Financial Performance - Total revenue for the year 2025 was $22.4 million, a decrease of 15% from $26.4 million in 2024[4] - Gross profit for 2025 was $15.2 million, representing a gross margin of 68%, down from 74% in the prior year[12] - Net income for the year was $0.3 million, or $0.02 per diluted share, compared to $1.4 million, or $0.12 per diluted share, in the prior year[13] - Adjusted EBITDA for 2025 was $1.6 million, a decline of 45% compared to $2.9 million in 2024[14] - Total revenue for 2025 was $22,402,188, a decrease of 15% compared to $26,350,819 in 2024[31] - Gross profit for 2025 was $15,202,626, down from $19,412,515 in 2024, reflecting a gross margin decline[31] - Net income for 2025 was $258,446, a significant decrease from $1,363,681 in 2024[31] Operational Highlights - Bookings in Q4 2025 totaled $7.3 million, contributing to total bookings of $26.7 million for the year[7] - The total backlog as of December 31, 2025, was $25.6 million, indicating strong customer demand despite funding disruptions[6] - The fourth quarter revenue was $2.9 million, down from $4.7 million in the same quarter of the previous year, primarily due to delays in government funding[15] - Management expects funding conditions to normalize, which will aid in converting backlog and pipeline activity into revenue[11] Cash and Assets - Cash and cash equivalents at year-end were $18.6 million, up from $18.0 million at the end of 2024, with total working capital of $30.8 million[18] - Cash and cash equivalents increased to $18,594,598 at the end of 2025, up from $18,040,827 at the end of 2024[33] - Net cash provided by operating activities was $4,587,967 in 2025, compared to $1,257,266 in 2024, showing a substantial improvement[33] - Total current assets decreased to $41,021,762 in 2025 from $43,975,098 in 2024[29] - Total liabilities decreased slightly to $19,544,403 in 2025 from $19,762,198 in 2024[29] Expenses and Cost Management - Operating expenses totaled $14,765,131 in 2025, compared to $17,416,184 in 2024, indicating a reduction of approximately 15%[31] - Research and development expenses were $2,383,595 in 2025, down from $3,003,302 in 2024, reflecting a focus on cost management[31] Product Development - The company introduced new products, including the V-One portable simulation platform, to enhance accessibility for smaller agencies[7] Share Information - The weighted average shares outstanding for basic and diluted shares were 11,272,483 in 2025, compared to 11,162,917 in 2024[31]

Revenue Growth - Full year gross revenue increased by 15% to $5.2 million, up from $4.5 million in 2024[4] - Fourth quarter gross revenue surged 62% to $1.4 million, compared to $0.9 million in Q4 2024[4] - Technology-enabled services revenue rose 85% to $1.7 million in 2025, up from $0.9 million in 2024, driven by the acquisition of W1[4] Profitability and Expenses - Gross profit for the full year increased by 9.5% to $2.7 million, compared to $2.5 million in 2024[4] - Total operating expenses decreased by 10% to $16.2 million in 2025, down from $18.0 million in 2024[4] - Loss from operations improved by 13% to $(13.5) million in 2025, compared to $(15.6) million in 2024[4] Strategic Focus and Future Outlook - The company targets approximately 100% revenue growth in 2026, reflecting a strategic focus on integrated solutions[21] - Wrap expanded its international presence in 2025, including entry into the Indian market through a strategic agreement[8] Product Deployment and Market Presence - Over 10,000 active BolaWrap units are deployed domestically, with more than 76% on the current-generation BolaWrap 150 platform[8] - The average deal size increased nearly sixfold from the first half to the fourth quarter of 2025, indicating a shift to fleet-wide deployments[8]

Product Development and Approval - As of March 2025, the company has ceased development of the SPR206 program and the SPR720 oral program, focusing resources on the tebipenem HBr program and collaboration with GSK[225]. - The company's business and prospects are substantially dependent on the tebipenem program and the collaboration with GSK, which has the right to terminate the GSK License Agreement under certain conditions[227]. - The company currently has no products approved for sale and has invested a significant portion of its resources in the development of tebipenem HBr for treating bacterial infections causing cUTI[228]. - The ability to realize the value of tebipenem HBr depends on obtaining FDA approval, which may impose requirements that could impact commercialization attractiveness[228]. - Clinical trials are expensive and inherently uncertain, with the potential for unfavorable results leading to additional costs or delays in product development[229]. - The company may face significant delays or abandonment of clinical trials if unable to enroll a sufficient number of patients, impacting the ability to seek marketing approval[242]. - The FDA has mandated the submission of a diversity action plan (DAP) for Phase 3 clinical trials, which may affect planning and timing of future trials[243]. - The FDA's draft guidance on DAPs, which has the force of law, was restored following a court ruling, creating uncertainty around its implementation[244]. - Clinical trials may produce negative or inconclusive results, which could lead to additional trials or studies being required[245]. - The company has ceased development of the SPR720 oral program and shifted focus to the tebipenem HBr program as of November 2025[257]. - The company has received fast track designation for tebipenem HBr for the treatment of cUTI, including pyelonephritis, which may allow for a rolling review process by the FDA[371]. - The FDA's priority review designation aims for a six-month review period for marketing applications, but does not guarantee approval within that timeframe[372]. - The company has negotiated a Special Protocol Assessment (SPA) agreement with the FDA for the pivotal Phase 3 clinical trial of tebipenem HBr, but this does not guarantee approval[374]. - The lengthy and unpredictable nature of the regulatory approval process may significantly impact the company's ability to commercialize its product