What changed in this filing

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Item 1A. Risk Factors

2026-03-31 compared with 2025-03-31 · 242 added, 191 removed, 1091 unchanged (28% of the section changed)

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is a summary of the principal risk factors we face:

financial statements are qualified on a going concern basis;

have had a history of losses and may not generate sustained positive cash flow sufficient to fund our operations and research and

development programs;

is substantial doubt about our ability to continue as a going concern;

need for, and ability to obtain, additional financing when needed on favorable terms, or at all;

or complications in conducting clinical trials, such as our Phase 2a study for oral CC-42344 for our Influenza program which in late

2024 we determined must be extended due to an insufficient infection rate;

or complications in conducting clinical trials, including our Phase 2a study for oral CC-42344 for our Influenza program which we

determined must be redone due to an insufficient infection rate;

challenges we face in furthering our research and development efforts, including advancing our product candidates in clinical studies

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risks inherent in developing, obtaining regulatory approvals for and commercializing new, commercially viable and competitive products

and treatments;

and treatments, including evolving regulatory requirements, public health recommendations and market acceptance;

research and development activities may not result in commercially viable products;

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in regulation and policies in the U.S.

and other countries, including a reduction on government spending on healthcare in the wake

of the recent election in the U.S.

and potential delays within government agencies such as the FDA which may result from efforts

to reduce the size of the federal government and spending by the Trump Administration;

and other countries, including a reduction in government spending on healthcare and potential

delays within government agencies such as the FDA which may result from ongoing efforts to reduce the size of the federal government

and spending by the Trump Administration;

competition, including the possibility that competitors may develop effective and/or less costly treatments or vaccines, including

as part of the programs financed by the U.S.

as part of programs financed by the U.S.

success is dependent on the involvement and continued efforts of our Chairman and Co-Chief Executive Officers;

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such as Federal Reserve interest rates, the imposition of tariffs and the possibility of trade wars, increases in unemployment rates,

geopolitical conflict and other ongoing or future events which could adversely impact our ability to access capital on favorable

terms or at all and further our research and development efforts;

wars and geopolitical conflicts and other ongoing or future events which could adversely impact our ability to access capital on

favorable terms or at all and further our research and development efforts;

to operations, including impact on employees, vendors, facilities or technology, or on the industry or economy, from uncontrollable

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We do not have sufficient working capital

and cash flows for continued operations for at least the next 12 months, which raises a risk of our potential inability to continue as

a going concern.

Our continued existence is dependent upon our obtaining the necessary capital to meet our expenditures, and we can provide

no assurance that we will be able to raise adequate capital to meet our future working capital needs.

and cash flows for continued operations for at least the next 12 months.

As a result, management has concluded, and our independent registered

public accounting firm has agreed with our conclusion that there is substantial doubt regarding our ability to continue as a going concern

for a period of at least 12 months beyond the filing of this Annual Report on Form 10-K.

Our continued existence is dependent upon our

obtaining the necessary capital to meet our expenditures, and we can provide no assurance that we will be able to raise adequate capital

to meet our future working capital needs.

RELATED TO OUR BUSINESS

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but there is no guarantee that will be achievable.

had an accumulated deficit of $333,418,000 from inception through December 31, 2024 and expect to continue losing money in the future.

had an accumulated deficit of $342.2 million from inception through December 31, 2025 and expect to continue losing money in the future.

We may never achieve income from operations or have positive cash flow from operations .

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pharmaceutical products.

As a result, we have accumulated losses of $333,418,000 from inception through December 31, 2024, expect losses

As a result, we have accumulated losses of $342.2 million from inception through December 31, 2025, expect losses

to continue, and have never generated revenue from product sales.

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infection rates or other study criteria.

For example, in December 2024, the Company announced plans to extend enrollment for the oral

CDI-42344 Phase 2a study due to unexpectedly low influenza infection among study participants.

Specifically, management determined that

the low infectivity obtained in this study hindered antiviral data analysis.

The Company is currently in continuing discussions with

the CRO to address this study and determine a course forward with respect thereto, including potentially by preparing a protocol amendment

for approval by the United Kingdom MHRA in order to seek to extend enrollment in this study and to ensure necessary infection rates among

enrolled study subjects in the study.

