CASSAVA SCIENCES INC

Previous wording

We are a clinical-stage biotechnology company based in Austin, Texas. Our mission is to detect and treat neurodegenerative diseases, such as Alzheimer’s disease. Our novel science is based on stabilizing – but not removing – a critical protein in the brain. Our lead therapeutic drug candidate, simufilam, is being evaluated for the proposed treatment of Alzheimer’s disease dementia in fully-enrolled, on-going Phase 3 clinical studies.

Current wording

Cassava Sciences, Inc. is a clinical-stage biotechnology company based in Austin, Texas. Our mission is to detect and treat central nervous system disorders, such as Alzheimer’s disease and TSC-related epilepsy. Our novel science is based on stabilizing – but not removing – a critical protein in the brain for patients with certain central nervous system disorders, such as Alzheimer’s or TSC.

Previous wording

Our second Phase 3 study, called REFOCUS-ALZ, is designed to evaluate the safety and efficacy of oral simufilam 100 mg and 50 mg tablets versus placebo over 76 weeks (NCT05026177). Top-line results of our 76-week Phase 3 study are anticipated approximately mid-year 2025.

Current wording

We have conducted two randomized placebo-controlled Phase 3 clinical trials of oral simufilam in patients with mild-to-moderate Alzheimer’s disease. Our first Phase 3 study, called RETHINK-ALZ, was designed to evaluate the safety and efficacy of simufilam 100 mg tablets versus placebo over 52 weeks (NCT04994483). Our second Phase 3 study, called REFOCUS-ALZ, was designed to evaluate the safety and efficacy of oral simufilam 100 mg and 50 mg tablets versus placebo over 76 weeks (NCT05026177).

Previous wording

We have yet to generate any revenues from product sales. We have an accumulated deficit of $380.8 million at December 31, 2023. These losses have resulted principally from costs incurred in connection with research and development activities, salaries and other personnel-related costs and general corporate expenses. Research and development activities include costs of preclinical and clinical studies as well as clinical supplies associated with our product candidates. Salaries and other personnel-related costs include stock-based compensation associated with options and other equity awards granted to employees and non-employees. Our operating results may fluctuate substantially from period to period as a result of the timing of preclinical activities, enrollment rates of clinical studies for our product candidates and our need for clinical supplies.

Current wording

We have yet to generate any revenues from product sales. We have an accumulated deficit of $405.1 million at December 31, 2024. These losses have resulted principally from costs incurred in connection with research and development activities, salaries and other personnel-related costs and general corporate expenses. Research and development activities include costs of preclinical and clinical studies as well as clinical supplies associated with our product candidates. Salaries and other personnel-related costs include stock-based compensation associated with options and other equity awards granted to employees and non-employees. Our operating results may fluctuate substantially from period to period as a result of the timing of preclinical activities, enrollment rates of clinical studies for our product candidates and our need for clinical supplies.

Previous wording

During the year ended December 31, 2023, we did not receive reimbursement from NIH research grants. During the years ended December 31, 2022 and 2021, we received $0.9 million and $3.9 million in research grants from the NIH, respectively. When applicable, the proceeds from grants are recorded as reductions to our research and development expenses.

Current wording

During the year ended December 31, 2024 and 2023, we did not receive reimbursement from NIH research grants. During the year ended December 31, 2022, we received $0.9 million in research grants from the NIH. When applicable, the proceeds from grants are recorded as reductions to our research and development expenses.

Previous wording

Estimating the dates of completion of clinical development, and the costs to complete development, of our product candidates would be highly speculative and subjective. Pharmaceutical products take a significant amount of time to research, develop and commercialize. The clinical study portion of the development of a new drug alone usually spans several years. We expect our research and development expenses to decrease modestly in 2024 as a result of decreased spending for our Phase 3 program, as patient screening and enrollment are now complete for the Phase 3 clinical studies. The decrease in Phase 3 program costs is expected to be partially offset by increased enrollment in the open-label study as well as higher stock-based compensation expense. We expect to reassess our future research and development plans based on our review of data we receive from our current research and development activities. The cost and pace of our future research and development activities are linked and subject to change.

