CASSAVA SCIENCES INC

1. General, Liquidity and Basis of Presentation

Cassava Sciences, Inc. and its wholly-owned subsidiary (collectively referred to as the “Company”) discovers and develops proprietary pharmaceutical product candidates that* may*offer significant improvements to patients and healthcare professionals. The Company generally focuses its product discovery and development efforts on disorders of the nervous system.

Basis of Consolidation



The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiary. All intercompany transactions have been eliminated in consolidation.

Liquidity

The Company has incurred significant net losses and negative cash flows since inception, and as a result has an accumulated deficit of $405.1 million at* December 31, 2024.The Company expects its cash requirements to be significant in the future. The amount and timing of the Company’s future cash requirements will depend on regulatory and market acceptance of its product candidates and the resources it devotes to researching and developing, formulating, manufacturing, commercializing and supporting its products. The Company mayseek additional funding through public or private financing in the future, if such funding is available and on terms acceptable to the Company. There areno* assurances that additional financing will be available on favorable terms, or at all. However, management believes that the current working capital position will be sufficient to meet the Company’s working capital needs for at least the next12 months.

2. Summary of Significant Accounting Policies

Use of Estimates

The Company makes estimates and assumptions in preparing its consolidated financial statements in conformity with accounting principles generally accepted in the United States. These estimates and assumptions affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amount of revenue earned and expenses incurred during the reporting period. The Company evaluates its estimates on an ongoing basis, including those estimates related to legal liabilities, common stock warrant liabilities, stock based compensation, clinical trials and manufacturing agreements. Actual results could differ from these estimates and assumptions.

Proceeds from Grants

During2024 and2023, there wereno reimbursements received pursuant to National Institutes of Health (“NIH”) research grants. In2022, the Company received $0.9 million of reimbursement from the NIH and National Institute on Drug Abuse. The Company records the proceeds from these grants as reductions to itsresearch and development expenses.

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Cash and Cash Equivalents and Concentration of Credit Risk

The Company invests in cash and cash equivalents. The Company considers highly-liquid financial instruments with original maturities ofthree months or less to be cash equivalents. Highly liquid investments that are considered cash equivalents include money market accounts and funds, certificates of deposit and U.S. Treasury securities. The Company maintains its cash and cash equivalents atone financial institution.

Fair Value Measurements

The Company recognizes financial instruments in accordance with the authoritative guidance on fair value measurements and disclosures for financial assets and liabilities. This guidance defines fair value, establishes a framework for measuring fair value in accordance with GAAP, and expands disclosures about fair value measurements. The guidance also establishes athree-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value. These tiers include:

If a financial instrument uses inputs that fall in different levels of the hierarchy, the instrument will be categorized based upon the lowest level of input that is significant to the fair value calculation. The fair value of cash and cash equivalents was based on Level1 inputs at* December 31, 2024and2023.*

The fair value of common stock warrants of $6.71 per warrant was determined at distribution on* January 3, 2024using a Monte Carlo valuation model since the warrants werenot* traded on the open market on* January 3, 2024.Warrant trading on Nasdaq began on January 4, 2024.Quantitative information regarding Level3* fair value measurements for common stock warrants is as follows:

The common stock warrants stopped trading on Nasdaq after* May 2, 2024and subsequently had little orno* market activity. As of* May 7, 2024,the warrants were presumed to haveno* value since they were redeemed for a nominal payment of $0.001 per warrant.

Segment Information

The Company reports segment information based on how it internally evaluates the operating performance of its business units, or segments. The Company’s operations are confined toone business segment: the development of novel drugs and diagnostics.

The Company’s reportable segment reflects the manner in which its chief operating decision maker ("CODM") allocates resources and assesses performance. The Company's CODM is the President and Chief Executive Officer. The primary measure used by the Company's CODM for purposes of allocating resources is based on net loss that also is reported on the income statement as consolidated net loss. The measure of segment assets is reported on the balance sheet as cash and cash equivalents.

The Company hasnot generated any product revenue in the current period and expects to continue to incur significant expenses and operating losses for the foreseeable future as we advance our product candidates through stages of development and clinical trials.

As such, the CODM uses cash forecast models in deciding how to invest in the development of novel drugs and diagnostics. Such cash forecast models are reviewed to assess the entity-wide operating results and performance. Net loss is used to monitor budget versus actual results. Monitoring budgeted versus actual results, net cash used in operating activities for the period and cash on hand are used in assessing performance of the segment.

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The following table summarizes expenses by category regularly reviewed by the CODM (in thousands):

(a) Other segment items include interest income, other income, net and gain from change in fair value of warrant liabilities.

The following table summarizes assets regularly reviewed by the CODM (in thousands):

For the year ended* December 31, 2024,and2023,* the net cash used in operating activities was $116.9 million and $82.0 million, respectively.

Stock-based Compensation** **

The Company recognizes non-cash expense for the fair value of all stock options and other share-based awards. The Company uses the Black-Scholes option valuation model (“Black-Scholes”) to calculate the fair value of stock options, using the single-option award approach and straight-line attribution method. This model requires the input of subjective assumptions including expected stock price volatility, expected life and estimated forfeitures of each award. These assumptions consist of estimates of future market conditions, which are inherently uncertain, and therefore, are subject to management’s judgment. For all options granted, it recognizes the resulting fair value as expense on a straight-line basis over the vesting period of each respective stock option, generallyone tofour years.

The Company has granted share-based awards that vest upon achievement of certain performance criteria (“Performance Awards”). The Company multiplies the number of Performance Awards by the fair value of its common stock on the date of grant to calculate the fair value of each award. It estimates an implicit service period for achieving performance criteria for each award. The Company recognizes the resulting fair value as expense over the implicit service period when it concludes that achieving the performance criteria is probable. It periodically reviews and updates as appropriate its estimates of implicit service periods and conclusions on achieving the performance criteria. Performance Awards vest and common stock is issued upon achievement of the performance criteria.

