Korsana Biosciences, Inc.

The following summarizes the principal factors that make an investment in the Company speculative or risky, all of which are more fully described in the Risk Factors section below. This summary should be read in conjunction with the Risk Factors section and should not be relied upon as an exhaustive summary of the material risks facing our business. Some of the factors, events and contingencies discussed below may have occurred in the past, but the disclosures below are not representations as to whether or not the factors, events or contingencies have occurred in the past, and instead reflect our beliefs and opinions as to the factors, events or contingencies that could materially and adversely affect us in the future. The occurrence of any of these risks, could harm our business, financial condition, results of operations and/or growth prospects or cause our actual results to differ materially from those contained in forward-looking statements we have made in this Quarterly Report and those we may make from time to time. You should consider all of the risk factors described in our public filings when evaluating our business.

Risk Factor Summary

Our business is subject to a number of risks that, if realized, could materially harm our business, prospects, financial condition and results of operations. The summary below is not exhaustive and is qualified by reference to the full set of risk factors set forth below. Some of the more significant risks and uncertainties we face include the following:

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We will need to raise additional capital, and if we are unable to do so when needed, that could raise substantial doubt about our ability to continue as a going concern;

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We are a preclinical-stage biotechnology company with a limited operating history on which to assess our business; we have not initiated, conducted, or completed any clinical trials, have no products approved for commercial sale, have historically incurred losses, and anticipate that we will continue to incur significant losses for the foreseeable future;

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Our programs are in preclinical stages of development and may fail in development or suffer delays that materially and adversely affect their commercial viability. If we or our current or future collaborators are unable to complete development of or commercialize our product candidates, or experience significant delays in doing so, our business will be materially harmed;

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We are substantially dependent on the success of our lead product candidate, KRSA-028, and our anticipated clinical trials of such product candidate may not be successful;

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We currently rely on licensing arrangements with Paragon through the license agreement with Paragon entered into on June 8, 2026 with respect to our Aβ program (the “Paragon License Agreement”) and research collaborations with Paragon through the Paragon ADOA, the Paragon POA, and the Paragon Research Letter Agreement. If we are unable to maintain collaborations or licensing arrangements, or if our collaborations or licensing arrangements are not successful, our business could be negatively impacted;

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Our intellectual property portfolio is at an early stage, and we do not currently own any issued patents or pending patent applications. Therefore, our ability to obtain and protect our patent rights, and protect other proprietary rights, is uncertain, exposing us to the possible loss of competitive advantage;

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The regulatory approval processes of the U.S. Food and Drug Administration (the “FDA”) and other comparable foreign regulatory authorities are lengthy, time-consuming, and inherently unpredictable. If we are not able to obtain, or if there are delays in obtaining, required regulatory approvals for our product candidates, we will not be able to commercialize, or will be delayed in commercializing, our product candidates, and our ability to generate revenue will be materially impaired;

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The market price of our common stock is expected to be volatile, and the market price of our common stock may drop;

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Provisions in our articles of organization and bylaws and provisions under Massachusetts law could make an acquisition of us more difficult and may prevent attempts by our shareholders to replace or remove our management, and if our proposed redomestication to the Cayman Islands is effected, we will be governed by Cayman Islands law and our new memorandum and articles of association, provisions of which also have anti-takeover implications;

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Holders of our Series B non-voting convertible preferred stock, no par value per share (“Series B Preferred Stock”), have the ability to significantly influence all matters submitted to our shareholders for approval, and the directors elected exclusively by such holders have the ability to control or significantly influence all matters submitted to our board of directors for approval; and

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Risk Factors

We are a preclinical stage biotechnology company with a limited operating history on which to assess our business; we have not completed any clinical trials, and we have no products approved for commercial sale, which may make it difficult to evaluate our current business and likelihood of success and viability.

We are a preclinical stage biotechnology company with a limited operating history. Since our inception, we have incurred operating losses with no corresponding revenue and have utilized substantially all of our resources to identify and develop our product candidates, organize and staff our company, and provide other general and administrative support for our operations. We have no significant experience as a company in initiating, conducting, or completing preclinical studies or clinical trials. In part because of this lack of experience, we cannot be certain that our preclinical studies or clinical trials will begin or be completed on time, if at all. In addition, we have not yet demonstrated an ability to obtain regulatory approvals, manufacture a commercial-scale product, or arrange for a third party to do so on our behalf, or conduct sales, marketing, and distribution activities necessary for successful product commercialization. Consequently, any predictions about our future success or viability may not be as accurate as they could be if we had a longer operating history.

In addition, as our business grows, we may encounter unforeseen expenses, restrictions, difficulties, complications, delays, and other known and unknown factors. We will need to transition at some point from a company with an early research and development focus to a company capable of supporting larger scale clinical trials and eventually commercial activities. We have not yet taken such steps and may not be successful in such a transition.

We will require substantial additional capital to finance our operations in the future. If we are unable to raise such capital when needed, or on acceptable terms, we may be forced to delay, reduce, and/or eliminate one or more of our development programs or future commercialization efforts.

Developing biotechnology products is a long, time-consuming, expensive, and uncertain process that takes years to complete. We expect our expenses to increase in connection with our ongoing activities, particularly as we conduct preclinical studies and anticipated clinical trials of, and seek regulatory approval for, our product candidates, advance discovery efforts with respect to our research and development programs, and advance any future programs and product candidates that we may license. Even if one or more of the programs that we develop is approved for commercial sale, we anticipate incurring significant costs associated with sales, marketing, manufacturing, and distribution activities to launch any such product. Our expenses could increase beyond expectations if we are required by the FDA or other regulatory agencies to perform preclinical studies or clinical trials in addition to or more expansive than those that we currently anticipate. Because the design and outcome of our planned and anticipated clinical trials are highly uncertain, we cannot reasonably estimate the actual amount of funding that will be necessary to successfully complete the development and commercialization of any program we develop. Our future capital requirements depend on many factors, including but not limited to:

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the scope, design, progress, results, and costs of discovery and preclinical and clinical development for our product candidates;

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the costs and timing of completing clinical and commercial-scale manufacturing activities;

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the success of our current or future collaborations, including our collaboration with Paragon and Paragon Laboratories pursuant to the Paragon ADOA and Paragon Research Letter Agreement, respectively, and the success of the Paragon License Agreement and any future license agreements we enter into with Paragon;

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As a result, we will require substantial additional funding to continue our operations. As of September 30, 2026, we had $456.2 million in cash and cash equivalents. We expect that our existing cash and cash equivalents will be sufficient to fund our operating expenses and capital expenditure requirements into 2029. However, we will still need to raise additional capital to continue to fund our operations in the future. If we are unable to raise additional capital when needed, that could raise substantial doubt about our ability to continue as a going concern.

We may be required to seek additional funds sooner than planned through public or private equity offerings, debt financings, collaborations and licensing arrangements, or other sources, and adequate additional financing may not be available to us on acceptable terms, or at all. Such financing may dilute our shareholders or the failure to obtain such financing may restrict our operating activities. Any additional fundraising efforts may divert our management from their day-to-day activities, which may adversely affect our business. To the extent that we raise additional capital through the sale of equity or convertible debt securities, the ownership interest of our shareholders will be diluted, and the terms may include liquidation or other preferences and anti-dilution protections that adversely affect the rights of our shareholders. Debt financing may result in the imposition of debt covenants, increased fixed payment obligations or other restrictions that may affect our business. If we raise additional funds through upfront payments or milestone payments pursuant to future collaborations with third parties, we may have to relinquish valuable rights to our product candidates, or grant licenses on terms that are not favorable to us. Our ability to raise additional capital may be adversely impacted by global macroeconomic conditions and volatility in the credit and financial markets in the United States and worldwide. Our failure to raise capital as and when needed or on acceptable terms would have a negative impact on our financial condition and our ability to pursue our business strategy, and we may have to delay, reduce the scope of, suspend, or eliminate one or more of our product candidates, clinical trials, or future commercialization efforts or cease our operations.

In addition, as a result of our assumption of the Paragon ADOA in connection with the Merger, we are subject to the obligation to grant to Parasa on December 31, 2026, warrants to purchase a number of shares equal to 1.00% of our outstanding shares of common stock as of the date of the grant on a fully-diluted basis, with an exercise price equal to the fair market value of the underlying shares on the grant date. Such warrants granted will result in further dilution to all of our securityholders.

We expect to continue to incur losses for the foreseeable future and may not be able to achieve or sustain profitability in the future. We have no products approved for sale, have not generated any revenue from our product candidates, and may never generate revenue or become profitable.

Investment in biotechnology product development is a highly speculative undertaking and entails substantial upfront capital expenditures and significant risks that any product candidate will fail to demonstrate adequate efficacy or an acceptable safety profile, gain regulatory approval, and become commercially viable. We have no products approved for commercial sale, have not generated any revenue from product sales to date, and continue to incur significant research and development and other expenses related to our ongoing operations. We do not expect to generate product revenue unless or until we successfully complete preclinical and clinical development and obtain regulatory approval for, and then successfully commercialize, at least one of our product candidates.

We incurred significant net losses in each period since we commenced operations in November 2024. We generated net losses of $35.7 million for the period from November 2024 (inception) to December 31, 2025 and net losses of $46.4 million and $77.3 million during the three and nine months ended September 30, 2026, respectively. As of September 30, 2026, we had an accumulated deficit of $113.0 million. We expect to continue to incur losses for the foreseeable future. Our operating expenses and net losses may fluctuate significantly from quarter to quarter and year to year. We anticipate that our expenses will increase substantially if and as we:

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advance our existing and future product candidates through preclinical and clinical development;

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seek to identify additional product candidates;

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seek, obtain, and maintain regulatory approvals for our product candidates;

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make milestone payments to Paragon under the Paragon License Agreement and Paragon ADOA, and to Paragon Laboratories under the Paragon Research Letter Agreement, and under any additional future collaboration or license agreements that we enter into;

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establish clinical and commercial-scale current good manufacturing practices (“cGMP”) capabilities through a third-party or our own manufacturing facility; and

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operate as a public company.

In addition, our expenses will increase if, among other things, we are required by the FDA or other regulatory authorities to perform clinical trials or studies in addition to, or different than, those that we currently anticipate, there are any delays in initiating or completing our clinical trials or the development of any of our product candidates, or there are any third-party challenges to our intellectual property or we need to defend against any intellectual property-related claim.

Our failure to become profitable would decrease our value and could impair our ability to raise capital, maintain our research and development efforts, expand our business, and/or continue our operations. A decline in the value of our stock could also cause shareholders to lose all or part of their investment.

The development and commercialization of drugs is highly competitive. Our product candidates, if approved, will face significant competition and our failure to effectively compete may prevent us from achieving significant market penetration. We compete with a variety of multinational biopharmaceutical companies, specialized biotechnology companies, and emerging biotechnology companies, as well as academic institutions, governmental agencies, and public and private research institutions, among others. If approved for the treatment of patients with Alzheimer’s disease, KRSA-028 would compete with two anti-amyloid antibody therapies that have been approved by the FDA for treatment of early Alzheimer’s disease: lecanemab (Leqembi), marketed by Eisai and Biogen, and donanemab (Kisunla), marketed by Eli Lilly. We are aware of several companies with product candidates in clinical development for the treatment of patients with Alzheimer’s disease, including Roche (including Genentech, its wholly owned subsidiary), Lilly, Eisai, Biogen, AbbVie, Merck, Sanofi, Bristol Myers Squibb, Voyager Therapeutics, Denali Therapeutics, Acumen, Alzheon, AC Immune, Alnylam Pharmaceuticals, ChainGen, Akeso, and others. Several of these companies are developing anti-Aβ antibodies that, like KRSA-028, are designed to use transferrin receptor-mediated transport to increase brain exposure, including Roche’s trontinemab, which is being evaluated in Phase 3 clinical trials, and AbbVie’s ABBV-1758 and Denali Therapeutics’ DNL921, each of which is in early-stage clinical development. In addition, Lilly is evaluating remternetug, an antibody that, like KRSA-028, targets a pyroglutamate-modified form of Aβ, in Phase 3 clinical trials, including with subcutaneous administration. Many of the companies with which we are currently competing or will compete against in the future have significantly greater financial resources and expertise in research and development, manufacturing, preclinical testing, conducting clinical trials, obtaining regulatory approvals, and commercialization than we do, and are further along in the clinical development and/or commercialization process. Mergers and acquisitions in the pharmaceutical and biotechnology industry may result in even more resources being concentrated among a smaller number of our competitors. Smaller or early-stage companies may also prove to be significant competitors, particularly through collaborative arrangements with large and established companies. These competitors also compete with us in recruiting and retaining qualified scientific and management personnel, establishing clinical trial sites, raising capital, enrolling patients in clinical trials, establishing and defending rights to intellectual property, as well as in acquiring technologies complementary to, or necessary for, our product candidates.

Our competitors have developed or are developing, and may in the future develop, product candidates or products competitive with our product candidates. Competitive therapeutic treatments include those that have already been approved and accepted by the medical community and any potential new treatments, including those currently under clinical development. Our success will depend partially on our ability to develop and commercialize products that have a competitive safety, efficacy, dosing, and/or presentation profile. Our commercial opportunity and success will be reduced or eliminated if competing products are (or are perceived to be) safer, more effective, less expensive, or have a more attractive dosing profile or presentation than the products we develop, or if competitors develop products or biosimilars that enter the market more quickly than us and gain market acceptance. Conversely, the lack of commercial success of other competing therapies may raise concerns about the financial viability of our product candidates.

In addition, because of the competitive landscape for Alzheimer’s disease, we may also face competition for establishing clinical trial sites and enrolling patients. Patient enrollment will depend on many factors, including if potential clinical trial patients choose to undergo treatment with approved products or enroll in competitors’ ongoing clinical trials for product candidates that are under development for the same indications as our product candidates. An increase in the number of approved products for the indications we are targeting with our product candidates will likely further exacerbate this competition. Our inability to enroll a sufficient number of patients could, among other impacts, delay our development timeline, which may further harm our competitive position.