Current wording

Estimating the dates of completion of clinical development, and the costs to complete development, of our product candidates would be highly speculative and subjective. Pharmaceutical products take a significant amount of time to research, develop and commercialize. The clinical study portion of the development of a new drug alone usually spans several years. We expect our research and development expenses to decrease significantly in 2025 as a result of decreased spending for our Phase 3 program in Alzheimer's disease, as both Phase 3 studies have either been completed or discontinued. Our open label studies in Alzheimer's disease have also been discontinued. The decrease in clinical program costs is expected to be partially offset by higher stock-based compensation expense. We expect to reassess our future research and development plans based on our review of data we receive from our current research and development activities. In particular, following our release of the topline REFOCUS-ALZ results, we intend to evaluate the results and determine the next steps for the future advancement, if any, of our Alzheimer’s program. The cost and pace of our future research and development activities are linked and subject to change.

Previous wording

We expect research and development expense to decrease modestly in future periods as patient screening and enrollment is complete for our Phase 3 clinical program. The decrease in Phase 3 program costs is expected to be partially offset by increased enrollment in the open-label study as well as higher stock-based compensation expense due to new grant awards in 2023.

Current wording

We expect significant costs to continue in the first quarter of 2025 as we wind down our existing clinical studies. Subsequently, we expect research and development expense to decrease significantly in future periods. The decrease in clinical program costs is expected to be partially offset by higher stock-based compensation expense due to new grant awards in 2024.

Previous wording

General and administrative expenses consist of personnel costs, allocated expenses and other expenses for outside professional services, including legal, human resources, audit and accounting services. Personnel costs consist of salaries, bonus, benefits and stock-based compensation. Allocated expenses consist primarily of existing facility costs. We incur insurance, audit, investor relations, SOX compliance and other administrative and professional services expenses associated with operating as a public company, including expenses related to compliance with the rules and regulations of the SEC and Nasdaq. General and administrative expense increased to $16.5 million in 2023 from $12.0 million in 2022. The 38% increase was due primarily to higher legal fees, stock-based compensation due to new grant awards and personnel costs compared to the prior year.

Current wording

General and administrative expenses consist of personnel costs, allocated expenses and other expenses for outside professional services, including legal, human resources, audit and accounting services. Personnel costs consist of salaries, bonus, benefits and stock-based compensation. Allocated expenses consist primarily of existing facility costs. We incur insurance, audit, investor relations, SOX compliance and other administrative and professional services expenses associated with operating as a public company, including expenses related to compliance with the rules and regulations of the SEC and Nasdaq. General and administrative expense increased to $71.8 million in 2024 from $16.5 million in 2023. The 334% increase was due primarily to completion of the $40 million settlement with the SEC as well as a $7.3 million increase in stock-based compensation expense due to new grant awards in late 2023 and 2024, increased compensation costs and higher legal related expenses.

Previous wording

Interest and other income, net, was $7.8 million in 2023 compared to $2.8 million in 2022. The increase in interest income was due to increases in interest rates in 2023 compared to the prior year.

Current wording

Interest income was $8.5 million in 2024 compared to $7.8 million in 2023. The increase in interest income was due to higher cash balances partially offset by lower interest rates in 2024 compared to the prior year.

Previous wording

We record the activities related to leasing office space to third parties in buildings we own as other income, net, as leasing is not core to the Company’s operations. Other income, net, was $0.9 million during the year ended December 31, 2023 compared to $1.0 million during 2022. We expect other income, net, to decrease in 2024 as higher vacancy rates are expected to lower rental income.

Current wording

We record the activities related to leasing office space to third parties in buildings we own as other income, net, as leasing is not core to the Company’s operations. Other income, net, was $0.4 million during 2024 compared to $0.9 million during 2023. We expect to record a net loss on leasing activities in 2025 as higher vacancy rates are expected to significantly lower rental income.

Previous wording

Since inception, we have financed our operations primarily through public and private stock offerings, payments received under collaborative agreements and interest earned on our cash and cash equivalents balances. We intend to continue to use our capital resources to fund research and development activities, capital expenditures, working capital requirements and other general corporate purposes. As of December 31, 2023, cash and cash equivalents totaled $121.1 million.