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Net Loss per Share

Basic net loss per common share is computed by dividing the net loss available to common stockholders by the weighted-average number of common shares outstanding during the period. Diluted net loss per common share is computed by dividing the net loss available to common stockholders by the weighted-average number of common shares outstanding and potentially dilutive securities outstanding during the period using the treasury stock method. Potentially dilutive securities are excluded from the computations of diluted earnings per share if their effect would be anti-dilutive. A net loss causes all potentially dilutive securities to be anti-dilutive. Potentially dilutive securities consist of outstanding common stock options and Performance Awards. There isno difference between the Company’s net loss and comprehensive loss. The numerators and denominators in the calculation of basic and diluted net loss per share were as follows (in thousands, except net loss per share data):

Warrant Liabilities

The Company accounts for warrants as either equity-classified or liability-classified instruments based on an assessment of the warrant’s specific terms and in accordance with the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC“)480, “Distinguishing Liabilities from Equity”, and ASC815, “Derivatives and Hedging”. The assessment considers whether the warrants are freestanding financial instruments pursuant to ASC480, meet the definition of a liability pursuant to ASC480, and whether the warrants meet all of the requirements for equity classification under ASC815, including whether the warrants are indexed to the Company’s own shares, among other conditions for equity classification. This assessment, which requires the use of professional judgment, is conducted at the time of warrant issuance and as of each subsequent quarterly period end date while the warrants are outstanding.

For issued or modified warrants that meet all of the criteria for equity classification, the warrants are required to be recorded as a component of additional paid-in capital at the time of issuance. For issued or modified warrants that donot meet all the criteria for equity classification, the warrants are required to be recorded at their initial fair value of the date of issuance, and each balance sheet date thereafter. Changes in the estimated fair value of liability classified warrants are recognized as a non-cash gain or loss on the statements of operations. Costs associated with issuing the warrants classified as derivative liabilities are charged to operations when the warrants are issued.

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Fair Value of Financial Instruments

Financial instruments include accounts payable, accrued expenses, accrued development expense and other liabilities. The estimated fair value of certain financial instruments* maybe determined using available market information or other appropriate valuation methodologies. However, considerable judgment is required in interpreting market data to develop estimates of fair value; therefore, the estimates arenot* necessarily indicative of the amounts that could be realized or would be paid in a current market exchange. The effect of using different market assumptions and/or estimation methodologies* may*be material to the estimated fair value amounts. The carrying amounts of accounts payable, accrued expenses, accrued development expense and other liabilities are at cost, which approximates fair value due to the short maturity of those instruments.

Research Contracts, Prepaids and Accruals

The Company has entered into various research and development contracts with research institutions and otherthird-party vendors. These agreements are generally cancelable. Related payments are recorded as research and development expenses as incurred. The Company records prepaids and accruals for estimated ongoing research costs. When evaluating the adequacy of prepaid expenses and accrued liabilities, the Company analyzes progress of the studies including the phase or completion of events, invoices received and contracted costs. Significant judgments and estimates are made in determining the prepaid and accrued balances at the end of any reporting period. Actual results could differ from the Company’s estimates. The Company’s historical prepaid and accrual estimates havenot been materially different from actual costs.

Incentive Bonus Plan

In2020, the Company established the2020 Cash Incentive Bonus Plan (the “CIB Plan”) to incentivize CIB Plan participants. Awards under the CIB Plan are accounted for as liability awards under ASC718 “Stock-based Compensation”. The fair value of each potential CIB Plan award will be determined once a grant date occurs and will be remeasured each reporting period. Compensation expense associated with the CIB Plan will be recognized over the expected achievement period for each CIB Plan award, when a Performance Condition (as defined below) is considered probable of being met. See Note11 for further discussion of the CIB Plan.

Property and Equipment

Property and equipment are recorded at cost, net of accumulated depreciation. Depreciation is recorded using the straight-line method over the estimated useful lives of the assets. Owned buildings and related improvements have estimated useful lives of 39 years and approximately 10 years, respectively. Tenant improvements related to leased space are amortized using the straight-line method over the useful lives of the improvements or the remaining term of the corresponding leases, whichever is shorter.

Property and equipment are reviewed for impairment when events or changes in circumstances indicate the carrying amount of an asset* may**not* be recoverable. If property and equipment are considered to be impaired, an impairment loss is recognized.

Intangible Assets

Acquired intangible assets are recorded at fair value at the date of acquisition and primarily consist of lease-in-place agreements and leasing commissions. Intangible assets are amortized over the estimated life of the lease-in-place agreements. Intangible assets also include leasing commissions, which are amortized over the life of the lease agreement.

Intangible assets are reviewed for impairment on an annual basis, and when there is reason to believe that their values have been diminished or impaired. If intangible assets are considered to be impaired, an impairment loss is recognized.

Insurance Recoveries

We record proceeds from our insurance policies when the loss event has occurred, and proceeds are estimable and probable of being recovered. Insurance recoveries and proceeds received are recorded as a reduction to general and administrative expense. There was approximately $9.9 million and $0.1 million of insurance recoveries recorded during the year ended* December 31, 2024and2023,* respectively. The applicable policy year had a $10.0 million recovery limit which has been reached at* December 31, 2024.*

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Related Party Transactions

On* July 15, 2024,our former President and Chief Executive Officer resigned from the Company, effective as of September 13, 2024 (the “Effective Date”). Pursuant to the terms of his employment agreement, our former President and Chief Executive Officer is receiving severance compensation equal to $1.23 million overtwelve* months following the Effective Date. Severance compensation was included in general and administrative expense.

