare
+Added: provider, which is our only approved product to date.
+Added: However, in connection with the Clinical Reprioritization, we significantly reduced the resources devoted to commercialization of IGALMI ® and it is possible that will have adverse consequences on the revenue that we are able to generate from IGALMI ® .
Revenues for IGALMI ® for the year ended December 31, 2025 were $0.6 million.
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The number of patients and treatable episodes in the United States and other major markets and elsewhere may turn out to be materially lower than expected, the number of treatable episodes may be significantly fewer than total episodes experienced, patients may not be otherwise amenable to treatment with our product candidates or new patients may become increasingly difficult to identify or gain access to, all of which would harm our results of operations and our business.
−Removed: For example, our estimates of the monthly average episodes for patients diagnosed with bipolar disorder and patients diagnosed with schizophrenia and, therefore, our estimated total addressable market are based on third-party market surveys which differ from an observational study in the EU of inhaled loxapine for the treatment of agitation in patients with schizophrenia or bipolar disorder conducted which found that only 40% of enrolled patients reported agitation episodes in the six-month study period.
+Added: For example, our estimates of the monthly average episodes for patients diagnosed with bipolar disorder and patients diagnosed with schizophrenia and, therefore, our estimated total addressable market are based on third-party market
+Added: surveys which differ from an observational study in the EU of inhaled loxapine for the treatment of agitation in patients with schizophrenia or bipolar disorder conducted which found that only 40% of enrolled patients reported agitation episodes in the six-month study period.
If third-party or internally generated data prove to be inaccurate or we make errors in our assumptions based on that data, our total addressable market may be meaningfully smaller than we have estimated, our future growth opportunities and sales growth may be impaired, any of which could have a material adverse effect on our business, financial condition and results of operations.
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Orphan drug exclusivity in the U.S.
−Removed: provides that the FDA may not approve any other applications, including a full NDA, to market the same drug for the same disease or condition for
+Added: provides that the FDA may not approve any other applications, including a full NDA, to market the same drug for the same disease or condition for seven years.
In limited circumstances, the applicable exclusivity period is 10 years in the EU.
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Further, even if we, or any future collaborators, obtain orphan drug exclusivity for a product, that exclusivity may not effectively protect the product from competition because different drugs with different active ingredients may be approved for the same disease or condition.
−Removed: Even after an orphan drug is approved, the FDA or foreign regulatory authorities can subsequently approve the same drug with the same active ingredient for the same condition if the FDA or foreign regulatory authorities conclude that the later drug is clinically superior in that it is shown to be safer, more effective or makes a major contribution to patient care or the manufacturer of the product with orphan exclusivity is unable to maintain sufficient product quantity.
+Added: Even after an orphan drug is approved, the FDA
+Added: or foreign regulatory authorities can subsequently approve the same drug with the same active ingredient for the same condition if the FDA or foreign regulatory authorities conclude that the later drug is clinically superior in that it is shown to be safer, more effective or makes a major contribution to patient care or the manufacturer of the product with orphan exclusivity is unable to maintain sufficient product quantity.
Orphan drug designation neither shortens the development or regulatory review time of a drug, nor gives the drug any advantage in the regulatory review or approval process and does not prevent competitors from obtaining approval of the same product candidate as ours for indications other than those in which we have been granted orphan drug designation.
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Typically, pharmaceutical companies would employ groups of sales representatives and associated sales and marketing staff numbering in the hundreds to thousands of individuals to call on the large number of physicians and hospitals.
−Removed: Following our Reprioritization, we may need to rebuild a commercial sales and marketing team if we seek to modify our commercial strategy for IGALMI ® or initiate commercial sales for any product candidate in the future, which will likely require significant cost.
+Added: Following our Clinical Reprioritization, we may need to rebuild a commercial sales and marketing team if we seek to modify our commercial strategy for IGALMI ® or initiate commercial sales for any product candidate in the future, which will likely require significant cost.
We may seek to collaborate with a third-party to market our drugs or may seek to market and sell our drugs by ourselves.
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The maintenance and expansion of our direct sales force or establishment of a contract sales force, or a combination thereof, as applicable, to market our products is expensive and time-consuming and could delay any product launch.
−Removed: In addition, reputational harm from the Reprioritization may adversely impact our efforts to hire personnel skilled in marketing and sales.
+Added: In addition, reputational harm from the Clinical Reprioritization may adversely impact our efforts to hire personnel skilled in marketing and sales.
Further, we can give no assurances that we will be able to maintain a direct and/or contract sales force for any period of time or that our sales efforts will be sufficient to grow our revenues or that our sales efforts will ever lead to profits.
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Further federal, state and foreign government proposals and health care reforms are likely which could limit the prices that can be charged for IGALMI ® and the product candidates that we develop and may further limit our commercial opportunities.
−Removed: Our results of operations could be materially adversely affected by proposed health care reforms, by the Inflation Reduction Act and other drug pricing legislation in the U.S., by the possible effect of such current or future legislation on amounts that private insurers will pay and by other health care reforms that may be enacted or adopted in the future.
+Added: Our results of operations could be materially adversely affected by proposed health care
+Added: reforms, by the Inflation Reduction Act and other drug pricing legislation in the U.S., by the possible effect of such current or future legislation on amounts that private insurers will pay and by other health care reforms that may be enacted or adopted in the future.
Health care reform measures could hinder or prevent our product candidates’ commercial success.
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The ACA also included changes to the Public Health Service’s 340B drug pricing program (the “340B program”) including expansion of the list of eligible covered entities that may purchase drugs under the program.
−Removed: Since its enactment, there have been judicial, executive and Congressional challenges to certain aspects of the ACA.
−Removed: On June 17, 2021, the U.S.
−Removed: Supreme Court dismissed the most recent judicial challenge to the ACA brought by several states without specifically ruling on the constitutionality of the ACA.
−Removed: Thus, the ACA will remain in effect in its current form.
+Added: On July 4, 2025, President Trump signed into law the One Big Beautiful Bill Act (“OBBBA”) which enacts significant changes to Medicaid and rescinds or does not continue major elements of the ACA.