candidates[368]. - The company must demonstrate the safety and efficacy of its product candidates to obtain regulatory approval, which may require extensive clinical data[366]. - The FDA may require additional clinical trials or impose restrictions on approved products, which could delay commercialization[369]. - The company faces risks related to the interpretation of clinical trial data and the potential for regulatory changes that could affect approval outcomes[370]. Financial Performance and Funding - The company currently has no products approved for sale and cannot guarantee future marketable products[245]. - The company has not generated any revenue from product sales and has incurred losses since its inception in 2013, with a net loss of $68.6 million for the year ended December 31, 2024[297]. - As of December 31, 2025, the company had net operating loss carryforwards of $226.1 million, which may be limited in their utilization due to ownership changes[313]. - The company expects to continue incurring significant expenses and operating losses for the foreseeable future as it advances its product candidates through development and marketing approval[299]. - The company has cash and cash equivalents sufficient to fund operations into 2028, but will need additional funding beyond that point to support ongoing activities[305]. - The company has filed a universal shelf registration statement to raise up to $300 million, which may include common stock and other securities[308]. - The company anticipates that any future capital raises may dilute existing stockholders' ownership interests[309]. Market Competition and Commercialization - The company faces substantial competition from major pharmaceutical and biotechnology companies, which may affect its operating results[267]. - Tebipenem HBr, if approved, may face significant pricing competition from established oral therapies like Levaquin and Cipro[268]. - The company intends to use collaborators for commercialization, which may lower product revenues compared to direct marketing[261]. - There is a risk that the company may not achieve market acceptance for any approved product candidates, affecting revenue generation[255]. - The company may incur significant costs and delays in establishing sales and marketing capabilities necessary for product commercialization[260]. - The company may face challenges in recruiting and retaining effective sales and marketing personnel, impacting its commercialization efforts[264]. - The company anticipates that its product candidate, if approved, will be administered in a hospital inpatient setting, where reimbursement is typically a single bundled payment, potentially affecting adoption due to additional costs[272]. - The commercial success of the company's product candidates will heavily depend on coverage and reimbursement availability from government health programs and third-party payors, which may limit profitability[273]. - Third-party payors are increasingly demanding higher levels of evidence for new technologies, which could impact the company's ability to secure coverage and adequate reimbursement rates[274]. Regulatory and Compliance Risks - The company faces risks related to product liability claims, which could divert resources and limit commercialization efforts[280]. - Compliance with environmental, health, and safety laws is critical, as failure to comply could result in significant fines and adversely affect the company's operations[282]. - The company is subject to evolving data protection laws, such as the California Consumer Privacy Act and the California Privacy Rights Act, which may increase compliance costs and potential liabilities[290]. - The company may incur substantial costs to comply with current or future environmental regulations, which could impair research and development efforts[286]. - Cybersecurity incidents pose a risk to the company's operations, potentially leading to significant disruptions and financial losses[287]. - The company is subject to various risks related to compliance with data protection laws, which could result in significant penalties and affect its financial condition[294]. - The company anticipates significant challenges and costs in ensuring compliance with healthcare laws and regulations, which may lead to civil, criminal, and administrative penalties if violations are found[398]. - Changes in FDA policies and regulations could delay or prevent marketing approvals, adversely affecting the company's business and profitability[393]. Intellectual Property and Collaboration - The company faces risks related to patent protection, as competitors may develop similar technologies if adequate protection is not maintained[344]. - The patent application process is expensive and time-consuming, and the company may not be able to file all necessary applications in a timely manner[344]. - The company may become involved in costly litigation to protect its intellectual property, which could divert management's attention and resources[352]. - The company relies on trade secrets and patents to protect its technology, but breaches of confidentiality agreements could harm its competitive position[359]. - The company has limited experience in obtaining regulatory approvals and relies on third-party organizations for support in this process[364]. - The company relies on third-party collaborators for the development and commercialization of product candidates, which may affect control over future success[315]. - Revenue generation from collaborations depends on the performance of third-party collaborators, including milestone payments and royalties[316]. - Significant competition exists in securing suitable collaborators, with risks including potential abandonment of projects and insufficient resource allocation[317]. - The company may need to alter development plans if collaborations are not established, requiring additional funds for commercialization[319]. - Reliance on third parties for clinical trials and studies may lead to delays in obtaining regulatory approvals if they do not meet contractual obligations[322]. - The company contracts with third parties for manufacturing clinical supplies, which increases