On* July 16, 2024,our former Senior Vice President (SVP), Neuroscience agreed to step down from her employment with the Company, effective immediately. Our former SVP, Neuroscience is the spouse of our former President and Chief Executive Officer. Pursuant to a separation agreement, our former SVP, Neuroscience is receiving severance compensation equal to $0.5 million in quarterly installments overtwelve* months. Severance compensation was included in research and development expense.

Included in accrued compensation and benefits at* December 31, 2024*is approximately $1.2 million of accrued severance costs for thetwo former senior officers.

On* July 16, 2024,the Company entered into aone-year consulting agreement with the Company’s former SVP, Neuroscience. Pursuant to the terms of the consulting agreement, the consultant is providing services for purposes of providing information and support for scientific research and/or obtaining governmental approval for the Company’s products. The Company will pay $500 per hour for such consulting services. The Company incurred fees totaling $43,000 under the consulting agreement during the year ended December 31, 2024.*

Income Taxes

The Company accounts for income taxes under the asset and liability method. Deferred tax assets and liabilities are recognized for the estimated future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax balances are adjusted to reflect tax rates based on currently enacted tax laws, which will be in effect in the years in which the temporary differences are expected to reverse. The Company has accumulated significant deferred tax assets that reflect the tax effects of net operating loss and tax credit carryovers and temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. Realization of certain deferred tax assets is dependent upon future earnings. The Company is uncertain about the timing and amount of any future earnings. Accordingly, the Company offsets these deferred tax assets with a valuation allowance.

The Company accounts for uncertain tax positions in accordance with ASC740, “Income Taxes”, which clarifies the accounting for uncertainty in tax positions. These provisions require recognition of the impact of a tax position in the Company’s financial statements only if that position is more likely thannot of being sustained upon examination by taxing authorities, based on the technical merits of the position. Any interest and penalties related to uncertain tax positions will be reflected as a component of income tax expense.

Recent Accounting Pronouncements

In* November 2023,the FASB issued Accounting Standards Update ("ASU")2023-07, Segment Reporting (Topic280*): Improvements to Reportable Segment Disclosures. This ASU includes amendments that expand the existing reportable segment disclosure requirements and requires disclosure of (i) significant expense categories and amounts by reportable segment as well as the segment’s profit or loss measure(s) that are regularly provided to the chief operating decision maker (the “CODM”) to allocate resources and assess performance; (ii) how the CODM uses each reported segment profit or loss measure to allocate resources and assess performance; (iii) the nature of other segment balances contributing to reported segment profit or loss that arenot captured within segment revenues or expenses; and (iv) the title and position of the individual or name of the group or committee identified as the CODM. This guidance requires retrospective application to all prior periods presented in the financial statements and is effective for fiscal years beginning after* December 15, 2023and interim periods within fiscal years beginning after December 15, 2024.The Company adopted this guidance and has included enhanced disclosures relating to its reportable segments. SeeBusiness Segments*, included in this Note2 to the Consolidated Financial Statements, for the Company's updated disclosure.

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Accounting Guidance Issued ButNot Adopted as of December 31, 2024****

In* November 2024,the FASB issued ASU2024*-03, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic220-40): Disaggregation of Income Statement Expenses. This ASU includes amendments that require entities to bifurcate specified expense line items on the income statement into underlying components, including employee compensation, depreciation, and intangible asset amortization, as applicable. Qualitative descriptions of the remaining components are required. These enhanced disclosures are required for both interim and annual periods. In* January 2025,the FASB subsequently issued ASU2025*-01, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic220-40): Clarifying the Effective Date, to provide clarification on the ASU's effective date. The new standard is effective for fiscal years beginning after* December 15, 2026on a prospective basis with the option to apply it retrospectively, and for interim periods within fiscal years beginning after December 15, 2027.*Early adoption is permitted. The adoption of this guidance will result in the Company being required to include enhanced disclosures around income statement expenses.

In* December 2023,the FASB issued ASU2023*-09, Income Taxes (Topic740): Improvements to Income Tax Disclosures. The ASU requires that an entity disclose specific categories in the effective tax rate reconciliation as well as reconciling items that meet a quantitative threshold. Further, the ASU requires additional disclosures on income tax expense and taxes paid, net of refunds received, by jurisdiction. The new standard is effective for annual periods beginning after* December 15, 2024*on a prospective basis with the option to apply it retrospectively. Early adoption is permitted. The adoption of this guidance will result in the company being required to include enhanced income tax related disclosures.

3. Prepaid Expenses and Other Current Assets

Prepaid and other current assets at* December 31, 2024and2023* consisted of the following (in thousands):

Contract research organization and other deposits represent cash payments made to vendors in excess of expenses incurred.

4. Real Property and Other Income, Expense

The Company owns atwo-building office complex in Austin, Texas, a portion of which serves as its 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,the Company occupied approximately 25% of the property with the remainder either leased or available for lease tothird* parties. Gross rental income under existingthird-party leases at* December 31, 2024is expected to total $0.3 million in2025,* $0.4 million in2026 and $0.2 million in2027.

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The Company records the net income from building operations and leases as other income, net, as leasing isnot core to the Company’s operations. Building depreciation and amortization for spacenot occupied by the Company is included in general and administrative expense. Building depreciation and amortization for space occupied by the Company is allocated between general and administrative expense and research and development expense. Components of other income, net, for the periods presented were as follows (in thousands):

The Company had accrued property taxes related to the building totaling $254,000 and $338,000 at* December 31, 2024and2023,* respectively, included in other current liabilities.

