What changed in this filing

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Item 5. Market for Registrant’s Common Equity

2025-06-17 compared with 2024-06-11 · 100 added, 173 removed, 156 unchanged (64% of the section changed)

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Holders of Common Stock

As of May 31, 2024, there were approximately 365 holders of record of our common stock.

As of June 10, 2025, there were approximately 357 holders of record of our common stock.

This number was derived from our shareholder records and does not include beneficial owners of our common stock whose shares are held in the name of various dealers, clearing agencies, banks, brokers, and other fiduciaries.

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See Item 12 of Part III of this Annual Report for information about our equity compensation plans, which information will be incorporated by reference to the information that will be contained in our proxy statement related to the 2025 Annual Meeting of Stockholders, which we intend to file with the SEC on or before July 29, 2025.

Performance Graph

Not applicable.

Unregistered Sales of Equity Securities

Use of Proceeds

Not Applicable

Issuer Repurchases of Equity Securities and Affiliated Purchasers

Management ’ s Discussion and Analysis of Financial Condition and Results of Operations

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These forward-looking statements are subject to a number of risks, uncertainties and assumptions.

Our business is subject to significant risks including, but not limited to, our ability to obtain substantial additional financing, the results of our research and development efforts, the results of nonclinical and clinical testing, the effect of regulation by the FDA and other domestic and foreign regulatory agencies, our ability to obtain, maintain and enforce patents on our products once approved for marketing, the impact of competitive products, product development, commercialization potential and technological difficulties, the effect of our accounting policies, and other risks as detailed in the section entitled “Risk Factors” in this Report.

Further, even if our product candidates appear promising at various stages of development, our share price may decrease such that we are unable to raise additional capital without significant dilution or other terms that may be unacceptable to our management and Board or disadvantageous to our stockholders.

Moreover, we operate in a very competitive and rapidly changing environment.

New risks emerge from time to time.

It is not possible for our management or Board to predict all risks, nor can we assess the impact of all factors on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements we may make in this Report or otherwise.

In light of these risks, uncertainties and assumptions, the future events and trends discussed in this Report may not occur and actual results could differ materially and adversely from those anticipated or implied in the forward-looking statements.

Accordingly, you should not rely upon forward-looking statements in this Report as predictions of future events.

The events and circumstances reflected in the forward-looking statements in this Report may not be achieved or occur.

Although we believe that the expectations reflected in the forward-looking statements in this Report are reasonable, we cannot guarantee future results, levels of activity, performance or achievements.

We are under no duty to update any of these forward-looking statements after the date of this Report or to conform these statements to actual results or revised expectations.

If we do update one or more forward-looking statements, no inference should be drawn that we will make additional updates with respect to those or other forward-looking statements.

Our business is subject to significant risks including, but not limited to:

our ability to obtain substantial additional financing;

our ability to successfully complete ongoing or future clinical trials of our product candidates within estimated timelines or at all, receive regulatory approval or be commercially successful;

our dependence on third-party collaborators for the development, manufacturing, regulatory approval, and/or commercialization of our product candidates and other aspects of our business, which are outside of our full control;

the effect of regulation by the U.S.

Food and Drug Administration (the FDA) and other domestic and foreign regulatory agencies;

current and potential future healthcare reforms;

our ability to obtain, maintain and enforce patents on our products if/or when we receive regulatory approval of any of our products;

the impact of competitive products, product development, commercialization potential and technological difficulties;

the effect of our accounting policies;

and other risks as detailed in the section entitled “Risk Factors” in this Annual Report.

Moreover, the biopharmaceutical industry in which we operate is very competitive and rapidly changing.

New challenges and risks emerge frequently.

It is not possible for our management or Board to predict all challenges and risks we will face, nor can we assess the impact of all factors on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements we may make in this Annual Report or otherwise.

In light of these risks, challenges, uncertainties and assumptions, the future events and trends discussed in this Annual Report may not occur and actual results could differ materially and adversely from those anticipated or implied in the forward-looking statements.

Accordingly, you should not rely upon the forward-looking statements in this Annual Report as predictions of future events.

The events and circumstances reflected in the forward-looking statements in this Annual Report may not be achieved or occur in part or at all.

Although we believe that the expectations reflected in the forward-looking statements in this Annual Report are reasonable as of the date of this Annual Report, we cannot guarantee future results, levels of activity, performance or achievements.

We are under no duty to update any of the forward-looking statements in this Annual Report after the date of this Annual Report or to conform the forward-looking statements to actual results or revised expectations.

If we do update one or more of the forward-looking statements in this Annual Report, no inference should be drawn that we will make additional updates with respect to those or any other forward-looking statements.

Business Overview

We are a neuroscience-focused biopharmaceutical company dedicated to pursuing a pioneering approach to the development and commercialization of groundbreaking therapies for psychiatric and neurological disorders based on our deep understanding of nose-to-brain neurocircuitry.

Our clinical-stage pipeline consists of intranasal product candidates from a new class of potential neuroscience therapies called pherines.

Designed exclusively as nasal sprays, each of our pherine product candidates is centered on our innovative approach to addressing neuroscience disorders with the nose as a new portal for the administration of novel, rapid-onset neuroactive therapies that do not require systemic absorption or binding to neurons in the brain to achieve desired therapeutic effects.

In addition, our neuroscience pipeline also includes a clinical-stage investigational oral prodrug candidate, AV-101, focused on neurological disorders involving the NMDA receptor.

We are advancing our pipeline with multiple clinical and nonclinical studies underway or planned, including our ongoing PALISADE-3 Phase 3 trial and open label extension for fasedienol as an acute treatment of SAD.

