Unicycive Therapeutics, Inc. 10-Q

ITEM 1. LEGAL PROCEEDINGS On August 15, 2025, a putative shareholder class action complaint captioned Elkhodari v. Unicycive Therapeutics, Inc., et al. , Case No. 3:25-cv-06923-JD (the “Securities Class Action”), was filed in the U.S. District Court for the Northern District of California (“Northern District of California”), naming the Company and certain current officers and/or directors of the Company as defendants. The lawsuit generally alleges that the Company made material misrepresentations and/or omissions of material fact relating to the Company’s manufacturing of oxylanthanum carbonate (“OLC”) and the approval prospects of its New Drug Application for OLC for the treatment of hyperphosphatemia in CKD patients on dialysis in violation of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 (the “Exchange Act”) and Rule 10b-5 promulgated thereunder. The putative class action is brought on behalf of persons or entities who purchased or otherwise acquired the Company’s securities between March 29, 2024, and June 27, 2025, inclusive, and seeks unspecified monetary damages on behalf of the putative class and an award of costs and expenses, including attorneys’ fees. On January 27, 2026, lead plaintiff filed an amended complaint. On March 13, 2026, defendants filed their motion to dismiss the amended complaint. On April 27, 2026, lead plaintiff filed his opposition to the motion to dismiss. On October 30 and November 7, 2025, two purported stockholders of the Company filed derivative complaints in the Northern District of California against certain of the Company’s current officers and directors (collectively, the “Derivative Actions”). The Company is named as a nominal defendant. The complaints are based on the same alleged misconduct as in the Securities Class Action. The complaints assert state law claims on behalf of the Company against the individual defendants for breach of fiduciary duty, unjust enrichment, gross mismanagement, and waste of corporate assets, and federal law claims under Section 14(a) of the Exchange Act. On November 20, 2025, the Court issued an order relating the Derivative Actions to the Securities Class Action, and on April 30, 2026, the Court consolidated the Derivative Actions. The Derivative Actions seek unspecified damages on behalf of the Company, corporate governance reforms, disgorgement and restitution, and an award of costs and expenses, including attorneys’ fees. On March 12, 2026, a purported stockholder made a demand on the Company’s Board of Directors to commence a civil action against certain of the Company’s current and former officers and directors for breaching their fiduciary duties based on the same alleged misconduct as alleged in the above-mentioned Securities Class Action and Derivative Actions (the “Demand”). On March 30, 2026, the Company’s Board of Directors responded that it would defer a final decision on the Demand given the pendency of the Securities Class Action and the Derivative Actions. At this early stage of the proceedings, the Company is unable to make any prediction regarding the outcome of the Securities Class Action, the Derivative Actions, or the Demand. 40 It is possible that additional lawsuits will be filed or allegations will be made by stockholders with respect to these same or other matters also naming the Company and/or our officers and directors as defendants. The Company intends to vigorously defend against the claims brought by the plaintiffs in each of these matters. Such lawsuits are subject to inherent uncertainties, and the actual defense and disposition costs will depend upon many unknown factors. The outcome of the pending lawsuits and any other related lawsuits is necessarily uncertain. The Company could be forced to expend significant resources and may incur substantial legal fees and costs in defending against the pending lawsuits and any other related lawsuits, and we may not prevail. Monitoring, initiating and defending against legal actions is time-consuming for our management, is likely to be expensive, and may detract from the ability to fully focus internal resources on business activities. Additionally, the Company may not be successful in having any such lawsuits dismissed or settled within the limits of insurance coverage. Given the early stage of these lawsuits and the inherent uncertainty of litigation, the Company cannot predict how long it may take to resolve the pending lawsuits or the potential outcome or possible amount of any damages. As such, we currently are unable to reasonably estimate the possible losses or a range of possible losses that may result from these matters, if any. Expenses associated with the pending lawsuits and any potential related lawsuits could be material to the financial statements if we do not prevail in the defense of such lawsuits, or even if we do prevail. In addition, from time to time, we may become involved in various lawsuits and legal proceedings, which arise in the ordinary course of business. Litigation is subject to inherent uncertainties and an adverse result in these or other matters may arise from time to time that may harm our business. We are currently not aware of any such legal proceedings or claims that will have, individually or in the aggregate, a material adverse effect on our business, financial condition or operating results.