While we cannot predict the ultimate outcome of these developments, we expect that we will need

to incur additional expenses to proceed with trial and obtain data that can be used to continue our development of our CDI-42344 Influenza

candidate, which development will also be delayed as a result.

Further, our investments in the initial Phase 2s trial process could prove

to be all or partially lost as a result.

These and other challenges or events that may arise in the future with respect to our research

and development efforts could materially adversely effect our operations and financial position, cause reputational harm or damage our

relationships with key or prospective collaborators or have other adverse consequences on us and our business.

For example, see the risk factor below entitled “We face significant risks and uncertainties

surrounding our Influenza A program following an initial Phase 2a study which failed to yield scientifically viable results relating

to the product candidate’s efficacy.” These and other challenges or events that may arise in the future with respect to our

research and development efforts could materially adversely effect our operations and financial position, cause reputational harm or

damage our relationships with key or prospective collaborators or have other adverse consequences on us and our business.

developing pharmaceutical products, including conducting preclinical studies and clinical trials, is capital-intensive.

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the Company unable to continue operations.

face significant risks and uncertainties surrounding our Influenza A program following an initial Phase 2a study which failed to yield

scientifically viable results relating to the product candidate’s efficacy.

December 2024, the Company’s management determined that a Phase 2a study conducted for the Company’s CC-42344 Influenza A

product candidate exhibited an inadequately low infectivity rate among participants which hindered antiviral data analysis.

management has determined that a new Phase 2a study would be necessary to further pursue research and development of this product candidate.

A dispute has arisen with the CRO that performed the study, in which the Company contends that the CRO breached its agreement in a number

of respects and is requesting that the CRO refund the $6,309,000 it was paid or redo the study.

The CRO has implicitly denied liability

and is seeking to recover an additional approximately $600,000 from the Company.

As of the date of this Report, it appears that the Company

will seek to arbitrate the dispute as required under the agreement with the CRO.

This development has resulted in considerable delays

in the development of our Influenza A program.

While we cannot predict the ultimate outcome of these developments, we expect that we

will need to conduct a new trial and obtain data that can be used to continue our development of our CC-42344 Influenza A candidate,

which development has and will continue to be delayed as a result.

Further, our investments in the initial Phase 2a trial process, including

the $6,309,000 million we already paid the CRO, could prove to be all or partially lost as a result.

For example, we may be unable to

recoup all or a significant portion of the amounts we previously paid the CRO.

Even if the CRO agrees to conduct a new study at no or

a reduced cost, we will still have been delayed in our efforts with respect to the product candidate, and have incurred and will likely

continue to incur additional expenses in excess of what were originally incurred and contemplated, as a result of these events, and similar

or other issues could arise with any subsequent study or continuance.

Further, if we are unable to reach a favorable resolution with

the CRO, we would need to raise capital to fund a new study.

These developments have created significant risks and uncertainties with

respect to CC-42344’s use for Influenza A.

RELATED TO THE DISCOVERY, DEVELOPMENT AND COMMERCIALIZATION OF PRODUCT CANDIDATES

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the costs of undertaking them.

For example, beginning in 2021, certain of our CROs began experiencing staffing shortages and other issues

due to the outbreak of Omicron cases, resulting in delays and increased costs in researching our product candidates.

We have also experienced

material delays and cost increases in general throughout the pandemic caused by pandemic-related difficulties faced by our CROs and CMOs.

Further, any disputes that may arise from our arrangements with CROs or CMOs may result in additional unexpected expenses and force our

management to allocate their limited time to seeking a resolution to the problem, which could materially adversely affect our operations.

For example, in the past certain of our CROs experienced staffing shortages and other issues due to the

outbreak of Omicron variant cases of COVID-19, resulting in delays and increased costs in researching our product candidates.

also experienced material delays and cost increases in general throughout the pandemic caused by pandemic-related difficulties faced

by our CROs and CMOs.

Further, any disputes that may arise from our arrangements with CROs or CMOs may result in additional unexpected

expenses and force our management to allocate their limited time to seeking a resolution to the problem, which could materially adversely

affect our operations.

these third parties terminate their engagements, we will need to enter into alternative arrangements which would delay our product development

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our product candidates ourselves, including:

chain shortages which were prevalent during the COVID-19 pandemic;

chain shortages including as may be caused by ongoing wars or geopolitical conflicts;

inability to meet any product specifications and quality requirements consistently;

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future products.