Our programs are in the preclinical stages of development and may fail in development or suffer delays that materially and adversely affect our viability. If we or our future collaborators are unable to complete development of or commercialize our product candidates, or experience significant delays in doing so, our business will be materially harmed.

We have no commercially approved products. Our programs are in the preclinical stages of development, and we have not initiated or completed any clinical trials. As a result, we expect it will be many years before we commercialize any product candidate, if ever. Our ability to achieve and sustain profitability depends on obtaining regulatory approvals for, and successfully commercializing, our product candidates, either alone or with third parties, and we cannot guarantee that we will ever obtain regulatory approval for any of our product candidates. We have not yet demonstrated our ability to complete any clinical trials, obtain regulatory approvals, manufacture a commercial-scale product or arrange for a third party to do so on our behalf, or conduct sales and marketing activities necessary for successful product commercialization. Before obtaining regulatory approval for the commercial distribution of any product candidate, we or an existing or future collaborator must conduct extensive preclinical tests and clinical trials to demonstrate the safety and efficacy in humans of the product candidate.

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regulators, such as the FDA, institutional review boards (“IRBs”), or comparable foreign regulatory authorities may not authorize us or our investigators to commence a clinical trial or conduct a clinical trial at a prospective trial site;

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we may experience delays in reaching, or fail to reach, agreement on acceptable terms with prospective trial sites and prospective clinical research organizations (“CROs”), the terms of which can be subject to extensive negotiation and may vary significantly among different CROs and trial sites;

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the number of subjects required for clinical trials of any product candidates may be larger than we can anticipate, and enrollment in these clinical trials may be slower than we anticipate or subjects may drop out of these clinical trials or fail to return for post-treatment follow-up at a higher rate than we anticipate;

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we may fail to establish an appropriate safety profile for a product candidate based on preclinical or clinical data for such product candidate as well as data emerging from other therapies in the same class as such product candidate; and

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We may not have the financial resources to continue development of our product candidates if we experience any issues that delay or prevent regulatory approval of, or our ability to commercialize, our product candidates. We or our future collaborators’ inability to complete development of, or commercialize our product candidates, or significant delays in doing so, could have a material and adverse effect on our business, financial condition, results of operations, and prospects.

We are substantially dependent on the success of KRSA-028, and our anticipated clinical trials for such product candidate may not be successful.

Our future success is substantially dependent on our ability to timely obtain regulatory approval for, and then successfully commercialize, KRSA-028. We are initially investing a majority of our efforts and financial resources into the research and development of this program. After we complete clinical trial-enabling activities, we plan to submit a CTN in Australia or a CTA in New Zealand by the end of 2026 and an IND in the United States in the first quarter of 2027. Pharmacokinetic data in healthy volunteers is anticipated by mid-year 2027 and interim proof-of-concept data in Alzheimer’s disease patients is anticipated by year-end 2027 or the first quarter of 2028. The success of KRSA-028 depends on demonstrating one or more clinical advantages over other approved anti-Aβ antibody products or product candidates in clinical development, which may include favorable data on amyloid plaque clearance, slowing of cognitive decline or disease progression, reduced rates of amyloid-related imaging abnormalities (“ARIA”), improved hematologic safety, and/or a convenient low-volume subcutaneous route of administration, particularly as lecanemab has been approved for subcutaneous administration throughout the course of treatment and other anti-Aβ antibodies, including remternetug, are being developed for subcutaneous administration. Our belief that KRSA-028 will show favorable clinical data is based in part on the assumption that the increased brain penetration observed in mice and non-human primates (“NHPs”) through the use of the proprietary THETA platform, which confers binding to the transferrin receptor (“TfR1”), will translate to humans. If our Phase 1 clinical trial of KRSA-028 or additional clinical trials do not demonstrate adequate brain delivery or improvements versus the limitations of other TfR1-based approaches, the clinical and commercial potential of KRSA-028 will be significantly and adversely affected.

Our product candidates will require completion of preclinical, clinical, and manufacturing activities, regulatory approval in multiple jurisdictions, substantial investment, and significant marketing efforts before we generate any revenues from product sales. We are not permitted to market or promote our product candidates before we receive regulatory approval from the FDA and comparable foreign regulatory authorities, and we may never receive such regulatory approvals.

The success of our product candidates will depend on a variety of factors. We do not have complete control over many of these factors, including certain aspects of clinical development and the regulatory submission process, potential threats to our intellectual property rights, potential threats from the intellectual property rights of third parties and the manufacturing, marketing, distribution, and sales efforts of any future collaborator. Accordingly, we cannot assure you that we will ever be able to generate revenue through the sale of these product candidates, even if approved. If we are not successful in obtaining regulatory approval for and commercializing KRSA-028 or future product candidates, or are significantly delayed in doing so, our business will be materially harmed.

Our product candidates are based on novel technology in fields that have seen limited success in drug development, which makes it difficult to predict the time and cost of product candidate development and subsequently obtaining regulatory approval.

We have focused our research and development efforts on addressing neurodegenerative diseases. Collectively, efforts by biopharmaceutical companies in the field of neurodegenerative diseases have seen limited success in drug development. There are few effective therapeutic options available for patients with neurodegenerative diseases, such as Alzheimer’s disease and Parkinson’s disease. Our future success is highly dependent on the successful development of our THETA™ platform and our product candidates for treating neurodegenerative diseases. Developing and, if approved, commercializing our product candidates for treatment of neurodegenerative diseases subjects us to a number of challenges, including engineering product candidates to cross the blood brain barrier (“BBB”) to enable optimal concentration of the therapeutic in the brain and obtaining regulatory approval from the FDA and other regulatory authorities who have only a limited set of precedents to rely on.

Our approach to the treatment of neurodegenerative diseases aims to identify and select targets with a link to neurodegenerative diseases; to identify and develop molecules that engage the intended target; to, where possible, identify and develop biomarkers, which are biological molecules found in blood, other bodily fluids, or tissues that are signs of a normal or abnormal process or of a condition or disease, to select patient populations and demonstrate, where possible, target engagement, pathway engagement, and impact on disease progression of our molecules; and to engineer our molecules to cross the BBB and act directly in the brain. This strategy may not prove to be successful. We may not be able to discover, develop, and utilize biomarkers to demonstrate target engagement, pathway engagement, and the impact on disease progression of our product candidates. We cannot be sure that our approach will yield satisfactory therapeutic products that are safe and effective, scalable, or profitable. Moreover, public perception of drug safety issues, including adoption of new therapeutics or novel approaches to treatment, may adversely influence the willingness of subjects to participate in clinical trials, or if approved, of physicians to subscribe to novel treatments.

If we do not achieve our projected development objectives in the time frames we announce and expect, the commercialization of our product candidates may be delayed which may harm our reputation and prospects, increase our expenses, and cause our stock price to decline.

From time to time, we estimate the timing of the anticipated accomplishment of various scientific, clinical, regulatory and other product development goals, which we sometimes refer to as milestones. These milestones may include the commencement or completion of scientific studies and clinical trials, such as the expected timing for the initiation of our Phase 1 clinical trial of KRSA-028, the timing for receipt of clinical data, and the timing for the submission of regulatory filings. From time to time, we may publicly announce the expected timing of some of these milestones. All of these milestones are and will be based on numerous assumptions. The actual timing of these milestones can vary dramatically compared to our estimates, in many cases for reasons beyond our control. If we do not meet these milestones as publicly announced, or at all, our prospects and reputation may be adversely affected, and our stock price may decline. Additionally, delays relative to our projected timelines are likely to cause overall expenses to increase, which may require us to raise additional capital sooner than expected and prior to achieving targeted development milestones.

Our approach to the discovery and development of our product candidates is unproven, and we may not be successful in our efforts to build a pipeline of product candidates with commercial value.

Our approach to the discovery and development of our product candidates leverages established mechanisms of action and incorporates advanced antibody engineering to optimize half-life and other properties designed to overcome limitations of existing therapies, including increased binding affinity, and TfR1 shuttling for delivering large molecule drugs across the BBB, enabling higher drug concentration inside the brain. Our product candidates are purposefully designed to improve upon existing product candidates and products while maintaining the same, established mechanisms of action. However, the scientific research that forms the basis of our efforts to develop differentiated product candidates using half-life extension technologies, effector function modification, and/or the TfR1-based THETA technology to deliver large molecule drugs across the BBB, is ongoing and may not result in viable product candidates. We have no clinical data on product candidates using TfR1-based THETA technology in neurodegenerative diseases and demonstrating whether they are safe or effective for long-term treatment in humans. We also have no clinical data to indicate whether our antibody engineering designed to optimize half-life and modify effector function enhances brain exposure or translates into improved safety, tolerability, convenience, or efficacy in humans. The long-term safety and efficacy of our product candidates compared to currently approved products is unknown.

We may ultimately discover that utilizing half-life extension technologies, effector function modulation, and the TfR1-based THETA technology to target 3pE-Aβ for our specific indications and any product candidates resulting therefrom do not possess certain properties required for therapeutic effectiveness. We currently have only preclinical data regarding the increased half-life properties, effector function modulation, and targeting mechanism of our product candidates, and the same results may not be seen in humans. In addition, product candidates using half-life extension technologies and effector function modulation, or that are designed to bind to 3pE-Aβ and clear amyloid plaques, may demonstrate different chemical, pharmacological and biological properties in patients than they do in laboratory studies. This technology and any product candidates resulting therefrom may not demonstrate the same chemical and pharmacological properties in humans and may interact with human biological systems in unforeseen, ineffective, or harmful ways. Many product candidates that appeared highly promising in preclinical studies or in early-stage clinical trials have failed when advanced into, or further in, clinical development.

In addition, other companies are developing drug products that target Aβ or utilize TfR1-mediated delivery technologies for central nervous system indications, or that utilize half-life extension technology and/or effector function modulation for other targets. The failure of those companies to demonstrate the safety and/or efficacy of their product candidates may be harmful to our business, financial condition, results of operations, and prospects. Conversely, if those companies are successful in demonstrating safety and/or efficacy of their product candidates, these competitive products may instead gain and hold the applicable market.

In addition, we may in the future seek to discover and develop product candidates that are based on novel targets and technologies that are unproven. If our discovery or business development activities fail to identify novel targets or technologies for drug development, or such targets or technologies prove to be unsuitable for treating human disease, we may not be able to develop viable additional product candidates. We and our future collaborators may never receive approval to market and commercialize any product candidate. Even if we or a future collaborator obtains regulatory approval, the approval may be for targets, disease indications or patient populations that are not as broad as we intended or desired or may require labeling that includes significant use or distribution restrictions or safety warnings. If the products resulting from our product candidates prove to be ineffective, unsafe, or commercially unviable, our product candidates and pipeline would have little, if any, value, which would have a material and adverse effect on our business, financial condition, results of operations, and prospects.

Before obtaining regulatory approval from regulatory authorities for the sale of any product candidate, we must complete preclinical studies and then conduct extensive clinical trials to demonstrate the safety and efficacy of our product candidate in humans. Our clinical trials may not be initiated or conducted as planned or completed on schedule, if at all, and failure can occur at any time during the preclinical study or clinical trial process. Furthermore, a failure of one or more clinical trials can occur at any clinical trial phase. The outcome of preclinical studies and early-stage clinical trials may not be predictive of the success of later clinical trials. Our preclinical studies may not be designed, conducted, or completed as planned, and we may be required to repeat studies or conduct additional studies if, for example, our study endpoints, dose selection, species selection, or sample sizes prove inadequate, if the test articles used in such studies are not representative of our clinical trial material, or if such studies fail to comply with GLP requirements. In particular, the animal models used to evaluate product candidates for Alzheimer’s disease do not fully replicate the human disease, and many product candidates that improved outcomes in such models have failed to demonstrate clinical benefit in humans. Similarly, reductions in amyloid plaque or favorable changes in other biomarkers observed in preclinical studies or early-stage clinical trials may not translate into a clinically meaningful slowing of cognitive or functional decline in later, larger and longer clinical trials. Further, because biologics can be highly species-specific, the pharmacological activity, brain exposure, and toxicity observed in mice and NHPs may not be predictive of those in humans. Moreover, preclinical and clinical data are often susceptible to varying interpretations and analyses, and many companies that have believed their product candidates performed satisfactorily in preclinical studies and clinical trials have nonetheless failed to obtain regulatory approval of their product candidates. In addition, we expect to rely on patients to provide feedback on subjective measures, including disease severity and quality of life, which are inherently difficult to evaluate. These measures can be influenced by factors outside of our control and can vary widely from day to day for a particular patient, and from patient to patient and from site to site within a clinical trial.

