ACHIEVE LIFE SCIENCES, INC.

Previous wording

Investing in our common stock involves a high degree of risk. You should carefully consider the risks and uncertainties described below, together with all of the other information contained in this Quarterly Report on Form 10-Q and in the other periodic and current reports and other documents we file with the Securities and Exchange Commission, before deciding to invest in our common stock. If any of the following risks materialize, our business, financial condition, results of operation and future prospects will likely be materially and adversely affected. In that event, the market price of our common stock could decline and you could lose all or part of your investment. These disclosures reflect our beliefs and opinions as to factors that could materially and adversely affect the Company and our securities in the future. References to past events are provided by way of example only and are not intended to be a complete listing of such events or a representation as to whether or not such factors or similar events have occurred in the past or their likelihood of occurring in the future. This list is not exhaustive and the order of presentation does not reflect management's determination of priority or likelihood.

Current wording

Investing in our common stock involves a high degree of risk. You should carefully consider the risks and uncertainties described below, together with all of the other information contained in this Quarterly Report on Form 10-Q and in the other periodic and current reports and other documents we file with the Securities and Exchange Commission, before deciding to invest in our common stock. If any of the following risks materialize, our business, financial condition, results of operations and future prospects will likely be materially and adversely affected. In that event, the market price of our common stock could decline and you could lose all or part of your investment. These disclosures reflect our beliefs and opinions as to factors that could materially and adversely affect the Company and our securities in the future. References to past events are provided by way of example only and are not intended to be a complete listing of such events or a representation as to whether or not such factors or similar events have occurred in the past or their likelihood of occurring in the future. This list is not exhaustive and the order of presentation does not reflect management's determination of priority or likelihood.

Previous wording

Cytisinicline is currently our sole product candidate and there is no guarantee that we will be able to successfully obtain approval from the FDA or other regulatory agencies to commercialize cytisinicline.

Current wording

Cytisinicline is currently our sole product candidate and there is no guarantee that we will be able to successfully obtain approval from the U.S. Food and Drug Administration, or FDA, or other regulatory agencies to commercialize cytisinicline.

Previous wording

We are currently dependent on the potential development and FDA approval of a single product candidate, cytisinicline. We are still developing and seeking regulatory approval for cytisinicline and it cannot be marketed or sold in the United States or in foreign markets until regulatory approval has been obtained from the FDA or applicable foreign regulatory agencies. The process of obtaining regulatory approval is expensive and time consuming. The FDA and foreign regulatory authorities may never approve cytisinicline for sale and marketing, and even if cytisinicline is ultimately approved, regulatory approval may be delayed or limited in the United States or in other jurisdictions. In September 2025, we announced that the FDA accepted for review our NDA for cytisinicline as a treatment of nicotine dependence for smoking cessation as the first indication in the United States and assigned a Prescription Drug User Fee Act, or PDUFA, targeted action date of June 20, 2026. One third-party manufacturer named in our NDA underwent a non-Achieve related FDA current Good Manufacturing Practices, or cGMP, inspection and the FDA made observations, two of which were related to solid oral dose manufacturing. As a result, the third-party manufacturer's facility, where the FDA made the two observations, received an Official Action Indicated, or OAI, classification and a warning letter. We expect to receive a Complete Response Letter from the FDA on or before our June 20, 2026 PDUFA targeted action date, which would delay our NDA approval. The contents of such CRL could be made public by the FDA and could result in reputational harm to our company and cytisinicline, result in litigation, or result in a delay or the inability to commercialize cytisinicline. Even if we are authorized to sell and market cytisinicline in one or more markets, there can be no assurance that we will be able to successfully market cytisinicline or that cytisinicline will achieve market acceptance sufficient to generate profits. If we are unable to successfully develop and commercialize cytisinicline due to failure to obtain regulatory approval for cytisinicline, to successfully market cytisinicline, to generate profits from the sale of cytisinicline, or due to other risk factors outlined in this report, it would have material adverse effects on our business, financial condition and results of operations.

