Annual Report for Fiscal Year Ending 12-31, 2025 (Form 10-K)

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

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our consolidated financial statements and related notes included elsewhere in this Annual Report on Form 10-K. This discussion contains forward-looking statements reflecting our or our management team's expectations, hopes, beliefs, intentions, strategies, estimates, and assumptions concerning events and financial trends that may affect our future financial condition or results of operations. Actual results and the timing of events may differ materially from those contained in these forward-looking statements due to a number of factors, including those discussed in the sections titled "Cautionary Note Regarding Forward-Looking Statements" and "Risk Factors" appearing elsewhere in this Annual Report on Form 10-K. Unless the context otherwise requires, for purposes of this section, the terms "we," "us," the "Company" or "our" are intended to mean the business and operations of Clene Inc. and its consolidated subsidiaries.

Business Overview

We are a clinical-stage pharmaceutical company pioneering the discovery, development, and commercialization of novel clean-surfaced nanotechnology ("CSN^®") therapeutics. CSN^® therapeutics are comprised of atoms of transition elements that, when assembled in nanocrystal form, possess unusually high, unique catalytic activities not present in those same elements in bulk form. These catalytic activities drive, support, and maintain beneficial metabolic and energetic cellular reactions within diseased, stressed, and damaged cells.

Our patent-protected, proprietary position affords us the potential to develop a broad and deep pipeline of novel CSN therapeutics to address a range of diseases with high impact on human health. We innovated an electro-crystal-chemistry drug development platform that draws from advances in nanotechnology, plasma and quantum physics, materials science, and biochemistry. Our platform process results in nanocrystals with faceted structures and surfaces that are free of the chemical surface modifications that accompany other production methods. Many traditional methods of nanoparticle synthesis involve the unavoidable deposition of potentially toxic organic residues and stabilizing surfactants on the particle surfaces. Synthesizing stable nanocrystals that are both nontoxic and highly catalytic has overcome this significant hurdle in harnessing transition metal catalytic activity for therapeutic use. Our clean-surfaced nanocrystals exhibit catalytic activities many-fold higher than other commercially available nanoparticles, produced using various techniques, that we have comparatively evaluated.

Our development and clinical efforts are dedicated to revolutionizing the treatment of neurodegenerative diseases to restore and protect neuronal health and function. Our nanotherapeutics target cellular energy impairments that are common to many diseases and we are currently focused on addressing the high unmet medical needs in central nervous system disorders including amyotrophic lateral sclerosis ("ALS"), multiple sclerosis ("MS"), and Parkinson's disease ("PD"). We currently have no drugs approved for commercial sale and have not generated any revenue from drug sales. We have never been profitable and have incurred operating losses in each year since inception. We generate revenue from sales of dietary supplements through our wholly-owned subsidiary, dOrbital, Inc., or through an exclusive license with 4Life Research LLC ("4Life"), an international supplier of health supplements, stockholder, debt holder, and related party. We anticipate these revenues to be small compared to our operating expenses and to the revenue we expect to generate from potential future sales of our drug candidates, for which we are currently conducting clinical trials.

Reverse Recapitalization

Clene Nanomedicine, Inc. ("Clene Nanomedicine") became a public company on December 30, 2020 (the "Closing Date") when it completed a reverse recapitalization (the "Reverse Recapitalization") with Tottenham Acquisition I Limited ("Tottenham"), and with Tottenham's wholly-owned subsidiary and our predecessor, Chelsea Worldwide Inc., and Creative Worldwide Inc., a wholly-owned subsidiary of Chelsea Worldwide Inc. On the Closing Date, Chelsea Worldwide Inc. changed its name to Clene Inc. and listed its shares of common stock, par value $0.0001 per share ("Common Stock") on the Nasdaq Capital Market ("Nasdaq") under the symbol "CLNN."

The Reverse Recapitalization provided for earn-out payments in the form of shares of Common Stock to be paid if we had achieved certain market-based milestones within three to five years following the Reverse Recapitalization. The earn-out payments were to be paid to certain Clene Nanomedicine stockholders (the "Clene Nanomedicine Contingent Earn-out") and Tottenham's sponsor and former officers and directors (the "Initial Stockholders," and together with the Clene Nanomedicine Contingent Earn-out, the "Contingent Earn-outs"). As of December 31, 2025, the milestones had not been achieved and the Contingent Earn-outs were cancelled.

Effective July 11, 2024 (the "Effective Date"), we filed a Certificate of Amendment to our Fourth Amended and Restated Certificate of Incorporation with the Secretary of State of the State of Delaware, to effect a 1-for-20 reverse stock split (the "Reverse Stock Split") of our Common Stock. Beginning with the opening of trading on the Effective Date, our Common Stock began trading on Nasdaq on a split-adjusted basis under the same symbol, "CLNN." As a result of the Reverse Stock Split, every 20 shares of our Common Stock issued and outstanding were automatically combined and converted into 1 validly issued, fully paid and non-assessable share of Common Stock. In lieu of any fractional shares, stockholders received an amount in cash (without interest) equal to: (i) the number of shares of Common Stock held by such stockholder before the Reverse Stock Split that would otherwise have been exchanged for such fractional shares multiplied by (ii) the closing price of our Common Stock on Nasdaq on the trading day immediately preceding the Effective Date.

The Reverse Stock Split did not reduce the total number of authorized shares of Common Stock or preferred stock, par value $0.0001 per share ("Preferred Stock"), or change the par values of our Common Stock or Preferred Stock. All outstanding stock options, warrants, rights to restricted stock awards, convertible debt, and contingent earn-out shares entitling their holders to purchase or receive shares of Common Stock were adjusted as a result of the Reverse Stock Split, in accordance with the terms of each such security. In addition, the number of shares reserved for issuance pursuant to our Amended 2020 Stock Plan was also appropriately adjusted. All historical share and per share data for the periods presented in our consolidated financial statements, including for periods ending prior to July 11, 2024, has been adjusted to reflect the 1-for-20 Reverse Stock Split on a retroactive basis as if the Reverse Stock Split occurred as of the earliest period presented.