We cannot be sure that the FDA or comparable foreign regulatory authorities will agree with our clinical development plans. We plan to use the data from healthy volunteers from our Phase 1 clinical trial of KRSA-028 to support additional clinical development. However, there is no guarantee the data from such Phase 1 trial will support additional development. If the FDA or comparable foreign regulatory authorities require us to conduct additional trials or enroll additional healthy volunteers or patients, our development timeline may be delayed. We cannot be sure that submission of an IND or similar foreign application will result in the FDA or comparable foreign regulatory authorities, as applicable, allowing clinical trials to begin in a timely manner, if at all. Moreover, even if these trials begin, issues may arise that could cause regulatory authorities to suspend or terminate such clinical trials. Events that may prevent successful or timely initiation or completion of clinical trials include: inability to generate sufficient preclinical, toxicology or other in vivo or in vitro data to support the initiation or continuation of clinical trials; delays in reaching a consensus with regulatory authorities on study design or implementation of the clinical trials; delays or failure in obtaining regulatory authorization to commence a trial; delays in reaching agreement on acceptable terms with prospective CROs and clinical trial sites, the terms of which can be subject to extensive negotiation and may vary significantly among different CROs and clinical trial sites; delays in identifying, recruiting and training suitable clinical investigators; delays in obtaining required IRB approval or positive ethics committee opinions at each clinical trial site; delays in manufacturing, testing, releasing, validating or importing/exporting sufficient stable quantities of our product candidates for use in clinical trials or the inability to do any of the foregoing; failure by our CROs, other third parties or us to adhere to clinical trial protocols; failure to perform in accordance with the FDA’s or any other regulatory authority’s good clinical practice (“GCP”) requirements or regulatory guidelines; changes to the clinical trial protocols; clinical sites deviating from trial protocol or dropping out of a trial; changes in regulatory requirements, guidance or clinical trial plans that require amending or submitting new clinical protocols; selection of clinical endpoints that require prolonged periods of observation or analyses of resulting data; transfer of manufacturing processes to new or larger-scale facilities and delays or failure by our CMOs or us to make any necessary changes to such manufacturing process; and third parties being unwilling or unable to satisfy their contractual obligations to us.

We may encounter difficulties enrolling patients in our clinical trials, and our clinical development activities could thereby be delayed or otherwise adversely affected.

The timely completion of clinical trials in accordance with their protocols depends, among other things, on our ability to enroll a sufficient number of patients who remain in the trial until its conclusion. We may experience difficulties in patient enrollment in clinical trials for a variety of reasons, including:

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the patient eligibility criteria defined in the protocol, including biomarker-driven identification and/or certain highly specific criteria related to stage of disease progression, which may limit the patient populations eligible for our clinical trials to a greater extent than competing clinical trials for the same indication that do not have biomarker-driven patient eligibility criteria;

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the design of the trial;

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delays in enrolling patients in our clinical trials caused by worldwide economic conditions, including pandemics or other public health outbreaks and other geopolitical events;

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availability of approved products that target the patient populations that we are seeking to enroll;

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clinicians’ and patients’ perceptions of the potential advantages and side effects of the product candidate being studied in relation to other available therapies and product candidates;

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the risk that we may not be able to collect data from patients for any reason.

We or our partners may encounter difficulties or delays in enrollment of our clinical trials due to the availability of newly approved therapies and competing products. For example, lecanemab received FDA approval for the treatment of Alzheimer’s disease in 2023, and donanemab received FDA approval for the treatment of Alzheimer’s disease in July 2024. As a result, our or our partners’ ability to enroll participants in clinical trials for Alzheimer’s disease may be hampered if potential participants choose to instead avail themselves of approved therapies. In addition, several early phase clinical programs and large Phase 3 clinical trials of competing anti-Aβ antibodies, including Roche’s TRONTIER 1 and TRONTIER 2 trials of trontinemab in early symptomatic Alzheimer’s disease and its PrevenTRON trial in preclinical Alzheimer’s disease, as well as Eli Lilly's TRAILRUNNER-ALZ 3 trial of remternetug, are enrolling or have recently enrolled participants, which may limit the availability of clinical trial sites and eligible participants given the long-term duration associated with these types of trials.

Any preliminary or topline data should be viewed with caution until the final data are available. From time to time, we may also disclose interim data from our preclinical studies and clinical trials. Interim data are subject to the risk that one or more of the clinical outcomes may materially change as patient enrollment continues and more patient data become available or as patients from our clinical trials continue other treatments. Further, others, including regulatory authorities, may not accept or agree with our assumptions, estimates, calculations, conclusions, or analyses or may interpret or weigh the importance of data differently, which could impact the value of the particular product candidate, the approvability or commercialization of the particular product candidate and of us as a company. In addition, the information we choose to publicly disclose regarding a particular preclinical study or clinical trial is based on what is typically extensive information, and you or others may not agree with what we determine is material or otherwise appropriate information to include in our disclosure. As a result, you or others may have reached different conclusions based on such extensive information in comparison to our publicly disclosed conclusion regarding a particular preclinical study or clinical trial. If the preliminary, topline, or interim data that we report differ from actual results, or if others, including regulatory authorities, disagree with the conclusions reached, our ability to obtain approval for, and commercialize, our product candidates may be harmed, which could harm our business, operating results, prospects, or financial condition.

Results of our clinical trials could reveal a high or unacceptable severity and prevalence of side effects, adverse events or unexpected characteristics. We have not yet completed any clinical trials in humans. If significant adverse events or other side effects are observed in any of our future clinical trials, we may have difficulty recruiting patients to such trials, patients may drop out of our trials, or we may be required to abandon the trials or our development efforts of one or more product candidates altogether.

Because KRSA-028 will have a similar mechanism of action as trontinemab, it is possible that patients in our future clinical trials could exhibit treatment-emergent adverse events ("TEAEs") of similar or worse frequency or severity. We, the FDA or other applicable regulatory authorities, or an IRB or ethics committee, may suspend any clinical trials of any product candidate at any time for various reasons, including a belief that subjects or patients in such trials are being exposed to unacceptable health risks or adverse side effects. Some potential products developed in the biotechnology industry that initially showed therapeutic promise in early-stage studies and trials have later been found to cause side effects that prevented their further development. Other potential products have shown side effects in preclinical studies, which side effects do not present themselves in clinical trials in humans. Even if the side effects do not preclude the product candidate from obtaining or maintaining regulatory approval, undesirable side effects may inhibit market acceptance of the approved product due to its tolerability versus other therapies. In addition, an extended half-life could prolong the duration of undesirable side effects, which could also inhibit market acceptance. TEAEs could also affect patient recruitment or the ability of enrolled subjects to complete our clinical trials or could result in potential product liability claims. Potential side effects associated with our product candidates may not be appropriately recognized or managed by the treating medical staff, as toxicities resulting from our product candidates may not be normally encountered in the general patient population and by medical personnel. Any of these occurrences could harm our business, financial condition, results of operations, and prospects significantly.

In addition, as with other biologics, our product candidates may elicit an immune response, including the development of anti-drug antibodies, which could reduce or neutralize their activity, alter their pharmacokinetics or brain exposure, or cause hypersensitivity reactions, infusion or injection-site reactions, or other adverse events. Engineered features of our product candidates may increase the risk of immunogenicity, and immunogenicity observed in animal studies is generally not predictive of immunogenicity in humans. If our product candidates are immunogenic, we may be required to conduct additional studies, modify development, or accept restrictive labeling.

Because we have limited financial and managerial resources, we focus our research and development efforts on certain selected programs. For example, we are initially focused primarily on our initial product candidate, KRSA-028. As a result, we may forgo or delay pursuit of opportunities with other programs that later prove to have greater commercial potential. Our resource allocation decisions may cause us to fail to capitalize on viable commercial products or profitable market opportunities. Our spending on current and future research and development product candidates for specific indications may not yield any commercially viable product candidates. If we do not accurately evaluate the commercial potential or target market for a particular product candidate, we may relinquish valuable rights to that product candidate through collaboration, licensing, or other royalty arrangements in cases in which it would have been more advantageous for us to retain sole development and commercialization rights to such product candidate. In addition, we may select product candidates amongst a variety of potential product candidates, and the product candidates we select may fail to be viable commercial products or the product candidates we do not select may have a greater likelihood of success.

Even if regulatory approval is obtained for a product candidate resulting from one of our current or future programs, we may not gain market acceptance among physicians, healthcare professionals, patients, healthcare payors, or the medical community. We may not generate or sustain revenue from sales of the product due to factors such as whether the product can be sold at a competitive cost and whether it will otherwise be accepted in the market. Market acceptance will depend on many factors, including factors that are not within our control.

There are two approved disease-modifying therapeutic products and additional product candidates in later stages of clinical development for the treatment of Alzheimer’s disease, including Leqembi (marketed by Eisai and Biogen) and Kisunla (marketed by Lilly). However, KRSA-028 is designed to have improved brain penetration and contains modifications that are known to increase the half-life of antibodies in circulation; to date, no such disease-modifying therapy with these design modifications has been approved by the FDA for the treatment of Alzheimer’s disease, though several such agents are in clinical development. In addition, each of Leqembi and Kisunla is approved with a boxed warning regarding ARIA, and their labeling requires MRI monitoring before and during treatment and recommends testing for ApoE ε4 status before initiating treatment. Because KRSA-028 is also an anti-Aβ antibody, any approval we obtain may include similar or more restrictive labeling, and the need for diagnostic confirmation of amyloid pathology, including through amyloid PET imaging, cerebrospinal fluid testing or blood-based biomarker testing, together with genetic testing and ongoing MRI monitoring, and constraints on the availability of these services, could limit the number of patients who are treated with KRSA-028 and slow its adoption. Market participants with significant influence over acceptance of new treatments, such as clinicians and third-party payors, may not adopt a biologic that incorporates effector function modification and half-life extension for our targeted indication, and we may not be able to convince the medical community and third-party payors to accept and use, or to provide favorable reimbursement for, any programs developed by us or our existing or future collaborators.

Market acceptance of our product candidates may be negatively impacted by performance of our competitors, including the occurrence of serious adverse events in such competitors’ clinical trials or failure by such competitors to obtain and maintain regulatory approval for their product candidates. Additionally, although we believe that the improved dosing and convenience we expect our product candidates to provide will improve market acceptance of such product candidates and that our product candidates will have a competitive efficacy profile, our predictions may not be accurate and other competitive products may instead gain and hold the applicable market. Sales of medical products also depend on the willingness of clinicians to prescribe the treatment. We cannot predict whether clinicians, clinicians’ organizations, hospitals, other healthcare providers, government agencies, or private insurers will determine that our product is safe, therapeutically effective, cost effective or less burdensome as compared with competing treatments. If any current or future product candidate is approved but does not achieve an adequate level of acceptance by such parties, we may not generate or derive sufficient revenue from that product candidate and may not become or remain profitable.

We are developing KRSA-028 for the treatment of Alzheimer’s disease and may in the future develop programs for additional neurodegenerative disease indications. However, developing multiple product candidates for neurodegenerative disease indications may negatively impact our business if the product candidates compete with each other. For example, if multiple product candidates are conducting clinical trials at the same time, they could compete for the enrollment of patients. In addition, if multiple product candidates are approved for the same indication, they may compete for market share, which could limit our future revenue.

Our research and development efforts are concentrated in the field of neurodegenerative diseases, which has historically experienced a high rate of clinical failure. If the scientific basis for our approach proves insufficient or the field experiences setbacks, our entire pipeline could be adversely affected.

We have concentrated our research and development efforts on therapeutics for neurodegenerative diseases, with our lead product candidate, KRSA-028, targeting Alzheimer’s disease. The neurodegenerative disease field has historically experienced a high rate of clinical trial failure compared to other therapeutic areas, and a number of companies have invested significant resources in the development of neurodegenerative disease product candidates without obtaining regulatory approval. If the scientific basis for our approach to treating neurodegenerative diseases, including the use of TfR1-based THETA technology to deliver therapeutics across the blood brain barrier, proves to be flawed or insufficient, our entire pipeline could be rendered nonviable. Because our pipeline is concentrated in a single therapeutic area, we do not have the benefit of diversification across multiple therapeutic areas that could offset failures in any one program. A setback in one program could have a disproportionate impact on our business, financial condition, results of operations, and prospects relative to a company with a more diversified pipeline. Adverse developments in the neurodegenerative disease field generally, including safety signals or clinical failures by other companies developing therapies for similar indications, could negatively affect investor sentiment, regulatory scrutiny, and patient enrollment for our clinical trials, regardless of the merits of our own product candidates.

We plan to conduct the single ascending dose (“SAD”) portion of our Phase 1 clinical trial of KRSA-028 in healthy participants in Australia or New Zealand, and we may choose to conduct the multiple ascending dose (“MAD”) portion of our Phase 1 clinical trial of KRSA-028 in AD patients and future clinical trials outside the United States in whole or in part, including potentially in the UK, EU, or Canada. Although the FDA may accept data from clinical trials conducted outside the United States, acceptance of this data is subject to conditions imposed by the FDA. For example, the clinical trial must be well designed and conducted and performed by qualified investigators in accordance with ethical principles. The trial population must also adequately represent the U.S. population, and the data must be applicable to the U.S. population and U.S. medical practice in ways that the FDA deems clinically meaningful. In addition, while these clinical trials are subject to the applicable local laws, FDA acceptance of the data will depend on our determination that the trials also complied with all applicable U.S. laws and regulations. Many foreign regulatory authorities have similar requirements for clinical data gathered outside of their respective jurisdictions. In addition, such foreign trials would be subject to the applicable local laws of the foreign jurisdictions where the trials are conducted. There can be no assurance that the FDA or any comparable foreign regulatory authority will accept data from trials conducted outside of the United States or the relevant jurisdiction, as applicable. If the FDA or any comparable foreign regulatory authority does not accept such data, it would likely result in the need for additional trials, which would be costly and time-consuming and would delay or permanently halt our development of the applicable product candidates or delay or prevent regulatory approval for commercialization in the applicable jurisdiction. Even if the FDA or any comparable foreign regulatory authority accepted such data, it could require us to modify our planned clinical trials to receive clearance to initiate such trials in the United States or the relevant jurisdiction, as applicable, or to continue such trials once initiated.

We rely on collaborations and licensing arrangements with third parties, including Paragon. If we are unable to maintain these collaborations or licensing arrangements, or if these collaborations or licensing arrangements are not successful, our business could be negatively impacted.