Our primary goal is to develop and commercialize a broad and diversified pipeline of innovative neuroactive pherine therapies for multiple highly prevalent neuroscience indications, such as SAD, MDD, and vasomotor symptoms (hot flashes) associated with menopause, with limited or inadequate current treatment options to meet the needs of millions of underserved patients in the U.S.

and worldwide.

See “Our Neuroscience Pipeline , ” “ Our Lead Programs ” and “Our Other Programs” in Part I, Item 1 above.

The following summarizes material developments during the fiscal year ended March 31, 2024.

• Results of PALISADE-2.

I n early August 2023, we received and reported positive topline results from our PALISADE-2 Phase 3 clinical trial of fasedienol in adults with SAD.

The PALISADE-2 trial met its primary efficacy endpoint, the difference in mean SUDS scores during the public speaking challenge at baseline (Visit 2) and treatment (Visit 3) for subjects treated with fasedienol versus placebo at Visit 3.

The trial also met its secondary endpoint, demonstrating a statistically significant difference in the proportion of clinician-assessed responders between fasedienol and placebo as measured by the CGI-I.

Fasedienol was observed to be well-tolerated with no SAEs, and the adverse event profiles were comparable between fasedienol and placebo.

• Exclusive Negotiation Agreement with Fuji Pharma Co., Ltd.

On September 1, 2023, we entered into an Exclusive Negotiation Agreement (the Negotiation Agreement) with Fuji Pharma Co., Ltd.

(Fuji Pharma), a Tokyo Stock Exchange-listed, Japan-based pharmaceutical company.

Pursuant to the terms and conditions of the Negotiation Agreement, we agreed, for a limited period of time, to negotiate exclusively with Fuji Pharma for a potential exclusive license agreement to develop and commercialize our PH80 product candidate in Japan (the Potential Definitive Agreement).

As consideration for the Exclusive Negotiation Period, Fuji Pharma paid to us $1.5 million (Purchase Price).

Should we enter into the Potential Definitive Agreement with Fuji Pharma, the Purchase Price will be creditable against any upfront fee due in connection with the execution of such agreement.

• October 2023 Public Offering.

On October 2, 2023, we entered into an underwriting agreement (the Underwriting Agreement) with Jefferies, Stifel, Nicolaus & Company, Incorporated, and William Blair & Company, L.L.C., as the representatives of the underwriters identified therein (the Underwriters), in connection with the underwritten offering, issuance and sale by us of 15,010,810 shares of our common stock, pre-funded warrants to purchase up to 3,577,240 shares of common stock (the Pre-Funded Warrants), warrants to purchase up to 9,294,022 shares of common stock (or pre-funded warrants to purchase up to 9,294,022 shares of common stock in lieu thereof) (the T1 Warrants) and warrants to purchase 11,265,086 shares of common stock (or pre-funded warrants to purchase up to 11,265,086 shares of common stock in lieu thereof) (the T2 Warrants).

The combined offering price for each share of common stock, accompanying T1 Warrant, and accompanying T2 Warrant was $5.38.

The combined offering price per Pre-Funded Warrant, accompanying T1 Warrant, and accompanying T2 Warrant was $5.379 (the October 2023 Public Offering).

We received net proceeds of approximately $93.5 million from the October 2023 Public Offering, after deducting underwriting discounts and commissions and estimated offering expense payable by us.

• Launch of PALISADE-3 and Planned Launch of PALISADE-4.

To complement the positive topline results from PALISADE-2, we launched PALISADE-3 in March 2024, and are preparing to launch PALISADE-4 in the second half of 2024.

Like PALISADE-2, both PALISADE-3 and PALISADE-4 are or are planned to be multi-center, randomized, double-blind, placebo-controlled studies designed to evaluate the efficacy, safety, and tolerability of the acute administration of fasedienol to relieve anxiety symptoms in adult patients with SAD after a single dose of fasedienol during a simulated, anxiety-provoking public speaking challenge in a clinical setting, as measured using the patient-reported SUDS as the primary efficacy endpoint.

In addition, both PALISADE-3 and PALISADE-4 will have an open-label extension for a period of up to 12 months.

We are also planning to initiate the Repeat Dose Study in the second half of 2024.

The Repeat Dose Study will be a multi-center, randomized, double-blind, placebo-controlled, clinical trial designed to evaluate repeated dosing of fasedienol in adult patients with SAD during a single simulated, anxiety-provoking public speaking challenge in a clinical setting.

The Repeat Dose Study trial will consist of three different dosing arms, with an open-label extension for a period of up to 12 months.

• Reverse Stock Split.

On June 6, 2023, we implemented a stockholder-approved one-for-thirty (1-for-30) reverse split of our common stock (the Reverse Stock Split).

All share and per share data for all periods presented in the accompanying Consolidated Financial Statements and related disclosures in this Annual Report have been adjusted retrospectively to reflect the Reverse Stock Split.

Our wholly-owned subsidiaries consist of Pherin Pharmaceuticals, Inc, a Delaware corporation (Pherin), and Vistastem, Inc., a California corporation founded in 1998 (Vistastem).

For the relevant periods, our condensed consolidated financial statements in this Report also include the accounts of Vistastem’s two wholly-owned inactive subsidiaries, Artemis Neuroscience, Inc., a Maryland corporation (Artemis), which was dissolved in April 2022, and VistaStem Canada, Inc., a corporation organized under the laws of Ontario, Canada (VistaStem Canada), which was dissolved in June 2022.

We are a late clinical-stage biopharmaceutical company leveraging a deep understanding of nose-to-brain neurocircuitry to develop and commercialize a new class of non-systemic intranasal product candidates called pherines.

Our broad and diverse neuroscience pipeline currently consists of five clinical-stage pherine product candidates, each with a novel mechanism of action (MOA) and positive clinical data in their targeted indication(s).