Recent Developments of Our Clinical Programs

Amyotrophic Lateral Sclerosis

In December 2025, we announced the completion of new biomarker analyses for CNM-Au8®. The three analyses were previously recommended by the FDA in late 2024 to strengthen the persuasiveness of CNM-Au8's effect on neurofilament light ("NfL") and its relationship to clinical benefit (i.e., effects on survival): (i) NfL change in the National Institutes of Health ("NIH")-sponsored Expanded Access Program (the "ACT-EAP"), (ii) evaluation of additional disease-relevant biomarkers, and (iii) evaluation of NfL trajectory in placebo participants in the HEALEY ALS Platform Trial who later transitioned to CNM-Au8 in the open-label extension ("OLE"):

●

Statistically significant decrease in NfL levels compared to matched ALS controls across the full analysis set (all evaluable matched participants) in the ACT-EAP. The week 36 area under curve ("AUC") difference (standard error of the mean) of NfL (Ln(pg/mL)*week) was: -0.0899 (0.0430), p=0.0373, equivalent to a geometric mean ratio ("GMR") difference of 0.914, 95% CI: 0.840 - 0.995. The effect size was similar to the NfL decline observed in the original double-blind phase of the HEALEY ALS Platform Trial: HEALEY week 24 AUC GMR of 0.901, 95% CI: 0.845 - 0.959, p=0.0013 compared to the ACT-EAP week 24 AUC GMR of 0.911, 95% CI: 0.836 - 0.993, p=0.0339. Multiple pre-specified supportive analyses in the ACT-EAP across the full analysis set at week 24 and week 48 confirmed the robustness of the findings (p<0.05). Pre-specified subgroups showed significant effects in participants including those with an age younger than the median, on background riluzole treatment, and in participants with bulbar onset (p<0.05). In the primary analysis population in non-bulbar onset participants (i.e., predominantly limb onset), the week 36 AUC NfL change was not significant (p=0.2085).

●

Additional disease-relevant biomarker effects on glial fibrillary acidic protein ("GFAP") were identified with statistically significant declines observed during the double-blind period in the HEALEY ALS Platform Trial (p<0.05)and were highly correlated with NfL change. GFAP is a structural protein in astrocytes. GFAP increase in ALS is a marker of harmful reactive astrogliosis, astrocytic injury, and degenerative processes that contribute to motor neuron loss. High GFAP levels are associated with a statistically significant increase in mortality risk in ALS patients. In comparison, placebo participants demonstrated increases across both NfL and GFAP biomarkers during the 24-week double-blind period. Consistent with these findings, in the matched ACT-EAP population, the magnitude and timing of NfL and GFAP reduction were closely correlated (Pearson's r>0.85, p<0.0001) demonstrating concordant effects for NfL and GFAP in the HEALEY ALS Platform Trial and ACT-EAP participants.

●

Among placebo-treated participants who transitioned to CNM-Au8 in the HEALEY ALS Platform Trial OLE, NfL trajectories generally showed decline or stabilization compared to increases observed during the double-blind period. With only relatively few ex-placebo participants (n=31), these analyses had limited power, but the relative decline compared to the double-blind period showed comparable GMR differences (OLE week 28 GMR: 0.885, 95% CI: 0.737 - 1.063, p=0.185). These findings are consistent with the NfL effects previously published for CNM-Au8 vs. placebo during the 24-week double-blind period (week 24 GMR difference: 0.905, 95% CI: 0.822 - 0.996, p=0.040).

●

NfL and GFAP biomarker decline is associated with improved survival. Among participants treated in the HEALEY ALS Platform Trial with CNM-Au8 30 mg, participants with the greatest declines across both NfL and GFAP biomarkers during the double-blind period had the largest long-term overall survival improvement relative to all participants treated with CNM-Au8 30 mg (NfL and GFAP average AUC decline < 25th percentile): Cox hazard ratio: 0.191, 95% CI: 0.047 - 0.782, p=0.0210, an 80% reduction in the risk of death compared to Regimen A concurrent controls.

The FDA noted that whether disease-specific biomarkers can serve as a reasonably likely surrogate endpoint for the effects of CNM-Au8 in ALS and whether the magnitude of change observed on NfL or other related disease-specific biomarkers in patients treated with CNM-Au8 can reasonably likely predict clinical benefit for ALS would be a matter of review.

We previously had a Type C meeting with the FDA to review the long-term survival benefit from CNM-Au8 30 mg treatment compared to concurrently randomized controls from Regimen A of the HEALEY ALS Platform Trial. The FDA recommended using the evidence of CNM-Au8 30 mg treatment effects on long-term survival as supportive evidence for the clinical meaningfulness of observed NfL or other disease-specific biomarker changes. The latest survival analyses (April 2025 data cut) in participants originally randomized to CNM-Au8 30 mg in the HEALEY ALS Platform Trial were conducted at intervals of one year (pre-specified OLE timepoint) and beyond using the pre-specified covariate model across two populations: the full analysis set ("FAS"), including all available participant data; and a risk-based balanced population, the comparable risk set ("CRS"), filtered for disease severity by NfL levels (Ln(NfL) ≥ 3.5 and TRICALS risk score) due to imbalances with significantly more low-progression risk patients present in the Regimen A group. CNM-Au8 30 mg treatment demonstrated statistically significant improved survival across both the FAS and CRS populations based on Cox proportional hazard model and restricted mean survival time ("RMST") analyses:

●

FAS population: 1-year Cox proportional hazard ratio: 0.2723, 95% CI: 0.0961 - 0.7719, p=0.0144, a 73% reduction in risk of death.

●

CRS population: 1-year Cox proportional hazard ratio: 0.229, 95% CI: 0.07 - 0.752, p=0.0151, a 77% reduction in risk of death.

Even the small cohort of placebo-to-CNM-Au8 switchers (n=31, starting treatment approximately 6 months later in disease progression) showed a significant RMST benefit of +30.7 days at 1 year following treatment initiation (95% CI: 7.52 - 53.85, p=0.0094). The FDA also recommended that we conduct further survival analyses comparing Regimen C to other regimens in the HEALEY ALS Platform Trial to strengthen the inference of a survival benefit.

In January 2026, we announced exploratory findings identifying Insulin-like Growth Factor Binding Protein 7 ("IGFBP7") as an additional pharmacodynamic biomarker of treatment response to CNM-Au8 30 mg from the double-blind period of the HEALEY ALS Platform Trial. IGFBP7 decline was strongly associated with improved survival with responders, defined as a cumulative AUC IGFBP7 reduction during the 24-week double-blind period, demonstrating 78% mortality risk reduction compared to concurrently randomized controls (n=38 of 56 evaluable; HR: 0.22, 95% CI: 0.07-0.71, p=0.012; 3 events in 38 responders vs 28% mortality in controls). IGFBP7 also showed strong, statistically significant correlations with concurrent declines in other disease-relevant biomarkers, including those associated with vascular integrity, synaptic function, protein clearance, and axonal integrity (AUC Week 0-24 change; r=0.50-0.78; all p<0.001). This correlation pattern supports a hypothesized mechanistic pathway linking CNM-Au8's mechanism of action to IGFBP7-mediated neuroprotection. Independent genetic evidence has found that a variant (rs4242007) associated with decreased IGFBP7 expression was significantly more common in patients with documented ALS reversals compared to typically progressive ALS (Crayle, et al. "Genetic Associations With an Amyotrophic Lateral Sclerosis Reversal Phenotype." Neurology, 103(4), e209696 (2024)). Together, these data suggest that lower IGFBP7, whether achieved genetically or pharmacologically, may help protect against ALS progression. These findings are exploratory and hypothesis-generating and require prospective confirmation.

