What changed in this filing

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Item 7. Management’s Discussion and Analysis

2025-03-31 compared with 2024-03-28 · 48 added, 55 removed, 125 unchanged (45% of the section changed)

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and seasonal strains, as well as strains resistant to Tamiflu® and Xofluza®.

March 2022 enrollment was initiated in a randomized, double-blind, placebo-controlled Phase 1 study of CC-42344, which was conducted

in Australia.

In December 2023, we reported favorable safety and tolerability results from a Phase 1 study of CC-42344 for the treatment

of both pandemic and seasonal influenza A.

October 2023 we announced receipt of authorization from the United Kingdom Medicines and Healthcare Products Regulatory Agency (MHRA)

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In December 2023 we announced achievement of first-patient-in for the Phase 2a human challenge clinical

Clinical results are expected in 2024.

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 an extension of the study is necessary due to low infectivity

rate of the challenge influenza strain used in this study.

The Company is currently in continuing discussions with the clinical research

organization 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 or a resubmission to study and to ensure

necessary infection rates among enrolled study subjects in study.

development is progressing with an inhaled formulation of CC-42344 as a treatment and prophylaxis for influenza A.

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novel, broad-spectrum pan-viral 3CL protease inhibitor antiviral drug candidate CDI-988 for clinical development as an oral treatment

for SARS-CoV-2 and norovirus.

for coronaviruses (including SARS-CoV-2) and norovirus.

randomized, double-blind, placebo-controlled Phase 1 study of CDI-988 is approved by Australia Human Research Ethics Committees (HREC).

The study is designed to access the safety, tolerability and pharmacokinetics of CDI-988.

September 2023 we announced dosing of the first subjects in the Phase 1 clinical trial with oral, first-in-class pan-norovirus and

pan-coronavirus 3CL protease inhibitor CDI-988.

September 2024 we initiated dosing of the first subjects in the MAD portion of the Phase 1 study with CDI-988 and topline Phase 1

study safety and tolerability SAD results and testing of 800 mg for 10 consecutive days were reported in January 2025 indicating

favorable safety and tolerability results.

The topline data of the MAD cohorts, including based on an additional cohort with a higher

dose of 1200 mg and a shorter treatment duration of five consecutive days, is expected to be released in the first half of 2025.

are using our proprietary structure-based drug discovery platform technology to discover replication inhibitors for orally administered

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and Development Expense

and development expenses consist primarily of compensation-related costs for our ten employees dedicated to research and development

activities and for our Scientific Advisory Board members, as well as lab supplies, lab services, and facilities and equipment costs.

and development expenses consist primarily of compensation-related costs for our employees dedicated to clinical advancement and research

and development activities and for our Scientific Advisory Board members, as well as lab supplies, lab services, and facilities and equipment

research and development expenses were $12,537,000 for the year ended December 31, 2024, compared with $15,169,000 for the year ended

December 31, 2023.

The increase of $2,777,000 was primarily due to advancing our influenza lead

candidate CC-42344 through a Phase 1 trial and preparation for a Phase 2a clinical trial planned for 2023, as well as advancing our lead

COVID-19 clinical oral candidate CDI-988 in preparation for a Phase 1 clinical trial planned for 2023.

The decrease of $2,632,000 was primarily due to timing of clinical study costs.

and Administrative Expense

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for the year ended December 31, 2023.

This increase of $245,000 was primarily due professional

fees and litigation.

the ordinary course of business, the Company entered into non-cancellable related party leases for its facilities (see Note 14 –

Transactions with Related Parties in the Consolidated Financial Statements).

the six months ended June 30, 2022, the Company saw a significant decrease in its price of common stock resulting in an overall reduction

in market capitalization and our recorded net book value exceeded our market capitalization as of June 30, 2022.

Pre-impairment, the

carrying value of the reporting unit exceeded the market capitalization of the Company at June 30, 2022 and concluded that goodwill was

impaired in its entirety and recorded during the second quarter ended June 30, 2022 a $19,092,000 non-cash impairment.

As of December

31, 2023 and 2022, the Company had no remaining goodwill.

This decrease of $649,000 was primarily due to reduction

of insurance cost and other general and administrative expenses.

July 2022, the Company filed a legal appeal and deposited $1.6 million with the United State District Court for the District of Delaware

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There is no further litigation with the insurer following the settlement.

Legal Proceedings” for more information

Commitments and Contingencies” in the footnotes to the financial statements contained in this Report for more information

other Income/Expense

other income was $374,000 for the year ended December 31, 2024, compared to total other expense of $575,000 for the year ended December

This increase of $583,000 was primarily due to interest income discussed below.

income was $640,000 for the year ended December 31, 2023, compared to interest expense of $2,000 for the year ended December 31, 2022.

The interest income in 2023 was related to interest earned from cash held in banks and deposits with court registry and the expense in

2022 was related to finance lease agreements.

This decrease of $201,000 was primarily due to a decrease in interest income discussed below.

income was $537,000 for the year ended December 31, 2024, compared to interest income of $640,000 for the year ended December 31, 2023.