Current wording

We are currently dependent on the potential development and FDA approval of a single product candidate, cytisinicline. We are still developing and seeking regulatory approval for cytisinicline and it cannot be marketed or sold in the United States or in foreign markets until regulatory approval has been obtained from the FDA or applicable foreign regulatory agencies. The process of obtaining regulatory approval is expensive and time consuming. The FDA and foreign regulatory authorities may never approve cytisinicline for sale and marketing, and even if cytisinicline is ultimately approved, regulatory approval may be delayed or limited in the United States or in other jurisdictions. In September 2025, we announced that the FDA accepted for review our NDA for cytisinicline as a treatment of nicotine dependence for smoking cessation as the first indication in the United States and assigned a Prescription Drug User Fee Act, or PDUFA, targeted action date of June 20, 2026. In June 2026, we received a Complete Response Letter, or CRL, from the FDA regarding our New Drug Application, or NDA, for cytisinicline relating to outstanding manufacturing-related observations from a current Good Manufacturing Practice, or cGMP, inspection of a third-party manufacturing facility and to final product labeling that was not completed by the FDA’s action date. The deficiencies cited in the CRL concern our prior third-party manufacturer named in our NDA, who underwent a non-Achieve related FDA cGMP inspection and the FDA made observations, two of which were related to solid oral dose manufacturing. As a result, the third-party manufacturer's facility, where the FDA made the two observations, received an Official Action Indicated, or OAI, classification and a warning letter.

Previous wording

The FDA advised us that long-term exposure data to assess for safety beyond 12 weeks would be needed to adequately assess safety risks given that the FDA views smoking cessation drugs as products for chronic, repeated, and intermittent use as patients may relapse and require subsequent courses of treatment over a lifetime. In the first quarter of 2024, we reached agreement with the FDA that a single, open-label study, which we refer to as ORCA-OL, evaluating the long-term safety effects of cytisinicline would be sufficient to complete the requirement and enable an NDA submission. The ORCA-OL open-label exposure trial was initiated in May 2024 and was completed in September 2025. The clinical trial enrolled 479 subjects at 29 clinical trial sites across the United States. Safety data, from the ORCA-OL trial, on over 300 participants with at least six months of cumulative cytisinicline exposure was included in our NDA submission in June 2025 and on over 100 participants receiving at least one year of cumulative cytisinicline exposure was submitted to the FDA in October 2025 as part of the 120-day safety update. In September 2025, we announced that the FDA accepted for review our NDA for cytisinicline as a treatment of nicotine dependence for smoking cessation in adults and assigned a PDUFA targeted action date of June 20, 2026. One third-party manufacturer named in our NDA underwent a non-Achieve related FDA cGMP inspection and the FDA made observations, two of which were related to solid oral dose manufacturing. As a result, the third-party manufacturer's facility, where the FDA made the two observations, received an Official Action Indicated, or OAI, classification and a warning letter. We expect to receive a Complete Response Letter from the FDA on or before our June 20, 2026 PDUFA targeted action date, which would delay our NDA approval. However, regardless of these discussions and the results of the ORCA-OL open label study, the FDA may determine that:

Current wording

The FDA advised us that long-term exposure data to assess for safety beyond 12 weeks would be needed to adequately assess safety risks given that the FDA views smoking cessation drugs as products for chronic, repeated, and intermittent use as patients may relapse and require subsequent courses of treatment over a lifetime. In the first quarter of 2024, we reached agreement with the FDA that a single, open-label study, which we refer to as ORCA-OL, evaluating the long-term safety effects of cytisinicline would be sufficient to complete the requirement and enable an NDA submission. The ORCA-OL open-label exposure trial was initiated in May 2024 and was completed in September 2025. The clinical trial enrolled 479 subjects at 29 clinical trial sites across the United States. Safety data, from the ORCA-OL trial, on over 300 participants with at least six months of cumulative cytisinicline exposure was included in our NDA submission in June 2025 and on over 100 participants receiving at least one year of cumulative cytisinicline exposure was submitted to the FDA in October 2025 as part of the 120-day safety update. In September 2025, we announced that the FDA accepted for review our NDA for cytisinicline as a treatment of nicotine dependence for smoking cessation as the first indication in the United States and assigned a PDUFA targeted action date of June 20, 2026. In June 2026, we received a CRL from the FDA regarding our NDA for cytisinicline relating to outstanding manufacturing-related observations from a cGMP inspection of a third-party manufacturing facility and to final product labeling that was not completed by the FDA’s action date. However, regardless of these developments and the results of the ORCA-OL open label study, the FDA may determine that:

Previous wording

We will need approval from the FDA to commercialize cytisinicline in the United States and approvals from similar regulatory authorities in foreign jurisdictions to commercialize cytisinicline in those jurisdictions. In September 2025, we announced that the FDA accepted for review our NDA for cytisinicline as a treatment of nicotine dependence for smoking cessation in adults and assigned a PDUFA targeted action date of June 20, 2026. One third-party manufacturer named in our NDA underwent a non-Achieve related FDA cGMP inspection and the FDA made observations, two of which were related to solid oral dose manufacturing. As a result, the third-party manufacturer's facility, where the FDA made the two observations, received an Official Action Indicated, or OAI, classification and a warning letter. We expect to receive a Complete Response Letter from the FDA on or before our June 20, 2026 PDUFA targeted action date, that would delay approval of our NDA. Even with the acceptance of our NDA by the FDA, we cannot predict whether the results of our clinical trials and/or the data from our research and clinical approaches included in the NDA will be sufficient to demonstrate the safety and efficacy of cytisinicline for approval from the FDA for the proposed indication of cytisinicline. The FDA has substantial discretion in the product approval process. The approval process may be delayed by changes in government regulation, future legislation or administrative action or changes in FDA policy that occur prior to or during our regulatory review. Even if we comply with all FDA requests, the FDA may ultimately reject one or more of our applications. We may never obtain regulatory approval for cytisinicline. Failure to obtain approval from the FDA or comparable regulatory authorities in foreign jurisdictions to commercialize cytisinicline will leave us without saleable products and therefore without any source of revenues. In addition, the FDA may require us to conduct additional clinical testing or to perform post-marketing studies, as a condition to granting marketing approval of a product or permit continued marketing, if previously approved. If conditional marketing approval is obtained, the results generated after approval could result in loss of marketing approval, changes in product labeling, and/or new or increased concerns about the side effects or efficacy of a product. The FDA has significant post-market authority, including the explicit authority to require post-market studies and clinical trials, labeling changes based on new safety information and compliance with FDA-approved risk evaluation and mitigation strategies. The FDA’s exercise of its authority has in some cases resulted, and in the future could result, in delays or increased costs during product development, clinical trials and regulatory review, increased costs to comply with additional post-approval regulatory requirements and potential restrictions on sales of approved products. In f…

Excerpt shortened here; the source contains the full paragraph.

Current wording

We will need approval from the FDA to commercialize cytisinicline in the United States and approvals from similar regulatory authorities in foreign jurisdictions to commercialize cytisinicline in those jurisdictions. In September 2025, we announced that the FDA accepted for review our NDA for cytisinicline as a treatment of nicotine dependence for smoking cessation as the first indication in the United States and assigned a PDUFA targeted action date of June 20, 2026. In June 2026, we received a CRL from the FDA regarding our NDA for cytisinicline relating to outstanding manufacturing-related observations from a current Good Manufacturing Practice, or cGMP, inspection of a third-party manufacturing facility and to final product labeling that was not completed by the FDA’s action date. The deficiencies cited in the CRL concern our prior third-party manufacturer named in our NDA, who underwent a non-Achieve related FDA cGMP inspection and the FDA made observations, two of which were related to solid oral dose manufacturing. As a result, the third-party manufacturer's facility, where the FDA made the two observations, received an Official Action Indicated, or OAI, classification and a warning letter. We intend to resubmit the NDA naming Adare as our finished drug product manufacturer for commercial supply in the fourth quarter of 2026 and anticipate the potential approval of cytisinicline for smoking cessation in the first half of 2027, followed by U.S. commercial launch. Even if our resubmitted NDA is accepted by the FDA, we cannot predict whether the results of our clinical trials and/or the data from our research and clinical approaches included in the NDA will be sufficient to demonstrate the safety and efficacy of cytisinicline for approval from the FDA for the proposed indication of cytisinicline. The FDA has substantial discretion in the product approval process. The approval process may be delayed by changes in government regulation, future legislation or administrative action or changes in FDA policy that occur prior to or during our regulatory review. Even if we comply with all FDA requests, the FDA may ultimately reject one or more of our applications. We may never obtain regulatory approval for cytisinicline. Failure to obtain approval from the FDA or comparable regulatory authorities in foreign jurisdictions to commercialize cytisinicline will leave us without saleable products and therefore without any source of revenues. In addition, the FDA may require us to conduct additional clinical testing or to perform post-marketing studies, as a condition to granting marketing approval of a product or permit continued marketing, if previously approved. If conditional marketing approval is obtained, the results generated after approval could result in loss of marketing approval, changes in product labeling, and/or new or increased concerns about the side effects or efficacy of a product. The FDA has significant post-market authority, including …