The FDA has granted us a Type C in-person meeting, which we expect to be held in the first quarter of 2026, to discuss the statistically significant reductions in NfL and GFAP, the strong associations of biomarker improvements with longer survival in participants treated with CNM-Au8, and to confirm the ability of the Company to file an NDA for ALS under an accelerated approval pathway, with the meeting minutes expected early in the second quarter of 2026. We plan to submit an NDA under an accelerated approval pathway by the end of June 2026, with the planned Phase 3 RESTORE-ALS trial commencing by the end of 2026, contingent on funding, and serving as the post-approval confirmatory study. RESTORE-ALS is designed to investigate the effects of CNM-Au8 on improved survival (primary endpoint) and delayed time to ALS clinical worsening events (secondary efficacy endpoint).

Across over 1,100 participant-years of CNM-Au8 exposure data, treatment with CNM-Au8 continues to demonstrate a safety profile without significant safety concerns or safety trends identified. No serious adverse events have been identified as related to CNM-Au8 treatment by any investigator to date.

Multiple Sclerosis

We met with the FDA in a Type B end of Phase 2 meeting during the third quarter of 2025 to review results from the Phase 2 VISIONARY-MS trial and discuss a planned Phase 3 study focusing on cognition improvement as an adjunct to standard-of-care MS therapies, addressing a critical unmet medical need for people struggling with MS. The FDA aligned with Clene acknowledging the limitations of the Expanded Disability Status Scale, a global measure of MS disease severity, and expressed openness to considering other potential primary endpoints, including cognition, to evaluate broader treatment effects. We plan to work closely with regulatory health authorities from the FDA, European Medicines Agency and other international regulatory bodies, MS experts, and patient representatives to determine the proper path to advance CNM-Au8 into Phase 3 and potential future approval. We also believe that once CNM-Au8 receives regulatory approval in another indication, licensing opportunities for the MS indication will improve.

The chart below reflects the growing body of evidence for CSN therapeutics from our completed and ongoing clinical programs.

Financial Overview

Our financial condition, results of operations, and the period-to-period comparability of our financial results are principally affected by the following factors:

Research and Development Expense

The discovery and development of novel drug candidates requires a significant investment of resources over a prolonged period of time, and a core part of our strategy is to continue making sustained investments in this area. As a result of this commitment, our pipeline of drug candidates has been advancing, with substantially all our research and development expenses relating to our lead asset, CNM-Au8.

Our research and development expenses are affected by the scope and advancement of our existing product pipeline and the commencement of new drug programs. Drug candidates in later stages of clinical development generally have higher development costs than those in earlier stages, primarily due to costs and fees for per patient clinical trial sites for larger clinical trials, opening and monitoring clinical sites, contract research organization ("CRO") activity, and manufacturing. We anticipate that our research and development expenses will increase in future years if and when we advance our assets into Phase 3. Additionally, if we are able to file an NDA with the FDA under an accelerated approval pathway or subsequent to future Phase 3 clinical development activities, if any, we anticipate that our research and development expenses related to regulatory activities would increase in advance of receiving regulatory approval.

Research and development costs consist primarily of payroll and personnel expenses for salaries, benefits, and stock-based compensation; supplies, materials, and manufacturing expenses to support our clinical trials; payments to CROs, principal investigators, and clinical trial sites; costs of preclinical and nonclinical activities; consulting costs; and allocated overhead costs, including rent, equipment, utilities, depreciation, insurance, maintenance, and information technology. Research and development costs are charged to operations as incurred, and nonrefundable advance payments related to future research and development activities are initially recorded as assets and are expensed when we receive the related goods or services. Grant funding is recognized as a reduction in research and development costs.

Our clinical trial accrual process seeks to account for expenses resulting from obligations under contracts with CROs, consultants, and clinical sites in connection with conducting clinical trials. The financial terms of these contracts vary and may result in payment flows that do not match the periods over which materials or services are provided to us under such contracts. We reflect the appropriate clinical trial expenses in the consolidated financial statements by matching the appropriate expenses with the period in which services are performed. In the event advance payments are made to CROs, the payments are recorded as prepaid assets and expensed over the period in which services are performed.

General and Administrative Expense

General and administrative expenses consist primarily of payroll and personnel expenses for salaries, benefits, and stock-based compensation; fees for legal, finance, accounting, tax, and information technology services; insurance costs; expenses for public and investor relations; rent, utilities, depreciation, and other costs related to our facilities.

We anticipate that our general and administrative expenses in future periods will be contingent upon our discussions with the FDA. If we are able to file an NDA with the FDA under an accelerated approval pathway, we anticipate our general and administrative expenses would increase in future periods to support increases in our drug development activities and as we build our commercial capabilities in advance of receiving regulatory approval. This potential increase will likely include increased headcount, increased stock-based compensation expenses, expanded infrastructure including certain sales and marketing activities performed ahead of regulatory approval, and increased insurance expenses. If we are unable to file an NDA with the FDA under an accelerated approval pathway, we would need to continue investing in clinical research activities and we anticipate our general and administrative expenses would decrease in future periods as we decrease commercial manufacturing expansion projects, including at our Elkton, Maryland facility, and as we implement cost-saving initiatives, such as a reduction in compensation, a hiring freeze, and elimination of certain staff positions.

Total Other Income (Expense), Net

Total other income (expense), net, consists primarily of (i) interest income and interest expense, (ii) changes in the fair value of our common stock warrant liabilities and derivative liabilities, and (iii) research and development tax credits, unrestricted grants, and conditional grants for which applicable conditions have been met.

Results of Operations

Our results of operations for the years ended December 31, 2025 and 2024 were as follows:

		Year Ended December 31,
(in thousands)		2025				2024				Change
Revenue:
Product revenue		$	119			$	237				(50	)%
Royalty revenue			81				105				(23	)%
Total revenue			200				342				(42	)%
Operating expenses:
Cost of revenue			43				70				(39	)%
Research and development			14,011				20,058				(30	)%
General and administrative			9,229				13,307				(31	)%
Total operating expenses			23,283				33,435				(30	)%
Loss from operations			(23,083	)			(33,093	)			(30	)%
Total other income (expense), net			(3,090	)			(6,307	)			(51	)%
Net loss		$	(26,173	)		$	(39,400	)			(34	)%

Revenue

Product revenue relates to our dietary supplement products and consists of (i) sales of an aqueous zinc-silver ion dietary (mineral) supplement sold by our wholly-owned subsidiary, dOrbital, Inc., under the trade name "rMetx™ ZnAg Immune Boost," or under a supply agreement with 4Life under the trade name "Zinc Factor™," and (ii) sales of KHC46, an aqueous gold dietary (mineral) supplement of very low-concentration, sold under a supply agreement with 4Life under the trade name "Gold Factor™." Royalty revenue relates to our dietary supplement products and consists of proceeds under an exclusive and royalty-bearing license agreement with 4Life relating to the sale of Gold Factor. During the years ended December 31, 2025 and 2024, changes in product and royalty revenues were due to the timing of purchases and sales of Zinc Factor and Gold Factor by 4Life under the supply and license agreements.