Some of these events could be the basis for regulatory actions, including injunction, recall, seizure or total or partial

suspension of production.

Some of these events could be the basis for regulatory actions or litigation, including injunction, recall, seizure

or total or partial suspension of production.

we expect to rely on limited sources of supply for the drug substance and drug product of product candidates, any disruption in the chain

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An alternative vendor would need to be qualified through a New Drug Application (“NDA”) or marketing authorization supplement,

which could cause further delay.

The FDA or other regulatory agencies outside of the United States may also require additional studies

if a new supplier is relied upon for commercial production.

which could cause further delay or increased costs.

The FDA or other regulatory agencies outside of the United States may also require

additional studies if a new supplier is relied upon for commercial production.

factors could cause the delay of clinical trials, regulatory submissions, required approvals or commercialization of our product candidates,

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failure by our distributors could delay clinical development or marketing approval of our product candidates or commercialization of

our products, if approved, producing additional losses and depriving us of potential product revenue.

our products, if approved, producing additional losses and depriving us of potential product revenue or incur losses.

the approach we are taking to discover and develop drugs is novel, it may never lead to marketable products.

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our future commercial success depends on gaining regulatory approval for our products, we cannot generate revenue without obtaining approvals,

which is a lengthy and uncertain process .

long-term success and generation of revenue will depend upon the successful development of new products from our research and development

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efforts to develop our product candidates are limited to a small number of product candidates aimed at treating a small number of viral

To date, we have only entered a limited number of compounds into human clinical trials, including our influenza A product candidate

to a Phase 2a trial and our norovirus / coronaviruses product candidate to a Phase 1 trial.

To date, we have only entered a limited number of compounds into human clinical trials.

We may be unable to progress our product

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community emphasized by the COVID-19 pandemic, including information we may consider to be trade secrets or other proprietary information.

If the FDA takes these measures, we may be forced to disclose propriety information about our product candidates and research, which

If the FDA takes these measures, we may be forced to disclose proprietary information about our product candidates and research, which

could materially harm our business.

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agreed to implement a multi-jurisdictional five-year waiver of patent protection with respect to vaccines that target COVID-19 in an

effort to fight the pandemic and allow for a more equal distribution of resources, particularly for developing countries, towards that

This resulted from ongoing discussions among WTO member countries which began in 2020 with a proposal for a more extensive waiver

that would have covered patents for COVID-19 related diagnostics and therapeutics as well as vaccines.

The WTO waiver, together with

similar actions that may be taken with respect to COVID-19-related products or other products in which we are or may become involved

could materially diminish or eliminate our ability to protect the underlying intellectual property rights we rely on for such products,

including those licensed from third parties, and as a result any potential competitive advantage would be lost.

If we are unable to prevent

material disclosure of the non-patented intellectual property related to our technologies to third parties, and there is no guarantee

we will have any such enforceable trade secret protection, we may not be able to establish or maintain a competitive advantage in our

market, which could materially adversely affect our business, results of operations and financial condition.

effort to fight the pandemic and allow for a more equal distribution of resources towards that goal.

Future actions such as the WTO waiver

may be taken by the U.S.

or foreign governments with respect to products in which we are or may become involved could materially diminish

or eliminate our ability to protect the underlying intellectual property rights we rely on for such products, including those licensed

from third parties, and as a result any potential competitive advantage would be lost.

If we are unable to prevent material disclosure

of the non-patented intellectual property related to our technologies to third parties, and there is no guarantee we will have any such

enforceable trade secret protection, we may not be able to establish or maintain a competitive advantage in our market, which could materially

adversely affect our business, results of operations and financial condition.

third-party intellectual property infringement claims are asserted against us, it may prevent or delay our development and commercialization

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we may develop.

programs we are focusing on are in a preclinical or early clinical development stage and are targeted toward indications for which

there are approved products on the market or product candidates in clinical development.

We will face competition from other drugs that

are or will be approved for the same therapeutic indications.

Our ability to compete successfully will depend largely on our ability

to leverage our experience in drug discovery and development to:

programs we are focusing on are in a preclinical or early clinical development stage and are targeted toward indications for which there

are approved products on the market or product candidates in clinical development.

We will face competition from other drugs that are

or will be approved for the same therapeutic indications.