5. Property and Equipment

The components of property and equipment, net, as of* December 31, 2024and2023* were as follows (in thousands):

Depreciation expense for property and equipment was $952,000, $1,084,000 and $804,000 for the years ended* December 31, 2024,*2023 and2022, respectively.

6. Intangible Assets

The components of intangible assets, net, as of* December 31, 2024and2023* were as follows (in thousands):

Amortization expense for intangible assets was $180,000, $446,000 and $497,000 for the years ended* December 31, 2024,*2023 and2022, respectively.

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Amortization expense for finite-lived intangible assets is expected to be as follows (in thousands):

7. Stockholders' Equity and Stock-Based Compensation

Preferred Stock

The Company’s Board of Directors (the “Board”) has the authority to issue preferred stock inone or more series and to fix the rights, preferences, privileges, restrictions and the number of shares constituting any series or the designation of the series.

2022 Registered Direct Offering

On* November**22,* 2022, the Company completed a common stock offering pursuant to which certain investors purchased 1,666,667 shares of common stock at a price of $30.00 per share. Net proceeds of the offering were approximately $47.3 million after deducting offering expenses.

Common Stock Warrant Distribution

See Notes2 and13 regarding the distribution of common stock warrants on* January 3, 2024.*

At the Market (ATM) Common Stock Issuance

On* May 1, 2023,the Company entered into an at-the-market offering program (“ATM”) to sell, from time to time, shares of Company 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 U.S. Securities and Exchange Commission (the “SEC”) on May 1, 2023and became effective immediately upon filing. The Company is obligated to pay a commission of up to 3% of the gross proceeds from the sale of shares of common stock under the ATM. As of the filing of this Annual Report on Form10*-K, the Company isno longer a Well-Known Seasoned Issuer, as defined by the SEC. Thus, the Company isnot 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.

There wereno common stock sales under the ATM during the year ended* December 31, 2024and2023.*

2008 Equity Incentive Plan

Under the Company’s2008 Equity Incentive Plan, or2008 Equity Plan, its employees, directors and consultants received share-based awards, including grants of stock options and performance awards. The2008 Equity Plan expired in* December 2017.Share-based awards generally expireten* years from the date of grant.

2018 Equity Incentive Plan

The Company’s Board or a designated Committee of the Board is responsible for administration of the Company’s2018 Omnibus Incentive Plan (the2018 Plan) and determines the terms and conditions of each option granted, consistent with the terms of the2018 Plan. The Company’s employees, directors, and consultants are eligible to receive awards under the2018 Plan, including grants of stock options and performance awards. Share-based awards generally expireten years from the date of grant. The2018 Plan, as amended in* May**2022,* provides for issuance of up to 5,000,000 shares of common stock, par value $0.001 per share, subject to adjustment as provided in the2018 Plan.

When stock options or performance awards are exercised net of the exercise price and taxes, the number of shares of stock issued is reduced by the number of shares equal to the amount of taxes owed by the award recipient and that number of shares are cancelled. The Company* may*then use its cash to pay tax authorities the amount of statutory taxes owed by and on behalf of the award recipient.

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Stock Options

The following summarizes information about stock option activity during2024:

Of the stock options exercised during the year ended* December 31, 2024,6,634 stock options were net settled in satisfaction of the exercise price, withno* cash proceeds received. In addition, an employee surrendered 6,500 shares of common stock in conjunction with a net exercise of a stock option. The common shares surrendered were retired by the Company.

The following summarizes information about stock options at* December 31, 2024*by a range of exercise prices:

The Company uses Black-Scholes to estimate the fair value of options granted. Black-Scholes considers a number of factors, including the market price of the Company’s common stock. Factors utilized in Black-Scholes to value each stock option granted, and the weighted average fair value of options granted during the years ended* December 31, 2024,*2023 and2022 were as follows:

Volatility is based on reviews of the historical volatility of the Company’s common stock. Risk-free interest rates are based on yields of U.S. treasury notes in effect at the date of grant. Expected life of option is based on actual historical option exercises. Dividend yield iszero because the Company doesnot anticipate paying cash dividends in the foreseeable future.

As of* December 31, 2024,*the Company expects to recognize compensation expense of $50.6 million related to non-vested options held by equity plan participants over the weighted average remaining recognition period of 2.3 years.

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Performance Awards

The following summarizes information about performance award activity during2024:

During the year ended* December 31, 2022,a total of 57,143 shares of restricted stock awards expired as performance criteria related to these Performance Awards werenot* attained. These shares of restricted stock were returned to the2008 Equity Incentive Plan, which expired in* December 2017,*and thus were retired.

If and when outstanding Performance Awards vest, the Company would recognize $101,000 in stock-based compensation expense. These performance awards expire in2026.

Stock-Based Compensation Expense

The following summarizes information about stock-based compensation expense, in thousands:

On* September 13, 2024,the Company entered into a Consulting Agreement with our former President and Chief Executive Officer for a period ofone* year, which was subsequently terminated on* January 23, 2025.The services to be provided under the Consulting Agreement werenot* deemed substantive for continuous service requirements of stock option vesting, resulting in a stock option modification under ASC718. The Company's stock-based compensation expense for the year ended* December 31, 2024included approximately $0.6 million from the stock option modification accounting. See further discussion in Note2* under "Related Party Transactions". There wereno such costs during the years ended* December 31, 2023and2022.*

8. Employee401(k) Benefit Plan**

The Company has a defined-contribution savings plan under Section401(k) of the Internal Revenue Code. The plan covers substantially all employees. Employees are eligible to participate in the plan thefirst day of the month after hire and* maycontribute up to the current statutory limits under Internal Revenue Service regulations. The401*(k) plan permits the Company to make additional matching contributions on behalf of all employees. Through* December 31, 2024,the Company hasnot* made any matching contributions to the401(k) plan.