risks related to supply availability and cost[328]. - The company’s dependence on third-party manufacturers may adversely affect profit margins and timely commercialization of products[337]. - Failure to comply with licensing agreements could result in the loss of important rights for product development and commercialization[338]. Financial Agreements and Milestones - The company received an upfront payment of $66.0 million from GSK for securing rights to tebipenem pivoxil and tebipenem HBr[340]. - A milestone payment of $30.0 million was achieved in Q3 2023 under the GSK License Agreement[340]. - The company is entitled to receive a total of $95.0 million in development milestone payments, payable in four equal semi-annual installments of $23.8 million each from 2024 to 2025[341]. - Future milestone payments under the GSK License Agreement include $25.0 million for NDA submission with the FDA for tebipenem HBr, expected in February 2026, and up to $101.0 million in commercial milestone payments[341]. - Royalties from GSK on annual net sales of licensed products are set at 1% for sales up to $750.0 million, increasing to high single-digit percentages for sales above that threshold[341]. - The company is responsible for the execution and costs of the follow-up Phase 3 clinical trial of tebipenem HBr, while GSK will handle commercialization activities[342]. - The company must comply with obligations to Meiji and GSK to avoid termination of agreements, which could adversely affect product development[343]. Market Exclusivity and Orphan Drug Designation - The company may seek orphan drug designation for future product candidates, which could provide market exclusivity for drugs intended to treat rare diseases affecting fewer than 200,000 individuals in the U.S.[377]. - Orphan designation offers financial incentives such as grant funding for clinical trials, tax advantages, and a seven-year exclusivity period for the first FDA-approved drug for a specific rare disease[378]. - The FDA granted orphan drug designation for SPR720 in March 2020, but development was ceased in November 2025, highlighting the uncertainty in obtaining and maintaining such designations[379]. - The FDA's interpretation of orphan drug exclusivity was reaffirmed in February 2026, allowing multiple versions of the same orphan drug to be approved for different sub-indications[380]. - If tebipenem HBr is approved for treating cUTI, it may receive five-year new chemical entity exclusivity, blocking generic competition during that period[383]. - The company faces risks in obtaining marketing approvals in international jurisdictions, as FDA approval does not guarantee success in other countries[384]. - The EU's new Pharma Package, expected to be adopted by mid-2026, may reduce regulatory data protection and exclusivity periods for orphan drugs, impacting the pharmaceutical industry[385]. - The UK’s Medicines and Healthcare Products Regulatory Agency (MHRA) will oversee approvals post-Brexit, with new regulations taking effect in April 2026[386]. Legislative and Regulatory Environment - The Affordable Care Act (ACA) imposes annual fees on manufacturers for certain branded prescription drugs and requires increased rebates under the Medicaid Drug Rebate Program, potentially negatively impacting future revenues[400]. - Medicare payments for items and services, including drugs, have been reduced by 2% due to the Budget Control Act, which could adversely affect payment for approved product candidates[402]. - The Inflation Reduction Act (IRA) mandates that drug manufacturers pay rebates if their drug prices increase faster than inflation, with negotiations for select drugs starting in 2026[404][405]. - The company faces heightened scrutiny over drug pricing practices, with potential legislative changes aimed at increasing transparency and reducing costs for prescription drugs[403]. - Proposed pilot programs under CMS aim to implement a "reference pricing" regime for drugs, which could impose rebates if prices exceed those in economically comparable countries[410]. - The company is subject to the federal Physician Payments Sunshine Act, requiring annual reporting of payments and transfers of value to physicians, which may affect operational practices[401]. - Future healthcare reforms may impose new regulatory requirements or reduce reimbursement for products, adversely affecting the company's business and financial condition[407]. - The company is monitoring ongoing litigation related to the IRA's Drug Price Negotiation Program, which could have unpredictable outcomes affecting operations[406]. - The company is preparing for potential impacts from executive orders aimed at reducing pharmaceutical prices, which may lead to further regulatory changes and litigation[408][409]. - Individual states are increasingly implementing regulations to control pharmaceutical pricing, including price constraints and marketing cost transparency measures[411]. - The IRA introduced a 1% excise tax on certain stock repurchases by publicly traded companies, which could affect financial conditions[413]. - The OBBBA includes tax provisions that may significantly impact business operations, including changes to the business interest deduction and research and development expenditure rules[413]. - The FDA's workforce is expected to decrease by approximately 3,500 employees due to a reorganization, potentially leading to delays in product approvals[418]. - The FDA's budget for Fiscal Year 2026 is approximately $7 billion, with a slight increase in user fees for drug and device companies[418]. - The federal government shutdown on October 1, 2025, lasted for 43 days, during which the FDA could not accept regulatory submissions requiring fee payments[423]. - Disruptions in government agencies, including the FDA, could hinder timely guidance and approval of product candidates, negatively impacting business[417]. - State Medicaid programs are developing strategies that may impose significant coverage barriers for products approved through accelerated pathways[412]. - Regulatory reforms under the Trump Administration may impact the FDA's operations and oversight activities, potentially affecting business[420].