Our ability to compete successfully will depend largely on our ability to leverage

our experience in drug discovery and development to:

and develop therapeutics superior to other products in the market;

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and commercialize.

We will not achieve our business plan if the acceptance of our products is inhibited by price competition or the reluctance

of physicians to switch from existing drug products to our products, or if physicians switch to other new drug products or reserve our

products for use in limited circumstances.

Additionally, the biopharmaceutical industry is characterized by rapid technological and scientific

change, and we may not be able to adapt to these rapid changes to the extent necessary to keep up with competitors or at all.

The inability

to compete with existing or subsequently introduced drug products would have a material adverse impact on our business, financial condition

and prospects.

We will not achieve our business plan if the acceptance of our products is inhibited by price competition, coverage

limitations by third party healthcare payors, or the reluctance of physicians to switch from existing drug products to our products,

or if physicians switch to other new drug products or reserve our products for use in limited circumstances.

Additionally, the biopharmaceutical

industry is characterized by rapid technological and scientific change, and we may not be able to adapt to these rapid changes to the

extent necessary to keep up with competitors or at all.

The inability to compete with existing or subsequently introduced drug products

would have a material adverse impact on our business, financial condition and prospects.

pharmaceutical companies may invest heavily to accelerate discovery and development of novel compounds or to in-license novel compounds

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Cybersecurity threats in particular, are persistent, evolve quickly and include, but are not limited to,

computer viruses, attempts to access information, denial of service and other electronic security breaches believe that we have implemented

appropriate measures and controls and invested in skilled information technology resources to appropriately identify threats and mitigate

potential risks, but there can be no assurance that such actions will be sufficient to prevent disruptions to critical systems, the unauthorized

release of confidential information or corruption of data.

A security breach or other significant disruption involving these types of

information and information technology networks and related systems could:

computer viruses, attempts to access information, denial of service and other electronic security.

While we breaches believe that we

have implemented appropriate measures and controls and invested in skilled information technology resources to appropriately identify

threats and mitigate potential risks, there can be no assurance that such actions will be sufficient to prevent disruptions to critical

systems, the unauthorized release of confidential information or corruption of data.

A security breach or other significant disruption

involving these types of information and information technology networks and related systems could:

the proper functioning of these networks and systems and therefore its operations and/or those of third parties on which we rely;

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our reputation with industry participants, existing or prospective strategic alliances, and the public generally.

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

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

of our information technology infrastructure to operate effectively could adversely affect our business.

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Any such events could cause us to lose opportunities

or progress with respect to product candidates or strategic alliances, and could require us to incur significant expense to remediate.

or progress with respect to product candidates or strategic alliances, and could require us to incur significant resources and expense

to remediate.

intelligence presents risks and challenges that can negatively impact our business.

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artificial intelligence to further their research efforts and advance competitive product candidates through clinical trials.

January 2026, the European Medicines Agency and FDA jointly established new artificial intelligence (“AI”) principles in

drug development that provide broad guidance on AI use in evidence generation and monitoring across all phases of a medicine’s

lifecycle - from early research and clinical trials to manufacturing and drug safety.

These AI principles may lead to future regulatory

guidance and requirements in various jurisdictions, which could affect the use of AI in our business.

the future, we may adopt and integrate artificial intelligence platforms and/or tools into our business.

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or is available at limited levels, we may not be able to successfully commercialize product candidates we develop.

to the recent change in presidential administration in the U.S., we and our industry face uncertainty including the potential for reduced

government funding of research programs and staff and resource reductions at the FDA and other government agencies, which may adversely

affect our business.

For example, the U.S.

Congress enacted the One Big Beautiful Bill (“OBBB”) Act, which made several changes to the Medicaid program, such as imposing

Medicaid work requirements and imposing stricter eligibility and enrollment standards.

Most of these policies will take effect in 2027.

In addition, the OBBB Act did not extend the availability of enhanced premium subsidies, which subsidize patient premiums for Affordable

Care Act (“ACA”) health insurance exchange plans and expired at the end of 2025.

If these subsidies are not reinstated, it

is possible that patient enrollment in ACA exchange plans could substantially decrease.

Additionally,

the volume of drug pricing-related legislation and administrative action continues to increase over recent years.