We rely on our collaboration with Paragon and Paragon Laboratories for a substantial portion of our discovery capabilities and for the rights necessary to develop and commercialize our product candidates. In the future, we could also rely on additional licensing arrangements with third parties. For example, we have entered into the Paragon ADOA, the Paragon POA, the Paragon Research Letter Agreement, and the Paragon License Agreement. However, Paragon or Paragon Laboratories could terminate these agreements under certain circumstances, including our failure to make any payments owed to Paragon under the agreement or any uncured material breach of the agreement by us, in which event we may lose intellectual property rights and may not be able to develop or commercialize the product candidates covered by that agreement, including KRSA-028.

Collaborations or licensing arrangements that we enter into may not be successful, and any success will depend heavily on the efforts and activities of such collaborators or licensors. If any of our collaborators or licensors experiences delays in performance of, or fails to perform, their obligations under their agreement with us, disagrees with our interpretation of the terms of such agreement, or terminates their agreement with us, our pipeline and product candidates and development timeline could be adversely affected. If we fail to comply with any of the obligations under our collaborations or license agreements, including payment terms and diligence terms, our collaborators or licensors may have the right to terminate such agreements, in which event we may lose intellectual property rights and may not be able to develop, manufacture, market or sell the products covered by our agreements or may face other penalties under our agreements. Our collaborators and licensors may also fail to properly maintain or defend the intellectual property we have licensed from them, if required by our agreement with them, leading to the potential invalidation of our intellectual property, or they may even infringe upon our intellectual property rights, any of which could subject us to litigation or arbitration, which would be time-consuming and expensive and could harm our ability to commercialize our product candidates. In addition, collaborators could independently develop, or develop with third parties, products that compete directly or indirectly with our product candidates and products if the collaborators believe that the competitive products are more likely to be successfully developed or can be commercialized under terms that are more economically attractive than ours.

As part of our strategy, we plan to evaluate additional opportunities to enhance our capabilities and expand our development pipeline or add development or commercialization capabilities. We may not realize the benefits of such collaborations, alliances or licensing arrangements. Any of these relationships may require us to incur non-recurring and other charges, increase our near and long-term expenditures, issue securities that dilute our existing shareholders or disrupt our management and business.

We have relied and continue to rely on Paragon, and expect to rely on our future licensing partners, to (i) conduct research and development in accordance with the applicable protocol, legal, regulatory, and scientific standards, (ii) accurately report the results of all preclinical studies conducted prior to our licensing or acquisition of the relevant product candidates, and (iii) correctly collect and interpret the data from these studies. If the research and development processes or the results of the development programs prior to our licensing or acquisition of our product candidates prove to be unreliable, this could result in increased costs and delays in the development of our product candidates, which could adversely affect any future revenue from such product candidates, if approved.

We may also acquire or in-license additional product candidates for preclinical or clinical development in the future as we continue to build our pipeline. The risks associated with acquiring or in-licensing product candidates could result in delays in the commencement or completion of our preclinical studies and clinical trials, if they are ever commenced or completed, and our ability to generate revenues from our product candidates may be delayed. Please see the risk factor titled “—Risks Related to Our Intellectual Property—If we are unable to obtain or maintain necessary rights to our programs through acquisitions and in-licenses, our business may be materially harmed” below for additional information regarding such risks.

We have utilized and plan to continue to utilize and depend upon independent investigators and collaborators, such as medical institutions, CROs, contract testing labs and strategic partners, to conduct and support our preclinical studies and clinical trials under agreements with us. We will rely heavily on these third parties over the course of our preclinical studies and clinical trials, and we control only certain aspects of their activities. As a result, we will have less direct control over the conduct, timing and completion of these preclinical studies and clinical trials and the management of data developed through preclinical studies and clinical trials than would be the case if we were relying entirely upon our own staff. Nevertheless, we are responsible for ensuring that each of our studies and trials is conducted in accordance with the applicable protocol, legal, regulatory, and scientific standards, and our reliance on these third parties does not relieve us of our regulatory responsibilities. Our toxicology and other preclinical studies intended to support regulatory submissions must be conducted in accordance with GLP requirements, and if we or our CROs fail to comply with GLP, the data from such studies may be deemed unreliable and we may be required to repeat them, which would delay our planned regulatory submissions. We and our third-party contractors and CROs are required to comply with GCP, which are regulations and guidelines enforced by the FDA and comparable foreign regulatory authorities for all of our product candidates in clinical development. If we or any of these third parties fail to comply with applicable GCP regulations, the clinical data generated in our clinical trials may be deemed unreliable and the FDA or comparable foreign regulatory authorities may require us to perform additional clinical trials before approving our marketing applications. We cannot assure you that upon inspection by a given regulatory authority, such regulatory authority will determine that any of our clinical trials comply with GCP. In addition, our clinical trials must be conducted with products manufactured in accordance with cGMP. Our failure to comply with these requirements may require us to repeat clinical trials, which would delay the regulatory approval process. Moreover, our business may be implicated if any of these third parties violates federal or state fraud and abuse or false claims laws and regulations or healthcare privacy and security laws, and foreign equivalents.

Any third parties conducting our clinical trials will not be our employees and, except for remedies available to us under our agreements with such third parties, we cannot control whether they devote sufficient time and resources to our programs. These third parties may encounter challenges hiring and retaining sufficient qualified personnel or they may be involved in mergers, acquisitions or similar transactions and may have relationships with other commercial entities, including our competitors, for whom they may also be conducting clinical trials or other product development activities, which could negatively affect their performance on our behalf and the timing thereof and could lead to products that compete directly or indirectly with our current or future product candidates. If these third parties do not successfully carry out their contractual duties or obligations or meet expected deadlines, if they need to be replaced or if the quality or accuracy of the clinical data they obtain is compromised due to the failure to adhere to our clinical protocols or regulatory requirements or for other reasons, our clinical trials may be extended, delayed or terminated and we may not be able to complete development of, obtain regulatory approval of or successfully commercialize our product candidates.

In addition, we rely on foreign CROs and CMOs, including WuXi Biologics (Hong Kong) Limited (“WuXi Biologics (Hong Kong)”), for formulation and manufacturing of our Phase 1 clinical trial materials, and will likely continue to rely on foreign CROs and CMOs in the future. Foreign CMOs may be the target of U.S. legislation, trade restrictions and other foreign regulatory requirements which could increase the cost or reduce the supply of material available to us, delay the procurement or supply of such material, restrict or even prohibit our ability to work with such CMOs, or have an adverse effect on our ability to secure significant commitments from governments to purchase potential therapies.

The biopharmaceutical industry in China is strictly regulated by the Chinese government. Changes to Chinese regulations or government policies affecting biopharmaceutical companies are unpredictable and may have a material adverse effect on our collaborators in China which could have an adverse effect on our business, financial condition, results of operations, and prospects. In addition, the United States government has imposed significant tariffs on imports from China and other countries and may impose more restrictions on goods, including biologically derived substances, manufactured in or imported from China or other countries or impose other restrictions on companies’ ability to work with Chinese or other foreign counterparties. Evolving changes in China’s public health, economic, political, and social conditions and the uncertainty around China’s relationship with other governments, such as the United States and the UK, could also negatively impact our ability to manufacture our product candidates for our planned clinical trials or have an adverse effect on our ability to secure government funding, which could adversely affect our financial condition and cause us to delay our clinical development programs. Furthermore, if one or more of our collaborators or vendors in China is deemed to be a biotechnology company of concern under the BIOSECURE Act, our operations and financial condition may be negatively impacted as a result of any delays or increased costs arising from the trade restrictions and other foreign regulatory requirements affecting such collaborators. In addition, while we have established relationships with CROs and CMOs outside of China, moving to those suppliers in the event of a geopolitical instability affecting our collaborators in China could introduce delays into the development program.

We rely on the use of third-party CMOs to manufacture our product candidates, and we expect to continue to rely on third-party CMOs to produce our products, if approved. Our business could be adversely affected if we are unable to use third-party manufacturing sites or if the third-party manufacturers encounter difficulties in production.

We do not currently own any facility that may be used as our clinical-scale manufacturing and processing facility and must rely on CMOs to manufacture our product candidates. We have not yet caused our product candidates to be manufactured on a commercial scale and may not be able to do so for any of our product candidates, if approved. We currently have a single source for our supply of our product candidates. If there should be any disruption in such supply arrangement, including any adverse events affecting our sole supplier, or if we experience delays or difficulties in transferring, or are unable to successfully transfer, our manufacturing processes, it could have a negative effect on the clinical development of our product candidates and other operations while we work to identify and qualify an alternate supply source. We have limited control over the manufacturing process of, and may be dependent on, our contract manufacturing partners for compliance with cGMP requirements and any other regulatory requirements of the FDA or comparable foreign regulatory authorities for the manufacture of our product candidates. Beyond periodic audits, we have limited control over the ability of our CMOs to maintain adequate quality control, quality assurance, and qualified personnel. If the FDA or another applicable regulatory authority does not approve these facilities for the manufacture of our product candidates or withdraws any approval in the future, we may need to find alternative manufacturing facilities, which would require the incurrence of significant additional costs and delays and materially adversely affect our ability to develop, obtain regulatory approval for or market our product candidates, if approved. We, or our future contract manufacturers, any future collaborators and their contract manufacturers could be subject to periodic unannounced inspections by the FDA, competent authorities of member states of the EU (“EU Member States”) or other comparable foreign regulatory authorities, to monitor and ensure compliance with cGMP. Despite our efforts to audit and verify regulatory compliance, one or more of our third-party manufacturing vendors may be found on regulatory inspection by the FDA, competent authorities of EU Member States or other comparable foreign regulatory authorities to be noncompliant with cGMP regulations. Our failure, or the failure of our CMOs, to comply with applicable regulations could result in sanctions being imposed on us, including fines, injunctions, civil penalties, delays, suspension, variation or withdrawal of approvals, license revocation, seizures or recalls of product candidates or drugs, operating restrictions and criminal prosecutions, any of which could significantly and adversely affect supplies of our product candidates or products, if approved, and harm our business and results of operations.

Moreover, our CMOs may experience manufacturing difficulties due to resource constraints, supply chain issues, intellectual property disputes or as a result of labor disputes or unstable political environments. If any CMOs on which we will rely fail to manufacture quantities of our product candidates at quality levels necessary to meet regulatory requirements and at a scale sufficient to meet anticipated demand at a commercially reasonable cost, our business, financial condition, and prospects could be materially and adversely affected. In addition, our CMOs are responsible for transporting temperature-controlled materials that can be inadvertently degraded during transport due to several factors, rendering certain batches unsuitable for trial use for failure to meet, among others, our integrity and purity specifications. We and any of our CMOs may also face product seizure or detention or refusal to permit the import or export of products. Our business could be materially adversely affected by business disruptions to our third-party providers that could materially adversely affect our anticipated timelines, potential future revenue and financial condition and increase our costs and expenses. Each of these risks could delay or prevent the completion of our preclinical studies and clinical trials or the approval of any of our product candidates by the FDA or comparable foreign regulatory authorities, result in higher costs or adversely impact commercialization of our product candidates.

Risks Related to Our Business and Operations

We expect to experience significant growth in the number of our employees and the scope of our operations, particularly in the areas of preclinical and clinical drug development, technical operations, clinical operations, and regulatory affairs. To manage our anticipated future growth, we must continue to implement and improve our managerial, operational, financial, and personnel systems, expand our facilities, and continue to recruit and train additional qualified personnel. Due to our limited financial resources and the limited experience of our management team working together in managing a company with such anticipated growth, we may not be able to effectively manage the expansion of our operations or recruit and train additional qualified personnel.

Our future growth may depend, in part, on our ability to develop and commercialize our product candidates, if approved, in foreign markets for which we may rely on collaboration with third parties. Recent and ongoing changes in the United States trade policy with foreign countries, including the continued uncertainty surrounding U.S. tariffs and potential retaliatory measures by foreign governments, may disrupt the global supply chain for biopharmaceutical products. For example, on April 2, 2026, President Trump issued a proclamation under Section 232 of the Trade Expansion Act of 1962 imposing tariffs of up to 100% on imports of certain patented pharmaceuticals and biologics and associated active pharmaceutical ingredients and key starting materials, which took effect on July 31, 2026 for certain large manufacturers and on September 29, 2026 for all other importers, subject to reduced rates for products of certain countries and for companies with approved U.S. onshoring plans, and to certain exemptions. It is not yet clear how these tariffs will apply to the importation of active pharmaceutical ingredients and possibly bulk drug products that are intended for use in clinical trials and not for commercial sale, which could increase the costs of materials for our clinical trials. Any such tariffs, as applied to us or our suppliers, may result in increased costs for raw materials and contract manufacturing services, reduced ability to source critical CMOs, and a delay in our development timelines.

We are not permitted to market or promote any of our product candidates before we receive regulatory approval from the applicable foreign regulatory authority, and we may never receive such regulatory approval for any of our product candidates. To obtain separate regulatory approval in many other countries, we must comply with numerous and varying regulatory requirements of such countries regarding safety and efficacy and governing, among other things, clinical trials and commercial sales, pricing, and distribution of our product candidates, if approved, and we cannot predict success in these jurisdictions. If we fail to comply with the regulatory requirements in international markets and receive applicable regulatory approvals, our target market will be reduced and our ability to realize the full market potential of our product candidates will be harmed and our business will be adversely affected. Moreover, even if we obtain approval of our product candidates and ultimately commercialize our product candidates in foreign markets, we would be subject to the risks and uncertainties, including the burden of complying with complex and changing foreign regulatory, tax, accounting and legal requirements and reduced protection of intellectual property rights in some foreign countries.

Some actors now engage and are expected to continue to engage in cyber-attacks, including without limitation nation-state actors for geopolitical reasons and in conjunction with military conflicts and defense activities. During times of war and other major conflicts, we, and the third parties upon which we rely, may be vulnerable to a heightened risk of these attacks, including retaliatory cyber-attacks, that could materially disrupt our systems and operations. In particular, severe ransomware attacks are becoming increasingly prevalent and can lead to significant interruptions in our operations, loss of sensitive data and income, reputational harm, and diversion of funds.