Cost of Revenue

Cost of revenue related to production and distribution costs for the sales of Gold Factor, Zinc Factor, and rMetx dietary supplements.

Research and Development Expense

Research and development expense during the years ended December 31, 2025 and 2024 was as follows:

		Year Ended December 31,
(in thousands)		2025				2024				Change
CNM-Au8:
Amyotrophic lateral sclerosis		$	5,936			$	3,400				75	%
Multiple sclerosis			295				239				23	%
Parkinsonʼs disease			-				(18	)			*
Regulatory activities			484				928				(48	)%
General/preclinical/nonclinical			95				375				(75	)%
CNM-ZnAg			-				17				*
Unallocated:
Facilities			1,662				1,560				7	%
Depreciation			1,351				1,379				(2	)%
Manufacturing			805				1,130				(29	)%
Research			11				48				(77	)%
Equipment			98				116				(16	)%
Maintenance			144				264				(45	)%
Information technology			324				160				103	%
Other			132				85				55	%
Personnel			8,210				10,114				(19	)%
Stock-based compensation			2,987				3,546				(16	)%
Grant revenue as a reduction of research and development expense			(8,523	)			(3,285	)			159	%
Total research and development		$	14,011			$	20,058				(30	)%

*	Not meaningful.

The change in research and development expenses was primarily due to the following:

(i)

an increase in expenses related to our lead drug candidate, CNM-Au8, primarily due to (A) an increase in expenses related to our ALS clinical programs, including our ACT-EAP due to higher enrollment in the EAP, and an increase in expenses for planning activities for our RESTORE ALS clinical trial; partially offset by a decrease in expenses related to the HEALEY ALS Platform Trial and RESCUE-ALS due to the previous completion of the blinded portion and open-label extensions of each trial, and a decrease in expenses related to our two ongoing EAPs with Massachusetts General Hospital; (B) an increase in expenses related to our MS clinical programs due to full enrollment of the second dosing cohort of REPAIR-MS, which concluded in September 2025, and an increase in expenses for our MS EAP which began enrollment in September 2024, partially offset by a decrease in expenses related to VISIONARY-MS and its long-term extension due to the completion of the studies; (C) a decrease in expenses for regulatory activities primarily driven by lower expenses related to our ongoing FDA discussions and NDA submission-related activities; and (D) a decrease in preclinical, nonclinical, and other general CNM-Au8-related expenses;

(ii)

a decrease in unallocated expenses, primarily due to: (A) a decrease in manufacturing expenses due to the conclusion of various clinical programs, partially offset by increased manufacturing expenses to support higher enrollment in our ongoing EAPs, (B) a decrease in expenses related to general research activities with external vendors and consultants, and (C) a decrease in maintenance expenses related to equipment and facilities; partially offset by (D) an increase in facility costs such as rent and utilities and (E) an increase in information technology-related expenses;

(iii)

a decrease in personnel expenses, primarily due to cost-saving initiatives and a decrease in expenses for manufacturing personnel due to the conclusion of various clinical programs;

(iv)

a decrease in stock-based compensation expense, primarily due to the timing of award grants, vesting, and forfeitures for research and development personnel; and

(v)

an increase in grant revenue, which is recorded as a reduction to research and development expense, due to an increase in enrollment and study operations in the ACT-EAP which resulted in higher reimbursable expenses, partially offset by a decrease in grant revenue related to our REPAIR-MS clinical trial due to the conclusion of the second dosing cohort.

General and Administrative Expenses

General and administrative expense during the years ended December 31, 2025 and 2024 was as follows:

		Year Ended December 31,
(in thousands)		2025				2024				Change
Insurance		$	725			$	822				(12	)%
Legal			504				822				(39	)%
Finance and accounting			1,013				761				33	%
Public and investor relations			343				662				(48	)%
Facilities			119				119				0	%
Depreciation			144				266				(46	)%
Information technology			152				300				(49	)%
Personnel			2,874				4,177				(31	)%
Stock-based compensation			3,395				4,407				(23	)%
Grant revenue as a reduction of general and administrative expense			(358	)			(147	)			144	%
Other			318				1,118				(72	)%
Total general and administrative		$	9,229			$	13,307				(31	)%

The change in general and administrative expense was primarily due to the following:

(i)

a decrease in insurance fees, primarily due to our directors' and officers' insurance;

(ii)

a decrease in legal fees, primarily due to a decrease in fees related to intellectual property, regulatory activities, and other general corporate legal fees; partially offset by an increase in legal fees related to financing and fundraising;

(iii)

an increase in finance and accounting fees, primarily due to an increase in audit and tax fees and fees from consultants, advisors, and other financial vendors;

(iv)

a decrease in fees related to our public and investor relations efforts;

(v)

a decrease in depreciation expense due to certain assets reaching the end of their depreciable life;

(vi)

a decrease in information technology-related expenses, primarily due to a decrease in software license fees; partially offset by an increase in expenses related to maintenance, subscriptions, security services;

(vii)

a decrease in personnel expenses, primarily due to cost-saving initiatives;

(viii)

a decrease in stock-based compensation expense, primarily due to the timing of award grants, vesting, and forfeitures for general and administrative personnel;

(ix)

an increase in grant revenue, recorded as a reduction to general and administrative expense, due to an increase in enrollment and study operations in the ACT-EAP which resulted in higher reimbursable expenses; and

(x)

a decrease in other expenses due to a decrease in expenses related to lobbying activities, consulting, postage, office equipment and supplies, and other miscellaneous expenses; partially offset by an increase in continuing education and travel expenses.

Total Other Income (Expense), Net

Total other income (expense), net, during the years ended December 31, 2025 and 2024 was as follows:

		Year Ended December 31,
(in thousands)		2025				2024				Change
Interest income		$	223			$	865				(74	)%
Interest expense			(2,682	)			(4,064	)			(34	)%
Loss on extinguishment of notes payable			-				(214	)			*
Issuance costs for common stock warrant liabilities			-				(157	)			*
Loss on initial issuance of equity			-				(2,097	)			*
Change in fair value of common stock warrant liabilities			(522	)			(702	)			(26	)%
Change in fair value of derivative liabilities			(363	)			(379	)			(4	)%
Change in fair value of Clene Nanomedicine contingent earn-out liability			-				75				*
Change in fair value of Initial Stockholders contingent earn-out liability			-				10				*
Research and development tax credits and unrestricted grants			254				357				(29	)%
Other expense, net			-				(1	)			*
Total other income (expense), net		$	(3,090	)		$	(6,307	)			(51	)%

*	Not meaningful.