Excerpt shortened here; the source contains the full paragraph.

Previous wording

There have also been multiple recent U.S. congressional inquiries and proposed and adopted federal and state legislation designed to, among other things, bring more transparency to drug pricing, review the relationship between pricing and manufacturer patient programs, and reform government program reimbursement methodologies for drugs and biologics. In addition, Congress and multiple presidential administrations have indicated that they will continue to seek new legislative and/or administrative measures to control drug costs. These initiatives recently culminated in the enactment of the Inflation Reduction Act, or the IRA, in August 2022, which will, among other things, allow HHS to negotiate the selling price of certain drugs and biologics that CMS reimburses under Medicare Part B and Part D, although only high-expenditure single-source drugs that have been approved for at least 7 years (11 years for biologics) can be selected by CMS for negotiation, with the negotiated price taking effect two years after the selection year. The negotiated prices, which will first become effective in 2026, will be capped at a statutory ceiling price beginning in October 2023, penalize drug manufacturers that increase prices of Medicare Part B and Part D drugs at a rate greater than the rate of inflation. The IRA permits the Secretary of HHS to implement many of these provisions through guidance, as opposed to regulation, for the initial years. Manufacturers that fail to comply with the IRA may be subject to various penalties, including civil monetary penalties. The IRA also extends enhanced subsidies for individuals purchasing health insurance coverage in U.S. Affordable Care Act, or ACA, marketplaces through plan year 2025. These provisions took effect progressively starting in 2023, although they may be subject to legal challenges. We anticipate that additional state and federal healthcare measures could be adopted in the future, any of which could limit the amounts that federal and state governments will pay for healthcare products and services, which could result in reduced demand or lower pricing for cytisinicline, or additional pricing pressures. Currently, ACA and other federal laws and rules require most health insurance plans in the U.S. to cover some level of tobacco cessation treatments, including smoking cessation counseling and medications. If these provisions are repealed, in whole or in part, our business, financial condition, or results of operations could be negatively affected.

Current wording

There have also been multiple recent U.S. congressional inquiries and proposed and adopted federal and state legislation designed to, among other things, bring more transparency to drug pricing, review the relationship between pricing and manufacturer patient programs, and reform government program reimbursement methodologies for drugs and biologics. In addition, Congress and multiple presidential administrations have indicated that they will continue to seek new legislative and/or administrative measures to control drug costs. These initiatives recently culminated in the enactment of the Inflation Reduction Act, or the IRA, in August 2022, which will, among other things, allow HHS to negotiate the selling price of certain drugs and biologics that CMS reimburses under Medicare Part B and Part D, although only high-expenditure single-source drugs that have been approved for at least 7 years (11 years for biologics) can be selected by CMS for negotiation, with the negotiated price taking effect two years after the selection year. The negotiated prices, the first of which became effective on January 1, 2026, are capped at a statutory ceiling price. Beginning in October 2023, the IRA penalizes drug manufacturers that increase prices of Medicare Part B and Part D drugs at a rate greater than the rate of inflation. The IRA permits the Secretary of HHS to implement many of these provisions through guidance, as opposed to regulation, for the initial years. Manufacturers that fail to comply with the IRA may be subject to various penalties, including civil monetary penalties. The IRA also extends enhanced subsidies for individuals purchasing health insurance coverage in U.S. Affordable Care Act, or ACA, marketplaces through plan year 2025. These provisions took effect progressively starting in 2023, although they may be subject to legal challenges. We anticipate that additional state and federal healthcare measures could be adopted in the future, any of which could limit the amounts that federal and state governments will pay for healthcare products and services, which could result in reduced demand or lower pricing for cytisinicline, or additional pricing pressures. Currently, ACA and other federal laws and rules require most health insurance plans in the U.S. to cover some level of tobacco cessation treatments, including smoking cessation counseling and medications. If these provisions are repealed, in whole or in part, our business, financial condition, or results of operations could be negatively affected.