+Added: The legislation is projected to significantly reduce federal healthcare spending over the next decade due to a likely increase in the number of uninsured individuals.
+Added: The OBBBA also restores the ability for companies to immediately deduct domestic research and experimentation (R&E) costs, a provision that was previously phased out.
+Added: This change provides significant tax relief and increases cash flow for biotech and life sciences companies, especially small and early-stage companies.
+Added: The OBBBA also mandates that able-bodied Medicaid recipients aged 19-64 must work, volunteer, or attend school for at least 80 hours per month, or risk losing coverage.
+Added: This is expected to reduce costs, but potentially also coverage for millions of people.
+Added: The Company is still evaluating the impact of OBBBA.
In addition, other legislative changes have been proposed and adopted in the U.S.
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More recently, on March 11, 2021, President Biden signed the American Rescue Plan Act of 2021 into law, which eliminates the statutory Medicaid drug rebate cap, beginning January 1, 2024.
+Added: The rebate was previously capped at 100% of a drug's average manufacturer price.
Most significantly, on August 16, 2022, President Biden signed the Inflation Reduction Act of 2022 (“IRA”) into law.
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On August 29, 2023, HHS announced the list of the first ten drugs that will be subject to price negotiations.
+Added: As of January 17, 2025, HHS announced it will begin price negotiations for a list of fifteen additional drugs.
HHS has issued and will continue to issue guidance implementing the IRA, although the Medicare drug price negotiation program is currently subject to legal challenges.
While the impact of the IRA on the pharmaceutical industry and our business cannot yet be fully determined, it is likely to be significant.
−Removed: The cost of prescription pharmaceuticals in the U.S.
−Removed: will likely continue to be the subject of considerable discussion.
−Removed: Members of Congress and the Biden Administration have indicated they will continue to pursue further legislative or administrative measures to control prescription drug costs.
−Removed: There have been several Congressional inquiries, as well as legislative and regulatory initiatives and executive orders designed to, among other things, bring more transparency to product pricing, review the relationship between pricing and manufacturer patient programs, and reform government program reimbursement methodologies for drug products.
−Removed: We cannot predict with certainty what impact any federal or state health reforms will have on us, but such changes could impose new or more stringent regulatory requirements on our activities or result in reduced reimbursement for our products, any of which could adversely affect our business, results of operations and financial condition.
+Added: Further, on January 20, 2025, President Trump reversed some of President Biden’s executive orders including rescinding Executive Order 14087 entitled “Lowering Prescription Drug Costs for Americans.” President Trump may issue new executive orders designed to impact drug pricing, and/or rescind or modify the previous administration’s efforts to address drug costs.
+Added: A number of these and other proposed measures may require authorization through additional legislation to become effective.
+Added: Congress and the Trump administration have indicated that they will continue to seek new legislative measures to control drug costs.
+Added: Additionally, OBBBA amends the IRA to be more favorable for orphan drug developers by allowing a drug with multiple orphan designations to remain exempt from price negotiation, potentially preserving profitability for rare disease therapies.
+Added: The Trump administration is pursuing a two-fold strategy to reduce drug costs in the United States.
+Added: On the one hand, President Trump has threatened to impose significant tariffs on pharmaceutical manufacturers that do not adopt pricing policies such as most favored nation pricing, which would tie the price for drugs in the United States to the lowest price in a group of other countries.
+Added: In response, multiple manufacturers have reportedly entered into confidential pricing agreements with the federal government.
+Added: On the other hand, the Trump administration is pursuing traditional regulatory pathways to impose drug pricing policies, and published two proposed regulations in December 2025, referred to as Globe and Guard.
+Added: If finalized, these regulations would implement mandatory payment models under which manufacturers of eligible drugs would be required to pay rebates to the federal government on a portion of the units of their drugs that are reimbursed by Medicare, with the rebate amount based on most favored nation pricing.
+Added: Imposing a rebate in the U.S.
+Added: that is based on drug prices outside the U.S.
+Added: would mark a drastic and unprecedented shift in the U.S.
+Added: pharmaceutical market, and while the impact of the Globe and Guard proposed regulations, if finalized, cannot yet be determined, it is likely to be significant.
Individual states in the U.S.
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Risks Related to Our Relationship with BioXcel LLC
−Removed: BioXcel LLC has significant influence over the direction of our business, and the concentrated ownership of our common stock will prevent you and other stockholders from influencing significant decisions.
−Removed: As of December 31, 2024, BioXcel LLC owned approximately 15.5% of the economic interest and voting power of our outstanding common stock and BioXcel LLC is controlled by BioXcel Holdings, Inc.
−Removed: Our Chief Executive Officer and member of our board of directors, Vimal Mehta, Ph.D., is the Chief Executive Officer, President, Treasurer and Secretary and a member of the board of managers of BioXcel LLC and Chief Executive Officer, President, Treasurer and Secretary and the sole member of the board of directors of BioXcel Holdings, Inc.
−Removed: See “ The management of and beneficial ownership in BioXcel LLC by our executive officers and our directors may create, or may create the appearance of, conflicts of interest.
−Removed: Even though BioXcel LLC controls less than a majority of the voting power of our outstanding common stock, it may influence the outcome of such corporate actions so long as it owns a significant portion of our common stock.
Approval of commercial terms between us and BioXcel LLC does not preclude the possibility of stockholder litigation, including but not limited to derivative litigation nominally against BioXcel LLC and against its directors and officers and also against us and our directors and officers.
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We negotiated the Services Agreement with BioXcel LLC pursuant to which BioXcel LLC agreed to perform certain intellectual property prosecution and management and research and development activities for us utilizing its EvolverAI.
−Removed: Under the Services Agreement, we had an option, exercisable until December 31, 2024, to enter into a separate collaborative services agreement with BioXcel LLC pursuant to which BioXcel LLC shall perform product identification and related services for us utilizing its EvolverAI.
−Removed: We agreed to pay BioXcel LLC $18,000 per month from March 13, 2023, to December 31, 2024 in exchange for this option.