The change in total other income (expense), net, was primarily due to the following:

(i)

a decrease in interest income primarily due to lower average balances of cash and cash equivalents and lower interest rates in 2025;

(ii)

a decrease in interest expense primarily due to (A) declining balances of notes payable following principal repayments, including repayment of notes payable with higher stated interest rates, and (B) a decrease in amortization of debt discounts due to repayment of notes payable with higher monthly amortization; partially offset by (C) an increase in non-cash interest expense due to the capitalization of interest on senior secured convertible promissory notes beginning in August 2025;

(iii)

a loss on extinguishment of notes payable from the repayment in full of our term loan (the "2021 Avenue Loan") with Avenue Venture Opportunities Fund, L.P. ("Avenue") during the year ended December 31, 2024;

(iv)

issuance costs from public equity offerings allocated to liability-classified warrants during the year ended December 31, 2024;

(v)

a loss on initial issuance of equity from the fair value in excess of proceeds from a public equity offering during the year ended December 31, 2024;

(vi)

a loss from the changes in fair value of common stock warrant liabilities during the years ended December 31, 2025 and 2024. The changes in fair value were due to changes in price of our Common Stock on Nasdaq and updates in valuation model assumptions (see "Critical Accounting Estimates");

(vii)

a loss from the change in fair value of derivative liabilities separated from our senior secured convertible promissory notes during the years ended December 31, 2025 and 2024. The changes in fair value were due to changes in price of our Common Stock on Nasdaq and updates in valuation model assumptions (see "Critical Accounting Estimates");

(viii)

a gain from the change in fair value of the Clene Nanomedicine Contingent Earn-out liability and Initial Stockholders Contingent Earn-out liability. The changes in fair value were due to changes in price of our Common Stock on Nasdaq and updates in valuation model assumptions; and

(ix)

a decrease in research and development tax credits and unrestricted grants due to changes in the amount of qualifying research and development expenses incurred.

Taxation

United States

We are incorporated in the state of Delaware and subject to statutory U.S. federal corporate income tax at a rate of 21.00%. We are also subject to state income tax in Maryland at a rate of 8.25%, and in Utah at a rate of 4.50%. As of December 31, 2025 and 2024, we recorded a full valuation allowance against our net deferred tax assets due to the uncertainty as to whether such assets will be realized resulting from our three-year cumulative loss position and the uncertainty surrounding our ability to generate pre-tax income in the foreseeable future.

Australia

Our wholly-owned subsidiary, Clene Australia Pty Ltd ("Clene Australia"), was established in Australia in March 2018 and is subject to corporate income tax at a rate of 30.00%. Clene Australia had no taxable income or provision for income taxes for the years ended December 31, 2025 and 2024. We recorded other income of $0.1 million and $0.4 million for the years ended December 31, 2025 and 2024, respectively, for research and development tax credits pertaining to Clene Australia for the 2025 and 2024 tax years, respectively.

Netherlands

Our wholly-owned subsidiary, Clene Netherlands B.V. ("Clene Netherlands"), was established in the Netherlands in April 2021 and is subject to corporate income tax at a rate of 19.00% up to €200,000 of taxable income and 25.80% for taxable income in excess of €200,000 for the years ended December 31, 2025 and 2024. Clene Netherlands had no taxable income or provision for income taxes for the years ended December 31, 2025 and 2024.

Liquidity and Capital Resources

Sources of Capital

We have incurred significant losses and negative cash flows from operations since our inception. We expect to incur additional losses in the future to fund our operations and conduct research and development of our drug candidates. We recognize the need to raise additional capital to fully implement our business plan. The long-term continuation of our business plan is dependent upon the generation of sufficient revenues from our products to offset expenses and capital expenditures. In the event that we do not generate sufficient revenues and are unable to obtain funding, we will be forced to delay, reduce, or eliminate some or all of our research and development programs, product portfolio expansion, commercialization efforts, or capital expenditures, which could adversely affect our business prospects, ability to meet long-term liquidity needs, or we may be unable to continue operations.

Since our inception, we have dedicated substantially all our resources to the development of our drug candidates. We have financed our operations principally through the following sources:

●

gross proceeds of $195.7 million from equity financing, including sales of common stock, preferred stock, common stock warrants, and pre-funded common stock warrants;

●

gross proceeds of $71.1 million from borrowings under notes payable, convertible notes payable, and convertible promissory notes;

●

gross proceeds of $9.4 million from the Reverse Recapitalization;

●

gross proceeds of $10.1 million from refundable research and development tax credits;

●

gross proceeds of $15.8 million from grants from various organizations; and

●

gross proceeds of $1.1 million from stock option and warrant exercises.

We also received indirect financial support for the HEALEY ALS Platform Trial, administered by Massachusetts General Hospital, which conducted an ALS platform trial of CNM-Au8 alongside multiple other drug candidates, at significantly lower costs than we would have otherwise incurred if we had conducted a comparably designed clinical trial at reasonable market rates.

Going Concern

We incurred a loss from operations of $23.1 million and $33.1 million for the years ended December 31, 2025 and 2024, respectively. Our accumulated deficit was $308.3 million and $282.1 million as of December 31, 2025 and 2024. Our cash and cash equivalents totaled $5.2 million and $12.2 million as of December 31, 2025 and 2024, respectively, and net cash used in operating activities was $18.5 million and $21.3 million for the years ended December 31, 2025 and 2024, respectively.

We have incurred significant losses and negative cash flows from operations since our inception. We have not generated significant revenues since our inception, and we do not anticipate generating significant revenues unless we successfully complete development and obtain regulatory approval for commercialization of a drug candidate. We expect to incur additional losses in the future, particularly as we advance the development of our clinical-stage drug candidates, continue research and development of our preclinical drug candidates, and initiate additional clinical trials of, and seek regulatory approval for, these and other future drug candidates. We expect that within the next twelve months, we will not have sufficient cash and other resources on hand to sustain our current operations or meet our obligations as they become due unless we obtain additional financing. Additionally, pursuant to our senior secured convertible promissory notes issued in December 2024 (the "2024 SSCP Notes"), we are required to maintain unrestricted cash and cash equivalents of at least $2.0 million to avoid acceleration of the full balance of the 2024 SSCP Notes (see Note 8 to the consolidated financial statements). These conditions raise substantial doubt about the Company's ability to continue as a going concern.

To mitigate our funding needs, we plan to raise additional funding, including exploring equity financing and offerings, debt financing, licensing or collaboration arrangements with third parties, as well as utilizing our existing at-the-market facility and potential proceeds from the exercise of outstanding warrants and stock options. These plans are subject to market conditions and reliance on third parties, and there is no assurance that effective implementation of our plans will result in the necessary funding to continue current operations. During the year ended December 31, 2025, we generated $10.6 million of gross proceeds from our equity distribution agreement and $1.5 million from the issuance of senior secured convertible promissory notes (see Note 8 to the consolidated financial statements). Subsequent to December 31, 2025, we generated $6.0 million of gross proceeds from the issuance of common stock and warrants in a registered direct offering. While we have implemented cost-saving initiatives, including delaying and reducing certain research and development programs and commercialization efforts, reducing employee compensation, and eliminating certain staff positions, we have concluded that our plans do not alleviate the substantial doubt about our ability to continue as a going concern beyond one year from the date the consolidated financial statements are issued.