Pherines specifically and selectively bind to peripheral receptors in human nasal chemosensory neurons, and are designed to rapidly activate nose-to-brain neurocircuits believed to regulate brain areas without requiring systemic absorption or uptake into the brain to achieve desired therapeutic benefits.

Our most advanced intranasal pherine product candidate is fasedienol, which is being investigated in our U.S.

registration-directed PALISADE Program for the acute treatment of social anxiety disorder (SAD).

In August 2023, we received and reported positive topline results from our PALISADE-2 Phase 3 trial of fasedienol for the acute treatment of SAD.

The ongoing clinical trials in our PALISADE Program include our PALISADE-3 and PALISADE-4 Phase 3 trials, which are designed similarly to PALISADE-2, and a small exploratory Phase 2 repeat dose study (the Repeat Dose Study).

Topline data for PALISADE-3 are expected in the fourth quarter of 2025 and topline results for PALISADE-4 and the Repeat Dose Study are expected in the first half of 2026.

We believe either PALISADE-3 or PALISADE-4, if successful, together with the positive results from PALISADE-2, may establish substantial evidence of the effectiveness of fasedienol in support of a potential New Drug Application (NDA) submission to the U.S.

FDA for the acute treatment of SAD.

The FDA has granted

Fast Track designation for the investigation of fasedienol for the acute treatment of SAD.

Fasedienol has the potential to be the first FDA-approved acute treatment of SAD and provide significant advantages relative to the current standard of care.

We have also reported positive results from an exploratory Phase 2A clinical trial for each of our next most advanced pherine product candidates, itruvone for treatment of major depressive disorder, and PH80 for both vasomotor symptoms (hot flashes) due to menopause and premenstrual dysphoric disorder (PMDD), as well as a pilot Phase 2A study of PH15 for improvement of psychomotor impairment due to mental fatigue and an exploratory Phase 2A study of PH284 for treatment of cancer cachexia.

We are passionate about developing transformative treatment options with potential to meet clear and growing unmet needs and bring meaningful relief to patients underserved by the current standard of care for multiple highly prevalent indications, all while delivering long term value to our shareholders.

Our wholly-owned subsidiaries consist of Pherin Pharmaceuticals, Inc, a Delaware corporation (Pherin), which we acquired in February 2023, and Vistastem, Inc., a California corporation founded in 1998 (Vistastem).

Components of Results of Operations

Sublicense and Other Revenue

Sublicense and other revenue consists of revenue recognized under the AffaMed Agreement and Negotiation Agreement with Fuji Pharma.

Sublicense and other revenue consist of revenue recognized under the AffaMed Agreement and Negotiation Agreement with Fuji Pharma.

Revenue is recognized as identified performance obligations are satisfied.

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• External costs, including:

◦ expenses incurred in connection with conducting clinical trials, including investigator grants and site payments for time and pass-through expenses and expenses incurred under agreements with CROs, central laboratories and other vendors and service providers engaged to conduct our trials;

◦ expenses incurred in connection with planning, preparing for and conducting clinical trials, including investigator grants and site payments, and pass-through expenses and expenses incurred under agreements with CROs, central laboratories and other vendors and service providers engaged to conduct our trials;

◦ expenses incurred in connection with the discovery and preclinical development of our product candidates, including under agreements with third parties, such as consultants and CROs;

◦ costs associated with consultants for CMC development, and other services;

◦ the cost of manufacturing compounds for use in our preclinical studies, including under agreements with third parties, such as consultants and third-party manufacturers;

◦ costs related to compliance with drug development regulatory requirements.

◦ costs associated with consultants for chemistry, manufacturing, and control (CMC) development, and other manufacturing-related services;

◦ the cost of manufacturing compounds for use in our nonclinical studies and clinical trials, including under agreements with third parties, such as consultants and third-party contract manufacturers;

◦ costs related to compliance with development regulatory requirements.

• Internal costs, including:

◦ employee-related expenses, including salaries, related benefits, travel and share-based compensation expenses for employees engaged in research and development functions;

◦ the costs of laboratory supplies and acquiring, developing and manufacturing preclinical study materials;

◦ the costs of laboratory supplies and acquiring and developing preclinical study materials;

◦ facilities, depreciation and other expenses, which include allocated expenses for rent and maintenance of facilities, and supplies.

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Our future research and development expenses may vary significantly based on a wide variety of factors, such as:

• the number and scope, rate of progress, expense and results of our discovery and preclinical development activities and clinical trials;

• the number and scope, rate of progress, expense and results of our preclinical development activities and clinical trials;

• the number of trials required for regulatory approval;

• the number of sites included in each of our clinical trials;

• the countries in which clinical and non-clincial trials are conducted;

• the length of time required to enroll eligible patients;

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• the impact of any business interruptions to our operations or to those of the third parties with whom we work;

• geopolitical instability, such as the war in Ukraine and, more recently, the war between Israel and Hamas;

• adverse effects on the financial markets, the global economy, the supply chain and our expenses due to pandemics or other epidemic diseases, geopolitical instability, inflation, rising interest rates and other factors;

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Sublicense and Other Revenue

Sublicense and other revenue was $ 1.1 million and $ (0.2) million for the years ended March 31, 2024 and 2023 , respectively.

The increase in sublicense and other revenue of $ 1.3 million is due to timing of revenue recognized under the AffaMed Agreement and a one-time true up of expense during the year ended March 31, 2023 due to a change in estimate, as well as revenue recognized under the Negotiation Agreement with Fuji Pharma executed in September 2023.

Sublicense and other revenue were $0.5 million and $1.1 million for the years ended March 31, 2025 and 2024, respectively.

The decrease in sublicense and other revenue of $0.6 million is due to timing of revenue recognized under the AffaMed Agreement.