These changes, individually

or in combination, could decrease health insurance coverage for patients taking medicines, potentially disrupting access to medicines

and reducing our potential market for the products we are seeking to develop.

to the 2025 inauguration of a new presidential administration in the U.S., we and our industry face uncertainty including the potential

for reduced government funding of research programs and staff and resource reductions at the FDA and other government agencies, which

may adversely affect our business.

taking office in January 2025, President Trump and his cabinet have expressed an intention of and undertaken efforts to reduce the size

and spending of the federal government.

As part of this initiative, President Trump established the Department of Government Efficiency

(“DOGE”), which is tasked with reducing government spending and increasing efficiency of the federal government and its component

Since its establishment, DOGE has taken action aimed at reducing the workforce of the federal government and eliminating other

expenditures, such as facility leases, used by the federal government and its component agencies.

While these and other actions taken

by the Trump Administration could be viewed as a part of a larger goal of de-regulation, a consequence of these developments and other

actions taken by DOGE or the Trump Administration generally could be reduced resources, employees and contractors at the FDA and other

federal agencies on which our operations depend or through which regulatory approvals are or will be required for us and our product

candidates and programs.

For example, less staff and resources at the FDA could result in the approval process for clinical trials or

product candidates having a longer duration or being more costly to expedite.

Additionally, government funding for research and development

programs such as those we are pursuing could be significantly reduced, which could have the effect of limiting or eliminating our ability

to access the capital needed to fund our programs.

Any of these or other outcomes of President Trump’s term and government action

generally, which remain uncertain, could materially adversely affect us.

For example, as part of this initiative, President Trump established the Department of Government

Efficiency (“DOGE”), which was tasked with reducing government spending and increasing efficiency of the federal government

and its component agencies.

Although disbanded in late 2025, its charter is active until July 4, 2026 and many of its functions were

integrated into the broader federal administration, demonstrating the continuing principles and objectives aimed at reducing the workforce

of the federal government and eliminating other expenditures, such as facility leases, used by the federal government and its component

While these and other actions taken by the Trump Administration could be viewed as a part of a larger goal of de-regulation,

a consequence of these developments and other actions taken by the Trump Administration could be reduced resources, employees and contractors

at the FDA and other federal agencies on which our operations depend or through which regulatory approvals are or will be required for

us and our product candidates and programs.

For example, less staff and resources at the FDA could result in the approval process for

clinical trials or product candidates having a longer duration or being more costly to expedite.

Additionally, government funding for

research and development programs such as those we are pursuing could be significantly reduced, which could have the effect of limiting

or eliminating our ability to access the capital needed to fund our programs.

Any of these or other outcomes of President Trump’s

term and government action generally, which remain uncertain, could materially adversely affect us.

we are unable to establish sales and marketing capabilities or enter into agreements with third parties to market and sell our product

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uncertainty in countries where labor unrest is endemic;

impact of any war or hostilities such as the Russian invasion of Ukraine;

impact of any war or hostilities such as the of the wars in the Middle East and Ukraine;

shortages resulting from any events affecting raw material supply or manufacturing capabilities abroad;

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As our Company matures, we expect to expand our employee base to increase our managerial,

scientific and operational, commercial, financial and other resources and to hire more consultants and contractors.

Future growth would

impose significant additional responsibilities on our management, including the need to identify, recruit, maintain, motivate and integrate

additional employees, consultants and contractors.

Also, our management may need to divert a disproportionate amount of its attention

away from our day-to-day activities and to manage these growth activities.

We may not be able to effectively manage the expansion of

our operations, which may cause weaknesses in our infrastructure, and give rise to operational mistakes, loss of business opportunities,

loss of employees and reduced productivity among remaining employees.

Our expected growth could require significant capital expenditures

and may divert financial resources from other projects, such as developing additional product candidates.

If our management cannot effectively

manage our growth, our expenses may increase more than expected, our ability to generate and/or grow revenues could be reduced, and we

may not be able to implement our business strategy.

Our future financial performance and our ability to commercialize product candidates

and compete effectively will depend, in part, on our ability to manage our future growth.

scientific and operational, commercial, financial and other resources and to hire more employees, consultants and contractors.

growth would impose significant additional responsibilities on our management, including the need to identify, recruit, maintain, motivate

and integrate additional employees, consultants and contractors.

Also, our management may need to divert a disproportionate amount of

its attention away from our day-to-day activities and to manage these growth activities.