−Removed: We agreed to negotiate any such collaborative services agreement in good faith and to incorporate reasonable market-based terms, including consideration for BioXcel LLC reflecting a low, single-digit royalty on net sales and reasonable development and commercialization milestone payments, provided that (i) development milestone payments shall not exceed $10 million in the aggregate and not be
−Removed: payable prior to proof of concept in humans and (ii) commercialization milestone payments shall be based on reaching annual net sales levels, be limited to 3% of the applicable net sales level, and not exceed $30 million in the aggregate.
−Removed: We did not exercise this option, which expired on December 31, 2024.
In addition, at the time of our initial public offering (“IPO”), BioXcel LLC granted us (i) a first right to negotiate exclusive rights to any additional product candidates in the fields of neuroscience and immuno-oncology that BioXcel LLC may identify on its own and not in connection with BioXcel LLC’s provision of services to us under the Services Agreement and (ii) an exclusivity agreement in the neuroscience and immuno-oncology fields whereby BioXcel LLC agreed not develop drugs, or engage in preclinical discovery for the purpose of developing drugs, in the neuroscience and immuno-oncology fields for or on behalf of a third party, utilizing EvolverAI or otherwise.
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If our rights under the Services Agreement were to become limited or if we are otherwise precluded from conducting research and development using EvolverAI, or if BioXcel LLC, Inveni or Invea do not fulfill their obligations under the agreements, such development could materially adversely affect our future operating results, financial condition, and prospects.
−Removed: Furthermore, certain individuals conducting services on our behalf are not our employees, and we cannot control whether they devote sufficient time, skill and resources to our ongoing development programs.
+Added: Furthermore, certain individuals conducting services on our behalf are not our
+Added: employees, and we cannot control whether they devote sufficient time, skill and resources to our ongoing development programs.
We also cannot ensure that BioXcel LLC retains sufficient resources or personnel or otherwise to conduct its operations.
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BioXcel LLC may experience challenges with the acquisition, development, enhancement, or deployment of technology necessary for EvolverAI.
−Removed: We may face similar challenges with other AI platforms that we utilize, including our own in-house proprietary platform.
+Added: We may face similar challenges with other AI platforms that we may utilize, including our own in-house proprietary platform.
BioXcel LLC operates in businesses that require sophisticated computer systems and software for data collection, data processing, cloud-based platforms, analytics, statistical projections and forecasting, mobile computing, social media analytics and other applications and technologies.
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There can be no guarantee that we or BioXcel LLC will be able to develop, acquire or integrate new technologies, that these new technologies will meet our and BioXcel LLC’s needs or achieve our expected goals, or that we will be able to do so as quickly or cost-effectively as our competitors.
−Removed: Significant technological change could render BioXcel LLC’s EvolverAI or other AI platforms that we utilize obsolete.
+Added: Significant technological change could render BioXcel LLC’s EvolverAI or other AI platforms that we may utilize obsolete.
BioXcel LLC’s and our continued success will depend on the ability to adapt to changing technologies, manage and process ever-increasing amounts of data and information and improve the performance, features and reliability of these services in response to changing client and industry demands.
If EvolverAI or other AI and machine learning models that we use are incorrectly designed, do not operate properly, the data we use to train them is incomplete, inadequate or biased in some way, or if we do not have sufficient rights to use the data on which our AI and machine learning models rely, the performance of our products, services and businesses, as well as our reputation, could suffer or we could incur liability through the violation of laws, third-party privacy rights or contracts to which we are a party.
−Removed: BioXcel LLC or we may experience difficulties that could delay or prevent the successful design, development, testing, and introduction of advanced versions of EvolverAI, limiting our
−Removed: ability to identify new product candidates.
+Added: BioXcel LLC or we may experience difficulties that could delay or prevent the successful design, development, testing, and introduction of advanced versions of EvolverAI, limiting our ability to identify new product candidates.
New services, or enhancements to existing EvolverAI services, may not adequately meet our requirements.
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Common difficulties in biotechnology and pharmaceutical manufacturing may include:
−Removed: sourcing and producing raw materials, transferring technology from chemistry and development activities to production activities, validating initial production designs, scaling manufacturing techniques, improving costs and yields, establishing and maintaining quality controls and stability requirements, eliminating contaminations and operator errors, and maintaining compliance with regulatory requirements.
+Added: sourcing and producing raw materials, transferring technology from chemistry and development activities to production activities, validating initial production designs, scaling manufacturing techniques,
+Added: improving costs and yields, establishing and maintaining quality controls and stability requirements, eliminating contaminations and operator errors, and maintaining compliance with regulatory requirements.
We do not currently have nor do we plan to acquire the infrastructure or capability internally to produce an adequate supply of compounds to meet future requirements for clinical trials and commercialization of our products or to produce our products in accordance with cGMP prescribed by the FDA or similar foreign requirements.
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Adverse developments may include labor disputes, resource constraints, shipment delays, inventory shortages, lot failures, unexpected sources of contamination, lawsuits related to our manufacturing techniques, equipment used during manufacturing, or composition of matter, unstable political environments, acts of terrorism, war, natural disasters, and other natural and man-made disasters.
−Removed: If we, ARx, the Patheon pharma services division of Thermo Fisher Scientific Inc., or our other third-party manufacturers were to
−Removed: encounter any of the above difficulties, or otherwise fail to comply with contractual obligations, our ability to provide any product for clinical trial or commercial purposes would be jeopardized.
+Added: If we, ARx, the Patheon pharma services division of Thermo Fisher Scientific Inc., or our other third-party manufacturers were to encounter any of the above difficulties, or otherwise fail to comply with contractual obligations, our ability to provide any product for clinical trial or commercial purposes would be jeopardized.
This may increase the costs associated with completing our clinical trials and commercial production.
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In addition, our CROs are not our employees, and except for remedies available to us under our agreements with such CROs, we cannot control whether they devote sufficient time and resources to our on-going clinical, nonclinical and preclinical programs.
−Removed: If CROs do not successfully carry out their contractual duties or obligations or meet expected deadlines, if they need to be replaced or if the quality or accuracy of the clinical data they obtain is compromised due to the failure to adhere to our clinical protocols, regulatory requirements or for other reasons, our clinical trials may be extended, delayed or terminated and we may not be able to obtain regulatory approval for or successfully commercialize our product candidates.