The accompanying consolidated financial statements have been prepared assuming we will continue as a going concern, which contemplates the realization of assets and satisfaction of liabilities in the normal course of business. As a result, the accompanying consolidated financial statements do not include any adjustments relating to the recoverability and classification of assets and their carrying amounts, or the amounts and classification of liabilities that may result should we be unable to continue as a going concern.

Short-Term Material Cash Requirements

For at least the next twelve months, our primary capital requirements are to fund our operations, including research and development, personnel, regulatory, and other clinical trial costs related to development of our lead drug candidate, CNM-Au8; general and administrative costs to support our drug development and pre-commercial activities in advance of receiving regulatory approval for our drug candidates; and principal and interest payments on our notes payable and convertible notes payable. Firm commitments for funds include approximately $1.2 million of payments under operating lease obligations, payment of principal and interest on notes payable and convertible notes payable totaling $5.3 million, and a commitment for capital expenditures totaling $0.2 million related to the construction of our manufacturing facilities. We expect to meet our short-term liquidity requirements primarily through cash on hand. Additional sources of funds include equity financing, debt financing, or other capital sources.

We enter into agreements in the normal course of business with CROs for clinical trials and with vendors for preclinical studies and other services and products for operating purposes, which are cancelable at any time by us, subject to payment of our remaining obligations under binding purchase orders and, in certain cases, nominal early termination fees. These commitments are not deemed significant.

Long-Term Material Cash Requirements

Beyond the next twelve months, our primary capital requirements are to fund our operations, including research and development, personnel, regulatory, and other clinical trial costs related to development of our lead drug candidate, CNM-Au8; general and administrative costs to support our drug development activities in advance of receiving regulatory approval for our drug candidates; and principal and interest payments on our notes payable and convertible notes payable. Additional funds may be spent to initiate new clinical trials, at our discretion. Known obligations beyond the next twelve months include $3.9 million of payments under operating lease obligations, and interest and principal repayment of notes payable and convertible notes payable of $15.9 million. We expect to meet our long-term liquidity requirements primarily through equity financing, debt financing, or other capital sources.

Use of Funds

Our cash flows for the years ended December 31, 2025 and 2024 were as follows:

		Year Ended December 31,
(in thousands)		2025				2024
Net cash used in operating activities		$	(18,546	)		$	(21,326	)
Net cash provided by (used in) investing activities			(39	)			6,316
Net cash provided by (used in) financing activities			11,518				(1,529	)
Effect of foreign exchange rate changes on cash			101				(127	)
Net decrease in cash, cash equivalents and restricted cash		$	(6,966	)		$	(16,666	)

Our primary use of cash in all periods presented was to fund our research and development, regulatory and other clinical trial costs, and general corporate expenditures.

Operating Activities

Net cash used in operating activities was $18.5 million for the year ended December 31, 2025, which resulted from a net loss of $26.2 million, adjusted for non-cash items totaling $11.0 million and a net change in operating assets and liabilities of $3.4 million. Significant non-cash items included: (i) depreciation expense of $1.5 million related to laboratory and office equipment and leasehold improvements, (ii) non-cash lease expense of $0.6 million, (iii) stock-based compensation expense of $6.4 million, (iv) accretion of debt discount of $1.0 million, (v) non-cash interest expense on notes payable of $0.6 million, (vi) a change in fair value of our common stock warrant liabilities of $0.5 million due to changes in the price of our Common Stock on Nasdaq and changes in valuation model inputs, and (vii) a change in fair value of our derivative liabilities of $0.4 million due to changes in the price of our Common Stock on Nasdaq and changes in valuation model inputs. The net change in operating assets and liabilities was primarily attributable to: (i) a decrease in accounts receivable of $0.1 million and a decrease in accounts payable of $0.3 million due to the timing of vendor invoicing and payments, (ii) a decrease in prepaid expenses and other current assets of $0.1 million due to (A) a decrease in prepaid clinical and CRO expenses from the timing of ACT-EAP invoicing, payments, and reimbursements, partially offset by (B) an increase in metals to be used in research and development due to the timing of invoicing, payments, and deliveries from suppliers, and (C) an increase in research and development tax credits receivable due to the timing of refund payments, (iii) a decrease in accrued liabilities of $2.2 million primarily due to (A) a decrease in accrued compensation and benefits resulting from payments of deferred employee bonuses in cash and equity, (B) a decrease in deferred grants due to satisfaction of grant conditions or performance obligations, and (C) a decrease in accrued CRO and clinical fees due to the timing of invoicing and payments, and (iv) a decrease in operating lease obligations of $1.0 million.

Net cash used in operating activities was $21.3 million for the year ended December 31, 2024, which resulted from a net loss of $39.4 million, adjusted for non-cash items totaling $14.9 million and a net change in operating assets and liabilities of $3.2 million. Significant non-cash items included: (i) depreciation expense of $1.6 million relating to laboratory and office equipment and leasehold improvements, (ii) non-cash lease expense of $0.5 million, (iii) issuance costs of $0.2 million from a public equity offering allocated to liability-classified warrants, (iv) a loss on initial issuance of equity of $2.1 million from the fair value in excess of proceeds from a public equity offering, (v) stock-based compensation expense of $8.0 million, (vi) a loss on extinguishment of notes payable of $0.2 million from the repayment in full of the 2021 Avenue Loan, (vii) a loss on disposal of property and equipment of $0.2 million, (viii) accretion of debt discount of $1.1 million, (ix) non-cash interest income on marketable securities of $0.2 million, (x) non-cash interest expense on notes payable of $0.1 million due to amortization of debt discounts on notes payable, (xi) a change in fair value of our common stock warrant liabilities of $0.7 million due to changes in the price of our Common Stock on Nasdaq and changes in valuation model inputs, (xii) a change in fair value of our derivative liabilities of $0.4 million due to changes in the price of our Common Stock on Nasdaq and changes in valuation model inputs, and (xiii) a change in fair value of the Clene Nanomedicine and Initial Stockholders Contingent Earn-outs of $0.1 million and $10,000, respectively, due to the changes in the price of our Common Stock on Nasdaq and changes in valuation model inputs. The net change in operating assets and liabilities was primarily attributable to: (I) a decrease in accounts receivable of $0.1 million and a decrease in accounts payable of $0.3 million due to the timing of vendor invoicing and payments, (ii) an increase in prepaid expenses and other current assets of $0.2 million due to the timing of vendor invoicing and payments, the timing of receipt of metals to be used in research and development, and an increase in prepaid ACT-EAP expenses, partially offset by a decrease in research and development tax credits receivable, (iii) an increase in accrued liabilities of $4.0 million primarily due to increased accrued compensation and benefits, increased deferred grants, and an increase in accrued CRO and clinical fees, partially offset by a decrease in other miscellaneous accrued liabilities, and (iv) a decrease in operating lease obligations of $0.4 million.