Previous wording

U.S. federal government agencies currently face potentially significant spending reductions. Under the Budget Control Act of 2011, the failure of Congress to enact deficit reduction measures of at least $1.2 trillion for the years 2013 through 2021 triggered automatic cuts to most federal programs. These cuts include aggregate reductions to Medicare payments to providers of up to two percent per fiscal year, which went into effect beginning on April 1, 2013 and will stay in effect through 2025 unless additional Congressional action is taken. The American Taxpayer Relief Act of 2012, which was enacted on January 1, 2013, among other things, reduced Medicare payments to several providers, including hospitals and imaging centers. The full impact on our business of these automatic cuts is uncertain.

Current wording

U.S. federal government agencies currently face potentially significant spending reductions. Under the Budget Control Act of 2011, the failure of Congress to enact deficit reduction measures of at least $1.2 trillion for the years 2013 through 2021 triggered automatic cuts to most federal programs. These cuts include aggregate reductions to Medicare payments to providers of up to two percent per fiscal year, which went into effect beginning on April 1, 2013 and, following subsequent Congressional extensions, are scheduled to remain in effect through fiscal year 2032. The American Taxpayer Relief Act of 2012, which was enacted on January 1, 2013, among other things, reduced Medicare payments to several providers, including hospitals and imaging centers. The full impact on our business of these automatic cuts is uncertain.

Previous wording

Third-party manufacturers, or CMOs, are subject to regulatory requirements covering manufacturing, testing, quality control and record keeping relating to product candidates and are also subject to ongoing inspections by regulatory agencies. Failure by CMOs to pass a pre-approval inspection by the FDA may require us to pursue alternative manufacturers, which could result in delay in review or approval of our NDA and commercialization, additional costs or other adverse impacts. Additionally, failure by CMOs to pass a pre-approval inspection by the FDA or to otherwise comply with applicable regulations may result in delays and interruptions to our product candidate supply, or additional costs, while we seek to secure another supplier that meets all regulatory requirements. One third-party manufacturer named in our NDA underwent a non-Achieve related FDA cGMP inspection and the FDA made observations, two of which were related to solid oral dose manufacturing. As a result, the third-party manufacturer's facility, where the FDA made the two observations, received an Official Action Indicated, or OAI, classification and a warning letter. The observations resulting in the OAI classification and warning letter at the third-party manufacturer's facility relate to general cGMP matters at the facility and are not specific to cytisinicline. We expect to receive a Complete Response Letter, or CRL, from the FDA on or before our June 20, 2026 PDUFA targeted action date, which would delay our NDA approval.

Current wording

Third-party manufacturers, or CMOs, are subject to regulatory requirements covering manufacturing, testing, quality control and record keeping relating to product candidates and are also subject to ongoing inspections by regulatory agencies. Failure by CMOs to pass a pre-approval inspection by the FDA may require us to pursue alternative manufacturers, which could result in delay in review or approval of our NDA and commercialization, additional costs or other adverse impacts. Additionally, failure by CMOs to pass a pre-approval inspection by the FDA or to otherwise comply with applicable regulations may result in delays and interruptions to our product candidate supply, or additional costs, while we seek to secure another supplier that meets all regulatory requirements.