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9. Income Taxes

The Company didnot provide for income taxes during the periods presented because it had book and federal taxable losses in those years and the tax benefit that would have resulted from the pre-tax losses was fully offset by a change in the valuation allowance.

The reconciliation of the statutory federal income tax rate to the Company’s effective tax rate for periods presented was as follows:

Deferred tax assets and valuation allowance

Deferred tax assets reflect the tax effects of net operating loss and tax credit carryforwards and temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. The Company’s deferred taxes assets at* December 31, 2024and2023* were valued at the corporate tax rate of 21%. The Company offsets its deferred tax assets by a valuation allowance because it is uncertain about the timing and amount of any future profits. Significant components of its deferred tax assets are as follows (in thousands):

The valuation allowance increased by $19.4 million and $23.3 million in2024 and2023, respectively, due primarily to continuing operations.

The Company’s net operating loss carryforwards of $205.5 million are federal, of which $74.1 million expires between2029 and2037 and $131.4 million carries forward indefinitely. As of* December 31, 2024,the Company had federal research and development tax credits of approximately $23.0 million, which expire in the years2025* through2044.

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Unrecognized tax benefits

As of* December 31, 2024,2023 and2022, the Company has unrecognized tax benefits related to tax credits of $9.2 million, $8.4 million and $6.5 million, respectively. None of the unrecognized tax benefits as of December 31, 2024,*if recognized, would impact the effective tax rate due to the valuation allowance andno interest or penalties have been recognized. A reconciliation of the beginning and ending balance of unrecognized tax benefits is as follows (in thousands):

As of* December 31, 2024,there wereno* unrecognized tax benefits that we expect would change significantly over the next12 months.

The Company files U.S. and Texas income tax returns. In the United States, the statute of limitations with respect to the federal income tax returns for tax years after 2020 are open to audit; however, since the Company has net operating losses, the taxing authority has the ability to review tax returns prior to the2021 tax year and make adjustments to these net operating loss carryforwards. We arenot under audit in any taxing jurisdiction at this time.

10. Commitments

Other Commitments

The Company conducts its product research and development programs through a combination of internal and collaborative programs that include, among others, arrangements with universities, contract research organizations and clinical research sites. It has contractual arrangements with these organizations that are generally cancelable. The Company’s obligations under these contracts are largely based on services performed. The Company also had non-cancellable commitments for the manufacture of simufilam's active pharmaceutical ingredient totaling approximately $1.2 million recorded in prepaid expenses and other current assets at* December 31, 2024.*The Company is dependent on contract development and manufacturing organizations for the manufacture of all our materials for clinical studies.

On* February 26, 2025,the Company entered into a License Agreement (the “License Agreement”) with Yale University (“Yale”) pursuant to which the Company was granted exclusive worldwide rights, with rights to sublicense, to Yale’s interest in certain patent and other intellectual property rights that could be useful or necessary to the development and commercialization of simufilam for the treatment of Tuberous Sclerosis Complex (TSC)-related epilepsy and other potential indications. Pursuant to the License Agreement, the Company has agreed to use reasonable commercial efforts to implement a plan that it has designed for such development and commercialization. In exchange for the rights acquired pursuant to the License Agreement, the Company agreed to pay Yale (i) a nominal upfront license fee, (ii) payments upon the achievement of specified clinical, regulatory and commercial milestones, totaling up to $4.5 million and (iii) upon transfer to athird* party in connection with a regulatory priority review voucher, if issued, a low-to-mid double digit percentage of any consideration received for such transfer. The Company also agreed to pay Yale tiered royalties, ranging from a low- to mid- single digit percentage, on aggregate net sales of licensed products, subject to tiered minimum annual royalty payments ranging from the low- to mid- hundreds of thousands of dollars.

Unless earlier terminated, the License Agreement will continue on a country-by-country basis until the later of (i) the date on which the last valid claim of the license patents expires or otherwise lapses, (ii) the end of any government or regulatory exclusivity period, and (iii)10 years following the date offirst sale of licensed product in such country.

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Note11. ** 2020 Cash Incentive Bonus Plan**

In* August 2020,the Board approved 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 willnot* 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 willnot 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 of the Board (the Compensation Committee) determines the Company has sufficient cash on hand, as defined in the CIB Plan. Because of the inherent discretion and uncertainty regarding these requirements, the Company has concluded that a CIB Plan grant date hasnot occurred as of* December 31, 2024.*

CIB Plan participants will be paid all earned cash bonuses allocated under the CIB Plan in the event of a Merger Transaction.

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 willnot* be allocated to any other participant under the CIB Plan. The Company’s independent directors havenot received, and as a result of such amendment will never receive, any payments under the CIB Plan.

The Company’s market capitalization for purposes of the CIB Plan is determined based on either (1) the closing price ofone share of the Company's common stock on the Nasdaq Capital Market multiplied by the total issued and outstanding shares and options to purchase shares of the Company, or (2) the aggregate consideration payable to security holders of the Company in a Merger Transaction. This constitutes a market condition under applicable accounting guidance.

The CIB Plan triggers a potential cash bonus each time the Company’s market capitalization increases significantly, up to a maximum*$5* billion in market capitalization. The CIB Plan specifies 14 incremental amounts between $200 million and $5 billion (each increment, a “Valuation Milestone”). Each Valuation Milestone triggers a potential cash bonus award in a pre-set amount defined in the CIB Plan. Each Valuation Milestone must be achieved and maintained forno less than 20 consecutive trading days for CIB Plan participants to be eligible for a potential cash bonus award. Approximately 67% of each cash bonus award associated with a Valuation Milestone is subject to adjustment and approval by the Compensation Committee. Any amountsnot awarded by the Compensation Committee areno longer available for distribution.