Investing Activities

Net cash used in investing activities was $39,000 for the year ended December 31, 2025, which consisted of purchases of property and equipment. Net cash provided by investing activities was $6.3 million for year ended December 31, 2024, which consisted of proceeds from maturities of marketable securities of $12.5 million, partially offset by purchases of marketable securities of $6.2 million and purchases of property and equipment of $15,000.

Financing Activities

Net cash provided by financing activities was $11.5 million for the year ended December 31, 2025, which consisted of proceeds from the issuance of common stock of $10.4 million and proceeds from the issuance of debt and derivative liabilities of $1.5 million, partially offset by payments of notes payable principal of $0.4 million.

Net cash used in financing activities was $1.5 million for the year ended December 31, 2024, which consisted of payments of notes payable principal of $20.8 million due to principal repayments and the ultimate payoff of the 2021 Avenue Loan and payments of finance lease obligations of $27,000, partially offset by proceeds from the exercise of stock options of $0.1 million, proceeds from the issuance of common stock, warrants, and pre-funded warrants, net of offering costs, of $9.2 million, and proceeds from the issuance of notes payable and convertible notes payable of $9.9 million.

Public Offerings

In October 2024, pursuant to a placement agency agreement with Canaccord Genuity LLC ("Canaccord"), we sold 725,000 shares of Common Stock and pre-funded warrants to purchase up to 17,626 shares of Common Stock at an exercise price of $0.001 per share. The aggregate gross proceeds were approximately $3.5 million, excluding the proceeds, if any, from the exercise of the pre-funded warrants and before deducting placement agent fees and expenses and other expenses payable by us. We paid Canaccord a placement agent fee of 6.00% of the aggregate gross proceeds of the offering. The offering was made pursuant to our registration statement on Form S-3 (file number 333-264299), declared effective by the Securities and Exchange Commission ("SEC") on April 26, 2022 (the "2022 S-3"), and a related prospectus supplement. Additionally, in separate, concurrent private placements, we also sold 379,930 shares of Common Stock, pre-funded warrants to purchase up to 424,358 shares of Common Stock at an exercise price of $0.001 per share, and warrants to purchase up to 1,546,914 shares of Common Stock at an exercise price of $4.82 per share. The aggregate gross proceeds from the private placements were approximately $3.8 million, of which $1.3 million was contributed by certain of our directors, executive officers and their affiliated entities, and excludes the proceeds, if any, from the exercise of the warrants and pre-funded warrants.

Common Stock Sales Agreement

During the years ended December 31, 2025 and 2024, we sold 2,300,804 and 504,292 shares of Common Stock, respectively, under our April 2022 equity distribution agreement (the "2022 ATM Agreement") and April 2025 equity distribution agreement (the "2025 ATM Agreement," and collectively with the 2022 ATM Agreement, the "ATM Agreements") with Canaccord, generated gross proceeds of $10.6 million and $2.7 million, respectively, and paid commissions of $0.2 million and $0.1 million, respectively. The issuance and sale of Common Stock by us under the 2022 ATM Agreement was made pursuant to our 2022 S-3, which expired on April 26, 2025, and a related prospectus supplement. The issuance and sale of Common Stock by us under the 2025 ATM Agreement was made pursuant to our registration statement on Form S-3 (file number 333-286058), declared effective by the SEC on April 25, 2025, and a related prospectus supplement.

Critical Accounting Estimates

Our discussion and analysis of our financial condition and results of operations is based on our consolidated financial statements, which have been prepared in accordance with U.S. Generally Accepted Accounting Principles. The preparation of these consolidated financial statements requires us to make estimates, assumptions, and judgments that affect the reported amounts of assets, liabilities, revenues, costs, and expenses. We evaluate our estimates and judgments on an ongoing basis, and our actual results may differ from these estimates. We base our estimates on historical experience, known trends and events, contractual milestones, and other various factors that are believed to be 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.

We consider the following estimates to be critical as they involve a significant level of estimation uncertainty and have had or are reasonably likely to have a material impact on our financial condition and results of operations.

Convertible Notes

In accordance with ASU 2020-06, Debt-Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging-Contracts in Entity's Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity's Own Equity, we classified the 2022 DHCD Loan as convertible notes payable in the consolidated balance sheets and did not separate the conversion option from the host contract as it did not meet the requirements for accounting as a derivative instrument. We account for the convertible note as a single liability measured at its amortized cost as of December 31, 2025 and 2024, with a carrying value of $5.3 million and $5.3 million, respectively.

We classified a portion of the senior secured convertible promissory notes (the "SSCP Notes") as convertible notes payable in the consolidated balance sheets and separated three features from the host contract as derivative instruments measured at fair value: (i) the conversion option (the "SSCPN Conversion Feature"), (ii) the redemption option upon a change of control or any bankruptcy, liquidation, or other restructuring process consisting of a cash payment equal to 115% of the outstanding principal (the "SSCPN Redemption Feature"), and (iii) the acceleration option plus a penalty equal to 10% of all outstanding principal and accrued and unpaid interest upon the occurrence and continuation of certain events of default (the "SSCPN Default Feature," collectively with the SSCPN Conversion Feature and SSCPN Redemption Feature, the "SSCPN Derivative Liabilities"). We accounted for the remainder of the SSCP Notes as liabilities measured at their amortized cost, with carrying values of (i) $9.3 million and $8.6 million for the 2024 SSCP Notes as of December 31, 2025 and 2024, respectively, and (ii) $1.4 million for the 2025 SSCP Notes as of December 31, 2025.

We remeasure the SSCPN Derivative Liabilities at each reporting date and record the change in fair value as a component of other income (expense), net in the consolidated statements of operations and comprehensive loss. The change in fair value of the SSCPN Derivative Liabilities resulted in a loss of $0.4 million and a loss of $0.4 million during the years ended December 31, 2025 and 2024, respectively. We estimate the fair value of the SSCP Notes with and without the SSCPN Derivative Liabilities and calculate the difference as the implied fair value of the SSCPN Derivative Liabilities. The valuation model consists of a discounted cash flow model and a Black-Scholes option-pricing model with probability weights for the occurrence of (i) a change of control transaction, (ii) dissolution of the Company, or (iii) held to maturity. These estimates require significant judgment. The unobservable valuation inputs were as follows:

		December 31,				August 13,				August 13,				December 31,
		2025				2025(1)				2025(2)				2024(3)
Expected stock price volatility			107.30	%			96.30	%			89.20	%			101.50	%
Discount rate			19.00	%			21.00	%			21.00	%			12.00	%
Risk-free interest rate			3.50% - 3.60	%			3.80% - 4.10	%			3.90% - 4.10	%			4.20	%
Expected dividend yield			0.00	%			0.00	%			0.00	%			0.00	%
Expected term (in years)			0.38 - 1.12				0.47 - 1.50				0.44 - 0.85				0.50 - 1.47
Probability of change of control			20.00	%			20.00	%			20.00	%			10.00	%
Probability of dissolution			35.00	%			45.00	%			45.00	%			45.00	%
Probability of held to maturity			45.00	%			35.00	%			35.00	%			45.00	%

(1)

Represents the unobservable inputs to the valuation of the SSCPN Derivative Liabilities related to: (i) the 2024 SSCP Notes immediately following an amendment in August 2025, and (ii) the 2025 SSCP Notes at issuance.