Previous wording

Our current supply agreement with Sopharma expires on July 28, 2037, unless extended by agreement between us and Sopharma. While Sopharma has been subject to oversight by regulators in Europe and Bulgaria, they have never been inspected by the FDA and there is no assurance that their quality systems will be satisfactory to pass a pre-approval inspection by the FDA in a timely manner or at all. We have concerns regarding Sopharma’s ability to meet the requirements of and pass an FDA pre-approval inspection and if our concerns regarding Sopharma are not resolved, we plan to engage third-party manufacturers until such time that Sopharma is able to pass an FDA inspection. Sopharma has alleged that our engagement of third-party manufacturers is a breach of our agreement, which we have disputed and have proposed steps to resolve the parties’ dispute. In the event we are unable to resolve our ongoing dispute with Sopharma, such dispute may result in litigation, additional costs or delays in activities relating to our NDA or ultimate commercialization.

Current wording

Our current supply agreement with Sopharma expires on July 28, 2037, unless extended by agreement between us and Sopharma. While Sopharma has been subject to oversight by regulators in Europe and Bulgaria, they have never been inspected by the FDA and there is no assurance that their quality systems will be satisfactory to pass a pre-approval inspection by the FDA in a timely manner or at all. We have concerns regarding Sopharma’s ability to meet the requirements of and pass an FDA pre-approval inspection and if our concerns regarding Sopharma are not resolved, we plan to utilize third-party manufacturers until such time that Sopharma is able to pass an FDA inspection. Sopharma has alleged that our planned utilization of third-party manufacturers is a breach of our agreement, which we have disputed and in July 2026, Sopharma filed an arbitration demand alleging breach of the Sopharma Supply Agreement. Sopharma seeks actual, compensatory, incidental, and consequential damages; costs and attorneys’ fees; restitution; declaratory relief; and an order requiring us to include Sopharma as our designated manufacturer in any future NDA submission. We dispute these claims and intend to defend the matter vigorously. In the event we are unable to resolve the dispute with Sopharma during arbitration proceedings or if the arbitration is resolved unfavorably to us, the dispute may result in additional costs or delays in activities relating to our NDA or commercialization.

Previous wording

Our transition of cytisinicline manufacturing to a new third-party manufacturer could result in delays, supply disruptions, increased costs, and regulatory risk.

Current wording

Our transition of finished drug product manufacturing to a new third-party manufacturer could result in delays, supply disruptions, increased costs, and regulatory risk.

Previous wording

We are transitioning the manufacturing of cytisinicline drug product to a new third-party manufacturer, Adare. Although we believe this transition will enhance our supply chain capabilities, including providing redundancy and U.S.-based manufacturing, transferring manufacturing to a new facility is complex and entails significant risks, including the risk that the new manufacturer may be unable to reliably or timely manufacture cytisinicline at the required quality standards, in the necessary quantities, or at an acceptable cost, particularly as we progress to validation and commercial-scale production. The process of qualifying a new manufacturing site and implementing or scaling manufacturing processes may result in unanticipated technical challenges, deviations, failed batches, delays in release testing, capacity constraints, supply interruptions, or the need to repeat manufacturing activities, any of which could delay our planned regulatory submissions or resubmissions, delay or prevent commercial launch (if approved), or otherwise adversely affect our business and prospects. In addition, our reliance on third parties for manufacturing subjects us to risks outside our control, including changes in the manufacturer’s priorities, performance issues, shortages of raw materials or components, labor or transportation disruptions, and compliance risk, including the risk of adverse inspectional findings or other regulatory actions affecting the manufacturing site. If we are unable to successfully complete this manufacturing transition and establish a consistent commercial supply chain on a timely basis, we may be required to identify and qualify alternative manufacturers, which could be time-consuming and costly, and could have a material adverse effect on our business, financial condition, results of operations, and prospects.