Absent the achievement of milestones under the AffaMed Agreement, or the execution of similar agreements in the future, if any, we expect sublicense and other revenue to stay consistent in future periods as we continue to recognize revenue under the AffaMed Agreement.

Research and Development Expenses

The following table summarizes our research and development expenses by development program for the years ended March 31, 2024 and 2023 (in thousands):

The following table summarizes our research and development expenses for the years ended March 31, 2025 and 2024 (in thousands):

Year Ended March 31,

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Total clinical and nonclinical studies and development expenses 24,995 9,154

Cost of Pherin Acquisition — 3,559

Salaries and benefits 9,402 7,323

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Total research and development expenses $ 39,375 $ 20,022

Research and development expenses were $ 20.0 million and $ 44.4 million for the years ended March 31, 2024 and 2023 , respectively.

The overall decrease of $ 24.4 million was primarily due to a decrease in preclinical expenses and clinical trial costs of $25.9 million due to the timing of expenses incurred for the PALISADE-1 and PALISADE-2 Phase 3 trials of fasedienol in SAD, including closing costs associated with these studies.

The decrease was partially offset by an increase in compensation and related costs of $0.9 million and an increase in consulting professional fees of $0.6 million.

We expect that our research and development expenses will increase substantially over the next several years as we advance our product candidates through clinical trials, continue to develop additional product candidates and expand our pipeline, maintain, expand, protect and enforce our intellectual property portfolio, and hire additional personnel.

Research and development expense was $39.4 million and $20.0 million for the years ended March 31, 2025 and 2024, respectively.

The increase of $19.4 million in research and development expense for the year ended March 31, 2025, as compared to the year ended March 31, 2024, was primarily due to an increase in expense of $15.8 million related to our U.S.

registration-directed PALISADE Program for fasedienol for the acute treatment of SAD, including manufacturing, nonclinical studies and our PALISADE-3 and PALISADE-4 Phase 3 clinical trials and the Repeat Dose Study, as well as manufacturing and nonclinical studies to support our planned PH80 U.S.

Investigational New Drug Application (IND) to facilitate further Phase 2 development for the treatment of VMS, and increase of $2.8 million in connection with the increased headcount, an increase in consulting and professional fees of $0.2 million, and an increase in occupancy and other costs of $0.5 million.

We expect that our research and development expense may increase over the next fiscal year as we continue to advance our pherine product candidates through nonclinical studies, clinical trials, and expand third-party contract manufacturing and regulatory activities required to advance further research and development of our current pherine product candidates and additional pherine product candidates, maintain, expand, protect and enforce our intellectual property portfolio, and hire additional headcount.

At this time, we cannot accurately estimate or know the nature, timing and costs of the efforts that will be necessary to complete the preclinical and clinical development of any pherine product candidates we may develop.

A change in the outcome of any number of variables with respect to product candidates we may develop could significantly change the costs and timing associated with the development of that product candidate.

General and Administrative Expenses

General and administrative expenses were $ 14.1 million and $ 14.7 million for the years ended March 31, 2024 and 2023 , respectively.

The decrease of $ 0.6 million was primarily due to a decrease of $1.4 million in professional fees related to pre-commercial activities as well as service fees associated with a potential credit facility offering that was not consummated in Fiscal 2023 as a result of the outcome of our PALISADE-1 clinical trial, which did not recur, as well as a decrease in stock-based compensation expense of $1.0 million.

This decrease was partially offset by an increase in compensation and related expenses of $1.5 million and an increase in IT-related costs of $0.3 million.

We expect that our general and administrative expenses will increase substantially over the next several years as we hire additional personnel to support the growth of our business and incur additional expenses associated with being a public company.

Other income was $ 3.7 million and $ 26 thousand for the years ended March 31, 2024 and 2023 , respectively.

The increase of $ 3.6 million was primarily related to an increase in interest rate return on our cash, cash equivalents, and marketable securities due to increased cash balances.

General and administrative expense was $17.1 million and $14.1 million for the years ended March 31, 2025 and 2024, respectively.

The increase of $3.0 million in general and administrative expense for the year ended March 31, 2025, as compared to the year ended March 31, 2024, was primarily due to an increase in headcount and related costs of $1.8 million, as well as an increase in consulting and professional fees of $0.6 million.

We expect that our general and administrative expenses may increase substantially over the next fiscal year as we hire additional personnel to support the continued growth of our research and development, contract manufacturing and pre-commercialization operations and incur additional expenses associated with being a public company.

Other income was $4.6 million and $3.7 million for the years ended March 31, 2025 and 2024, respectively.

The increase of $0.9 million was primarily related to an increase in interest rate return on our cash, cash equivalents, and marketable securities due to increased investment balances.

Liquidity and Capital Resources

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Since our inception, we have not generated any revenue from product sales and have incurred significant operating losses and negative cash flows from our operations.

To date, we have financed our operations and technology acquisitions primarily through the issuance and sale of our equity and debt securities for cash proceeds of approximately $338.5 million, as well as from an aggregate of approximately $22.7 million of government research grant awards (excluding the fair market value of government-sponsored and funded clinical trials), strategic collaboration payments, intellectual property licensing payments, and other revenues.

Additionally, we have issued equity securities with an approximate value

at issuance of $41.3 million in non-cash acquisitions of product licenses, the Pherin Acquisition, and in settlements of certain liabilities, including liabilities for professional services rendered to us or as compensation for such services.

In May 2021, we entered into an Open Market Sale Agreement (the Sales Agreement) with Jefferies LLC (Jefferies) as sales agent, with respect to an at-the-market offering program (the ATM) under which we were permitted, at our option, offer and sell, from time to time, shares of our common stock having an aggregate offering price of up to $75.0 million through Jefferies as our sales agent.