If we (or a third party upon whom we rely) experience a security incident or are perceived to have experienced a security incident, we may experience adverse consequences, such as government enforcement actions (for example, investigations, fines, penalties, audits, and inspections); additional reporting requirements and/or oversight; restrictions on Processing Sensitive Information (including personal data); litigation (including class claims); indemnification obligations; negative publicity; reputational harm; monetary fund diversions; interruptions in our operations (including availability of data); financial loss; and other similar harms. Security incidents and attendant consequences may cause stakeholders (including investors, collaborators, clinical trial sites and clinical trial participants) to lose confidence in us, delay or disrupt our research and development programs, and negatively impact our ability to grow and operate our business.

We, and third parties we work with, are or may become subject to numerous domestic and foreign laws, regulations, and standards relating to privacy, data protection, and data security, the scope of which is changing, subject to differing applications and interpretations, and may be inconsistent among countries, or conflict with other rules. In addition, we are and may become subject to the terms of contractual obligations related to privacy, data protection, and data security. Our obligations may also change or expand as our business grows. The actual or perceived failure by us or third parties related to us to comply with such laws, regulations and obligations could increase our compliance and operational costs, expose us to regulatory scrutiny, actions, fines and penalties, result in reputational harm, lead to a loss of customers, result in litigation and liability, and otherwise cause a material adverse effect on our business, financial condition, and results of operations.

We are subject to numerous environmental, health and safety laws and regulations, including those governing laboratory procedures and the handling, use, storage, treatment and disposal of hazardous materials and wastes. Our operations may involve the use of hazardous and flammable materials, including chemicals and biological and radioactive materials. In addition, we may incur substantial costs in order to comply with current or future environmental, health and safety laws and regulations. These current or future laws and regulations may impair our research, development, or commercialization efforts. Failure to comply with these laws and regulations also may result in substantial fines, penalties, or other sanctions.

For example, the United States enacted the Inflation Reduction Act of 2022, which implements, among other changes, a 1% excise tax on certain stock buybacks. In addition, beginning in 2022, the Tax Cuts and Jobs Act (the “TCJA”) eliminated the previously available option to deduct research and development expenditures and requires taxpayers to amortize them generally over five years for research activities conducted in the United States and over fifteen years for research activities conducted outside the United States. On July 4, 2025, the U.S. Congress enacted the One Big Beautiful Bill Act, which includes a provision restoring the immediate deductibility of domestic research and development expenditures, for taxable years beginning after December 31, 2024, but which continues to require that research and development expenditures attributable to research conducted outside the United States be capitalized and amortized over fifteen years. Because we conduct, and expect to continue to conduct, a portion of our research and development activities outside the United States, including our planned Phase 1 clinical trial of KRSA-028 in Australia or New Zealand and the manufacture of clinical trial materials by CMOs located outside the United States, a portion of our research and development expenditures may continue to be subject to capitalization and amortization. The impact of this law on our tax position will depend on how the provision is implemented and interpreted by the IRS and other regulatory authorities, which to date have issued procedural guidance but have not issued proposed or final regulations interpreting the provision. In addition, we have no assurance as to whether, when and how this provision may be subject to further amendment or repeal. Such changes, among others, may adversely affect our effective tax rate, results of operations, and financial condition.

Risks Related to Our Intellectual Property

Our intellectual property portfolio is at an early stage. Therefore, our ability to obtain and protect our patent rights, and protect other proprietary rights, is uncertain, exposing us to the possible loss of competitive advantage.

We will rely upon a combination of patents, trademarks, trade secret protection, copyrights and confidentiality agreements, licenses, and our agreements with Paragon and Paragon Laboratories to protect the intellectual property related to our programs and technologies and to prevent third parties from competing unfairly with us. Our success depends in large part on our ability to obtain and maintain patent protection for our product candidates and their uses, as well as our ability to operate without infringing on or violating the proprietary rights of others. If we are unable to obtain patent protection with respect to KRSA-028, or any future product candidates, our business, financial condition, results of operations and prospects could be materially harmed.

Our intellectual property portfolio is at an early stage. We do not currently own any issued patents or pending patent applications. With respect to Research Program 002 (including KRSA-028) and Research Program 001, Paragon has filed provisional patent applications in the United States directed to (i) antibodies targeting Aβ and (ii) antibodies targeting both Aβ and TfR1, including applications covering composition of matter, pharmaceutical formulations, and methods of using such antibodies, which we have exclusively licensed from Paragon pursuant to the Paragon License Agreement. With respect to the THETA technology, Paragon has filed provisional patent applications in the United States directed to antibodies targeting TfR1, including applications covering composition of matter, pharmaceutical formulations, and methods for using such antibodies or compounds, such as bispecific antibodies, comprising such antibodies, which we have non-exclusively licensed from Paragon pursuant to the Paragon License Agreement. Paragon, or us, with respect to licensed project antibody transport vehicle patents for which we have the first right, but not the obligation, to prepare, file, prosecute and maintain patent applications, intend to file one or more non-provisional patent applications claiming priority to these provisional patent applications. However, we cannot provide assurances that such non-provisional patent application(s) will be filed, nor whether such non-provisional patent application(s), if filed, will issue, the breadth of any resulting issued patent(s), or whether any issued patent(s) will be found to be invalid, unenforceable, or will be challenged by third parties.

Any issued patents may not afford sufficient protection of our product candidates or their intended uses against competitors, nor can there be any assurance that the patents issued will not be infringed, designed around, or invalidated by third parties, or effectively prevent others from commercializing competitive technologies, products, or product candidates. Even if these patents are granted, they may be difficult to enforce. Further, any issued patents that we may license or own covering our product candidates could be narrowed or found invalid or unenforceable if challenged in court or before administrative bodies in the United States or abroad, including the U.S. Patent and Trademark Office (the “USPTO”). If we do not obtain patent coverage for the work we are conducting, or if we obtain such rights but they are invalidated or rendered unenforceable, we may be unable to exclude competitors from pursuing and marketing the same or similar product candidates. Other risks we face if we are not able to obtain and maintain patent coverage for our product candidates are the reduction in valuation of our product candidates, and ultimately of us as a company, by potential investors, and our inability to assert claims for infringement against third parties or counterclaim against such third parties or negotiate more advantageous settlement parameters. Further, if we encounter delays in our clinical trials or delays in obtaining regulatory approval, the period of time during which we could market our product candidates under patent protection would be reduced. Thus, the patents that we may own or license may not afford us any meaningful exclusivity period or competitive advantage.

Additionally, we may not be able to obtain or protect our intellectual property rights throughout the world and the legal systems in certain countries may not favor enforcement or protection of at least certain patents, trade secrets, or other intellectual property. Filing, prosecuting, maintaining, and defending patents on product candidates and other related inventions worldwide would be expensive and our intellectual property rights in some foreign jurisdictions can be less extensive than those in the United States; the reverse may also occur. As such, we may not have patents in all countries or all major markets and may not be able to obtain patents in all jurisdictions even if we or our licensor files patent applications to obtain such rights. Our competitors may operate in countries where we do not have patent protection and may be able to freely use our technologies and discoveries in such countries, at least to the extent not forbidden by law.

We have the right to control prosecution, defense, maintenance, and enforcement of patents exclusively in-licensed under the Paragon License Agreement. However, there may be times when rights for patents and patent applications relating to our product candidates are controlled by our future licensors or collaboration partners, including with respect to patents non-exclusively in-licensed under the Paragon License Agreement. If we, Paragon or any of our future licensors (including Paragon Laboratories) or collaboration partners fail to prosecute, defend, maintain and enforce such patents and patent applications in a manner consistent with our best interests, including by payment of all applicable fees for patents covering our product candidates, we could lose our rights to the intellectual property or our exclusivity with respect to those rights, our ability to develop and commercialize those product candidates may be adversely affected and we may not be able to prevent competitors from making, using and selling competing products. In addition, even if we have the right to control prosecution of patents and patent applications we have licensed to and from third parties, including under future license agreements with Paragon or Paragon Laboratories following the point at which such control is assumed, we may still be adversely affected or prejudiced by actions or inactions of Paragon, additional licensees, or licensors and their counsel prior to the date upon which we assume control over patent prosecution. For example, Paragon is currently responsible for the prosecution, defense, maintenance, and enforcement of patents related to Research Program 003, for which we have not exercised our ADOA Option or entered into a license agreement. Pursuant to the Paragon License Agreement, we have the first right, but not the obligation, to prepare, file, prosecute and maintain certain licensed project antibody transport vehicle patents for Research Program 002, including KRSA-028, and Research Program 001, but Paragon retains control over patent prosecution for certain non-exclusively licensed transit antibody technology, including the THETA technology, and other Paragon-controlled patents.

Because the intellectual property landscape in the biotechnology industry is rapidly evolving and interdisciplinary, it is difficult to conclusively assess our freedom to operate and guarantee that we can operate without infringing on or violating third party rights. If certain of our product candidates are ultimately granted regulatory approval, patent rights held by third parties could be alleged to render one or more of our product candidates infringing. If a third party successfully brings a claim against us, and our rights are not held invalid or unenforceable, we may be required to pay substantial damages, be forced to abandon any affected product candidate and/or seek a license from the patent holder. In addition, any intellectual property claims (e.g., patent infringement or trade secret misappropriation) brought against us, whether or not successful, may cause us to incur significant legal expenses and divert the attention of our management and key personnel from other business concerns. We cannot be certain that future patents, if filed and issued, owned, or licensed by us will not be challenged by others, whether in the course of litigation or in agencies like the USPTO. Some of our competitors may be able to sustain the costs of complex intellectual property litigation more effectively than we can because they have substantially greater resources. In addition, any uncertainties resulting from the initiation and continuation of any litigation could have a material adverse effect on our ability to raise funds.

In addition, if our product candidates are found to infringe the intellectual property rights of third parties, these third parties may assert infringement claims against our future licensees or customers and other parties with whom we have business relationships and we may be required to indemnify those parties for any damages they suffer as a result of these claims, which may require us to initiate or defend protracted and costly litigation on behalf of licensees or other parties regardless of the merits of such claims. If any of these claims succeed, we may be forced to pay damages on behalf of those parties or may be required to obtain licenses for the products we use.

Our success will depend in part on our and our current and future licensors’ ability to obtain, maintain and enforce patent protection for our licensed intellectual property.

Our success will depend in part on our, Paragon’s, and our future licensors’ (including Paragon Laboratories’) ability to obtain, maintain and enforce patent protection for our licensed intellectual property. Currently, pursuant to the Paragon License Agreement, we have the first right, but not the obligation, to prosecute and maintain certain licensed project antibody transport vehicle patents for Research Program 002 (including KRSA-028) and Research Program 001, and Paragon controls the prosecution, maintenance, enforcement, and defense of certain other licensed patents, including licensed transit antibody patents and other Paragon-controlled patents. We, Paragon and our future licensors may not successfully prosecute the patent applications that cover our product candidates. Even if patents are issued in respect of these patent applications, we, Paragon, and our future licensors (including Paragon Laboratories) may fail to maintain these patents, may determine not to pursue litigation against other companies that are infringing these patents, or may pursue such litigation less aggressively than we would. Without protection for any in-licensed intellectual property, other companies might be able to offer substantially identical products for sale, which could adversely affect our competitive business position and harm our business prospects.

As is common in the biotechnology industry, in addition to our employees, we engage the services of consultants to assist us in the development of our product candidates. Many of these consultants, and many of our employees, were previously employed at, or may have previously provided or may be currently providing consulting services to, other biotechnology or pharmaceutical companies including our competitors or potential competitors. We could in the future be subject to claims that we or our employees have inadvertently or otherwise used or disclosed alleged trade secrets or other confidential information of former employers or competitors. Although we try to ensure that our employees and consultants do not use the intellectual property, proprietary information, know-how or trade secrets of others in their work for us, we may become subject to claims that we caused an employee to breach the terms of his or her non-competition or non-solicitation agreement, or that we or these individuals have, inadvertently or otherwise, used or disclosed the alleged trade secrets or other proprietary information of a former employer or competitor.

In addition, because some patent applications in the United States may be maintained in secrecy until the patents are issued, patent applications in the United States and many foreign jurisdictions are typically not published until 18 months after filing, and publications in the scientific literature often lag behind actual discoveries, we cannot be certain that others have not filed patent applications for technology covered by our future issued patents or our pending applications, if filed, or that we are the first to invent the technology. Our competitors may have filed, and may in the future file, patent applications covering our products or technology similar to ours. Any such patent application may have priority over our future patent applications or patents, if filed and issued, which could require us to obtain rights to issued patents covering such technologies.

We may be subject to claims that former employees, collaborators or other third parties have an interest in our future patents, if filed and issued, or other intellectual property as an inventor or co-inventor. The failure to name the proper inventors on a patent application can result in the patents issuing thereon being invalid or unenforceable. Inventorship disputes may arise from conflicting views regarding the contributions of different individuals named as inventors, the effects of foreign laws where foreign nationals are involved in the development of the subject matter of the patent, conflicting obligations of third parties involved in developing our programs or as a result of questions regarding co-ownership of potential joint inventions. Litigation may be necessary to resolve these and other claims challenging inventorship and/or ownership. Alternatively, or additionally, we may enter into agreements to clarify the scope of our rights in such intellectual property. If we fail in defending any such claims, in addition to paying monetary damages, we may lose valuable intellectual property rights, such as exclusive ownership of, or right to use, valuable intellectual property. Such an outcome could have a material adverse effect on our business. Even if we are successful in defending against such claims, litigation could result in substantial costs and be a distraction to management and other employees.