+Added: If CROs do not
+Added: successfully carry out their contractual duties or obligations or meet expected deadlines, if they need to be replaced or if the quality or accuracy of the clinical data they obtain is compromised due to the failure to adhere to our clinical protocols, regulatory requirements or for other reasons, our clinical trials may be extended, delayed or terminated and we may not be able to obtain regulatory approval for or successfully commercialize our product candidates.
For example, investigator misconduct during our TRANQUILITY II trial evaluating BXCL501 in patients with probable Alzheimer’s disease could require us to conduct additional clinical trials before we are able to seek or obtain approval for BXCL501 for use in this patient population, as described more fully in the risk factor above entitled:
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In addition, the global economy, including credit and financial markets, has recently experienced extreme volatility and disruptions, including severely diminished liquidity and credit availability, rising interest and inflation rates, declines in consumer confidence, declines in economic growth, increases in unemployment rates and uncertainty about economic stability.
−Removed: A severe or prolonged economic downturn or recession and a continued increase in inflation rates or interest rates could result in a variety of risks to our business, and our ability to raise additional capital when needed on acceptable terms, if at all.
−Removed: There can be no assurance that further deterioration in credit and financial markets and confidence in economic conditions will not occur.
−Removed: A weak or declining economy could also strain our suppliers, possibly resulting in supply disruption, or cause our customers to delay making payments for our services.
−Removed: Increased inflation rates and related increases in interest rates can adversely affect us by increasing our costs, including labor and employee benefit costs.
In addition, events such as pandemics, epidemics, or outbreaks of an infectious disease may materially and adversely impact our business if we or any of the third parties with whom we engage were to experience shutdowns or other business disruptions.
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Any of the foregoing could harm our business and we cannot anticipate all of the ways in which the current economic climate and financial market conditions could adversely impact our business.
+Added: Additionally, trade policies and geopolitical disputes and other international conflicts can result in tariffs, sanctions and other measures that restrict international trade, and can materially adversely affect our business, particularly if these measures affect regions where raw materials are sourced.
+Added: For example, tensions between the United States and China have led to a series of tariffs being imposed by the United States on imports from China, as well as other business restrictions.
+Added: Countries may also adopt other measures, such as controls on imports or exports of goods, technology or data, that could adversely impact our operations and supply chain.
+Added: As these tensions continue to rise, more targeted approaches on certain products, industries or companies could significantly impact our development and commercialization efforts.
+Added: government has recently imposed tariffs on certain foreign goods, and some foreign governments have threatened or instituted retaliatory tariffs on certain U.S.
+Added: goods and have indicated a willingness to
+Added: impose additional tariffs on U.S.
+Added: products, which could increase the cost of goods needed to commercialize our products and continue development of our product candidates.
+Added: Further, such actions by the U.S.
+Added: could result in other retaliatory actions by those countries which could impact our ability to profitably commercialize our products in those jurisdictions.
+Added: As a result, our business, operations, and financial condition could be materially harmed.
+Added: A severe or prolonged economic downturn, or additional global financial or political crises, could result in a variety of risks to our business, including delayed clinical studies or preclinical studies, delayed approval of our product candidates, delayed ability to obtain patents and other intellectual property protection, weakened demand for our product candidates, if approved, or our ability to raise additional capital when needed on acceptable terms, if at all.
+Added: The extent of the impact of these conditions on our operational and financial performance, including our ability to execute our business strategies and initiatives in the expected timeframe, as well as that of third parties upon whom we rely, will depend on future developments which are uncertain and cannot be predicted.
+Added: A weak or declining economy also could strain our suppliers, possibly resulting in supply disruption.
+Added: Any of the foregoing could harm our business and we cannot anticipate all of the ways in which the current economic climate and financial market conditions could adversely impact our business.
+Added: Furthermore, our stock price may decline due in part to the volatility of the stock market and the general economic downturn.
Our future success may depend on our ability to attract and retain qualified personnel, including consultants.
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We might not be successful in maintaining our unique culture and continuing to attract and retain qualified personnel.
−Removed: We have, from time to time, had difficulty hiring and retaining highly skilled personnel with appropriate qualifications, including as a result of the Reprioritization and related consequences for our reputation.
+Added: We have, from time to time, had difficulty hiring and retaining highly skilled personnel with appropriate qualifications, including as a result of the Clinical Reprioritization and related consequences for our reputation.
We may experience such difficulties in the future, and any further restructuring or related reduction in force could exacerbate such difficulties.
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These locations may be subject to additional security and other risk factors due to the limited control of our employees.
−Removed: If such an event as
−Removed: described above were to occur in the future, it may cause interruptions in our operations, delay research and development programs, clinical trials, regulatory activities, manufacturing and quality assurance activities, sales and marketing activities, hiring, training of employees and persons within associated third parties, and other business activities.
+Added: If such an event as described above were to occur in the future, it may cause interruptions in our operations, delay research and development programs, clinical trials, regulatory activities, manufacturing and quality assurance activities, sales and marketing activities, hiring, training of employees and persons within associated third parties, and other business activities.
For example, the loss of clinical trial data from completed or future clinical trials could result in delays in our regulatory approval efforts and significantly increase our costs to recover or reproduce the data.
Likewise, we will rely on third parties, including ARx, to manufacture IGALMI ® and our product candidates and to conduct clinical trials, and similar events as those described in the prior paragraph relating to their business systems, equipment and facilities could also have a material adverse effect on our business.
−Removed: To the extent that any disruption or security breach were to result in a loss of, or damage to, our data or applications, or inappropriate disclosure of confidential or proprietary information, we could incur liability and the further development and commercialization of our product candidate could be delayed or altogether terminated.
+Added: To the extent that any disruption or security breach were to result in a loss of, or damage to, our data or applications, or inappropriate disclosure of
+Added: confidential or proprietary information, we could incur liability and the further development and commercialization of our product candidate could be delayed or altogether terminated.
Data breaches or cyber-attacks could disrupt our business operations and information technology systems or those of third parties on which we rely, adversely impact our financial results, or result in the loss or exposure of confidential or sensitive product candidate, clinical trial, employee, or Company information.