Current wording

Since inception, we have financed our operations primarily through public and private stock offerings, payments received under collaborative agreements and interest earned on our cash and cash equivalents balances. We intend to continue to use our capital resources to fund research and development activities, capital expenditures, working capital requirements and other general corporate purposes. As of December 31, 2024, cash and cash equivalents totaled $128.6 million.

Previous wording

2024 Common Stock Warrant Distribution and On-going Offering

Current wording

2024 Common Stock Warrant Distribution

Previous wording

On January 3, 2024, we completed a distribution of approximately 16.9 million warrants to purchase shares of our common stock to holders of record of our common stock as of the close of business on December 22, 2023.

Current wording

On January 3, 2024, we made a distribution of approximately 16.9 million warrants to purchase shares of our common stock to holders of record of our common stock as of the close of business on December 22, 2023.

Previous wording

From January 3, 2024 to February 26, 2024, a total of approximately 659,000 warrants were exercised at an exercise price of $33.00 per warrant resulting in gross proceeds to the Company of approximately $21.8 million and the issuance of approximately 989,000 shares of our common stock, including Bonus Share Fractions. After the first $20 million of gross proceeds, the Company is obligated to pay a commission of 2.5% of the gross proceeds from the sale of shares of common stock in the offering to our financial advisor for the warrant distribution.

Current wording

After the first $20 million of gross proceeds, the Company was obligated to pay a commission of 2.5% of the gross proceeds from the sale of shares of common stock from warrant exercises to the Company's financial advisor for the warrant distribution. Total cost of warrant exercises through the Redemption Date were approximately $2.7 million.

Previous wording

On May 1, 2023, we entered into an at-the-market offering program (“ATM”) to sell, from time to time, shares of our common stock having an aggregate offering price of up to $200 million in common stock pursuant to a shelf registration statement that was filed with the SEC on May 1, 2023 and became effective immediately upon filing. We are obligated to pay a commission of up to 3% of the gross proceeds from the sale of shares of common stock under the ATM. We are not obligated to sell any shares in the offering.

Current wording

On May 1, 2023, we entered into an at-the-market offering program (ATM) to sell, from time to time, shares of our common stock having an aggregate offering price of up to $200 million in common stock pursuant to a shelf registration statement that was filed with the SEC on May 1, 2023 and became effective immediately upon filing. We are obligated to pay a commission of up to 3% of the gross proceeds from the sale of shares of common stock under the ATM. We are not obligated to sell any shares in the offering. As of the filing of this Annual Report on Form 10-K, the Company is no longer a Well-Known Seasoned Issuer, as defined by the SEC. Thus, the Company is not eligible to sell securities under the ATM under its existing “automatic” shelf registration statement on Form S-3 unless and until it files a new Form S-3 that is declared effective by the SEC.

Previous wording

There were no common stock sales under the ATM during the year ended December 31, 2023.

Current wording

There were no common stock sales under the ATM during the years ended December 31, 2024 and 2023.

Previous wording

In August 2020, the Board approved the2020 Cash Incentive Bonus Plan (the Plan). The Plan was established to promote the long-term success of the Company by creating an “at-risk” cash bonus program that rewards Plan participants with additional cash compensation in lockstep with significant increases in the Company’s market capitalization. The Plan is considered “at-risk” because Plan participants will not receive a cash bonus unless the Company’s market capitalization increases significantly and certain other conditions specified in the Plan are met. Specifically, Plan participants will not be paid any cash bonuses unless (1) the Company completes a merger or acquisition transaction that constitutes a sale of ownership of the Company or its assets (a Merger Transaction) or (2) the Compensation Committee determines the Company has sufficient cash on hand, as defined in the Plan. Plan participants will be paid all earned cash bonuses in the event of a Merger Transaction.