If the Company were to exceed a $5 billion market capitalization forno less than 20 consecutive trading days, all Valuation Milestones would be deemed achieved, in which case cash bonus awards would range from a minimum of $111.4 million up to a hypothetical maximum of $289.7 million. Payment of cash bonuses is deferred until such time as (1) the Company completes a Merger Transaction, or (2) the Compensation Committee determines the Company has sufficient cash on hand to render payment (each, a “Performance Condition”), neither of which* mayever occur. Accordingly, there can beno* assurance that CIB Plan participants will ever be paid a cash bonus that is awarded under the CIB Plan, even if the Company’s market capitalization increases significantly.

The CIB Plan is accounted for as a liability award. The fair value of each Valuation Milestone award will be determined once a grant date occurs and will be remeasured each reporting period. Compensation expense associated with the CIB Plan will be recognized over the expected achievement period for each of the 14 Valuation Milestones, when a Performance Condition is considered probable of being met.

In* October 2020,the Company achieved thefirst* Valuation Milestone. Subsequently in2020, the Compensation Committee approved a potential cash bonus award of $6.5 million in total for all CIB Plan participants (after taking into account the* March 2023CIB Plan amendment), subject to future satisfaction of a Performance Condition. There isno* continuing service requirement for CIB Plan participants once the Compensation Committee approves a cash bonus award.

During the year ended* December 31, 2021,the Company achieved 11 additional Valuation Milestones. On February 13, 2025,the Compensation Committee concluded thatno* discretionary cash bonus amounts would be awarded for the 11 milestones achieved in2021 nor for the2 remaining CIB Plan milestones, which havenot been achieved. Therefore,no compensation expense has been recorded andno payments have been made sinceno grant date has occurred andno Performance Conditions are considered probable of being met.

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The achievement the 11 milestones in2021 triggered a non-discretionary potential Company obligation to a CIB Plan participant of $74.9 million (after taking into account the* March 2023CIB Plan amendment) and contingent upon future satisfaction of a Performance Condition. However, no compensation expense has been recorded andno* payments have been made sinceno grant date has occurred andno Performance Conditions are considered probable of being met.

No Valuation Milestones were achieved during the years ended* December 31, 2024,*2023 and2022.

As discussed in Note12, on* January 24, 2025,*the Delaware Court of Chancery entered a Final Order and Judgment approving the Stipulation and dismissing an action related to the CIB Plan with prejudice. The Final Order and Judgment requires the Company to further amend the CIB Plan, as provided in the Stipulation.

No actual cash payments were authorized or made to participants under the CIB Plan through* December 31, 2024and the date of filing of this Annual Report on Form10*-K.

12. Contingencies

The Company is, and from time to time, the Company* maybecome, involved in litigation or other legal proceedings and claims, including U.S. government inquiries, investigations and Citizen Petitions submitted to FDA. In addition, the Company has received, and from time to time may*receive, inquiries from government authorities relating to matters arising from the ordinary course of business. The outcome of these proceedings is inherently uncertain. Regardless of outcome, legal proceedings can have an adverse impact on the Company because of defense and settlement costs, diversion of management resources, and other factors. At this time,no assessment can be made as to their likely outcome or whether the outcome will be material to the Company other than as disclosed below. The Company believes that its total provisions for legal matters are adequate based upon currently available information.

Update on Government Investigations

Beginning in* August 2021,*the Company has received subpoenas, a Civil Investigative Demand (“CID”) and other requests for documents and information from the Department of Justice (“DOJ”) and document requests from the SEC, each seeking corporate information and documents concerning the research and development of simufilam and/or SavaDx. The Company has been providing documents and information in response to these subpoenas, the CID and requests for information.

On* September 26, 2024,the Company announced that it had reached a settlement with the SEC resolving the SEC investigation of the Company’s disclosures regarding its Phase2b* clinical trial of simufilam for the treatment of Alzheimer’s disease (the “Phase2b Study”) and related matters. The SEC also agreed to a settlement withtwo former senior employees of the Company. Pursuant to these settlements, the U.S. District Court for the Western District of Texas entered final consent judgment on* October 18, 2024,on a complaint filed by the SEC against the Company and itstwo* former senior employees. The Company has neither admitted nor denied the allegations of the complaint. The SEC’s complaint alleged that certain disclosures by the Company regarding the Phase2b Study violated certain federal securities laws and SEC rules, including negligence-based disclosure violations of Sections17(a)(2) and17(a)(3) of the Securities Act of1933, as amended (the “Securities Act”), as well as recordkeeping and reporting requirements under the Securities Exchange Act of1934, as amended (the “Exchange Act”). The complaint alleges that the Company’s SEC reports and other public statements regarding the Phase2b Study negligently contained materially misleading statements and omissions. The SEC’s allegations with respect to the Company’stwo former employees relate to these employees’ roles in such disclosures. Under its settlement, the Company consented to a permanent injunction against future violations of Section17(a) of the Securities Act, Section13(a)(1) of the Exchange Act and Rules12b-20, 13a-1, 13a-11 and13a-13 under the Exchange Act. In addition, the Company paid a civil monetary penalty of*$40* million in* November 2024.*

The Company continues to cooperate with the DOJ related to requests for documents and information, including those related to conduct alleged in the indictment of Dr. Hoau-Yan Wang announced by DOJ on* June 28, 2024.The Company cannot predict the outcome or impact of ongoing matters, including whether a government authority maypursue an enforcement action against the Company or others. The Company doesnot* at this time anticipate, however, that DOJ will bring criminal charges against or seek a criminal resolution with the Company.