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As our operations and business grow, we may become subject to or affected by new or additional data protection laws and regulations and face increased scrutiny or attention from regulatory authorities.
−Removed: In the U.S., HIPAA imposes, among other things, certain standards relating to the privacy, security, transmission, and breach reporting of individually identifiable health information.
+Added: In the U.S., HIPAA imposes,
+Added: among other things, certain standards relating to the privacy, security, transmission, and breach reporting of individually identifiable health information.
Most healthcare providers, including research institutions from which we obtain patient health information, are subject to privacy and security regulations promulgated under HIPAA.
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The UK GDPR mirrors the fines under the GDPR (i.e., fines up to the greater of £17.5 million or 4% of global turnover).
−Removed: On October 12, 2023,
−Removed: the UK Extension to the DPF came into effect (as approved by the UK Government), as a data transfer mechanism from the UK to U.S.
+Added: On October 12, 2023, the UK Extension to the DPF came into effect (as approved by the UK Government), as a data transfer mechanism from the UK to U.S.
entities self-certified under the DPF.
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At December 31, 2025 the Company had approximately $510.3 million of gross federal and $530.6 million of gross state net operating loss carry-forwards.
−Removed: Tax Cuts and Jobs Act (“TCJA”) in 2017 amended the net operating losses carryforward rules.
+Added: The Tax Cuts and Jobs Act (“TCJA”) in December 2017 amended the net operating losses carryforward rules.
Net operating losses generated after December 31, 2017, may be carried forward indefinitely, subject to certain limitations on their use.
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Neither provisional patent applications nor PCT applications issue directly as patents.
−Removed: We own PCT patent applications relating to our platform technologies covering methods of use and applications of the platform technologies.
+Added: patent applications relating to our platform technologies covering methods of use and applications of the platform technologies.
We cannot be certain that any future patents will issue with claims that cover our product candidates.
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A court could prohibit us from using technologies, features or other intellectual property rights that are essential to our products or technologies, if such technologies or features are found to incorporate or be derived from the trade secrets or other proprietary information of another person or entity, including another or former employers.
−Removed: An inability to incorporate technologies, features or other intellectual property rights that are important or essential to our products or product candidates could have a material adverse effect on our business, financial condition, results of operations, and competitive position, and may prevent us from developing, manufacturing and/or commercializing our
−Removed: products or technologies.
+Added: An inability to incorporate technologies, features or other intellectual property rights that are important or essential to our products or product candidates could have a material adverse effect on our business, financial condition, results of operations, and competitive position, and may prevent us from developing, manufacturing and/or commercializing our products or technologies.
In addition, we may lose valuable intellectual property rights or personnel.
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Our product candidates have been or will be submitted to the FDA for approval under Section 505(b)(2) of the FDCA.
−Removed: Section 505(b)(2) permits the submission of an NDA where at least some of the information required for approval comes from studies that were not conducted by, or for, the applicant and on which the applicant has not obtained a right of reference.
+Added: Section 505(b)(2) permits the submission of an NDA where at least some of the information required for
+Added: approval comes from studies that were not conducted by, or for, the applicant and on which the applicant has not obtained a right of reference.
The 505(b)(2) application would enable us to reference published literature and/or the FDA’s previous findings of safety and effectiveness for a branded reference drug with the same active ingredient.
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We may also be hindered or prevented from enforcing our rights with respect to a government entity or instrumentality because of the doctrine of sovereign immunity.
−Removed: Our ability to enforce our patent or other intellectual
−Removed: property rights depends on our ability to detect infringement.
+Added: Our ability to enforce our patent or other intellectual property rights depends on our ability to detect infringement.
It may be difficult to detect infringers who do not advertise the components or methods that are used in connection with their products or technologies.
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Such mechanisms include interference proceedings, post grant review, inter partes review, and derivation proceedings before the USPTO and similar proceedings in foreign jurisdictions.
−Removed: If third parties prepare and file patent applications in the United States that also claim technology similar or identical to ours, we may have to participate in interference or derivation proceedings in the USPTO to determine which party is entitled to a patent on the disputed invention.
+Added: If third parties prepare and file patent applications in the United States that also claim technology similar or identical to ours, we may have to
+Added: participate in interference or derivation proceedings in the USPTO to determine which party is entitled to a patent on the disputed invention.
We may also become involved in similar opposition proceedings in the European Patent Office or similar offices in other jurisdictions regarding our intellectual property rights with respect to our products and technology.
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We may not have sufficient resources to bring these actions to a successful conclusion.
−Removed: In addition, if we do not obtain a license, develop or obtain non-infringing technology, fail to defend an infringement action successfully or have infringed patents declared invalid, we may incur
−Removed: substantial monetary damages, encounter significant delays in bringing our product candidates to market and be precluded from manufacturing or selling our product candidates.
+Added: In addition, if we do not obtain a license, develop or obtain non-infringing technology, fail to defend an infringement action successfully or have infringed patents declared invalid, we may incur substantial monetary damages, encounter significant delays in bringing our product candidates to market and be precluded from manufacturing or selling our product candidates.
We cannot be certain that others have not filed patent applications for technology covered by our pending applications, or that we were the first to invent the technology, because:
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If another party has filed U.S.
−Removed: patent applications on inventions similar to ours that claim priority to any applications filed prior to the priority dates of our applications, we may have to participate in an interference proceeding declared by the USPTO to determine priority of invention in the U.S.
+Added: patent applications on inventions
+Added: similar to ours that claim priority to any applications filed prior to the priority dates of our applications, we may have to participate in an interference proceeding declared by the USPTO to determine priority of invention in the U.S.
The costs of these proceedings could be substantial, and it is possible that such efforts would be unsuccessful if, unbeknownst to us, the other party had independently arrived at the same or similar inventions prior to our own inventions, resulting in a loss of our U.S.
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Therefore, we may not be able to prevent the unauthorized disclosure or use of our technical knowledge or other trade secrets by such employees, consultants, advisors or third parties, despite the existence generally of these confidentiality restrictions.