Financial Performance - Net loss for the year ended December 31, 2025, was $20.2 million, or $0.61 per share, compared to a net loss of $20.4 million, or $0.89 per share, for 2024[10]. - The company reported a loss of $20.16 million for the period in 2025, slightly improved from a loss of $20.41 million in 2024[25]. - The company’s accumulated deficit widened to $81.19 billion in 2025 from $60.78 billion in 2024[25]. Expenses - Research and development (R&D) expenses decreased by $0.6 million to $10.2 million for the year ended December 31, 2025, compared to $10.8 million for 2024, primarily due to pipeline cost optimization[8]. - General and administrative (G&A) expenses decreased by $1.1 million to $8.5 million for the year ended December 31, 2025, from $9.6 million for 2024, mainly due to lower stock-based compensation and legal fees[9]. Cash and Assets - Cash, cash equivalents, and marketable securities were $20.8 million as of December 31, 2025, up from $10.4 million as of December 31, 2024[10]. - Total assets increased to $22.82 billion in 2025 from $12.12 billion in 2024, representing an 88% growth[25]. - Current assets rose to $22.24 billion in 2025, up from $11.60 billion in 2024, marking a 91% increase[25]. - Cash and cash equivalents more than doubled, reaching $20.84 billion in 2025, up from $10.39 billion in 2024[25]. - Operating lease right-of-use assets increased to $334.09 million in 2025 from $219.72 million in 2024, a rise of 52%[25]. Liabilities and Equity - Total liabilities decreased to $4.25 billion in 2025 from $4.78 billion in 2024, a reduction of 11%[25]. - Stockholders' equity surged to $18.56 billion in 2025, compared to $7.34 billion in 2024, reflecting a 153% increase[25]. - Additional paid-in capital increased to $119.14 billion in 2025 from $88.78 billion in 2024, a growth of 34%[25]. - Accounts payable decreased to $825.03 million in 2025 from $946.26 million in 2024, a decline of 13%[25]. Clinical Development - In participants with elevated baseline levels of glucosylsphingosine (GluSph) in cerebrospinal fluid (CSF), GluSph decreased by an average of 81% after 90 days of treatment with GT-02287[4]. - MDS-UPDRS scores remained stable over 150 days of dosing in the Phase 1b study, indicating durable effects of GT-02287[3]. - The Phase 1b nine-month extension study for GT-02287 is expected to complete in September 2026, with results anticipated in Q4 2026[3][13]. - GT-04686, a novel glucocerebrosidase (GCase) allosteric modulator, is ready for IND-enabling studies for the treatment of Parkinson's disease and other neurological disorders[6]. - The company expects to begin a Phase 2 clinical trial of GT-02287 in people with Parkinson's disease in Q3 2026[13]. - Gain Therapeutics has received funding support from The Michael J. Fox Foundation and other organizations for the development of its lead program in Parkinson's disease[17].

Clinical Results - Mipletamig demonstrated an 86% clinical benefit rate in 28 frontline AML patients, with a 79% CR/CRi remission rate and a 61% complete remission rate[5] - No cytokine release syndrome was observed in patients treated with mipletamig, indicating a favorable safety profile[6] Financial Performance - Cash and cash equivalents increased to $21.6 million as of December 31, 2025, compared to $8.7 million at the end of 2024[10] - Research and development expenses rose to $14.5 million in 2025, up from $14.4 million in 2024, primarily due to increased mipletamig and employee costs[12] - General and administrative expenses increased by $1.6 million to $11.8 million in 2025, driven by higher employee, consulting, and legal costs[13] - The net loss attributable to common shareholders was $27.5 million for 2025, compared to $24.1 million in 2024, with a basic and diluted net loss per share of $87.27[15] - Total assets increased to $27.2 million as of December 31, 2025, from $15.6 million at the end of 2024[19] Strategic Initiatives - Aptevo expanded its CD3 pipeline with three new multispecific candidates, including its first two trispecific drug candidates[3] - The company established a $60 million equity line facility in 2026 to enhance financial capacity and support operations into 2029 if fully utilized[4] Risks and Uncertainties - Aptevo's actual results may differ materially from forward-looking statements due to various risks, including adverse clinical developments and regulatory changes[25] - The company faces uncertainties related to preliminary data and the predictive nature of preclinical studies for later-stage clinical trials[25] - Macroeconomic conditions such as rising inflation, interest rates, and market volatility could impact Aptevo's business prospects[25] - Geopolitical risks, including conflicts like the war between Russia and Ukraine, may affect the company's operations and market conditions[25] - Aptevo's ability to secure strategic partnerships or funding on acceptable terms is crucial for the commercial potential of its product candidates[25] - The company does not assume any obligation to update forward-looking statements unless required by law[25] - Additional risks affecting results are detailed in Aptevo's filings with the SEC, including its Annual Report on Form 10-K for the fiscal year ended December 31, 2024[25] Company Mission - Aptevo's mission is to improve treatment outcomes for cancer patients through innovative immunotherapies[22]