During the first-half of the fiscal year ended March 31, 2024, we sold 4,698,495 shares of our common stock under the terms of our Sales Agreement for net cash proceeds of approximately $36.2 million.

We did not sell any shares of our common stock under the Sales Agreement during the second half of the fiscal year ended March 31, 2024.

Pursuant to a registration statement on SEC Form S-3 declared effective during the quarter ended March 31, 2024, we may now, at our option, offer and sell, from time to time, shares of our common stock having an aggregate offering price of up to $100.0 million through Jefferies as our sales agent.

In addition, during the fiscal year ended March 31, 2024, we received net proceeds of approximately $93.5 million from the October 2023 Public Offering and $1.5 million from Fuji Pharma under the Negotiation Agreement.

We had cash and cash equivalents of approximately $ 119.2 million at March 31, 2024 , which we believe is sufficient to fund our planned operations for the at least twelve months following the issuance of these Consolidated Financial Statements.

We are continuing to manage our cash resources with primary emphasis on our lead pipeline programs, including our registration-directed PALISADE Phase 3 program for fasedienol as a potential new acute treatment of anxiety in adults with SAD, as well as planning for potential Phase 2B development of itruvone for treatment of moderate-to-severe MDD, standard U.S.

IND-enabling nonclinical studies of PH80 to facilitate potential Phase 2B development for the treatment of vasomotor symptoms (hot flashes) associated with menopause and certain limited pre-commercialization activities.

However, as we have not yet developed products that generate recurring revenue and, in the event we successfully complete future clinical and/or nonclinical programs, we will need to obtain and invest substantial additional capital resources to develop and commercialize our drug candidates.

To date, as of March 31, 2025, we have financed our operations and technology acquisitions primarily through the issuance and sale of our equity securities for cash proceeds of approximately $340.4 million, as well as from an aggregate of approximately $22.7 million of government research grant awards (excluding the fair market value of government-sponsored and funded clinical trials), strategic collaboration payments, intellectual property licensing payments, and other revenues.

Additionally, we have issued equity securities with an approximate value at issuance of $41.3 million for non-cash acquisitions of product licenses, the Pherin Acquisition, and in settlements of certain liabilities, including liabilities for professional services rendered to us or as compensation for such services.

In May 2021, we entered into an Open Market Sale Agreement (the Sales Agreement) with Jefferies LLC (Jefferies) as sales agent, with respect to an at-the-market offering program (the ATM) under which we were permitted, at our option, to offer and sell, from time to time, shares of our common stock having an aggregate offering price of up to $75.0 million through Jefferies as our sales agent.

In February 2024, the aggregate gross proceed available under the Sales Agreement was increased to $100 million.

During the years ended March 31, 2025 and 2024, we sold an aggregate of 1,108,587 and 4,698,495 shares, respectively, under the Sales Agreement, for net proceeds of $3.0 million and $36.2, respectively, after sales agent commissions.

We pay Jefferies a commission of up to three percent (3.0%) of the aggregate gross proceeds from any sales under the Sales Agreement.

In addition, during the year ended March 31, 2024, we received net proceeds of approximately $93.5 million from the October 2023 Public Offering and $1.5 million from Fuji Pharma under the Negotiation Agreement.

As of March 31, 2025 and 2024, we had cash, cash equivalents, and marketable securities of $80.5 million and $119.2 million, respectively.

As of June 17, 2025 , the issuance date of the consolidated financial statements in this Annual Report as of and for the year ended March 31, 2025, there is uncertainty about whether our combined cash, cash equivalents, and marketable securities will be sufficient to fund operations beyond twelve months from the issuance date of these consolidated financial statements and therefore we concluded that substantial doubt existed about our ability to continue as a going concern.

When necessary and/or advantageous, we will seek additional capital to fund our planned operations through (i) sales of our equity and/or debt securities in one or more public offerings and/or private placements, including sales of our securities under the Sales Agreement, (ii) non-dilutive government grants and research awards and/or (iii) non-dilutive strategic partnering collaborations to advance development and commercialization of our product candidates.

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Our future working capital requirements will depend on many factors, including, without limitation, potential impacts related to adjustments in the size of our staff, the scope and nature of opportunities related to our success or failure and the success or failure of certain other companies in nonclinical and clinical trials, including the development and commercialization of our current product candidates, and the availability of, and our ability to enter into financing transactions and research, development and commercialization collaborations on terms acceptable to us.

In the future, to further advance the clinical development of our product candidates, as well as support our operating activities, we plan to seek additional financing, including both equity-based capital and funding from non-dilutive sources, and continue to carefully manage our operating costs, including, but not limited to, our clinical, nonclinical, and pre-commercialization programs.

In the future, to further advance the clinical development of our product candidates, as well as support our operating activities, we plan to seek additional financing, including both equity-based and/or debt-based capital and potentially from non-dilutive sources other than debt-based capital, and continue to carefully manage our operating costs, including, but not limited to, our clinical, nonclinical, and pre-commercialization programs.

Notwithstanding the foregoing, there can be no assurance that future financings will be available to us in sufficient amounts, in a timely manner, or on terms acceptable to us, if at all, or that current or future development and commercialization collaborations will generate revenue from future potential milestone payments or otherwise.

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Net cash used in operating activities for the year ended March 31, 2025 was $42.1 million, consisting primarily of our net loss of $51.4 million, adjusted for $4.6 million of non-cash charges primarily related to stock-based compensation expense and amortization of our operating lease right-of-use asset, and $4.8 million for net changes in operating assets and liabilities.