−Removed: These agreements may not effectively prevent disclosure of
−Removed: confidential information and may not provide an adequate remedy in the event of unauthorized disclosure of confidential information.
+Added: These agreements may not effectively prevent disclosure of confidential information and may not provide an adequate remedy in the event of unauthorized disclosure of confidential information.
There can be no assurances that such employees, consultants, advisors or third parties will not breach their agreements with us, that we will have adequate remedies for any breach, or that our trade secrets will not otherwise become known or independently developed by third parties, including our competitors.
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Such security measures may not, for example, in the case of misappropriation of a trade secret by an employee, consultant or other third party with authorized access, provide adequate protection for our proprietary information.
−Removed: Our security measures may not prevent an employee, consultant or other third party from misappropriating our trade secrets and providing them to a competitor, and recourse we take against such misconduct may not provide an adequate remedy to protect our interests fully.
+Added: measures may not prevent an employee, consultant or other third party from misappropriating our trade secrets and providing them to a competitor, and recourse we take against such misconduct may not provide an adequate remedy to protect our interests fully.
Unauthorized parties may also attempt to copy or reverse engineer certain aspects of our products or services that we consider proprietary.
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As is common in the biotechnology and pharmaceutical industries, we employ individuals who were previously employed at other biotechnology or pharmaceutical companies, including our competitors or potential competitors.
−Removed: Some of these employees, consultants and contractors may have executed proprietary rights, non-disclosure and non-competition agreements in connection with such previous employment or
+Added: Some of these employees, consultants and contractors may have executed proprietary rights, non-disclosure and non-competition agreements in connection with such previous employment or engagement.
Although we try to ensure that our employees, consultants and independent contractors do not use the intellectual property rights, proprietary information, know-how, or trade secrets of others in their work for us, and do not perform work for us that is in conflict with their obligations to another employer or any other entity, we may be subject to claims that we or our employees, consultants or independent contractors have, inadvertently or otherwise misappropriated the intellectual property, including know-how, trade secrets or other proprietary information of their former employers or clients.
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Patents granted before the implementation of the new system can be opted out of UPC jurisdiction, remaining as national patents in the UPC countries.
−Removed: Patents that remain under the jurisdiction of the UPC may be challenged in a single UPC-based revocation proceeding that, if successful, could invalidate the patent in all countries who are signatories to the UPC.
+Added: Patents that remain under the jurisdiction of the UPC may be challenged in a single UPC-based revocation proceeding that, if successful, could invalidate the patent in all countries
+Added: who are signatories to the UPC.
Further, because the UPC is a new court system and there is little precedent for the court’s laws, there is increased uncertainty regarding the outcome of any patent litigation.
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● changes in our capital structure or dividend policy, future issuances of securities, sales of large blocks of common stock by our stockholders;
+Added: ● sales of our common stock under our existing “at-the-market” equity offering program or other future issuances;
● our cash position;
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In addition, if the market for stocks in our industry or industries related to our industry, or the stock market in general, experiences a loss of investor confidence, the trading price of our common stock could decline for reasons unrelated to our business, financial condition and results of operations.
−Removed: If any of the foregoing occurs, it could cause our
−Removed: stock price to fall and may expose us to lawsuits that, even if unsuccessful, could be costly to defend and a distraction to management.
+Added: If any of the foregoing occurs, it could cause our stock price to fall and may expose us to lawsuits that, even if unsuccessful, could be costly to defend and a distraction to management.
Future sales and issuances of our common stock, including common stock that may be sold following exercise of outstanding warrants, would result in additional dilution of the percentage ownership of our stockholders and could adversely impact the share price of our common stock.
−Removed: We expect that significant additional capital will be needed in the future to continue our planned operations, including, without limitation, funding our trials and studies, marketing and commercializing our products and funding our operations.
+Added: We expect that significant additional capital will be needed in the future to continue our planned operations, including, without limitation, funding our trials and studies, marketing and commercializing our products and funding
+Added: our operations.
Accordingly, we have sold, and in the future may sell, common stock, convertible securities or other equity securities in one or more transactions at prices and in a manner we determine from time to time.
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In March 2024, we issued and sold in a registered direct offering 190,913 shares of our common stock, accompanying warrants to purchase up to 538,728 shares of our common stock and pre-funded warrants to purchase up to 347,814 shares of our common stock.
−Removed: In November 2024, we issued and sold in a registered direct offering 350,000 shares of our common stock, accompanying warrants to purchase up to 912,500 shares of our common stock and pre-funded warrants to purchase up to 562,500 shares of our common stock, (see Note 11, Common Stock Financing Activities in this Annual Report on Form 10-K for additional information).
+Added: In November 2024, we issued and sold in a registered direct offering 350,000 shares of our common stock, accompanying warrants to purchase up to 912,500 shares of our common stock and pre-funded warrants to purchase up to 562,500 shares of our common stock, (for additional information see Note 11, Common Stock Financing Activities in our Annual Report on Form 10-K for the fiscal year ended December 31, 2025).
In addition, we issued additional warrants to purchase up to 312,506 shares of common stock in connection with the Fifth Amendment of our Credit Agreement (see Note 9, Debt and Credit Facilities in this Annual Report on Form 10-K for additional information).
−Removed: In March 2025, we issued and sold in a registered direct offering 188,383 shares of common stock, pre-funded warrants to purchase up to 3,811,617 shares of our common stock, accompanying warrants to purchase up to 4 million shares, and option warrants to purchase an additional 4 million shares and 4 million warrants.
+Added: In March 2025, we issued and sold in a registered direct offering 188,383 shares of common stock, pre-funded warrants to purchase up to 3,811,617 shares of our common stock, accompanying warrants to purchase up to 4 million shares, and option warrants to purchase an additional 4 million shares of common stock (or pre-funded warrants in lieu thereof) and 4 million warrants.
+Added: The option warrants expired on March 18, 2025 without being exercised.
+Added: In addition, in April 2025, we entered into an Equity Distribution Agreement with Canaccord Genuity LLC establishing an “at-the-market” equity offering program under which Canaccord acts as sales agent (the “Company ATM Program”).