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Securities Class Actions and Shareholder Derivative Actions

Between* August 27, 2021and October 26, 2021,*four putative class action lawsuits were filed alleging violations of the federal securities laws by the Company and certain named officers. The complaints rely on allegations contained in Citizen Petitions submitted to FDA and allege that various statements made by the defendants regarding simufilam were rendered materially false and misleading. The Citizen Petitions were all subsequently denied by FDA. These actions were filed in the U.S. District Court for the Western District of Texas. The complaints seek unspecified compensatory damages and other relief on behalf of a purported class of purchasers.

On* June 30, 2022,a federal judge consolidated thefour class action lawsuits intoone case and appointed a lead plaintiff and a lead counsel. Lead plaintiff filed a consolidated amended complaint on August 18, 2022on behalf of a putative class of purchasers of the Company’s securities between September 14, 2020and July 26, 2022.On May 11, 2023,the court dismissed with prejudice plaintiffs’ claims against defendant Nadav Friedmann, PhD, MD, our former Chief Medical Officer and a Company director, who is now deceased, but otherwise denied defendants’ motion to dismiss. Defendants filed an answer to the consolidated amended complaint on July 3, 2023.On February 22, 2024,plaintiffs filed a motion to supplement their complaint to extend the putative class period through October 12, 2023.The court granted that Motion on June 12, 2024,and plaintiffs filed a supplemental complaint on June 13, 2024.On November 13, 2024,Plaintiffs filed asecond* motion to supplement their complaint. On* March 13, 2024,plaintiffs filed a Motion for Class Certification. On February 25, 2025,*the Court denied Plaintiff’s Motion for Class Certification without prejudice, explaining that rulings on pending motions, including specifically Plaintiffs’second motion to supplement their complaint, could affect disposition of class certification.

On* November 4, 2021,a related shareholder derivative action was filed, purportedly on behalf of the Company, in the U.S. District Court for the Western District of Texas, asserting claims under the U.S. securities laws and state fiduciary duty laws against certain named officers and the members of the Company’s Board. This complaint relies on the allegations made in Citizen Petitions that were submitted to (and subsequently denied by) FDA. The complaint alleges, among other things, that the individual defendants exposed the Company to unspecified damages and securities law liability by causing it to make materially false and misleading statements, in violation of the U.S. securities laws and in breach of their fiduciary duties to the Company. The derivative case seeks, among other things, to recover unspecified compensatory damages on behalf of the Company arising out of the individual defendants’ alleged wrongful conduct. Although the plaintiff in this derivative case doesnot* seek relief against the Company, the Company has certain indemnification obligations to the individual defendants. Between* November 4, 2021and June 20, 2023,four additional shareholder derivative actions were filed alleging substantially similar claims, two in the U.S. District Court for the Western District of Texas, one in Texas state court (Travis County District Court) andone in the Delaware Court of Chancery. On July 5, 2022,thethree actions in the Western District of Texas were consolidated into a single action. All of the foregoing actions are currently stayed pending further developments in the consolidated securities action described above. On November 9, 2023,*another shareholder derivative action alleging substantially similar claims was filed in the U.S. District Court for the Western District of Texas. The parties to that case expect that it will be consolidated into the existing consolidated federal court shareholder derivative action.

On* February 2, 2024,a putative class action lawsuit was filed, purportedly on behalf of the Company, alleging violations of the federal securities law by the Company and certain named officers. The complaint relies on an October 12, 2023article that describes a purported leaked report of alleged scientific misconduct by a scientific collaborator of the Company at City University of New York. The complaint alleges that various statements made by the defendants regarding simufilam were rendered materially false and misleading by this article. The action was filed in the U.S. District Court for the Northern District of Illinois. The complaint seeks unspecified compensatory damages and other relief on behalf of a purported class of purchasers of the Company’s securities between August 18, 2022and October 12, 2023.On May 28, 2024,*the Northern District of Illinois transferred this action to the Western District of Texas.

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Beginning on* March 18, 2024,two related shareholder derivative actions were filed, purportedly on behalf of the Company, in the U.S. District Court for the Northern District of Illinois, asserting claims under the U.S. securities laws and state fiduciary duty laws against certain named officers and the members of the Company’s Board. The complaints rely on an October 12, 2023article that describes a purported leaked report of alleged scientific misconduct by a scientific collaborator of the Company at City University of New York. The complaints allege, among other things, that the individual defendants exposed the Company to unspecified damages and securities law liability by causing it to make materially false and misleading statements, in violation of the U.S. securities laws and in breach of their fiduciary duties to the Company. The derivative cases seek, among other things, to recover unspecified compensatory damages on behalf of the Company arising out of the individual defendant’s alleged wrongful conduct. Although the plaintiffs in these derivative cases donot* seek relief against the Company, the Company has certain indemnification obligations to the individual defendants. On* September 6, 2024,thesetwo cases were consolidated and stayed pending further developments in the shareholder class action initially filed in the Northern District of Illinois on February 2, 2024.*

The Company disputes the allegations and intends to defend against these lawsuits vigorously. The Company is unable to estimate the possible loss or range of loss, if any, associated with these lawsuits.

On* December 13, 2024,a putative class action lawsuit was filed, purportedly on behalf of the Company, alleging violations of the federal securities law by the Company and certain named officers. The complaint alleges that various statements made by the defendants regarding simufilam were revealed to be materially false and misleading by the release of top-line results for the Company’s RETHINK-ALZ Phase3* clinical trial on* November 25, 2024.The action was filed in the U.S. District Court for the Western District of Texas. The complaint seeks unspecified compensatory damages and other relief on behalf of a purported class of purchasers of the Company’s securities between February 7, 2024,and November 24, 2024.The Company believes that the likelihood of an unfavorable outcome isnot* probable, however, it is reasonably possible that the Company* may*incur a loss. The Company is unable to reasonably estimate the amount or range of potential loss at this time.