Current wording

We are transitioning the manufacturing of our finished drug product to a new third-party manufacturer, Adare. Although we believe this transition will enhance our supply chain capabilities, including providing redundancy and U.S.-based manufacturing, transferring manufacturing to a new facility is complex and entails significant risks, including the risk that the new manufacturer may be unable to reliably or timely manufacture cytisinicline at the required quality standards, in the necessary quantities, or at an acceptable cost, particularly as we progress to validation and commercial-scale production. The process of qualifying a new manufacturing site and implementing or scaling manufacturing processes may result in unanticipated technical challenges, deviations, failed batches, delays in release testing, capacity constraints, supply interruptions, or the need to repeat manufacturing activities, any of which could delay our planned regulatory submissions or resubmissions, delay or prevent commercial launch (if approved), or otherwise adversely affect our business and prospects. In addition, our reliance on third parties for manufacturing subjects us to risks outside our control, including changes in the manufacturer’s priorities, performance issues, shortages of raw materials or components, labor or transportation disruptions, and compliance risk, including the risk of adverse inspectional findings or other regulatory actions affecting the manufacturing site. If we are unable to successfully complete this manufacturing transition and establish a consistent commercial supply chain on a timely basis, we may be required to identify and qualify alternative manufacturers, which could be time-consuming and costly, and could have a material adverse effect on our business, financial condition, results of operations, and prospects.

Previous wording

We plan to establish necessary internal commercial infrastructure and engage third parties to build certain commercial capabilities to market cytisinicline. There are risks involved with entering into arrangements with third parties to perform these services. Furthermore, we have entered into a partnership with Omnicom to support the commercial launch of cytisinicline in the United States, which requires financial commitments in advance of approval and may result in disruption of our commercialization efforts if disputes or other issues arise in our relationship with Omnicom. If the commercial launch of cytisinicline is delayed or does not occur for any reason, including failure to receive marketing approval from the FDA, we would have prematurely or unnecessarily incurred these commercialization expenses.

Current wording

We plan to establish necessary internal commercial infrastructure and engage third parties to build certain commercial capabilities to market cytisinicline. There are risks involved with entering into arrangements with third parties to perform these services. If the commercial launch of cytisinicline is delayed or does not occur for any reason, including failure to receive marketing approval from the FDA, we would have prematurely or unnecessarily incurred these commercialization expenses.

Previous wording

Cytisinicline is not eligible for composition of matter patents in the United States as it is a naturally occurring substance. As such, third parties are able to manufacture, sell or distribute cytisinicline without royalties or other payments to us and compete with our products in the United States and potentially worldwide and negatively impact our commercialization efforts of our products. We are aware of additional cytisinicline products approved in several European countries and we may not be able to block other third parties from launching generic versions of cytisinicline. Third parties may also sell or distribute cytisinicline as an herbal or homeopathic product. Other than regulatory exclusivity or other limitations, there may be little to nothing to stop these third parties from manufacturing, selling or distributing cytisinicline. Because we have no ability to set rigorous safety standards or control processes over CMOs, sellers or distributors of cytisinicline, excluding Sopharma, these formulations of cytisinicline may be unsafe or cause adverse effects to patients and negatively impact the reputation of cytisinicline as a safe and effective smoking cessation aid.

Current wording

Cytisinicline is not eligible for composition of matter patents in the United States as it is a naturally occurring substance. As such, third parties are able to manufacture, sell or distribute cytisinicline without royalties or other payments to us and compete with our products in the United States and potentially worldwide and negatively impact our commercialization efforts of our products. We are aware of additional cytisinicline products approved in several European countries and we may not be able to block other third parties from launching generic versions of cytisinicline. Third parties may also sell or distribute cytisinicline as an herbal or homeopathic product, which could compete with our products without the same regulatory oversight or clinical rigor applied to our development program. Other than regulatory exclusivity or other limitations, there may be little to nothing to stop these third parties from manufacturing, selling or distributing cytisinicline. Because we have no ability to set rigorous safety standards or control processes over CMOs, sellers or distributors of cytisinicline, excluding Sopharma, these formulations of cytisinicline may be unsafe or cause adverse effects to patients and negatively impact the reputation of cytisinicline as a safe and effective smoking cessation aid.