+Added: On August 18, 2025, following an increase in the Company's public float above $75 million, we amended the program to permit sales of shares having an aggregate offering price of up to $80,000,000.
+Added: Any sales under the Company ATM Program will be dilutive to existing stockholders and could adversely affect our stock price.
+Added: From the inception of the Company ATM Program in April 2025 through December 31, 2025, we sold 12,086,560 shares of our common stock under the Equity Distribution Agreement for aggregate gross proceeds of approximately $34.5 million.
The number of shares of common stock underlying our outstanding warrants is significant in relation to our outstanding common stock (29% as of March 26, 2026), which could have a negative effect on the market price of our common stock and make it more difficult for us to raise funds through future equity offerings.
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To the extent outstanding stock options or warrants are exercised, there would be further dilution to our existing stockholders, which could impact the price of our common stock.
+Added: Any future issuances of equity securities, including under our existing “at-the-market” program or in connection with potential strategic transactions, would further dilute existing stockholders and could materially and adversely affect the market price of our common stock and our ability to raise additional capital on favorable terms.
+Added: If we do not maintain compliance with the continued listing standards of the Nasdaq Capital Market, Nasdaq may delist our common stock from trading on its exchange, which could limit investors' ability to make transactions in our securities and subject us to additional trading restrictions.
+Added: Our common stock is currently listed for trading on Nasdaq and we are currently in compliance with all Nasdaq listing requirements.
+Added: However, while the Company currently meets all Nasdaq Capital Market listing requirements for continued listing, we have in the past and may again in the future receive notice of the failure to satisfy a continued listing rule from Nasdaq .
+Added: There can be no assurance that, should we fall out of compliance with the continued listing standards of Nasdaq, we will be able to regain and maintain compliance and will not face a delisting from Nasdaq in the future.
We do not intend to pay cash dividends on our shares of common stock so any returns will be limited to the value of our shares.
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We intend to conduct our operations so that we will not be deemed an investment company.
−Removed: However, if we were to be deemed an investment company, restrictions imposed by the 1940 Act, including limitations on our capital structure and our ability to transact with affiliates, could
−Removed: make it impractical for us to continue our business as contemplated and could have a material adverse effect on our business, financial condition and results of operations.
+Added: However, if we were to be deemed an investment company, restrictions imposed by the 1940 Act, including limitations on our capital structure and our ability to transact with affiliates, could make it impractical for us to continue our business as contemplated and could have a material adverse effect on our business, financial condition and results of operations.
We are a “smaller reporting company” and are able to avail ourselves of reduced disclosure requirements applicable to smaller reporting companies, which could make our common stock less attractive to investors.
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On February 24, 2025, while the Company’s motion to dismiss remained pending, Plaintiffs moved for leave to further amend their complaint.
−Removed: The Company filed an opposition to the motion on March 17, 2025.
−Removed: Plaintiffs’ reply is due April 7, 2025.
+Added: On September 29, 2025, the Court issued an order granting Plaintiffs’
+Added: motion for leave to amend, denying Defendants’ motion to dismiss as moot, and allowing Plaintiffs to proceed on certain of their claims.
+Added: The Company filed an answer to the third amended complaint on October 28, 2025.
+Added: On January 23, 2026, the parties reached a tentative agreement to settle the action.
+Added: In light of this agreement, on January 28, 2026, the Court entered an order vacating the scheduling order and requiring Plaintiffs to file a motion for preliminary approval of the settlement or status report by February 27, 2026.
+Added: Plaintiffs filed a motion for preliminary approval on February 27, 2026, and the Court granted the motion on March 2, 2026.
+Added: The hearing on the motion for final approval of the settlement is set for September 2, 2026.
On November 28, 2023, Plaintiffs Pratheesan Panancherry and Jeffrey Bastress filed a stockholder derivative complaint in the United States District Court for the District of Connecticut purportedly on behalf of the Company and against Vimal Mehta, Richard I.
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Stockholder Derivative Litigation , 3:23-cv-1554 (D.
−Removed: The consolidated action is currently stayed.
+Added: On October 30, 2025, the Court entered the parties’ joint stipulation staying the consolidated action until the resolution of Hills v.
+Added: BioXcel et al , 3:23-cv-00915 (D.
On January 11, 2024, Plaintiff Jeremy Smith filed a stockholder derivative complaint in the United States District Court for the United States District Court for the District of Delaware purportedly on behalf of the Company and against Vimal Mehta, Peter Mueller, June Bray, Sandeep Laumas, Michael Miller, Michal Votruba, Richard I.
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Derivative Litigation, 1:24-cv-00041 (D.
−Removed: The consolidated action is currently stayed.
−Removed: The Company is also cooperating with a formal investigation of the Company and certain of its officers and directors by the SEC, relating to the Company’s public disclosures, including about product sales and the receipt of a Form 483 by an investigator at one of the Company’s clinical trial sites in the TRANQUILITY II study, and trading in the securities of the Company.
+Added: On October 30, 2025, the Court entered the parties’ joint stipulation staying the consolidated action until the resolution of Hills v.
+Added: BioXcel et al , 3:23-cv-00915 (D.
+Added: On May 7, 2025, Plaintiff Yaakov Portnoy filed a stockholder derivative complaint in the Court of Chancery of the State of Delaware purportedly on behalf of the Company and against Vimal Mehta, Peter Mueller, June Bray, Sandeep “Steve” Laumas, Michael P.
+Added: Miller, Michal Votruba, Richard I.
+Added: Steinhart, Robert Risinger, and Krishnan Nandabalan, and the Company as Nominal Defendant under the caption Yaakov Portnoy, derivatively on behalf of BioXcel Therapeutics, Inc.
+Added: Vimal Mehta, et al , 2025-0508-BWD (Del.
+Added: The complaint alleges similar claims to those raised in In re BioXcel Therapeutics, Inc.
+Added: Derivative Litigation , 1:24-cv-00041 (D.
+Added: Del.), including business torts.
+Added: On January 27, 2026, the Court entered the parties’ joint stipulation staying the case until the resolution of Hills v.
+Added: BioXcel et al , 3:23-cv-00915 (D.