Our future licensors may retain certain rights under the relevant agreements with us, including the right to use or license the licensed technology outside of the scope of our license, use the underlying technology for noncommercial academic and research use, to publish general scientific findings from research related to the technology, and to make customary scientific and scholarly disclosures of information relating to the technology. It is difficult to monitor whether our licensors limit their use of the technology to these uses, and we could incur substantial expenses to enforce our rights to our licensed technology in the event of misuse. In addition, while there are certain restrictions on Paragon’s ability to develop products that could be competitive with ours as more fully described in Note 9 to our condensed consolidated financial statements included in Part I, Item 1 of this Quarterly Report, these restrictions may not prevent the possible future license or development by Paragon of certain technology that could lead to product candidates competitive with ours. This could have a material adverse effect on our competitive position, business, financial condition, results of operations, and prospects.

Risks Related to Government Regulation

The process of obtaining regulatory approvals, both in the United States and abroad, is unpredictable, expensive, and typically takes many years following commencement of clinical trials, if approval is obtained at all, and can vary substantially based upon a variety of factors, including the type, complexity and novelty of the product candidates involved. We cannot commercialize product candidates in the United States without first obtaining regulatory approval from the FDA. Similarly, we cannot commercialize product candidates outside of the United States without obtaining regulatory approval from comparable foreign regulatory authorities. Before obtaining regulatory approvals for the commercial sale of our product candidates, including KRSA-028, we must demonstrate through lengthy, complex, and expensive preclinical studies and clinical trials that our product candidates are both safe and effective for each targeted indication. Securing regulatory approval also requires the submission of information about the drug manufacturing process to, and inspection of manufacturing facilities by, the relevant regulatory authority. Further, our product candidates may not be effective, may be only moderately effective, may prove to have undesirable or unintended side effects, toxicities, or other characteristics, or may fail to improve on the applicable standard of care, any of which may preclude us from obtaining regulatory approval. The FDA and comparable foreign regulatory authorities have discretion in the approval process and may refuse to accept any application or may decide that our data is insufficient for approval and require additional preclinical, clinical, or other data. Our product candidates could be delayed in receiving, or fail to receive, regulatory approval for many reasons, including: the FDA or comparable foreign regulatory authorities may disagree with the design or implementation of our clinical trials; we may be unable to demonstrate to the satisfaction of the FDA or comparable foreign regulatory authorities that a product candidate is safe and effective for our proposed indication; the results of clinical trials may not meet the level of statistical significance required by the FDA or comparable foreign regulatory authorities for approval; serious and unexpected drug-related side effects may be experienced by participants in our clinical trials or by individuals using drugs similar to our product candidates; we may be unable to demonstrate that a product candidate’s clinical and other benefits outweigh our safety risks; the FDA or comparable foreign regulatory authorities may disagree with our interpretation of data from preclinical studies or clinical trials; the data collected from clinical trials of our product candidates may not be acceptable or sufficient to support the submission of a biologics license application (“BLA”) or other submission or to obtain regulatory approval in the United States or elsewhere, and we may be required to conduct additional clinical trials; the FDA or the applicable foreign regulatory authority may disagree regarding the formulation, labeling and/or the specifications of our product candidates; the FDA or comparable foreign regulatory authorities may fail to approve the manufacturing processes or facilities of third-party manufacturers with which we contract for clinical and commercial supplies; and the approval policies or regulations of the FDA or comparable foreign regulatory authorities may significantly change in a manner rendering our clinical data insufficient for approval.

Of the large number of drugs in development, only a small percentage successfully complete the FDA or applicable foreign regulatory approval processes and are commercialized. The lengthy approval process as well as the unpredictability of future clinical trial results may result in us failing to obtain regulatory approval to market our product candidates, which would significantly harm our business, results of operations and prospects.

We may not be able to meet requirements for the chemistry, manufacturing, and control of our product candidates, and the manufacture of biologics is complex and subject to significant risks.

In order to receive approval of our products by the FDA and comparable foreign regulatory authorities, we must show that we and our contract manufacturing partners are able to characterize, control and manufacture our drug products safely and in accordance with regulatory requirements. This includes manufacturing the active ingredient, developing an acceptable formulation, manufacturing the drug product, performing tests to adequately characterize the formulated product, documenting a repeatable manufacturing process, and demonstrating that our drug products meet stability requirements. Biologics such as KRSA-028 are manufactured using living cell lines and are inherently more difficult to manufacture than small molecule drugs. Slight changes in manufacturing conditions or raw materials can affect product quality attributes, including glycosylation, aggregation, potency, purity, and stability, and can result in batch failures, contamination, or lot-to-lot variability. As we scale up manufacturing or change our manufacturing processes, sites, or formulations, including to support a low-volume subcutaneous formulation, we may be required to demonstrate comparability between the material used in our preclinical studies, clinical trials, and any commercial supply, and if we are unable to do so, we may need to conduct additional preclinical studies or clinical trials. We also have limited stability data for our product candidates, and if they do not demonstrate adequate stability, we may be unable to supply our clinical trials or obtain approval with a commercially viable shelf life or storage conditions. Meeting these chemistry, manufacturing and control requirements is a complex task that requires specialized expertise. If we are not able to meet the chemistry, manufacturing, and control requirements, we may not be successful in getting our products approved.

We believe that any of our product candidates approved as biologics under a BLA should qualify for the 12-year period of exclusivity. However, there is a risk that this exclusivity could be shortened due to congressional action or otherwise, or that the FDA will not consider our product candidates to be reference products for competing products, potentially creating the opportunity for competition sooner than anticipated. Other aspects of the BPCIA, some of which may impact the BPCIA exclusivity provisions, have also been the subject of recent litigation. Moreover, the extent to which a biosimilar, once approved, will be substituted for any reference products in a way that is similar to traditional generic substitution for non-biological products is not yet clear, and will depend on a number of marketplace and regulatory factors that are still developing.

We may face difficulties from healthcare and regulatory legislative reform measures, or from government or other third-party payers’ failure to provide adequate coverage and reimbursement for our products.

Existing regulatory policies may change, and additional government regulations may be enacted that could prevent, limit, or delay regulatory approval of our product candidates, or alter coverage, pricing, and reimbursement of our product candidates even if approved. Adequate coverage and reimbursement from governmental healthcare programs, such as Medicare and Medicaid, and commercial payors is critical to patients being able to access new products. We cannot predict the likelihood, nature or extent of government regulation that may arise from future legislation or administrative action, either in the United States or abroad. For example, the Trump administration has discussed several changes to the reach and oversight of the FDA, which could affect its relationship with the pharmaceutical industry, transparency in decision making and ultimately the cost and availability of prescription drugs. If we are slow or unable to adapt to changes in existing requirements or the adoption of new requirements or policies, or if we are not able to maintain regulatory compliance, we may lose any regulatory approval that we may have obtained and we may not achieve or sustain profitability.

In the United States and some foreign jurisdictions, there have been, and continue to be, a number of legislative and regulatory changes and proposed changes regarding the healthcare system that could prevent or delay marketing approval of our product candidates, restrict or regulate post-approval activities, limit coverage, reimbursement or pricing of our products, and affect our ability to profitably sell any product candidates for which we obtain marketing approval. In the United States, the pharmaceutical industry has been a particular focus of these efforts. For example, the ACA, among other things, subjected biologic products to potential competition by lower-cost biosimilars, and increased the minimum rebates owed by manufacturers under the Medicaid Drug Rebate Program and extended that program to Medicaid managed care utilization.

In addition, the Inflation Reduction Act of 2022 (the “IRA”) includes provisions intended to reduce prescription drug prices in Medicare Parts B and D, including manufacturer inflation rebates, a redesign of the Medicare Part D benefit that shifts additional costs to manufacturers and lowers patients’ overall out-of-pocket costs, and a drug price negotiation program under which the Secretary of the U.S. Department of Health and Human Services may set prices for certain high-expenditure Medicare Part B and Part D drugs and biologics without generic or biosimilar competition. Negotiated prices for the first ten selected Part D drugs took effect on January 1, 2026, and additional Part D and Part B drugs have been selected for negotiation for subsequent years. Biologics generally become eligible for selection 11 years after licensure, with negotiated prices taking effect two years later. Because Alzheimer’s disease primarily affects older individuals, we expect that a substantial majority of patients who may be treated with KRSA-028, if approved, will be Medicare beneficiaries, and the IRA could therefore reduce the Medicare revenues we are able to generate from any approved product and the period during which we can earn revenues at prices not subject to negotiation. The IRA’s provisions have been and may continue to be subject to legal challenge, and their effect on our business and the pharmaceutical industry remains uncertain.

The current U.S. administration has also sought to lower prescription drug prices through executive action. For example, in May 2025, President Trump issued an executive order directing HHS to establish “most-favored-nation” pricing targets intended to align U.S. prescription drug prices with those paid in other developed countries, and the administration has since entered into pricing agreements with certain pharmaceutical manufacturers. In November 2025, the Centers for Medicare & Medicaid Services (“CMS”) announced a voluntary Medicaid “most-favored-nation” model, and in September 2026, CMS finalized the Global Benchmark for Efficient Drug Pricing (GLOBE) Model, a mandatory Medicare Part B model that uses international reference prices in calculating manufacturer rebates and is scheduled to begin in January 2027. CMS has also proposed a similar model for Medicare Part D, although it remains uncertain whether that model (GUARD) will be finalized and, if so, whether it will follow GLOBE’s approach. As a result, price controls and pricing pressure in foreign countries may adversely affect the prices we are able to obtain in the United States for any product candidates we successfully commercialize. Any reduction in reimbursement from Medicare and other government programs pursuant to such most favored nation or other reforms may result in a similar reduction in payments from private payers. In addition, the One Big Beautiful Bill Act enacted in July 2025 includes changes to Medicaid eligibility and funding that are expected to increase the number of uninsured individuals, and individual states have increasingly enacted laws and regulations designed to control pharmaceutical pricing, including through price transparency requirements, prescription drug affordability boards and upper payment limits. We expect that these and other healthcare reform measures that may be adopted in the future may result in more rigorous coverage criteria and in additional downward pressure on the price that we may receive for any approved product, which could harm our business, financial condition and prospects.

Coverage and reimbursement for Alzheimer’s disease therapies presents additional challenges. Under a national coverage determination finalized in April 2022, Medicare covers FDA-approved monoclonal antibodies directed against amyloid for the treatment of Alzheimer’s disease only under “coverage with evidence development,” which, for antibodies that receive traditional approval, conditions coverage on the treating clinician’s participation in a CMS-approved registry or study, and, for antibodies that receive accelerated approval, limits coverage to patients enrolled in qualifying randomized controlled trials. If KRSA-028 is approved, it may be subject to these or similar coverage restrictions, which could increase the administrative burden on prescribers, limit patient access and adversely affect demand. Coverage and reimbursement for the diagnostic testing and MRI monitoring associated with anti-Aβ antibody therapy may also be limited, which could further restrict the use of KRSA-028.

Risks Related to the Proposed Redomestication

On October 15, 2026, we filed a definitive proxy statement for a special meeting of our shareholders to approve the redomestication of the Company from the Commonwealth of Massachusetts to the Cayman Islands (the “Redomestication”). There can be no assurance that the Redomestication will be approved by our shareholders or, if approved and effected, that the Redomestication will result in all or any of the benefits that we anticipate, including the benefits of or resulting from the transfer by way of continuation of the Company into the Cayman Islands or the application of Cayman Islands law to our internal affairs.

Currently, we are governed by Massachusetts law, our articles of organization and our bylaws, but upon effectiveness of the Redomestication we will be governed by Cayman Islands law and the Cayman Articles, provisions of which have anti-takeover implications.

Upon effectiveness of the Redomestication, our organizational documents will change and we and our organizational documents will be governed by Cayman Islands law rather than Massachusetts law. Provisions that will be included in the memorandum and articles of association to be adopted in connection with the Redomestication (the “Cayman Articles”) may discourage, delay, or prevent a merger, acquisition, or other change in control of us that shareholders may consider favorable, including transactions in which our ordinary shareholders might otherwise receive a premium price for their ordinary shares. These provisions could also limit the price that investors might be willing to pay in the future for our ordinary shares, thereby depressing the market price of our ordinary shares. In addition, because our board of directors will be responsible for appointing the members of our management team, these provisions may frustrate or prevent any attempts by our shareholders to replace or remove our current management by making it more difficult for shareholders to replace members of our board of directors. Among other things, these provisions will:

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allow the authorized number of our directors to be changed only by resolution of our board of directors, subject to the terms of the Cayman Series B Certificate of Designation (as defined below);

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limit the manner in which shareholders can remove directors from our board of directors;

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provide for advance notice requirements for nominations for election to our board of directors or for proposing matters that can be acted on at shareholder meetings;

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limit who may call a general meeting of shareholders;

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authorize our board of directors to issue preferred shares without shareholder approval, which could be used to institute a “poison pill” that would work to dilute the share ownership of a potential hostile acquirer, effectively preventing acquisitions that have not been approved by our board of directors; and

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require a special resolution passed by the affirmative vote of not less than two-thirds of the votes cast at a general meeting of the Company to amend provisions of the Cayman Articles.

In addition, upon effectiveness of the Redomestication, the certificate of designation relating to the Series B non-voting convertible preferred shares of the Cayman Islands company (the “Cayman Series B Certificate of Designation” and such shares, the “Cayman Series B Preferred Shares”) may delay or prevent a change in control of us. At any time while at least 30% of the originally issued Cayman Series B Preferred Shares remain issued and outstanding, we may not, without the affirmative vote of the holders of a majority of the then-outstanding Cayman Series B Preferred Shares, (i) consummate (x) any Fundamental Transaction (as defined in the Cayman Series B Certificate of Designation) or (y) any merger or consolidation of us with or into another entity or any share sale to, or other business combination in which our shareholders immediately before such transaction do not hold at least a majority of the shares in our capital immediately after such transaction, (ii) increase the size of our board of directors, (iii) adopt, amend or repeal any written delegation of authority policy, corporate authority matrix or similar document, framework or schedule unless such adoption, amendment or repeal has been approved by the unanimous vote of our board of directors, or (iv) retain or replace our registered independent public accounting firm, independent compensation consultant or corporate counsel. This provision of the Cayman Series B Certificate of Designation may make it more difficult for us to enter into any of the aforementioned transactions, even potential change of control transactions that could offer a premium over our market value to the ordinary shareholders, as it would require the separate consent of the majority of the issued and outstanding Cayman Series B Preferred Shares.