Net cash used in operating activities for the year ended March 31, 2023 was $ 49.7 million, consisting primarily of our net loss of $ 59.2 million, adjusted for $ 7.5 million of non-cash charges primarily related to stock-based compensation expense, non-operating expenses related to our acquisition of Pherin Pharmaceuticals, Inc.

completed in February 2023 (the Pherin Acquisition), and amortization of our operating right-of-use asset, partially offset by $ 2.0 million for net changes in operating assets and liabilities.

Net cash used in operating activities for the year ended March 31, 2024 was $25.8 million, consisting primarily of our net loss of $29.4 million, adjusted for $2.8 million of non-cash charges primarily related to stock-based compensation expense and amortization of our operating lease right-of-use asset, and $0.8 million for net changes in operating assets and liabilities.

Investing Activities

Net cash used in investing activities for the year ended March 31, 2025 was $13.1 million, consisting of purchases of marketable securities and property and equipment, partially offset by the sale and maturity of marketable securities.

Net cash used in investing activities for the year ended March 31, 2024 was $0.1 million, consisting of purchases of property and equipment.

Net cash used in investing activities for the year ended March 31, 2023 was $ 0.7 million, consisting of $ 0.5 million related to the Pherin Acquisition and $ 0.2 million for purchases of property and equipment.

Financing Activities

Net cash provided by financing activities during the year ended March 31, 2025 was $3.2 million.

This consisted primarily of net proceeds of $ 93.5 million resulting from the October 2023 Public Offering, net proceeds of $ 35.9 million resulting from the sale of shares of our common stock under the Sales Agreement, partially offset by costs related to repayment of notes payable of $ 1.0 million .

Net cash used in financing activities during the year ended March 31, 2023 was $ 1.0 million.

This consisted primarily of repayment of notes payable of $ 1.0 million .

consisting primarily of net proceeds from the sale of shares of our common stock in ATM transactions under the Sales Agreement.

Net cash provided by financing activities during the year ended March 31, 2024 was $128.4 million.

This consisted primarily of net proceeds of $93.5 resulting from the October 2023 Public Offering, net proceeds of $35.9 million resulting from the sale of shares of our common stock under the Sales Agreement, partially offset by the repayment of notes payable of notes payable of 1.0 million.

Future Funding Requirements

Based on our current operating plan, we believe that our existing cash and cash equivalents, will be sufficient to meet our anticipated operating expenses and capital expenditures through at least the next twelve months.

However, our forecast of the period of time through which our financial resources will be adequate to support our operations is a forward-looking statement that involves risks and uncertainties, and actual results could vary materially.

Based on our current operating plan, we believe that our existing cash, cash equivalents, and marketable securities will not be sufficient to fund our operations beyond the next twelve months from the date of this Annual Report.

We anticipate that we will continue to seek additional funding, though the precise timing and nature of such additional funding may prove uncertain.

Our forecast of the period of time through which our financial resources will be adequate to support our operations is a forward-looking statement that involves risks and uncertainties, and actual results could vary materially.

See "Risk Factors " above.

We have based this estimate on assumptions that may prove to be wrong, and we could deplete our capital resources sooner than we expect.

Additionally, the process of conducting preclinical studies and testing product candidates in clinical trials is costly, and the timing of progress and expenses in these studies and trials is uncertain.

Additionally, the process of conducting nonclinical studies and testing product candidates in clinical trials is costly, and the timing of progress and expenses in these studies and trials is uncertain.

Our future capital requirements will depend on many factors, including:

• the initiation, type, number, scope, results, costs and timing of, our ongoing and planned preclinical studies and clinical trials of existing product candidates or clinical trials of other potential product candidates we may choose to pursue in the future, including based on feedback received from regulatory authorities;

• the initiation, type, number, scope, results, costs and timing of, our ongoing and planned nonclinical studies and clinical trials of existing product candidates or clinical trials of other potential product candidates we may choose to pursue in the future, including based on feedback received from regulatory authorities;

• the costs and timing of manufacturing for current or future product candidates, including commercial scale manufacturing if any product candidate is approved;

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• our efforts to enhance operational systems and hire additional personnel to satisfy our obligations as a public company, including enhanced internal controls over financial reporting;

• the costs and timing of establishing or securing sales and marketing capabilities if any current or future product candidate is approved;

• the costs and timing of establishing or securing sales and marketing capabilities if any current or future product candidate is approved, and should we decide to commercialize them on our own;

• our ability to achieve sufficient market acceptance, coverage and adequate reimbursement from third-party payers and adequate market share and revenue for any approved products;

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However, we may be unable to raise additional funds or enter into such other arrangements when needed on favorable terms or at all.

To the extent that we raise additional capital through the sale of equity or convertible debt securities, the ownership interest of our stockholders could be diluted, and the terms of these securities may include liquidation or other preferences that adversely affect the rights of our common stockholders.

To the extent that we raise additional capital through the sale of equity or convertible debt securities, the ownership interest of our stockholders could, and likely will, be diluted, and the terms of these securities may include liquidation or other preferences that adversely affect the rights of our common stockholders.

Debt financing and equity financing, if available, may involve agreements that include covenants limiting or restricting our ability to take specific actions, such as incurring additional debt, making capital expenditures or declaring dividends.

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These obligations are further described in Note 5 to our audited consolidated financial statements.

In addition, we enter into agreements in the normal course of business with certain vendors for the provision of goods and services, which includes manufacturing services with CMOs, development services with CROs, and research and development services from other industry consultants.

In addition, we enter into agreements in the normal course of business with certain vendors for the provision of goods and services, which includes third-party contract manufacturing services with CDMOs, development services with CROs, and research and development services from other industry consultants.

These agreements may include certain provisions for purchase obligations and termination obligations that could require payments for the cancellation of committed purchase obligations or for early termination of the agreements.

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These obligations and commitments are not separately presented.