We may not be able to effectively manage the

expansion of our operations, which may cause weaknesses in our infrastructure, and give rise to operational mistakes, loss of business

opportunities, loss of employees and reduced productivity among remaining employees.

Our expected growth could require significant capital

expenditures and may divert financial resources from other projects, such as developing additional product candidates.

If our management

cannot effectively manage our growth, our expenses may increase more than expected, our ability to generate and/or grow revenues could

be reduced, we may not be able to implement our business strategy and we may face reputational or operational harm.

Our future financial

performance and our ability to commercialize product candidates and compete effectively will depend, in part, on our ability to manage

our future growth.

relationships with customers and third-party payors may be subject, directly or indirectly, to federal and state healthcare fraud and

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are false or fraudulent;

federal Health Insurance Portability and Accountability Act of 1996, or HIPAA, which created new federal criminal statutes that prohibit

federal Health Insurance Portability and Accountability Act of 1996, or HIPAA, which created federal criminal statutes that prohibit

executing a scheme to defraud any healthcare benefit program and making false statements relating to healthcare matters;

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imposes certain requirements relating to the privacy, security and transmission of individually identifiable health information;

Department of Justice Final Rule on Preventing Access to U.S.

Sensitive Personal Data and Government-Related Data by Countries

of Concern or Covered Persons, which impacts how and where clinical and other sensitive data is shared;

and foreign law equivalents of each of the above federal laws, such as anti-kickback and false claims laws which may apply to items

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subject to penalties, including, without limitation, civil and criminal penalties, damages, fines, possible exclusion from Medicare,

Medicaid and other government healthcare programs, and curtailment or restructuring of our operations, which could adversely affect our

ability to operate our business and our results of operations.

Medicaid and other government and private healthcare programs, and curtailment or restructuring of our operations, which could adversely

affect our ability to operate our business and our results of operations.

we face potential product liability if claims are brought against us, we may incur substantial liability and costs.

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office in Miami, Florida and an administrative office in Australia.

In addition, we rely on Australian CROs for our coronaviruses and

norovirus programs, and our Influenza A program will continue to depend on one or more CROs in the United Kingdom for its Phase 2a study

for the furtherance of our research and development efforts as to that product.

We and third parties on which we rely are vulnerable

to natural disasters such as earthquakes, tornados, severe storms, hurricanes, tsunamis, and fires, as well as other events that could

disrupt our operations and cause delays in research and development of our product candidates.

We do not carry insurance for natural

disasters or similar events, and we may not carry sufficient business interruption insurance to compensate us for losses that may occur.

Any losses or damages we incur could have a material adverse effect on our operations.

We and third parties on which we rely are vulnerable to natural disasters

such as earthquakes, tornados, severe storms, hurricanes, tsunamis, and fires, as well as other events that could disrupt our operations

and cause delays in research and development of our product candidates.

We do not carry insurance for natural disasters or similar events,

and we may not carry sufficient business interruption insurance to compensate us for losses that may occur.

Any losses or damages we

incur could have a material adverse effect on our operations.

our information technology systems are compromised, the information we store and process, including our intellectual property, could

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announcement concerning the initiation of or delay in our planned clinical trials;

occurrence of any other events or factors which may have created the unusual volatility and spike in volume.

occurrence of any other events or factors which may create unusual volatility in volumes and prices.

the current price is reduced, investors may sustain large losses.

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and volume fluctuations in the overall stock market from time-to-time;

to external factors such as geopolitical turmoil, a possible recession, inflation or other events, including the conflicts in Ukraine

and Israel or other unknown hostilities, investors may sell our common stock to meet margin calls on other stocks or as the result

of economic disruptions;

to external factors such as wars and geopolitical turmoil, a possible recession, inflation or other events, including the wars in

the Middle East and Ukraine or other unknown hostilities, investors may sell our common stock to meet margin calls on other stocks

or as the result of economic disruptions;

in the market prices and trading volumes of biotechnology stocks generally, or those in our peer group in particular;

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result in substantial costs and a diversion of our management’s attention and resources.

of central bank actions to combat inflation, the imposition and threat of tariffs and geopolitical conflicts, and other major events,

the effect on the capital markets and the economy is uncertain, and we may have to deal with a recessionary economy and economic uncertainty

including possible material adverse effects upon our business.