Because the Cayman Articles designate the courts of the Cayman Islands as the sole and exclusive forum for certain types of actions and proceedings that may be initiated by our shareholders, this could limit your ability to obtain a favorable judicial forum for disputes with us or our directors, officers, or other employees.

The Cayman Articles will provide that unless we consent in writing to the selection of an alternative forum, the courts of the Cayman Islands shall have exclusive jurisdiction over any claim or dispute arising out of or in connection with the Cayman Articles or otherwise related in any way to each shareholder’s shareholding in us, including but not limited to (i) any derivative action or proceeding brought on our behalf, (ii) any action asserting a claim of breach of any fiduciary or other duty owed by any of our current or former directors, officers or other employees to us or our shareholders, (iii) any action asserting a claim arising pursuant to any provision of the Companies Act (As Revised) of the Cayman Islands or the Cayman Articles, or (iv) any action asserting a claim against us concerning our internal affairs. The forum selection provision in the Cayman Articles will not apply to actions or suits brought to enforce any liability or duty created by the Securities Act of 1933, as amended (the “Securities Act”), the Exchange Act, or any claim for which the federal district courts of the United States of America are, as a matter of the laws of the United States of America, the sole and exclusive forum for determination of such a claim. The Cayman Articles will also provide that, without prejudice to any other rights or remedies that we may have, each of our shareholders acknowledges that damages alone would not be an adequate remedy for any breach of the selection of the courts of the Cayman Islands as exclusive forum and that accordingly we shall be entitled, without proof of special damages, to the remedies of injunction, specific performance or other equitable relief for any threatened or actual breach of the selection of the courts of the Cayman Islands as exclusive forum. This choice of forum provision may increase a shareholder’s cost and limit the shareholder’s ability to bring a claim in a judicial forum that it finds favorable for disputes with us or our directors, officers, or other employees, which may discourage lawsuits against us and our directors, officers, and other employees. Any person or entity purchasing or otherwise acquiring any of our shares or other securities, whether by transfer, sale, operation of law or otherwise, shall be deemed to have notice of and have irrevocably agreed and consented to these provisions. There is uncertainty as to whether a court would enforce such provisions, and the enforceability of similar choice of forum provisions in other companies’ memorandum and articles of association or other charter documents has been challenged in legal proceedings. It is possible that a court could find this type of provision to be inapplicable or unenforceable, and if a court were to find this provision in the Cayman Articles to be inapplicable or unenforceable in an action, we may incur additional costs associated with resolving the dispute in other jurisdictions, which could have an adverse effect on our business and financial performance.

The market price of our common stock is expected to be volatile, and the market price of our common stock may drop.

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additions or departures of key personnel;

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significant lawsuits, including patent or shareholder litigation;

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trading volume of our common stock;

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adverse publicity relating to anti-Aβ antibody therapies or other therapies for neurodegenerative diseases, including with respect to other products in such markets;

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period-to-period fluctuations in our financial results.

or conflict with our strategic direction or seek changes in the composition of our board of directors could have an adverse effect on our operating results, financial condition, and cash flows.

We have incurred and will continue to incur significant legal, accounting, and other expenses as a public company that Pre-Merger Korsana did not incur as a private company, including costs associated with public company reporting obligations under the Exchange Act. Our management team consists of the executive officers of Pre-Merger Korsana prior to the Merger.

These executive officers and other personnel will need to devote substantial time to gaining expertise related to public company reporting requirements and compliance with applicable laws and regulations to ensure that we comply with all of these requirements. Any changes we make to comply with these obligations may not be sufficient to allow us to satisfy our obligations as a public company on a timely basis, or at all. These reporting requirements, rules and regulations, coupled with the increase in potential litigation exposure associated with being a public company, could also make it more difficult for us to attract and retain qualified persons to serve on the board of directors or on board committees or to serve as executive officers, or to obtain certain types of insurance, including directors’ and officers’ insurance, on acceptable terms.

We are subject to the reporting requirements of the Exchange Act, which requires, among other things, that we file with the SEC annual, quarterly, and current reports with respect to our business and financial condition as well as other disclosure and corporate governance requirements. However, as a “smaller reporting company,” as such term is defined in Rule 12b-2 under the Exchange Act, in at least the near term, we may take advantage of exemptions from disclosure requirements, including not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act and reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements. Once we are no longer a smaller reporting company or otherwise no longer qualify for these exemptions, we will be required to comply with these additional legal and regulatory requirements applicable to public companies and will incur significant legal, accounting, and other expenses to do so. If we are not able to comply with the requirements in a timely manner or at all, our financial condition or the market price of our common stock may be harmed. For example, if we or our independent auditor identify deficiencies in our internal control over financial reporting that are deemed to be material weaknesses, we could face additional costs to remedy those deficiencies, the market price of our stock could decline or we could be subject to sanctions or investigations by the SEC or other regulatory authorities, which would require additional financial and management resources.

As a public company listed on The Nasdaq Stock Market LLC (“Nasdaq”), we are subject to the reporting requirements of the Exchange Act, the Sarbanes-Oxley Act and the rules and regulations of Nasdaq. The Sarbanes-Oxley Act requires, among other things, that we maintain effective disclosure controls and procedures and internal control over financial reporting. We must perform system and process evaluation and testing of our internal control over financial reporting to allow management to report on the effectiveness of our internal controls over financial reporting in our Annual Report on Form 10-K, as required by Section 404 of the Sarbanes-Oxley Act. As a private company, Pre-Merger Korsana was not required to document and test its internal controls over financial reporting nor was its management required to certify the effectiveness of its internal controls, and its auditors have not been required to opine on the effectiveness of its internal control over financial reporting. We are required to incur substantial professional fees and internal costs to expand our accounting and finance functions and expend significant management efforts. We may experience difficulty in meeting these reporting requirements in a timely manner.

We may discover weaknesses in our system of internal control over financial reporting that could result in a material misstatement of our financial statements. Our internal control over financial reporting will not prevent or detect all errors and all fraud. A control system, no matter how well designed and operated, can provide only reasonable, not absolute, assurance that the control system’s objectives will be met. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that misstatements due to error or fraud will not occur or that all control issues and instances of fraud will be detected.

Provisions in our articles of organization and bylaws and provisions under Massachusetts law could make an acquisition of us more difficult and may prevent attempts by our shareholders to replace or remove our management.

Provisions included in our articles of organization and bylaws may discourage, delay, or prevent a merger, acquisition, or other change in control of us that shareholders may consider favorable, including transactions in which our common shareholders might otherwise receive a premium price for their shares. These provisions could also limit the price that investors might be willing to pay in the future for shares of our common stock, thereby depressing the market price of our common stock. In addition, because our board of directors is responsible for appointing the members of our management team, these provisions may frustrate or prevent any attempts by our shareholders to replace or remove our current management by making it more difficult for shareholders to replace members of our board of directors. Among other things, these provisions:

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provide that directors may be removed by our shareholders only for cause, and that the Preferred Directors (as defined below) may be removed only by the holders of a majority of the outstanding shares of our Series B Preferred Stock;

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provide for advance notice requirements for nominations for election to our board of directors or for proposing matters that can be acted on at shareholder meetings;

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require that shareholder actions must be effected at a duly called shareholder meeting or by the unanimous written consent of all shareholders in lieu of such a meeting;

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limit who may call a special meeting of shareholders;

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authorize our board of directors to issue preferred stock without shareholder approval, which could be used to institute a “poison pill” that would work to dilute the stock ownership of a potential hostile acquirer, effectively preventing acquisitions that have not been approved by our board of directors; and

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require the approval of the holders of at least a majority of the votes that all of our shareholders would be entitled to cast to amend or repeal certain provisions of our articles of organization or bylaws.

In addition, the provisions of our articles of organization, as amended, relating to our Series B Preferred Stock may delay or prevent a change in control of us. At any time while at least 30% of the originally issued Series B Preferred Stock remains issued and outstanding, we may not, without the affirmative vote of the holders of a majority of the then-outstanding shares of the Series B Preferred Stock, (i) consummate (x) any Fundamental Transaction (as defined in our articles of organization, as amended) or (y) any merger or consolidation of us with or into another entity or any stock sale to, or other business combination in which our shareholders immediately before such transaction do not hold at least a majority of our capital stock immediately after such transaction, (ii) increase the size of our board of directors, (iii) adopt, amend or repeal any written delegation of authority policy, corporate authority matrix or similar document, framework or schedule unless such adoption, amendment or repeal has been approved by the unanimous vote of our board of directors, or (iv) retain or replace our registered independent public accounting firm, independent compensation consultant or corporate counsel. This provision of the Series B Certificate of Designation may make it more difficult for us to enter into any of the aforementioned transactions, even potential change of control transactions that could offer a premium over our market value to the common shareholders, as it would require the separate consent of the majority of the holders of the Series B Preferred Stock.

If the Redomestication is approved by our shareholders and effected, the rights of our shareholders will no longer be governed by our articles of organization, our bylaws and the Massachusetts Business Corporation Act (the “MBCA”), and instead will be governed by the Cayman Articles and the Companies Act (As Revised) of the Cayman Islands. See “—Risks Related to the Proposed Redomestication—Currently, we are governed by Massachusetts law, our articles of organization and our bylaws, but upon effectiveness of the Redomestication we will be governed by Cayman Islands law and the Cayman Articles, provisions of which have anti-takeover implications.”

Our articles of organization, as amended, provide that, unless we consent in writing to the selection of an alternative forum, certain designated courts will be the sole and exclusive forum for certain legal actions between us and our shareholders, which could limit our shareholders’ ability to obtain a favorable judicial forum for disputes with us or our directors, officers, employees, or shareholders.

Our articles of organization, as amended, provide that, unless we consent in writing to the selection of an alternative forum, a state or federal court located within the Commonwealth of Massachusetts shall be the sole and exclusive forum for (a) any derivative action or proceeding brought on our behalf, (b) any action asserting a claim of breach of a fiduciary duty owed by any of our directors, officers or other employees to us or our shareholders, (c) any action asserting a claim arising pursuant to any provision of the MBCA or any successor statute, or (d) any action asserting a claim governed by the internal affairs doctrine, in all cases subject to the court having personal jurisdiction over the indispensable parties named as defendants, which for purposes of this risk factor we refer to herein as the “Massachusetts Forum Provision.” The Massachusetts Forum Provision does not apply to any causes of action arising under the Securities Act and the Exchange Act. In addition, our articles of organization, as amended, provide that any person or entity purchasing or otherwise acquiring any interest in shares of our capital stock is deemed to have notice of and consented to the foregoing Massachusetts Forum Provision.

The Massachusetts Forum Provision may impose additional costs on our shareholders in pursuing any such claims, particularly if the shareholders do not reside in or near the Commonwealth of Massachusetts or were permitted to select another jurisdiction. Additionally, the forum selection clauses in our articles of organization, as amended, may limit our shareholders’ ability to bring a claim in a judicial forum that they find favorable for disputes with us or our directors, officers, employees, or shareholders, which may discourage such lawsuits against us and our directors, officers, employees, and shareholders even though an action, if successful, might benefit our shareholders. Alternatively, if a court were to find the Massachusetts Forum Provision contained in our articles of organization, as amended, to be inapplicable or unenforceable in an action, we may incur additional costs associated with resolving such action in other jurisdictions, which could materially and adversely affect our business, financial condition, and results of operations.

If the Redomestication is approved by our shareholders and effected, the Massachusetts Forum Provision will no longer apply. See “—Risks Related to the Proposed Redomestication—Because the Cayman Articles designate the courts of the Cayman Islands as the sole and exclusive forum for certain types of actions and proceedings that may be initiated by our shareholders, this could limit your ability to obtain a favorable judicial forum for disputes with us or our directors, officers, or other employees.”

An active trading market for our common stock may not develop and our shareholders may not be able to resell their shares of common stock for a profit, if at all.

Prior to the Merger, there had been no public market for shares of Pre-Merger Korsana capital stock, and our common stock has only traded on a post-Merger basis since September 9, 2026. An active trading market for our shares of common stock may never develop or be sustained. If an active market for our common stock does not develop or is not sustained, it may be difficult for our shareholders to sell their shares at an attractive price or at all.

If existing securityholders sell, or indicate an intention to sell, substantial amounts of our common stock in the public market after legal restrictions on resale in connection with our recent merger lapse, the trading price of our common stock could decline. In addition, shares of common stock that are subject to outstanding options will become eligible for sale in the public market to the extent permitted by the provisions of various vesting agreements and Rules 144 and 701 under the Securities Act. If these shares are sold, the trading price of our common stock could decline.

Because Cyclerion was a shell company prior to the Merger, we are subject to more stringent reporting requirements, offering limitations and resale restrictions.