Revenue and Financial Performance - In the years ended December 31, 2025, 2024, and 2023, a group of affiliated companies accounted for 18.3%, 8.3%, and 13.7% of total revenues, respectively [30]. - Revenues increased by 11% to $51.8 million in the year ended December 31, 2025, compared to $46.5 million in 2024, driven by increased demand and new equipment installation [183]. - Cost of revenues rose by 21% to $43.8 million in 2025 from $36.2 million in 2024, attributed to higher employee compensation, production inefficiencies, and currency devaluation [184]. - Gross profit decreased by 23% to $8.0 million in 2025, with a gross profit margin of 15.4%, down from 22.2% in 2024, primarily due to increased costs and inefficiencies [185]. - Operating profit fell to $2.3 million in 2025 from $4.4 million in 2024, reflecting the decline in gross profit [187]. - Financial expenses were $1.3 million in 2025, compared to $0.7 million of financial income in 2024, mainly due to currency devaluation [188]. - The backlog as of December 31, 2025, was approximately $15.8 million, down from $23.1 million on December 31, 2024, with expectations to deliver most of this backlog in 2026 [167]. - Net cash provided by operating activities was $1.1 million in 2025, down from $4.5 million in 2024 and $8.9 million in 2023, primarily due to a decrease in pre-tax income [205]. - Net cash used in investing activities was $5.4 million in 2025, a decrease from $15.9 million in 2024, mainly for the purchase of fixed assets [206]. - Net cash used in financing activities was $1.2 million in 2025, primarily due to dividend distribution, compared to $9.6 million generated in 2024 from a public offering [207]. - Capital expenditures were approximately $5.4 million in 2025, $9.5 million in 2024, and $2.4 million in 2023, focusing on production and manufacturing equipment [208]. - The company expects to finance its 2026 operations from cash flow and cash balances, although liquidity may be affected by regional hostilities and economic downturns [209]. Supply Chain and Raw Material Challenges - The company is experiencing a significant shortage in the supply of rigid laminates and prepreg, critical raw materials, due to increased global demand for electronics grade glass fibers [42]. - The shortage of raw materials has resulted in suppliers imposing monthly allocation limits and significant price increases, which are highly volatile [43]. - The company is facing a shortage of key raw materials, which could disrupt manufacturing and affect operating margins and profitability [148]. Competition and Market Dynamics - Competition in the PCB market is intense, particularly from manufacturers in Asia with lower manufacturing costs [23]. - The company faces intense competition in the global PCB market, particularly from manufacturers in Asia with significantly lower production costs [50]. - The company faces competition from lower-cost PCB manufacturers in Asia, which may limit its pricing power and profitability [93]. - The company is focusing its marketing efforts on high-end PCB markets, particularly in flex-rigid PCBs, where profit margins are higher [160]. Regulatory and Compliance Risks - The company is subject to environmental laws and regulations, which could impose significant compliance costs and risks [38]. - The company is subject to environmental claims and litigation, including a penalty of approximately $0.6 million for an alleged breach of the Clean Air Law [60]. - The company may incur significant costs due to increased regulation associated with climate change and greenhouse gas emissions, impacting operations [64]. - The company must maintain its ITAR certification to sell PCBs to the U.S. defense market, with potential risks associated with changes in control [67]. - The company faces potential liabilities under Anti-Corruption Laws, which could adversely affect its reputation, business, and financial condition [72]. - Investigations related to Anti-Corruption Laws could result in fines, loss of operating licenses, and restrictions on contracting with public administration [74]. - The company’s international operations are subject to regulatory restrictions, which may hinder its ability to maintain or increase market demand for its products [78]. Operational Risks - The company is dependent on a limited number of unique manufacturing machines, and malfunctions could halt production for several days to months [29]. - The company’s manufacturing is concentrated in Israel, and any damage to its facilities could significantly disrupt operations and increase costs [80]. - The company’s operating results are highly variable and difficult to forecast due to factors such as order volume and timing, which can fluctuate significantly [87]. - The company is closely monitoring global inflation and high interest rates, which have increased costs of goods and services and borrowing costs, potentially impacting financial stability [101][102]. - The company has experienced significant fluctuations in its share price and trading volume, influenced by various factors including market conditions and operational results [109][111]. Investment and Future Outlook - The company invested approximately $17 million in new equipment and facility expansion during the three years ended December 31, 2025, and plans to invest about $5 million in capital expenditures in 2026 to enhance manufacturing capacity and technological capabilities [137]. - The company expects its investment program to increase annual sales by $10-15 million, targeting a total of around $60 million, contingent on sustained demand for its products [152]. - The company has unutilized revolving lines of credit aggregating NIS 8.7 million (approximately $2.7 million), but these may not remain available in the future [48]. - The company may require additional capital in the future, which may not be readily available [23]. Shareholder and Corporate Governance - Nistec Golan Ltd. and Mr. Nissan hold 58.7% of the company's shares as of March 3, 2026, following a series of share transactions since 2013 [135]. - The company has faced challenges in obtaining directors' and officers' insurance on reasonable terms, which may impact its ability to attract and retain key personnel [107]. - The company may be classified as a passive foreign investment company (PFIC), which could subject U.S. investors to adverse tax implications [113]. - The company has non-competition clauses in employment agreements, but recent legal rulings may limit the enforceability of these clauses [104]. Security and Geopolitical Risks - Political, economic, and military instability in Israel may adversely affect the company's operations and