President Trump’s inauguration in January 2025, certain trends and events have begun to unfold which appear to be affecting the

global and United States capital markets and economies, including the continued high central bank interest rates, the imposition and

threat of tariffs, trade wars among nations and ongoing geopolitical conflicts, and uncertain capital markets with significant declines

in leading market indexes in March 2025.

The duration of these events and their impact are at best uncertain, and their continuation

may result in negative consequences on the U.S.

of central bank actions to combat inflation, the imposition of and uncertainties surrounding tariffs, wars and geopolitical conflicts,

and other major events, the effect on the capital markets and the economy is uncertain, and we may have to deal with a recessionary economy

and economic uncertainty including possible material adverse effects upon our business.

President Trump’s inauguration in January 2025, certain trends and events have unfolded and continue to evolve and develop which

are affecting and have the potential to further affect the global and United States capital markets and economies, including the continued

high central bank interest rates, the imposition and threat of tariffs as well as subsequent developments and uncertainties surrounding

tariffs, trade wars among nations and ongoing wars geopolitical conflicts, and uncertain capital markets with significant volatility

and declines in leading market indexes thus far 2026.

The duration and scope of these events and their impact are at best uncertain,

and their continuation may result in negative consequences on the U.S.

or global economies.

President Trump recently began imposing tariffs on certain foreign

countries with which the U.S.

engages in trades with frequently, including Canada, Mexico and China, and in response certain countries

and jurisdictions have responded by imposing or threatening to impose tariffs on U.S.

These developments follow the increase in

interest rates that began in 2022 as the Federal Reserve in U.S.

and central banks in other jurisdictions have sought to combat inflation.

impositions of tariffs by the U.S.

and any retaliatory actions by foreign countries, as well as refunds on tariffs following the U.S.

Supreme Court’s ruling to strike down certain tariffs, could contribute to higher inflation and reduced economic activity for a

prolonged period of time, thereby delaying any rate reductions or potentially resulting in rate increases in the future, as well as reduced

demand for mortgages.

Similarly, the wars in the Middle East and the Ukraine could also contribute to increased and prolonged inflation

including by increasing the price of oil and causing adverse impacts on supply chains.

These uncertainties and developments could result

in supply chain issues, higher prices for goods and services or other adverse consequences on us and our contractors.

In addition, these

events come with an increased probability for an economic downturn or recession by making it more difficult for businesses to borrow

money and individuals to maintain employment.

Further, in February the labor market unexpectedly declined notwithstanding many economists

anticipating growth for the month, further contributing to uncertainty and a potentially recessionary environment.

developments follow the increase in interest rates that began in 2022 as the Federal Reserve in U.S.

and central banks in other jurisdictions

have sought to combat inflation.

While in the U.S.

inflation has since declined, many economists view additional increases in inflation as a likely consequence of tariffs

and a trade war, and in addition central banks including the U.S.

Federal Reserve have been reluctant to reduce interest rates until

further evidence appears that inflation is under control.

Rising prices from tariffs could cause an increase in inflation.

In the meantime,

uncertainty in the markets and concerning the state and prospects for the U.S.

and global economies and capital markets in the near term

remains and has amplified due to the factors described above.

If inflation does not fall low enough and/or the Federal Reserve declines

to reduce interest rates in the near term, or tariffs imposed or threatened by President Trump are counteracted by retaliatory tariffs

imposed by other countries or otherwise adversely impact the economy, the result could be tipping the U.S.

inflation has since declined, many economists view additional increases in inflation

as a likely or possible consequence of these developments.

Uncertainty surrounding rising or elevated prices and concerning the state

and prospects for the U.S.

and global economies and capital markets in the near term remains and has amplified due to the factors described

If inflation does not fall low enough and/or the Federal Reserve declines to reduce interest rates in the near term, or tariffs

and related developments adversely impact the economy, the result could be tipping the U.S.

economy into a recession.

In the wake of these events, the U.S.

and global capital markets have demonstrated substantial volatility in the first quarter of 2025,

as many investors consider economic outlooks to be uncertain and consider the risk of a recession and a decline in the marketplace to

be increasingly probable or imminent.

Ultimately the economy may turn into a recession with uncertain and potentially severe impacts

upon the public capital markets and us.