On* August 19, 2022,a shareholder derivative action was filed, purportedly on behalf of the Company, in the Delaware Court of Chancery, asserting claims under state fiduciary duty laws against certain named officers and members of the Company’s Board. The complaint alleges, among other things, that the individual defendants breached their fiduciary duties by approving the CIB Plan in August 2020.The complaints sought unspecified compensatory damages and other relief. On January 6, 2023,the plaintiffs filed an amended complaint. Defendants filed a partial answer to the amended complaint on March 10, 2023,and moved to partially dismiss the amended complaint on March 14, 2023.*

On* May 28, 2024,the parties entered into a Stipulation and Agreement of Settlement, Compromise, and Release (the “Stipulation”) to resolve the action. The Stipulation and exhibits thereto, including the proposed Notice of Pendency of Settlement of Class and Derivative Action (the “Notice”) and [Proposed] Scheduling Order with Respect to Notice and Settlement Hearing (the “Scheduling Order”), were filed in the Delaware Court of Chancery on May 28, 2024.*

On* June 26, 2024,the Delaware Court of Chancery entered the Scheduling Order, which included approval of the Notice. The Delaware Court of Chancery held a settlement hearing on September 9, 2024.On January 24, 2025,the Delaware Court of Chancery entered a Final Order and Judgment approving the Stipulation and dismissing the action with prejudice. Pursuant to the Final Order, the Company paid $1 million in attorneys’ fees and expenses in February 2025,which was recorded in accounts payable and other accrued expenses at December 31, 2024.*

Anti-SLAPP Lawsuit

On* August 6, 2024,*a lawsuit was filed in the District Court for the Southern District of New York which, as amended and as joined by intervenor plaintiffs, asserts claims, including a claim under the New York Anti-SLAPP Law, against the Company and againsttwo former officers to whom the Company has certain indemnification obligations. The amended complaint and the complaint in intervention seeks costs and damages relating to a defamation action filed by the Company against the plaintiffs and subsequently dismissed voluntarily and without prejudice by the Company. The Company intends to defend the lawsuit vigorously. The Company is unable to estimate the possible loss or range of loss, if any, associated with this lawsuit.

13. Warrant Dividend Distribution

On* January 3, 2024,the Company made a distribution to the holders of record of the Company’s common stock in the form of warrants to purchase shares of common stock. Each holder of record of the Company's common stock as of the close of business on December 22, 2023*received four warrants for every 10 shares of common stock (rounded down for any fractional warrant) resulting in the issuance of approximately 16.9 million warrants.

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Each warrant entitled the holder to purchase, at the holder’s sole expense and exclusive election, at an exercise price of $33.00 per warrant, one andone-half shares of common stock (rounded down for any fractional shares). Payment for shares of common stock upon exercise of warrants was required to be in cash.

On* April 15, 2024,the Company announced that all outstanding warrants would be redeemed on May 7, 2024 (the “Redemption Date”). The redemption price was equal to 1/10 of $0.01 per warrant. The warrants were exercisable at any time starting on January 3, 2024*until the business day prior to the Redemption Date. There areno remaining warrants currently outstanding.

The warrants were subject to the terms and conditions of the Warrant Agreement (including Form of Warrant), dated* January 3, 2024,between Cassava Sciences, Inc., Computershare Inc., and Computershare Trust Company, N.A. as filed in a Current Report on Form8*-K with the SEC on* January 3, 2024.*The warrants were listed and traded separately from the Company's common stock on the Nasdaq Capital Market under the ticker “SAVAW”.

From* January 3, 2024to March 31, 2024,a total of approximately 674,000 warrants were exercised resulting in net proceeds to the Company of approximately $22.3 million. The Company issued approximately 1.0 million shares of common stock from the exercise of warrants through March 31, 2024.*

Subsequent to* March 31, 2024and through the Redemption Date, a total of approximately3.15* million warrants were exercised resulting in gross proceeds to the Company of approximately*$104.0* million. The Company issued approximately 4.7 million shares of common stock from the exercise of warrants from* March 31, 2024*through the Redemption Date.

Gross proceeds for the year ended* December 31,*2024 from the warrant distribution totaled approximately $126.3 million from the issuance of approximately 5.7 million common shares at $22.00 per share. Total net proceeds of the warrant distribution were approximately $123.6 million after deducting exercise expenses and commissions.

After thefirst $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.

Costs of the warrant distribution totaling approximately $537,000 were recorded as general and administrative expenses in the statements of operations upon distribution of the warrants on* January 3, 2024.*

The outstanding warrants were classified as liabilities in accordance with ASC480 and ASC815, which requires the warrants to be measured at initial fair value on* January 3, 2024and at each reporting period thereafter, with the changes in fair value recognized as a non-cash gain or loss in our consolidated statements of operations. As of December 31, 2024,*there wereno warrants outstanding.

During the period from common stock warrant distribution on* January 3, 2024*to the Redemption Date, changes in the Company's common stock warrants liability and warrants outstanding were as follows (in thousands):

See Note2 for additional information regarding common stock warrants and associated warrant liability.

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14. Subsequent Event

On* January 7, 2025,the Company announced a reduction its workforce by 10 employees, a reduction of 33% (the “Workforce Reduction”). The Company communicated the Workforce Reduction to affected employees on January 7, 2025.*

The Company estimates that it will incur approximately $0.4 million ofone-time costs in connection with the Workforce Reduction, primarily related to severance payments. The Company expects the Workforce Reduction to be completed, and the majority of the associated costs and cash payments to be incurred, during thefirst quarter of2025.