results [117]. - The intensity and duration of the security situation in Israel remain unpredictable, which could increase risks of disruptions to business and the Israeli economy [120]. - The company is closely monitoring the security situation, as any escalation could impact its ability to raise capital and conduct business effectively [123]. - Since the outbreak of the war on October 7, 2023, the company's operations have not been materially affected, and there have been no disruptions to business operations [120]. - The company may face increased costs and operational disruptions due to the obligation of personnel to perform military reserve service [124]. Taxation and Financial Incentives - The Israeli government currently provides tax and capital investment incentives, but there is a risk of future reductions or eliminations of these benefits, which could adversely affect the company's financial condition [132]. - The company is subject to the standard corporate tax rate of 23% if it fails to meet the requirements for maintaining tax benefits under the Investment Law [133]. - The effective corporate tax rate is 23%, but the company may qualify for a reduced rate of 16% as a "preferred enterprise" under specific investment laws [197]. - Tax expenses recorded were $0.2 million in 2025, down from $0.9 million in 2024, primarily related to operations in Israel [199].

Financial Performance - The company reported net losses of $143.4 million and $62.8 million for the years ended December 31, 2025 and 2024, respectively, with an accumulated deficit of $334.2 million as of December 31, 2025[627]. - The net loss for 2025 was $143.4 million, compared to a net loss of $62.8 million in 2024, reflecting an increase of $80.6 million[658]. - Total operating expenses rose to $163.2 million in 2025, up from $80.1 million in 2024, reflecting a $73.8 million increase[658]. - Research and development expenses surged to $136.8 million in 2025, compared to $63.0 million in 2024, driven by increased costs in the verekitug program[661]. - General and administrative expenses increased to $26.4 million in 2025 from $17.2 million in 2024, primarily due to higher personnel and professional fees[665]. - The company has incurred significant net operating losses and will require additional financing to support ongoing operations and development efforts[630]. Cash and Investments - The company has cash, cash equivalents, and short-term investments totaling $341.5 million, which are expected to fund operations through 2027[627]. - Cash, cash equivalents, and short-term investments totaled $341.5 million as of December 31, 2025[668]. - Net cash used in operating activities was $133.3 million in 2025, compared to $59.2 million in 2024[669]. - Net cash provided by financing activities for the year ended December 31, 2024, was $418.9 million, primarily from $268.8 million in net proceeds from the IPO and $149.9 million from the issuance of Series B Preferred Stock[676]. - The company expects to finance operations through a combination of equity offerings, debt financings, and collaborations, which may dilute ownership interests[680]. Product Development - The company is developing verekitug, a monoclonal antibody currently in Phase 2 trials for severe asthma, chronic rhinosinusitis with nasal polyps, and chronic obstructive pulmonary disease[625]. - Positive top-line results were reported in the Phase 2 trial for chronic rhinosinusitis with nasal polyps in September 2025 and for severe asthma in February 2026[625]. - The company plans to initiate Phase 3 trials for severe asthma and chronic rhinosinusitis with nasal polyps in Q1 2027, focusing on maximizing efficacy without biomarker restrictions[625]. - The company incurred approximately $98.7 million in direct external expenses for the development of verekitug for severe asthma since its nomination[664]. - The increase in manufacturing costs of $16.4 million was primarily due to higher CMO costs for Phase 3 clinical material development[663]. - Research and development expenses are expected to increase as the company advances verekitug through clinical trials[644]. Revenue and Collaborations - The company has not generated any revenue from product sales and does not expect to do so in the foreseeable future[642]. - Collaboration revenue increased to $2.9 million in 2025 from $2.4 million in 2024, primarily related to the Phase 2 clinical trial for severe asthma[659]. - The company has received $2.8 million and $1.9 million from the Maruho License Agreement for the years ended December 31, 2025 and 2024, respectively[640]. Accounting and Reporting - The company is classified as an "emerging growth company" under the JOBS Act, allowing it to adopt new accounting standards at the same time as private companies[701]. - The company is also a "smaller reporting company," with a market value threshold of less than $250 million or annual revenue below $100 million to maintain this status[702]. - If the company remains a smaller reporting company after ceasing to be an emerging growth company, it can continue to rely on certain disclosure exemptions[702]. - The company is not required to provide quantitative and qualitative disclosures about market risk due to its smaller reporting company status[703]. - The company has not made any material adjustments to prior estimates of accrued research and development expenses, indicating stable financial forecasting practices[696]. Lease and Other Agreements - The company entered into a lease agreement for office space with an initial base rent of approximately $0.7 million for the first year, increasing to approximately $0.8 million for the second and third years[689]. - The company made an annual payment of $0.5 million to Lonza under the Lonza License Agreement during the years ended December 31, 2025 and 2024[688]. - The company has not made any royalty payments to Regeneron under the Regeneron Letter Agreement to date, which requires mid-single-digit percentage royalties on worldwide net sales of a Royalty Product[684].