Current wording

In August 2020, the Board approved the2020 Cash Incentive Bonus Plan (the CIB Plan). The CIB Plan was established to promote the long-term success of the Company by creating an “at-risk” cash bonus program that rewards CIB Plan participants with additional cash compensation in lockstep with significant increases in the Company’s market capitalization. The CIB Plan is considered “at-risk” because CIB Plan participants will not receive a cash bonus unless the Company’s market capitalization increases significantly and certain other conditions specified in the CIB Plan are met. Specifically, CIB Plan participants will not be paid any cash bonuses unless (1) the Company completes a merger or acquisition transaction that constitutes a sale of ownership of the Company or its assets (a Merger Transaction) or (2) the Compensation Committee determines the Company has sufficient cash on hand, as defined in the CIB Plan. CIB Plan participants will be paid all earned cash bonuses in the event of a Merger Transaction.

Previous wording

As of December 31, 2022, the Company’s independent directors were participants in the Plan. However, effective March 16, 2023, the Board amended the Plan to remove all independent directors as participants in the Plan and the independent directors consented to such removal. The independent directors’ share of potential benefits under the Plan were completely forfeited to the Company and will not be allocated to any other participant under the Plan. The Company's independent directors have not received, and as a result of such amendment will never receive, any payments under the Plan.

Current wording

As of December 31, 2022, the Company’s independent directors were participants in the CIB Plan. However, effective March 16, 2023, the Board amended the CIB Plan to remove all independent directors as participants in the CIB Plan and the independent directors consented to such removal. The independent directors’ share of potential benefits under the CIB Plan were completely forfeited to the Company and will not be allocated to any other participant under the CIB Plan. The Company's independent directors have not received, and as a result of such amendment will never receive, any payments under the CIB Plan.

Previous wording

The Company’s market capitalization, including all outstanding stock options, was $89.4 million at the inception of the Plan in August 2020. If the Company were to exceed a $5 billion market capitalization for no less than 20 consecutive trading days, and conditions noted above for payment are met, all Plan milestones would be deemed achieved, in which case total cash bonus awards would range from a minimum of $111.4 million up to a hypothetical maximum of $289.7 million. Any warrants outstanding are excluded from the determination of market capitalization.

Current wording

The Company’s market capitalization, including all outstanding stock options, was $89.4 million at the inception of the CIB Plan in August 2020. If the Company were to exceed a $5 billion market capitalization for no less than 20 consecutive trading days, and conditions noted above for payment are met, all CIB Plan milestones would be deemed achieved, in which case total cash bonus awards would range from a minimum of $111.4 million up to a hypothetical maximum of $289.7 million.

Previous wording

The Company’s potential financial obligation to Plan participants at December 31, 2023 totaled $6.5 million (after the March 2023 Plan amendment), based upon the achievement of one Plan milestone in the Company’s market capitalization in 2020. No actual cash bonus payments have been made to any Plan participant, as the Company has not yet satisfied all the conditions necessary for amounts to be paid under the Plan. During the year ended December 31, 2021, the Company’s market capitalization increased substantially. These increases triggered the achievement of 11 additional Plan milestones. Collectively, the achievement of such milestones could trigger potential Company obligations to Plan participants ranging from a minimum of $74.9 million up to a hypothetical maximum of $202.3 million, with exact amounts to be determined by the Compensation Committee and contingent upon future satisfaction of a Performance Condition.

Current wording

The Company’s potential financial obligation to CIB Plan participants at December 31, 2024 totaled $6.5 million (after taking into account the March 2023 CIB Plan amendment), based upon the achievement of one CIB Plan milestone in the Company’s market capitalization in 2020. No actual cash bonus payments have been made to any CIB Plan participant, as the Company has not yet satisfied all the conditions necessary for amounts to be paid under the CIB Plan.

Previous wording

No actual cash payments were authorized or made to participants under the Plan as of December 31, 2023, or through the filing date of this Annual Report on Form 10-K.

Current wording

No actual cash payments were authorized or made to participants under the CIB Plan as of December 31, 2024, or through the filing date of this Annual Report on Form 10-K.

Previous wording

Net cash used in operating activities was $77.5 million for the year ended December 31, 2022, resulting primarily from the net loss reported of $76.2 million, a decrease in accounts payable of $3.4 million, accrued compensation and benefits of $1.7 million and a decrease in accrued developmental expenses of $0.5 million, partially offset by a decrease in in prepaid and other assets of $1.2 million, and stock-based compensation expense of $2.1 million.