Cyclerion was a shell company immediately prior to the Merger. As such, we are subject to the requirements applicable to shell company business combinations. The requirements applicable to shell company business combinations are as follows:

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we were required to file a Form 8-K to report the Form 10 type information after closing with the SEC reflecting our status as an entity that is not a shell company, which we filed on September 11, 2026;

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we will not be eligible to use a Form S-3 until 12 full calendar months after closing;

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we will be an “ineligible issuer” for three years following the closing, which will prevent us from (i) incorporating by reference in our Form S-1 filings, (ii) using a free writing prospectus, or (iii) taking advantage of well-known seasoned issuer status despite our public float;

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investors who (i) were affiliates of Pre-Merger Korsana at the time the Merger was submitted for the vote or consent of Pre-Merger Korsana stockholders, (ii) received our securities in the Merger (i.e., Rule 145(c) securities), and (iii) publicly offer or sell such securities, will be deemed to be engaged in a distribution of such securities, and therefore to be underwriters with respect to resales of those securities, and accordingly such securities may not be included in the Form S-1 resale registration statement anticipated to be filed following the closing of the Merger unless such securities are sold only in a fixed price offering in which such investors are named as underwriters in the prospectus; and

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Rule 144(i)(2) will limit the ability to publicly resell Rule 145(c) securities per Rule 145(d), as well as any other “restricted” or “control” securities of the Company per Rule 144 (i.e., holders of restricted securities and any of our affiliates are also affected) until one year after the Form 10 information was filed with the SEC.

The foregoing SEC requirements increase our time and cost of raising capital, offering stock under equity plans, and complying with securities laws. Further, such requirements add burdensome restrictions on the resale of our shares by affiliates of Pre-Merger Korsana and any holders of “restricted” or “control” securities.

Holders of our Series B Preferred Stock have the ability to significantly influence our management and affairs and matters submitted to our shareholders for approval.

As of September 30, 2026, holders of our Series B Preferred Stock, in the aggregate, beneficially owned approximately 34% of our outstanding shares of common stock (on a fully-diluted basis). Although our Series B Preferred Stock generally does not have voting rights, holders of our Series B Preferred Stock are entitled to elect the Preferred Directors described below, vote together with the holders of our common stock on an as-converted basis in the election of our other directors, have consent rights over certain significant corporate actions, and, together with their affiliates, also hold shares of our common stock. As a result, if these shareholders were to choose to act together, they would be able to significantly influence matters submitted to our shareholders for approval, as well as our management and affairs. For example, these shareholders, if they choose to act together, would significantly influence the election of directors and approval of any merger, consolidation, or sale of all or substantially all of our assets. This concentration of voting power could delay or prevent an acquisition of us on terms that other shareholders may desire.

Preferred Directors elected by the holders of our Series B Preferred Stock have the ability to control or significantly influence all matters submitted to our board of directors for approval.

Pursuant to our articles of organization, as amended, at all times when at least 30% of the originally issued Series B Preferred Stock remains issued and outstanding: (i) the holders of Series B Preferred Stock, exclusively and voting together as a separate class on an as-converted to common stock basis, are entitled to elect four directors (the “Preferred Directors”); and (ii) the holders of our common stock and of any other class or series of voting stock (including the Series B Preferred Stock), exclusively and voting together as a single class on an as-converted to common stock basis, are entitled to elect the balance of the total number of our directors (the “At-Large Directors”). Each Preferred Director is entitled to three votes on each matter presented to our board of directors. The Preferred Directors may be removed, with or without cause, only by the affirmative vote of the holders of a majority of the outstanding shares of Series B Preferred Stock.

Dr. Gottesdiener, Mr. Kiselak, Ms. Pernice, and Mr. Shah serve as the four Preferred Directors. These four Preferred Directors represent approximately 86% of the total votes of our board of directors. As a result, these four Preferred Directors are able to control or significantly influence all matters submitted to our board of directors for approval, including business plans and policies and the appointment and removal of our officers. The holders of Series B Preferred Stock thereby have influence with respect to the composition of our board of directors and, to the extent they influence the actions of the Preferred Directors, if at all, actions of our board of directors. Entities affiliated with Fairmount and Venrock are the holders of 100% of our Series B Preferred Stock.

We expect that the decision to enter into or amend any agreement with Paragon will be subject to the approval of our board of directors. As noted above, our board of directors includes four Preferred Directors that are affiliated with and elected by Fairmount and Venrock, two of whom are affiliated with Fairmount, in addition to Dr. Violin. As a result, Fairmount may exert influence on the decisions of our board of directors and our management, including as it relates to agreements with Paragon and decisions to exercise options or enter into license agreements thereunder, which interests may differ from the interests of our shareholders given Fairmount’s interest in us and Paragon, and indirect interest in Parasa. All of our directors owe fiduciary duties pursuant to Massachusetts law, and our directors are expected to comply with their respective fiduciary duties under Massachusetts law relevant to related party transactions. If the Redomestication is effected, all of our directors will owe fiduciary duties pursuant to Cayman Islands law, and our directors will be expected to comply with their respective fiduciary duties under Cayman Islands law relevant to related party transactions. We have adopted a related party transaction approval policy, and our audit committee is responsible for the review, consideration and approval or ratification of related party transactions.

Conflicts of interest may arise between us and Paragon or Paragon Laboratories or us and Fairmount.

In connection with the Merger, we assumed the rights and obligations of Pre-Merger Korsana under the Paragon ADOA, the Paragon POA, the Paragon Research Letter Agreement and the Paragon License Agreement. Fairmount beneficially owns more than 5% of each of Paragon and Paragon Laboratories, appointed the board of directors of each of Paragon and Paragon Laboratories, and has the contractual right to approve the appointment of any executive officers of Paragon and Paragon Laboratories. Parasa is an entity formed by Paragon as a vehicle to hold equity in Pre-Merger Korsana (and as a result of the Merger, us) in order to share profits with certain employees of Paragon. Fairmount beneficially owns 19.99% of our common stock assuming conversion of the Series B Preferred Stock and exercise of the pre-funded warrants held by Fairmount (in each case, subject to beneficial ownership limitations). Three of our directors (Tomas Kiselak, Michelle Pernice and Jonathan Violin, Ph.D.) have current or historical affiliations or associations with Fairmount, two of whom (Mr. Kiselak and Ms. Pernice) serve as Preferred Directors. The remaining three members of our board of directors are not affiliated with Fairmount or Paragon.

Our relationship with Paragon, Paragon Laboratories, Parasa, Fairmount and our non-employee directors may create, or may create the appearance of, conflicts of interest when we are faced with decisions that could have different implications for Paragon,

Paragon Laboratories or Parasa than the decisions have for us. For example, such conflicts may arise in connection with the selection of additional targets, the exercise of options under the Paragon ADOA, the Paragon POA or the Paragon Research Letter Agreement, the negotiation of the terms of any future license agreements, the allocation of resources and expenses, the enforcement or defense of intellectual property rights, the pursuit of strategic partnerships or transactions, or the resolution of any disputes that may arise between us and Paragon, Paragon Laboratories or Parasa. We expect that the decision to amend the Paragon ADOA, the Paragon POA, the Paragon Research Letter Agreement or the Paragon License Agreement or enter into any similar agreements or license agreements with Paragon or Paragon Laboratories will be subject to the approval of our board of directors. All of our directors owe fiduciary duties pursuant to Massachusetts law, and our directors are expected to comply with their respective fiduciary duties under Massachusetts law relevant to related party transactions.

Furthermore, because Paragon and Fairmount have interests in other biotechnology companies that may compete with us or pursue similar or complementary product candidates or technologies, they may have an incentive to favor or support such other companies over us. These potential conflicts of interest may make it more difficult for us to favorably advance our business interests and may adversely affect our competitive position, business, financial condition, results of operations and prospects.

Our principal shareholders own a significant percentage of our common stock and will be able to exert significant influence over matters subject to shareholder approval.

As of September 30, 2026, our executive officers, directors and holders of 5% or more of our capital stock and their respective affiliates beneficially owned approximately 68% of our outstanding common stock. These shareholders, if they act together, may be able to significantly influence matters requiring shareholder approval, including the election of directors, amendments to our organizational documents, the Redomestication and any merger, consolidation or sale of all or substantially all of our assets. The interests of these shareholders may not always coincide with, and may conflict with, the interests of our other shareholders, and this concentration of ownership could delay, defer or prevent a change in control, impede a merger or other business combination, or discourage a potential acquirer from making a tender offer, which could reduce the market price of our common stock.

If we fail to comply with the continued listing requirements of Nasdaq, our common stock may be delisted, which could adversely affect the liquidity and market price of our common stock.

Our common stock is listed on The Nasdaq Capital Market. To maintain that listing, we must satisfy continued listing requirements, including minimum bid price, minimum shareholders’ equity or market value, and corporate governance requirements. Immediately prior to the Merger, Cyclerion effected a 1-for-7 reverse stock split, and there can be no assurance that the market price of our common stock will remain at levels sufficient to satisfy Nasdaq’s minimum bid price requirement. Under Nasdaq Listing Rule 5810(c)(3)(A)(iv), because we effected a reverse stock split within the prior one-year period, if our common stock fails to satisfy the minimum bid price requirement before September 8, 2027, we will not be eligible for any compliance period to regain compliance, and Nasdaq would instead issue a delisting determination with respect to our common stock. If we fail to satisfy Nasdaq’s continued listing requirements, Nasdaq may take steps to delist our common stock, which could reduce the liquidity and market price of our common stock, limit our ability to raise capital on acceptable terms or at all, and result in a loss of investor and collaborator confidence.

Each of Cyclerion and Pre-Merger Korsana incurred losses during its history, and we do not expect to become profitable in the near future and may never achieve profitability. As of December 31, 2025, Cyclerion had federal net operating loss (“NOL”)

carryforwards of approximately $211 million. As of December 31, 2025, Pre-Merger Korsana had federal NOL carryforwards of approximately $31.5 million. Under current law, U.S. federal NOLs incurred in tax years beginning after December 31, 2017 may be carried forward indefinitely, but the deductibility of such NOL carryforwards is limited to 80% of taxable income. It is uncertain if and to what extent various states will conform to federal law. In addition, under Sections 382 and 383 of the Internal Revenue Code of 1986, as amended (the “Code”), U.S. federal NOL carryforwards and other tax attributes may become subject to an annual limitation in the event of certain cumulative changes in ownership. An “ownership change” pursuant to Section 382 of the Code generally occurs if one or more shareholders or groups of shareholders who own at least 5% of a company’s stock increase their ownership by more than 50 percentage points over their lowest ownership percentage within a rolling three-year period. We believe that the Merger resulted in an ownership change of Cyclerion, and, as a result, Cyclerion’s pre-Merger NOL carryforwards and other tax attributes are expected to be subject to substantial limitation, and a significant portion of them may expire unused or otherwise be unavailable to offset our future taxable income. This limitation could be reduced to zero if we do not continue Cyclerion’s historic business or use a significant portion of its historic business assets in a business for at least two years following the Merger. In addition, the Merger and the Pre-Closing Financing may have resulted in an ownership change with respect to Pre-Merger Korsana. Our ability to utilize our NOL carryforwards and other tax attributes to offset future taxable income or tax liabilities may be limited as a result of ownership changes, including in connection with the Merger or other transactions. Similar rules may apply under state tax laws. If we earn taxable income, such limitations could result in increased future income tax liability to us, and our future cash flows could be adversely affected.

General Risk Factors

We may become exposed to costly and damaging liability claims, when testing a product candidate in the clinical stage or at the commercial stage, and our product liability insurance may not cover all damages from such claims.

From time to time, we may be subject to litigation claims through the ordinary course of our business operations regarding, but not limited to, securities litigation, employment matters, security of patient and employee personal information, contractual relations with collaborators and licensors and intellectual property rights. Litigation to defend us against claims by third parties, or to enforce any rights that we may have against third parties, could result in substantial costs and diversion of our resources, causing a material adverse effect on our business, financial condition, results of operations, or cash flows.

The global economy, including credit and financial markets, has experienced extreme volatility and disruptions, including, among other things, diminished liquidity and credit availability, declines in consumer confidence, declines in economic growth, supply chain shortages, increases in inflation rates, fluctuating interest rates, and uncertainty about economic stability. Adverse macroeconomic conditions, including inflation, slower growth or recession, new or increased tariffs imposed by the U.S. government and potential retaliatory measures by foreign governments and other barriers to trade, especially in light of recent comments and executive orders made by the Trump administration, changes to fiscal and monetary policy or government budget dynamics (particularly in the pharmaceutical and biotech areas), government shutdowns, tighter credit, higher interest rates, volatility in financial markets, high unemployment, labor availability constraints, currency fluctuations and other challenges in the global economy have in the past adversely affected, and may in the future adversely affect, us and our business partners and suppliers. For example, the COVID-19 pandemic resulted in widespread unemployment, economic slowdown, and extreme volatility in the capital markets. In addition, the U.S. has imposed and taken action to pause, resume or adjust tariffs on imports from a number of countries. Since February 2025, the United States government has imposed various tariffs on imports from most countries, including tariffs on imports from China and South Korea. There still remains substantial uncertainty about the duration of existing tariffs and whether additional tariffs may be imposed, modified, or suspended. Historically, tariffs have led to increased trade and political tensions. In response to tariffs, other countries have implemented retaliatory tariffs on U.S. goods. Uncertainty and political tensions as a result of trade policies could reduce trade volume, investment, technological exchange, and other economic activities between major international economies, resulting in a material adverse effect on global economic conditions and the stability of global financial markets. The Federal Reserve has raised interest rates multiple times in recent years in response to concerns about inflation and it may raise them again. High interest rates, coupled with reduced government spending and volatility in financial markets, may increase economic uncertainty and affect consumer spending. Similarly, the ongoing military conflict between Russia and Ukraine and in the Middle East and rising tensions with China have created extreme volatility in the global capital markets and may have further global economic consequences, including disruptions of the global supply chain. Any such volatility and disruptions may adversely affect our business or the third parties on whom we rely. If the equity and credit markets deteriorate, including as a result of political unrest or war, it may make any necessary debt or equity financing more costly, more dilutive, or more difficult to obtain in a timely manner or on favorable terms, if at all. Increased inflation rates can adversely affect us by increasing our costs, including labor and employee benefit costs.