IPO and Fundraising - The Company completed its IPO on December 12, 2025, raising gross proceeds of $345,000,000 from the sale of 34,500,000 Units at $10.00 per Unit, including the full exercise of the underwriters' over-allotment option [342]. - The Company also sold 890,000 Private Placement Units at $10.00 per Unit, generating additional gross proceeds of $8,900,000 [343]. - Total transaction costs incurred through the IPO amounted to $20,186,929, which included $6,900,000 in cash underwriting fees and $12,075,000 in deferred underwriting fees [354]. - The net proceeds from the IPO and Private Placement, totaling $345,000,000, were placed in a Trust Account for the benefit of public shareholders [344]. Financial Performance - As of December 31, 2025, the Company had a net income of $357,006, primarily from interest earned on marketable securities held in the Trust Account [350]. - As of December 31, 2025, the Company had cash of $834,527 and a working capital surplus of $815,086 [351]. Business Operations - The Company has not yet engaged in any operations or generated revenues, with activities focused on organizational tasks and preparing for the IPO [349]. - The Company intends to use substantially all funds in the Trust Account to complete a Business Combination, which must have a fair market value of at least 80% of the net assets held in the Trust Account [345]. - The Company may incur additional costs in pursuing its acquisition plans and cannot assure the successful completion of a Business Combination [348]. Regulatory and Compliance - The Company has no off-balance sheet arrangements as of December 31, 2025 [360]. - The company is classified as a smaller reporting company under Rule 12b-2 of the Exchange Act and is not obligated to provide the detailed disclosures typically required for market risk [363].

Research and Development - The company plans to advance the R&D of its product candidates to commercialization through studies and clinical trials, with anticipated costs and timelines yet to be determined[27]. - The company is focusing on the research and development of Lucid-MS to prevent and reverse myelin degradation, with the Lucid-21-302 clinical development program advancing towards human Phase 2 efficacy trials[27]. - The company is committed to maintaining a portfolio of strategic investments through FSD Strategic Investments Inc.[27]. - The company has made certain assumptions regarding securing additional licenses and entering into agreements for future product acquisitions[29]. - The company is focused on developing Lucid-MS, a patented new chemical entity targeting the treatment of multiple sclerosis (MS)[65]. - The company remains responsible for ensuring that product candidate drug trials comply with regulatory standards, despite reliance on third parties for research and development[83]. - Success in preclinical testing does not guarantee favorable results in later clinical trials, which could hinder regulatory approval[87]. - Product candidates may be associated with side effects that could delay or halt clinical development and regulatory approval[88]. - Regulatory authorities may require additional trials if undesirable side effects are identified post-approval, impacting the company's reputation and financial condition[90]. - The company may face challenges in identifying and licensing additional product candidates, which could adversely affect its business prospects[92]. Financial Position and Funding - The company believes its current financial position and recent operational improvements provide a solid foundation for operations and potential growth opportunities[27]. - The company is exploring near-term funding strategies to support its ongoing and planned clinical studies[27]. - The company anticipates significant losses for the foreseeable future as it pursues the commercialization of its Product Candidates[35]. - The company’s ability to raise additional capital on favorable terms is uncertain, which may impact its operational strategy[49]. - The company has a history of operating losses and negative cash flow, relying on equity, debt securities, and cryptocurrency activities for funding[211]. - The ability to continue as a going concern is uncertain, with potential challenges in raising additional capital on acceptable terms[212]. - Future capital raises may dilute existing shareholders and impose unfavorable terms, affecting the company's operations and financial condition[212]. Market Competition and Risks - The company faces significant competition for its drug candidate Lucid-MS, which may impact its market acceptance and commercial success[45]. - The company faces significant competition in the MS treatment market from established pharmaceutical companies and other biotechnology firms[78]. - The commercial success of Lucid-MS will depend on market acceptance by physicians, patients, and payors, as well as competitive pricing and manufacturing capabilities[76]. - The company is subject to various risks related to its intellectual property, including potential infringement claims that could delay development[46]. - The company may not achieve profitability even if Lucid-MS is approved, as market acceptance and competitive factors will significantly influence revenue generation[77]. - If approved, product candidates may face competition from generic drugs, which could impact