Previous wording

We currently rely primarily on trade secret protection and on confidentiality agreements to protect proprietary know-how that is not patentable or that we elect not to patent, processes for which patents are difficult to enforce and any other elements of our product candidate discovery and development processes that involve proprietary know-how, information or technology that is not covered by patents. Trade secrets can be difficult to protect, however, and even where they are protected, they generally provide less intellectual property protection to the holder of the trade secret than to a holder of a patent. We seek to protect our proprietary technology and processes, in part, by entering into confidentiality agreements with our employees, consultants, scientific advisors, and contractors. We also seek to preserve the integrity and confidentiality of our data and trade secrets by maintaining physical security of our premises and physical and electronic security of our information technology systems. While we have confidence in these individuals, organizations and systems, agreements or security measures may be breached, and we may not have adequate remedies for any breach. In addition, our trade secrets may otherwise become known or be independently discovered by competitors.

Current wording

We currently rely primarily on trade secret protection and on confidentiality agreements to protect proprietary know-how that is not patentable or that we elect not to patent, processes for which patents are difficult to enforce and any other elements of our product candidate discovery and development processes that involve proprietary know-how, information or technology that is not covered by patents. Trade secrets can be difficult to protect, however, and even where they are protected, they generally provide less intellectual property protection to the holder of the trade secret than to a holder of a patent. We seek to protect our proprietary technology and processes, in part, by entering into confidentiality agreements with our employees, consultants, scientific advisors, and contractors.

Previous wording

failure of any of our product candidates to demonstrate safety and efficacy, receive regulatory approval and achieve commercial success;

Current wording

failure of our product candidate to demonstrate safety and efficacy, receive regulatory approval and achieve commercial success;

Previous wording

As of March 31, 2026, there were 4,970,511 shares of our common stock subject to outstanding options and 1,084,330 subject to outstanding restricted stock units, almost all of which have been registered under the Securities Act on Form S-8. The shares so registered can be freely sold in the public market after being issued to the option holder upon exercise, except to the extent they are held by an affiliate of ours, in which case such shares will become eligible for sale in the public market as permitted by Rule 144 under the Securities Act. Furthermore, as of March 31, 2026, there were approximately 20,391,307 shares of our common stock subject to outstanding warrants to purchase common stock, with a weighted average exercise price of $3.30 per share, and 142,857 shares of our common stock subject to outstanding pre-funded warrants, with an exercise price of $0.001 per share. To the extent any of these warrants are exercised, the shares underlying these warrants may be immediately sold in the public market.

Current wording

As of June 30, 2026, there were 9,299,447 shares of our common stock subject to outstanding options and 14,479,065 subject to outstanding restricted stock units, almost all of which have been registered under the Securities Act on Form S-8. The shares so registered can be freely sold in the public market after being issued to the option holder upon exercise, except to the extent they are held by an affiliate of ours, in which case such shares will become eligible for sale in the public market as permitted by Rule 144 under the Securities Act. Furthermore, as of June 30, 2026, there were approximately 69,909,876 shares of our common stock subject to outstanding warrants to purchase common stock, with a weighted average exercise price of $3.45 per share, and 243,357 shares of our common stock subject to outstanding pre-funded warrants, with an exercise price of $0.001 per share. To the extent any of these warrants are exercised, the shares underlying these warrants may be immediately sold in the public market.

Previous wording

In the future, we plan to raise additional capital through private placements or public offerings of our equity or debt securities. We cannot be certain that additional funding will be available on acceptable terms, if at all. To the extent that we raise additional financing by issuing equity securities, we may do so at a price per share that represents a discount to the then-current per share trading price of our common stock and our stockholders may experience significant dilution. Any debt financing, if available, may involve restrictive covenants, such as limitations on our ability to incur additional indebtedness, limitations on our ability to acquire or license intellectual property rights and other operating restrictions that could adversely affect our ability to conduct our business.

Current wording

In the future, we may raise additional capital through private placements or public offerings of our equity or debt securities. We cannot be certain that additional funding will be available on acceptable terms, if at all. To the extent that we raise additional financing by issuing equity securities, we may do so at a price per share that represents a discount to the then-current per share trading price of our common stock and our stockholders may experience significant dilution. Any debt financing, if available, may involve restrictive covenants, such as limitations on our ability to incur additional indebtedness, limitations on our ability to acquire or license intellectual property rights and other operating restrictions that could adversely affect our ability to conduct our business.