Current wording

Net cash used in operating activities was $116.9 million for the year ended December 31, 2024, resulting primarily from the net loss reported of $24.3 million, change in fair value of warrants of $108.2 million and a decrease in accounts payable and other accrued expenses of $2.9 million. This change was partially offset by stock compensation expense of $16.3 million, depreciation and amortization of $1.1 million and an increase in accrued compensation and benefits of $1.2 million.

Previous wording

Net cash used in operating activities was $82.0 million for the year ended December 31, 2023, resulting primarily from the net loss reported of $97.2 million partially offset by an increase in accounts payable of $6.9 million and accrued development expense of $0.8 million, a decrease in in prepaid and other assets of $1.7 million, stock-based compensation expense of $4.6 million and depreciation and amortization of $1.0 million.

Current wording

Net cash used in operating activities was $82.0 million for the year ended December 31, 2023, resulting primarily from the net loss reported of $97.2 million partially offset by an increase in accounts payable and other accrued expenses of $6.9 million and accrued development expense of $0.8 million, a decrease in prepaid and other assets of $1.7 million, stock-based compensation expense of $4.6 million and depreciation and amortization of $1.0 million.

Previous wording

Net cash used in investing activities during the year ended December 31, 2022 was $2.7 million related to renovations and fixtures for our corporate headquarters.

Current wording

Net cash used in investing activities during the year ended December 31, 2024 was $0.1 million for computers and equipment and other assets.

Previous wording

Net cash provided by financing activities during the year ended December 31, 2022 was $47.8 million, consisting of $47.3 million in proceeds from our registered direct offering of common stock in November 2022 and $0.5 million from the exercise of stock options.

Current wording

Net cash provided by financing activities during the year ended December 31, 2024 was $124.5 million including $123.6 million of net proceeds from the exercise of warrants and $0.9 million from the exercise of stock options.

Previous wording

We own an office complex in Austin, Texas, a portion of which serves as our corporate headquarters. This property is intended to accommodate our anticipated growth and expansion of our operations in the coming years. Maintenance, physical facilities, leasing, property management and other key responsibilities related to property ownership are outsourced to professional real-estate managers. The office complex measures approximately 90,000 rentable square feet. At December 31, 2023, we occupied approximately 25% of the property with the remainder either leased or available for lease to third parties. Virtually all existing tenant leases will expire in 2024. We believe tenant leases that expire in 2024 may likely not be extended, renewed or re-leased beyond their expiry date, in which case we will no longer receive rental payments or reimbursement for shared expense for such office space.

Current wording

We own an office complex in Austin, Texas, a portion of which serves as our corporate headquarters. Maintenance, physical facilities, leasing, property management and other key responsibilities related to property ownership are outsourced to professional real-estate managers. The office complex measures approximately 90,000 rentable square feet. At December 31, 2024, we occupied approximately 25% of the property with the remainder either leased or available for lease to third parties. Most tenant leases expired in 2024. We expect to record a net loss on leasing activities in 2025 as the higher vacancy rates are expected to significantly lower rental income.

Previous wording

We have an accumulated deficit of $380.8 million at December 31, 2023. We expect our cash requirements to be significant in the future. The amount and timing of our future cash requirements will depend on regulatory and market acceptance of our product candidates and the resources we devote to researching and developing, formulating, manufacturing, commercializing and supporting our products. We believe that our current resources should be sufficient to fund our operations for at least the next 12 months. We may seek additional future funding through public or private financing in the future, if such funding is available and on terms acceptable to us.

Current wording

We have an accumulated deficit of $405.1 million at December 31, 2024. We expect our cash requirements to be significant in the future. The amount and timing of our future cash requirements will depend on regulatory and market acceptance of our product candidates and the resources we devote to researching and developing, formulating, manufacturing, commercializing and supporting our products. We believe that our current resources should be sufficient to fund our operations for at least the next 12 months. We may seek additional future funding through public or private financing in the future, if such funding is available and on terms acceptable to us.