market share and revenue[105]. - The company may face competition from generic drugs if competitors obtain marketing approval, potentially limiting demand and pricing for its products[108]. - Product liability lawsuits could lead to substantial liabilities, affecting the commercialization of product candidates[109]. Regulatory Environment - The company acknowledges the risks associated with its ability to conduct operations efficiently and the potential impact of regulatory changes on its business[32]. - The company operates in a highly regulated industry, and failure to comply with applicable laws could result in substantial penalties[49]. - The company's future success is heavily dependent on obtaining regulatory approval for its product candidates, which is a lengthy and uncertain process[67]. - The regulatory approval processes vary by country, and obtaining approval in one jurisdiction does not guarantee approval in others, potentially limiting market access[95]. - The company must comply with strict regulations regarding the production, storage, and use of controlled drugs, which could affect future research if resumed[155]. - The company is subject to various risks related to its intellectual property, including potential infringement claims that could delay development[46]. Cryptocurrency Holdings and Risks - The company’s treasury holdings in cryptocurrencies are subject to significant volatility, which could adversely affect its financial condition[49]. - The Company has pledged 18.32 Bitcoin units, valued at approximately US$1,601,865, as collateral for a US$1,000,000 loan facility with a 9% annual interest rate[161]. - The price of Bitcoin fluctuated between approximately $62,000 and $124,000 during the twelve-month period ending March 25, 2026, highlighting the extreme volatility of cryptocurrencies[164]. - The Company currently engages in staking with its Solana (SOL) holdings, which generates variable staking rewards subject to risks associated with the Solana network[160]. - The Company’s cryptocurrency holdings are accounted for at fair value, with changes in value recognized directly in the consolidated statement of loss, impacting reported net loss[175]. - The company’s cryptocurrency holdings currently represent approximately 45% of total unconsolidated assets, exceeding the 40% threshold under the Investment Company Act of 1940[197]. - The SEC has proposed amendments to custody rules that could impose additional regulatory requirements on the custody and storage of digital assets[183]. - The regulatory environment for cryptocurrencies remains uncertain, with potential changes from future executive actions or Congressional legislation[181]. - The company faces significant volatility and liquidity risks in its cryptocurrency investments, which may lead to substantial decreases in value over short periods[205]. - Cybersecurity risks could result in the permanent loss of cryptocurrency assets due to theft or technological failures[207]. - Fluctuations in cryptocurrency values may introduce volatility into the company's financial statements, directly affecting reported net losses[208]. - The company's cryptocurrency treasury activities divert management attention and resources from its core biopharmaceutical business, potentially slowing progress on drug development[210]. Operational Challenges - The company relies on third parties for conducting drug trials and aspects of research and preclinical testing, which may affect development timelines[45]. - The company expects to rely on third parties for drug supply storage and distribution, with potential performance failures leading to delays in clinical development[85]. - Failure of third parties to meet contractual duties could delay marketing approvals for product candidates, impacting commercialization efforts[84]. - Manufacturing problems at contract manufacturing organizations (CMOs) could lead to delays in clinical trials and increased costs[97]. - The company has no pharmaceutical products approved for commercial sale and has not generated any revenue from pharmaceutical product sales[65]. - The company lacks a comprehensive infrastructure for sales and marketing, which may hinder its ability to generate product revenue[115]. - Ongoing litigation regarding a breach of a nondisclosure agreement and trade secret misappropriation may impact the company's operations[128]. - The company has placed all research related to Lucid-PSYCH on hold due to funding issues as of April 2023[149]. - The company relied on a single-source supplier for drug substances and products for Lucid-PSYCH, which poses risks such as potential supply disruptions and increased costs[150]. - There is uncertainty regarding the approval of psychedelic drugs as medicines, with certain substances classified as Schedule I drugs under U.S. federal law, making medical use illegal[153]. - Delays in the drug substance and product manufacturing and supply chain may occur due to unforeseen problems with permitting and quota processes[156].

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 20-F (Mark One) ☐ REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR (g) OF THE SECURITIES EXCHANGE ACT OF 1934 OR ☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2025 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from _________ to _________ Ontario, Canada (Jurisdiction of incorpo ...