Among the potential consequences could be a substantial decline in stock prices including ours,

a reduction in demand for securities of public companies (which may be more prevalent for smaller companies such as us) and more difficulty

for us to raise capital we need and accessing capital on favorable terms or at all as a result.

These and related consequences could

also impact our vendors which could have negative impacts on us and our research programs.

We cannot predict how this will affect our

business, but the impact may be material and adverse.

In the wake of

these events, the U.S.

and global capital markets have demonstrated substantial volatility in the first quarter of 2026, as many investors

consider economic outlooks to be uncertain and consider the risk of a recession and a decline in the marketplace to be increasingly probable

Ultimately the economy may turn into a recession with uncertain and potentially severe impacts upon the public capital markets

Among the potential consequences could be a substantial decline in stock prices including ours, a reduction in demand for securities

of public companies (which may be more prevalent for smaller companies such as us) and more difficulty for us to raise capital we need

and accessing capital on favorable terms or at all as a result.

These and related consequences could also impact our vendors which could

have negative impacts on us and our research programs.

We cannot predict how this will affect our business, but the impact may be material

issuances of our common stock or rights to purchase our common stock could cause additional dilution of the percentage ownership of our

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our stock price.

of March 28, 2025, out of approximately 10.2 million shares of common stock outstanding, approximately 6.8 million are either free trading

or may be sold without volume or manner of sale limitations under Rule 144.

The remainder of our shares, because they are held by our

officers, directors and one 5% stockholder subject to a voting agreement, who we deem affiliates, are subject to additional restrictions

of March 24, 2026, out of approximately 13,785,759 shares of common stock outstanding, approximately 7,743,000 of which are either free

trading or may be sold without volume or manner of sale limitations under Rule 144.

The remainder of our shares, because they are held

by our officers, directors and one 5% stockholder subject to a voting agreement, who we deem affiliates, are subject to additional restrictions

as described below.

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manner of sale provisions;

in September 2025 the Company issued and sold 5,529,420 two-year warrants to purchase common stock at an exercise price of $1.50 per

share, and subsequently registered the resale of such underlying shares of common stock on a registration statement on Form S-1 which

became effective on September 25, 2025.

In total, the Company has 7,222,821 warrants outstanding as of the date of this Report.

of all or a substantial amount of these warrants and sale of the underlying shares could result in volatility and dilution to our existing

shareholders.

Additionally,

as of December 31, 2025, we had approximately 537,000 options and 230,000 RSUs outstanding that, if fully exercised, would result in

the issuance of 806,000 shares of common stock and approximately 27,000 shares of common stock remain available for future grants under

the Cocrystal Pharma, Inc.

2015 Equity Incentive Plan.

the issuance of 767,000 shares of common stock.

sales of substantial amounts of shares of our common stock in the public market, or the perception that those sales may occur, could

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may issue preferred stock which could make it more difficult for a third-party to acquire us and could depress our stock price .

accordance with the provisions of our Certificate of Incorporation and the Stockholder Rights Agreement described above, our Board may

issue one or more additional series of preferred stock that have more than one vote per share, so long as the Board obtains the majority

approval of the stockholders who formerly held our Series A Convertible Preferred Stock, which is no longer authorized.

This could permit

our Board to issue preferred stock to investors who support our management and give effective control of our business to our management.

Issuance of preferred stock could block an acquisition resulting in both a drop in our stock price and a decline in interest of our common

This could make it more difficult for stockholders to sell their common stock.

This could also cause the market price of our common

stock shares to drop significantly, even if our business is performing well.

accordance with the provisions of our Certificate of Incorporation, our Board may issue one or more additional series of preferred stock

that have more than one vote per share, so long as the Board obtains the majority approval of the stockholders who formerly held our

Series A Convertible Preferred Stock, which is no longer authorized.

This could permit our Board to issue preferred stock to investors

who support our management and give effective control of our business to our management.

Issuance of preferred stock could block an acquisition

resulting in both a drop in our stock price and a decline in interest of our common stock.

This could make it more difficult for stockholders

to sell their common stock.

This could also cause the market price of our common stock shares to drop significantly, even if our business

is performing well.

amended and restated Bylaws provide for an exclusive forum in the Court of Chancery of the State of Delaware for certain disputes between

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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.

What changed 10-K

Item 1A. Risk Factors