(2)

Represents the unobservable inputs to the valuation of the SSCPN Derivative Liabilities related to the 2024 SSCP Notes immediately preceding an amendment in August 2025.

(3)

Represents the unobservable inputs to the valuation of the SSCPN Derivative Liabilities related to the 2024 SSCP Notes only.

Common Stock Warrant Liabilities

In accordance with ASC 815, we recognized the below common stock warrants as derivative liabilities measured at fair value and will remeasure them at each reporting date and record the change in fair value as a component of other income (expense), net, in the consolidated statements of operations and comprehensive loss.

Pursuant to amendments to the 2021 Avenue Loan in June 2023 and September 2024, we issued a warrant to purchase 150,000 shares of Common Stock at $4.6014 per share (the "2023 Avenue Warrant"). The change in fair value of the 2023 Avenue Warrant resulted in a loss of $51,000 and a loss of $49,000 during the years ended December 31, 2025 and 2024, respectively. We estimate the fair value using a Black-Scholes option-pricing model with probability weights for the occurrence of (i) settlement of the instrument upon a change of control transaction, (ii) dissolution of the Company, or (iii) held to expiration. These estimates require significant judgment. The unobservable valuation inputs were as follows:

		December 31,				December 31,
		2025				2024
Expected stock price volatility			104.40% - 119.00	%			100.20% - 101.40	%
Risk-free interest rate			3.50% - 3.60	%			4.20% - 4.30	%
Expected dividend yield			0.00	%			0.00	%
Expected term (in years)			0.50 - 2.50				0.75 - 3.50
Probability of change of control			20.00	%			10.00	%
Probability of dissolution			35.00	%			45.00	%
Probability of held to expiration			45.00	%			45.00	%

Pursuant to an underwritten public offering in June 2023, we issued warrants to purchase 2,500,000 shares of Common Stock at $22.00 per share (the "Tranche A Warrants"). The change in fair value of the Tranche A Warrants resulted in a gain of $0.3 million and a gain of $0.6 million during the years ended December 31, 2025 and 2024, respectively. We estimate the fair value using a Black-Scholes option-pricing model with probability weights for the occurrence of (i) FDA acceptance of an NDA for CNM-Au8, (ii) settlement upon a fundamental transaction, (iii) dissolution of the Company, and (iv) held to maturity. These estimates require significant judgment. The unobservable valuation inputs were as follows:

		December 31,				December 31,
		2025				2024
Expected stock price volatility			124.00	%			97.80% - 101.90	%
Risk-free interest rate			3.60	%			4.20	%
Expected dividend yield			0.00	%			0.00	%
Expected term (in years)			0.46				0.71 - 1.46
Probability of NDA acceptance before warrant expiration			0.00	%			20.00	%
Probability of fundamental transaction before warrant expiration			0.00	%			10.00	%
Probability of dissolution before warrant expiration			35.00	%			45.00	%
Probability of held to expiration			65.00	%			25.00	%

Pursuant to a registered direct public offering in October 2024, we issued warrants to purchase 1,546,914 shares of Common Stock at $4.82 per share (the "2024 Common Warrants"). The change in fair value of the 2024 Common Warrants resulted in a loss of $0.8 million and a loss of $1.3 million during the years ended December 31, 2025 and 2024, respectively. We estimate the fair value using a Black-Scholes option-pricing model with probability weights for the occurrence of (i) dissolution of the Company and (ii) held to maturity. These estimates require significant judgment. The unobservable valuation inputs were as follows:

		December 31,				December 31,
		2025				2024
Expected stock price volatility			104.30	%			107.50	%
Risk-free interest rate			3.60	%			4.40	%
Expected dividend yield			0.00	%			0.00	%
Expected term (in years)			3.75				4.75
Probability of dissolution			35.00	%			45.00	%
Probability of held to expiration			65.00	%			55.00	%

Income Taxes

We record uncertain tax positions in accordance with ASC 740, Income Taxes, on the basis of a two-step process to (i) determine whether it is more likely than not that the tax positions will be sustained on the basis of the technical merits of the position, and (ii) for those tax positions that meet the more-likely-than-not recognition threshold, we recognize the largest amount of tax benefit that is more than 50% likely to be realized upon ultimate settlement with the related tax authority. We recognize deferred tax assets to the extent we believe these assets are more likely than not to be realized. In making such a determination, we consider all available positive and negative evidence, including future reversals of existing taxable temporary differences, projected future taxable income, tax-planning strategies, and recent results of operations. If we determine that we would be able to realize any deferred tax assets in the future in excess of their net recorded amount, we would make an adjustment to the deferred tax asset valuation allowance, which would reduce the provision for income taxes. The estimation of these factors requires significant judgment. Based on our evaluation of these factors, we have not recorded income tax benefits for the net operating losses or for research and development tax credits or other deferred tax assets due to uncertainty of realizing benefits from these items.

Stock-Based Compensation

We account for stock-based compensation arrangements using a fair value-based method for costs related to all share-based payments including stock options and stock awards. The fair value is recognized over the period during which a grantee was required to provide services in exchange for the option award and service-based stock awards, known as the requisite service period (usually the vesting period), on a straight-line basis. For stock awards with market conditions, the fair value is recognized over the period based on the expected milestone achievement dates as the derived service period (usually the vesting period), on a straight-line basis. For stock awards with performance conditions, the grant-date fair value of these awards is the market price on the applicable grant date, and compensation expense will be recognized when the conditions become probable of being satisfied. We will recognize a cumulative true-up adjustment once the conditions become probable of being satisfied as the related service period had been completed in a prior period. We elect to account for forfeitures as they occur, rather than estimating expected forfeitures.

We estimate the fair value of stock options using a Black-Scholes option-pricing model, which requires significant judgment. The unobservable valuation inputs were as follows:

		Year Ended December 31,
		2025				2024
Expected stock price volatility			90.97% - 110.25	%			97.78% - 111.49	%
Risk-free interest rate			3.66% - 4.24	%			3.52% - 4.58	%
Expected dividend yield			0.00	%			0.00	%
Expected term of options (in years)			5.00 - 6.25				5.00 - 10.00