Critical Accounting Policies and Significant Judgements and Estimates

Our management’s discussion and analysis of our financial condition and results of operations are based on our financial statements, which have been prepared in accordance with U.S.

Generally Accepted Accounting Principles (GAAP).

preparation of these financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenue and expenses and the disclosure of contingent assets and liabilities in our financial statements.

Critical Accounting Estimates

Our management’s discussion and analysis of our financial condition and results of operations are based on our consolidated financial statements, which have been prepared in accordance with U.S.

Generally Accepted Accounting

Principles (GAAP).

The preparation of these consolidated financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenue and expenses and the disclosure of contingent assets and liabilities in our consolidated financial statements.

We base our estimates on historical experience, known trends and events, and on various other factors that we believe are reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources.

Our actual results may differ from these estimates under different assumptions or conditions.

While our significant accounting policies are described in more detail in Note 2 to our Consolidated Financial Statements included elsewhere in this Annual Report, we believe the following accounting policies and estimates to be most critical to the preparation of our financial statements.

Revenue Recognition

Under ASC Topic 606, we recognize revenue when our customer obtains control of promised goods or services, in an amount that reflects the consideration that we expect to receive in exchange for those goods or services.

To determine revenue recognition for arrangements that we determine are within the scope of Topic 606, we perform the following five steps:

(i) identify the contract with a customer;

(ii) identify the performance obligations in the contract;

(iii) determine the transaction price, including variable consideration, if any;

(iv) allocate the transaction price to the performance obligations in the contract;

and (v) recognize revenue when (or as) we satisfy a performance obligation.

We only apply the five-step model to contracts when it is probable that we will collect the consideration to which we are entitled in exchange for the goods or services we transfer to a customer.

At contract inception, once the contract is determined to be within the scope of ASC 606, the Company assesses whether the goods or services promised within each contract are distinct and, therefore, represent a separate performance obligation.

Goods and services that are determined not to be distinct are combined with other promised goods and services until a distinct combined performance obligation is identified.

We then allocate the transaction price (that is, the amount of consideration we expect to be entitled to from a customer in exchange for the promised goods or services) to each performance obligation and recognizes the associated revenue when (or as) each performance obligation is satisfied.

Our estimate of the transaction price for each contract includes all variable consideration to which we expect to be entitled, subject to the constraint on variable consideration.

Variable consideration is not constrained if the potential reversal of cumulative revenue recognized at the contract level is not significant.

We then recognize as revenue the amount of the transaction price that is allocated to the respective performance obligation when (or as) each performance obligation is satisfied at a point in time or over time, and if over time, based on the use of an output or input method.

License Rights — If the license to our intellectual property (IP) is determined to be distinct from the other promises or performance obligations identified in the arrangement, which generally include research and development services, we recognize revenue from non-refundable, upfront fees allocated to the license when the license is transferred to the customer and the customer is able to use and benefit from the license.

In assessing whether a license is distinct from the other promises, we consider relevant facts and circumstances of each arrangement, including the research and development capabilities of the collaboration partner and the availability of the associated expertise in the general marketplace.

In addition, we consider whether the collaboration partner can benefit from the license for its intended purpose without the receipt of the remaining promises, whether the value of the license is dependent on the unsatisfied promises, whether there are other vendors that could provide the remaining promises and whether it is separately identifiable from the remaining promises.

For licenses that are combined with other promises, we utilize judgment to assess the nature of the combined performance obligation and whether the license is the predominant promise within the combined performance obligation to determine whether the combined performance obligation is satisfied over time or at a point in time and, if over time, the appropriate method of measuring progress for purposes of recognizing revenue.

If the license is the predominant promise, and it is determined that the license represents functional IP, revenue is recognized at the point in time when control of the license is transferred.

If it is determined that the license does not represent functional IP, revenue is recognized over time using an appropriate method of measuring progress.

Customer Options — Our arrangements may provide a collaborator with the right to acquire additional goods or services in the future.

If an arrangement is determined to contain customer options that allow the customer to acquire additional goods or services, the additional goods and services underlying the customer options are evaluated in order to determine if these additional goods or services are distinct from those included as a performance obligation at the outset of the arrangement.

If the additional services are not determined to be distinct, the variable consideration pertaining to the customer option is

added to the initial transaction price at the time in which the option exercise becomes probable.

Any such adjustments to the transaction price are recorded on a cumulative catch-up basis, which would affect revenues and earnings in the period of adjustment.

If the additional services are distinct, we evaluate the customer options for material rights, or options to acquire additional goods or services for free or at a discount.

Material rights are recognized as a separate performance obligation at the inception of the arrangement.

We allocate the transaction price to material rights based on the relative stand-alone selling price, which is determined based on the identified discount and the probability that the customer will exercise the option.

Amounts allocated to a material right are not recognized as revenue until, at the earliest, the option is exercised or expires.

Milestone Payments — At the inception of an arrangement that includes development milestone payments, we evaluate whether the milestones are considered likely of being achieved and estimate the amount to be included in the transaction price using the most likely amount method.

If it is probable that a significant reversal of cumulative revenue recognized would not occur, the associated milestone value is included in the transaction price.

Milestone payments that are not within our control, such as regulatory approvals, are not considered probable to be achieved until those approvals are received.

We evaluate factors such as the scientific, clinical, regulatory, commercial and other risks that must be overcome to achieve the particular milestone in making this assessment.

There is considerable judgment involved in determining whether it is probable that a significant revenue reversal would not occur.

At the end of each subsequent reporting period, we reevaluate the probability of achievement of all milestones subject to constraint and, if necessary, adjusts its estimate of the overall transaction price.

Any such adjustments are recorded on a cumulative catch-up basis, which would affect revenues and earnings in the period of adjustment.