+Added: The Company is also cooperating with a formal investigation of the Company and certain of its officers and directors by the SEC, relating to the Company’s public disclosures—including about product sales and the receipt of a Form 483 by an investigator at one of the Company’s clinical trial sites in the TRANQUILITY II study, the Company’s technology platform, and study enrollment—and trading in the securities of the Company.
The Company has produced documents, and current and former officers and employees of the Company have testified before the SEC.
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In addition, lawsuits and other legal proceedings may be time consuming to defend or prosecute and may require a commitment of management and personnel resources that will be diverted from our normal business operations.
−Removed: Also, our insurance coverage may be insufficient, our assets may be insufficient to cover any amounts that exceed our insurance coverage, and we may have to pay damage awards or otherwise may enter into settlement arrangements in connection with such claims.
+Added: Also, our insurance coverage may be insufficient, our assets may be insufficient to cover any amounts that exceed our insurance coverage, and we may have to pay damage awards or otherwise may enter into settlement arrangements in
+Added: connection with such claims.
Moreover, we may be unable to continue to maintain our existing insurance at a reasonable cost, if at all, or to secure additional coverage, which may result in costs associated with lawsuits and other legal proceedings being uninsured.
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Provisions of our amended and restated certificate of incorporation and our amended and restated bylaws and Delaware law also could have the effect of discouraging potential acquisition proposals or making a tender offer or delaying or preventing a change in control, including changes a stockholder might consider favorable.
−Removed: Such provisions
−Removed: may also prevent or frustrate attempts by our stockholders to replace or remove our management.
+Added: Such provisions may also prevent or frustrate attempts by our stockholders to replace or remove our management.
In particular, the certificate of incorporation and bylaws and Delaware law, as applicable, among other things:
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require significant expenditures and place significant demands on our management and other personnel, including costs resulting from public company reporting obligations under the Exchange Act and the rules and regulations regarding corporate governance practices, including those under the Sarbanes-Oxley Act, the Dodd-Frank Wall Street Reform and Consumer Protection Act, and the listing requirements of the stock exchange on which our securities are listed.
−Removed: These rules require the establishment and maintenance of effective disclosure and financial controls and procedures, internal control over financial reporting and changes in corporate governance practices, among many other complex rules that are often difficult to implement, monitor and maintain compliance with.
+Added: These rules require the establishment and maintenance of effective disclosure and financial controls and procedures, internal control over financial reporting and changes in
+Added: corporate governance practices, among many other complex rules that are often difficult to implement, monitor and maintain compliance with.
Moreover, despite reforms made possible by the JOBS Act, the reporting requirements, rules, and regulations will make some activities more time-consuming and costly, particularly as we are no longer an “emerging growth company.” In addition, we expect these and similar rules and regulations to make it more difficult and more expensive for us to obtain director and officer liability insurance and we may be required to incur substantial costs to maintain such insurance.
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Changes in tax laws, regulations, or rulings, or changes in interpretations of existing laws and regulations, could materially adversely affect our business, financial condition, results of operations, and prospects.
−Removed: For example, the TCJA, the Coronavirus Aid, Relief and Economic Security Act, and the Inflation Reduction Act (the “IRA”) made many significant changes to the U.S.
+Added: For example, the TCJA, the Coronavirus Aid, Relief and Economic Security Act, and the IRA made many significant changes to the U.S.
Beginning in 2022, the TCJA requires taxpayers to capitalize and amortize certain research and development expenditures over five years if incurred in the U.S.
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federal income taxation of certain corporations, including imposing a minimum tax on the book income of certain large corporations and a 1% excise tax on the value of certain corporate stock repurchases by publicly traded companies that would be imposed on the company repurchasing such stock.
+Added: Further, beginning with our 2025 tax year, the OBBBA
+Added: restored immediate deductibility of domestic expenditures, while foreign expenditures will continue to be capitalized and amortized over 15 years.
Regulatory or accounting guidance with respect to existing or future tax laws could materially affect our tax obligations and effective tax rate.
It is uncertain if, and to what extent, various states will conform to current federal law or any newly enacted federal tax legislation.
+Added: For example, the One Big Beautiful Bill Act (the “OBBBA”) was signed into law on July 4, 2025 and made significant changes to U.S.
+Added: federal tax law.
+Added: Changes to tax laws (which changes may have retroactive application) could adversely affect us or holders of our common stock.
+Added: We are evaluating the elections available under the OBBBA.
+Added: Based on our current assessment, we do not expect the changes to Section 174 under the OBBBA to have a material impact on our financial position or results of operations.
+Added: For example, under Section 174 of the Internal Revenue Code of 1986, as amended (the "Code"), in taxable years beginning after December 31, 2021, expenses that are incurred for research and development performed outside the U.S.
+Added: will be capitalized and amortized, which may have an adverse effect on our cash flow.
+Added: The OBBBA provides that for taxable years beginning after December 31, 2024, expenses that are incurred for research and development performed in the U.S.
+Added: may, at the taxpayer’s election, be immediately deducted or capitalized and amortized.
+Added: In addition, the OBBBA provides that for taxable years beginning after December 31, 2021 and before January 1, 2025, certain eligible taxpayers generally may elect to retroactively deduct expenses for research and development performed in the U.S.
+Added: in such taxable years by filing amended tax returns for such taxable years, and all other taxpayers that are not eligible to make such an election and that amortized expenses for research and development performed in the U.S.
+Added: in such taxable years generally may elect to accelerate and deduct the remaining unamortized amounts of such research and development expenses (i) in the first taxable year beginning after December 31, 2024, or (ii) ratably over the two-taxable year period beginning with the first taxable year beginning after December 31, 2024.
+Added: In recent years, many such changes have been made and changes are likely to continue to occur in the future.
+Added: Future changes in U.S.
+Added: tax laws could have a material adverse effect on our business, cash flow, financial condition or results of operations.
+Added: We urge investors to consult with their legal and tax advisors regarding the implications of potential changes in U.S.
+Added: tax laws on an investment in our common stock.
Additional indirect taxes in various jurisdictions could materially adversely affect our business, financial condition, results of operations, and prospects.
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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.