The interest income was primarily earned on cash held in interest bearing bank accounts.

also had foreign exchange loss of $163,000 and $65,000 for the years ended December 31, 2024 and 2023, respectively, related to currency

exchange rate measurements with regards to our Australian operations.

had a net loss of $17,984,000 for the year ended December 31, 2023, compared to a net loss of $38,837,000 for the year ended December

This decrease of $20,853,000 was primarily due to a $19,092,000 non-cash impairment-loss

of goodwill in 2022 and offset by increases in research and development expenses in 2023 due transition from clinical trial phase I to

phase II of our CC-42344 product, and compensated by the increase efforts in the initiation of clinical trial phase I for CDI-988 and

other product candidates.

a result of the above factors, net loss for the years ended December 31, 2024 and 2023 was $ 17,504,000 and $17,984,000 (net of $2.6

million legal settlement received), respectively.

and Capital Resources

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of $14,666,000 for the year ended December 31, 2023.

The decrease in cash used in operating activities in 2023 as compared to 2022 was

attributable to the decrease of operating costs related to our COVID-19 and influenza-A clinical trials.

This increase was primarily related to period expenses of our Influenza A Phase

2a clinical trial and preparation for our anticipated Influenza A Phase 1 inhaler administer medicine clinical trial and completion of

our COVID-19 Phase 1 clinical trial.

the year ended December 31, 2024, net cash used in investing activities netted to $8,000, which consisted of capital expenditures for

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in a private placement sale of common stock.

We expect that our reported cash balance will be sufficient to support

the Company’s working capital needs for the 12 months following the filing of this Report.

expect that our reported cash balance is not be sufficient to support the Company’s working capital needs for the 12 months following

the filing of this Report, taking into account our intended research and development efforts in 2025.

As a result, we need to complete

a financing to provide the needed working capital.

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

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of product candidates.

Because we have an influenza A product candidate that is currently in a Phase 2a clinical trial and a pan-viral

coronavirus & norovirus product candidate that is currently in a Phase 1 clinical trial we may need to raise additional capital to

support our operations or form partnerships and collaborative alliances.

Such funding may not be available to us on acceptable terms,

Company is party to the At-The-Market Offering Agreement, dated July 1, 2020 (“ATM Agreement”) with H.C.

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respect to market opportunities for certain product candidates and our plans regarding further clinical development of such product candidates,

our search for collaboration partners following the termination of agreements with Merck and KSURF, our expectations regarding future

operating results, statement regarding the suitability and adequacy of our properties and capital resources, and our future liquidity.

our search for collaboration partners, our expectations regarding future operating results, statement regarding the suitability and adequacy

of our properties and capital resources, and our future liquidity.

words “believe,” “may,” “estimate,” “continue,” “anticipate,” “intend,”

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may cause actual results to differ materially from these forward-looking statements include inflation, the possibility of recession,

interest rate increases and the conflicts in Ukraine and Israel on our Company, our collaboration partners, and on the U.S., U.K., Australia

and global economy, including manufacturing and research delays arising from raw materials and labor shortages, supply chain disruptions

and other business interruptions including any adverse impacts on our ability to obtain raw materials and test animals as well as similar

problems with our vendors and our current and any future CROs and CMOs, the results of the studies for CC-42344 and CDI-988, the ability

of our CROs to recruit volunteers for, and to proceed with, clinical studies, our and our collaboration partners’ technology and

software performing as expected, financial difficulties experienced by certain partners, the results of future preclinical and clinical

trials, general risks arising from clinical trials, receipt of regulatory approvals, regulatory changes, development of effective treatments

and/or vaccines by competitors, including as part of the programs financed by the U.S.

government, and potential mutations in a virus

we are targeting which may result in variants that are resistant to a product candidate we develop.

interest rate increases, imposed and threatened tariffs and geopolitical conflicts including the conflicts in Ukraine and Israel on our

Company, our collaboration partners, and on the U.S., U.K., Australia and global economy, including manufacturing and research delays

arising from raw materials and labor shortages, supply chain disruptions and other business interruptions including any adverse impacts

on our ability to obtain raw materials and test animals as well as similar problems with our vendors and our current and any future CROs

and CMOs, the progress and results of the studies for CC-42344 and CDI-988 including the delay of the Phase 2a study for CC-42344 which

may require us to incur substantial additional costs, the ability of our CROs to recruit volunteers for, and to proceed with, clinical

studies, our and our collaboration partners’ technology and software performing as expected, financial difficulties experienced

by certain partners, the results of future preclinical and clinical trials, general risks arising from clinical trials, receipt of regulatory

approvals, regulatory changes including based on initiatives and actions taken by the Trump Administration which could, among other things,

result in delays in regulatory approvals or limit access to federal funding for our programs, development of effective treatments and/or

vaccines by competitors, including as part of the programs financed by the U.S.

government, and potential mutations in a virus we are

targeting which may result in variants that are resistant to a product candidate we develop.

Further information on such uncertainties

and risks is contained in the “Risk Factors” in Item 1A of this this Annual Report.

and risks is contained in the “Risk Factors” in Item 1A of this Annual Report.

We undertake no obligation to publicly

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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 7. Management’s Discussion and Analysis