Royalties — For arrangements that include sales-based royalties, including milestone payments based on a level of sales, where the license is deemed to be the predominant item to which the royalties relate, we recognize revenue at the later of (i) when the related sales occur or (ii) when the performance obligation to which some or all of the royalty has been allocated has been satisfied (or partially satisfied).

To date, we have not recognized any royalty revenue resulting from licensing agreements.

Amounts due to us for satisfying the revenue recognition criteria or that are contractually due based upon the terms of the collaboration agreements are recorded as accounts receivable in our consolidated balance sheet.

Amounts received prior to satisfying the revenue recognition criteria are recorded as deferred revenue.

Amounts expected to be recognized as revenue within the one year following the balance sheet date are classified as current deferred revenue.

Amounts not expected to be recognized as revenue within one year of the balance sheet date are classified as deferred revenue, net of current portion.

While our significant accounting policies are described in more detail in Note 2 to our Consolidated Financial Statements included elsewhere in this Annual Report, we believe the following accounting estimate to be most critical to the preparation of our financial statements.

Research and Development Expenses.

Research and development expenses consist of external and internal costs associated with our research and development activities, including its discovery and research efforts and the preclinical and clinical development of its product candidates.

Prepaids, and Accruals

Research and development expenses consist of external and internal costs associated with our research and development activities, including its discovery and research efforts and the manufacturing, nonclinical and clinical development of our neuroscience product candidates.

Research and development costs are expensed in the period incurred.

We have entered into various research and development contracts with clinical research organizations, clinical manufacturing organizations, clinical sites and other vendors and consultants.

We have entered into various research and development contracts with CROs, CDMOs, clinical sites and other vendors and consultants.

Payments for these activities are based on the terms of the individual agreements, which may differ from the pattern of costs incurred, and payments made in advance of or after performance are reflected in the accompanying balance sheets as prepaid expenses or accrued liabilities, respectively.

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When evaluating the adequacy of the accrued liabilities, we analyze progress of the services, including the phase or completion of events, invoices received and contracted costs.

We hold discussions with applicable personnel and outside service providers as to the progress of our clinical trials, or the services completed.

Significant judgments and estimates may be made in determining the prepaid or accrued balances at the end of any reporting period.

We hold discussions with applicable personnel and outside service providers as to the progress of our manufacturing, nonclinical studies, clinical trials, or contracted services are completed.

Significant judgments and estimates may be made in assessing the phase or completion of events to determine the expense and the resulting prepaid or accrued balances at the end of any reporting period.

Actual results could differ from our estimates.

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Costs incurred in obtaining product or technology licenses are charged immediately to research and development expense if, at acquisition, the product or technology licensed has not achieved regulatory approval or reached technical feasibility and has no alternative future uses.

We treated the Pherin Acquisition as an acquisition of assets for accounting purposes.

Since, at the date of the acquisition, neither fasedienol, itruvone nor the other three pherines acquired had achieved regulatory approval and each required significant additional development and were without alternative future use, we recorded the costs related to acquiring the assets as research and development expense in our Consolidated Statement of Operations and Comprehensive Loss for our fiscal year ended March 31, 2023.

Stock-Based Compensation

We recognize compensation cost for all stock-based awards to employees, non-employee directors, and consultants based on the grant date fair value of the award.

For awards with only service periods, we record stock-based compensation expense over the requisite service period using the straight-line method.

We have not granted restricted stock awards to employees or consultants, nor do we have any awards with market or performance conditions.

Estimating the fair value of equity-settled awards as of the grant date using the Black-Scholes option pricing model is based on assumptions.

Changes in the assumptions can materially impact the fair value and ultimately how much stock-based compensation is recognized.

These inputs are subjective and generally require significant analysis and judgement to develop.

The inputs are as follows:

• Fair Value of Common Stock - The fair value of common stock is based on the closing stock price on the date of grant as reported on The Nasdaq Capital Market.

• Expected Term - The expected term represents the period that our options are expected to be outstanding and is determined using the simplified method (based on the mid-point between the vesting date and the end of the contractual term) as we do not have sufficient historical information to develop reasonable expectations about future exercise patterns and post-vesting employment termination behavior for our stock option grants.

• Expected Volatility - The expected volatility of stock options is estimated based on the average historical volatility of our own common stock over a period equal to the expected term of the grant.

• Risk-Free Interest Rate - The risk-free interest rate is based on U.S.

Treasury yields in effect at the grant date for notes with comparable terms as the awards.

• Expected Dividend Yield - We have never paid dividends on our common stock and have no plans to do so in the future.

Therefore, we used an expected dividend of zero.

Warrants Issued in Connection with Equity Financing

We evaluate the appropriate balance sheet classification of warrants we issue as either equity or as a derivative liability.

In accordance with ASC 815-40, Derivatives and Hedging-Contracts in the Entity ’ s Own Equity (ASC 815-40), we classify a warrant as equity if it is “indexed to the Company’s equity” and meets several specific conditions for equity classification.

A warrant is not considered “indexed to the Company’s equity,” in general, when it contains certain types of exercise contingencies or potential adjustments to its exercise price.

If a warrant is not indexed to the Company’s equity or it has net cash settlement that results in the warrants to be accounted for under ASC 480, Distinguishing Liabilities from Equity or ASC 815-40, it is classified as a derivative liability which is carried on the consolidated balance sheet at fair value with any changes in its fair value recognized immediately in the Statement of Operations and Comprehensive Loss.

Recently Issued Accounting Pronouncements

A description of recently issued accounting pronouncements that may potentially impact our financial condition and results of operations is disclosed in Note 2 to our audited Consolidated Financial Statements appearing elsewhere in this Annual Report.

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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 5. Market for Registrant’s Common Equity