FILANA THERAPEUTICS, INC.

Previous wording

Dr. Bordey joined the Company as Senior Vice President, Neuroscience, on May 1, 2025, while continuing her tenured academic position at Yale School of Medicine on a part time basis. In connection with plans to initiate a clinical program in TSC-related epilepsy, the Company appointed Dr. Joseph Hulihan as Chief Medical Officer in August 2025. Dr. Hulihan, who brings over 25 years of industry experience, devotes approximately half of his professional time to the Company and will advise on the clinical development of simufilam.

Current wording

Dr. Bordey joined the Company as Senior Vice President, Neuroscience, in May 2025, while continuing her tenured academic position at Yale School of Medicine on a part-time basis. In connection with plans to initiate a clinical program in TSC-related epilepsy, the Company appointed Dr. Joseph Hulihan as Chief Medical Officer in August 2025. Dr. Hulihan, who brings over 25 years of industry experience, devotes approximately half of his professional time to the Company and will advise on the clinical development of simufilam.

Previous wording

Based on the results of these studies, the Company filed an Investigational New Drug (IND) application with the U.S. Food and Drug Administration (FDA) in order to initiate a proof-of-concept clinical trial for simufilam in TSC-related epilepsy. On December 15, 2025, the Company received a formal letter from FDA confirming that the proposed clinical trial is on full clinical hold subject to the Company providing FDA with additional information, including additional pre-clinical data, and modifying the protocol design.

Current wording

Based on the results of these studies, the Company filed an Investigational New Drug (IND) application with the U.S. Food and Drug Administration (FDA) in order to initiate a proof-of-concept clinical trial for simufilam in TSC-related epilepsy. On December 15, 2025, the Company received a formal letter from FDA confirming that the proposed clinical trial is on full clinical hold subject to the Company providing FDA with additional information, including additional pre-clinical data, and modifying the protocol design. The Company is working expeditiously to address the items identified in the letter. The timing for initiation of a clinical trial will depend on the Company’s ability to provide the requested information to FDA and on satisfactory completion of FDA’s review.

Previous wording

Between 2021 and 2025 we enrolled 1,900 patients—including 1,153 patients treated with simufilam during the blinded phase—in two randomized placebo-controlled Phase 3 clinical trials of oral simufilam in mild-to-moderate Alzheimer’s disease. The 800 patients enrolled in the first Phase 3 study, called RETHINK-ALZ, received either 100 mg simufilam tablets or placebo twice daily for 52 weeks (NCT04994483). The 1,125 patients enrolled in the second Phase 3 study, called REFOCUS-ALZ, received either 100 mg and 50 mg simufilam tablets or placebo twice daily for 76 weeks (NCT05026177). Patients who completed either of these Phase 3 studies or the 24-month Phase 2 safety study were eligible to enter a 12-month Open Label Extension study in which all patients received simufilam.

Current wording

Between 2021 and 2025 we enrolled approximately 1,900 patients—including 1,153 patients treated with simufilam during the blinded phase—in two randomized placebo-controlled Phase 3 clinical trials of oral simufilam in mild-to-moderate Alzheimer’s disease. The 800 patients enrolled in the first Phase 3 study, called RETHINK-ALZ, received either 100 mg simufilam tablets or placebo twice daily for 52 weeks (NCT04994483). The 1,125 patients enrolled in the second Phase 3 study, called REFOCUS-ALZ, received either 100 mg and 50 mg simufilam tablets or placebo twice daily for 76 weeks (NCT05026177). Patients who completed either of these Phase 3 studies or the 24-month Phase 2 safety study were eligible to enter a 12-month Open Label Extension study in which all patients received simufilam.

Previous wording

We have yet to generate any revenues from product sales. We have an accumulated deficit of $506.4 million at March 31, 2026. These losses have resulted principally from costs incurred in connection with research and development activities, salaries and other personnel-related costs, legal related costs and general corporate expenses. Research and development activities include costs of clinical and preclinical trials as well as clinical supplies associated with our product candidates. Salaries and other personnel-related costs include stock-based compensation associated with stock 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 enrollment rates of clinical trials for our product candidates, timing of preclinical activities and our need for clinical supplies.

Current wording

We have yet to generate any revenues from product sales. We have an accumulated deficit of $515.0 million at June 30, 2026. These losses have resulted principally from costs incurred in connection with research and development activities, salaries and other personnel-related costs, legal related costs and general corporate expenses. Research and development activities include costs of clinical and preclinical trials as well as clinical supplies associated with our product candidates. Salaries and other personnel-related costs include stock-based compensation associated with stock 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 enrollment rates of clinical trials for our product candidates, timing of preclinical activities and our need for clinical supplies.

Previous wording

Product revenue will depend on our ability to receive regulatory approvals for, and successfully market, our product candidates. If our development efforts result in regulatory approval and successful commercialization of our product candidates, we expect to generate revenue from direct sales of our drugs and/or, if we license our drugs to future collaborators, from the receipt of license fees and royalties from sales of licensed products. We conduct our research and development programs through a combination of internal and collaborative programs. We rely on arrangements with universities, certain collaborators, contract development and manufacturing organizations (“CDMOs”), clinical research organizations ("CROs") and clinical research sites for a significant portion of our product development efforts.

Current wording

Product revenue will depend on our ability to receive regulatory approvals for, and successfully market, our product candidates. If our development efforts result in regulatory approval and successful commercialization of our product candidates, we expect to generate revenue from direct sales of our drugs and/or, if we license our drugs to future collaborators, from the receipt of license fees and royalties from sales of licensed products. We conduct our research and development programs through a combination of internal and collaborative programs. We rely on arrangements with universities, certain collaborators, contract development and manufacturing organizations, clinical research organizations ("CROs") and clinical research sites for a significant portion of our product development efforts.

Previous wording

There have been no material changes to our critical accounting estimates during the three months ended March 31, 2026 from those described in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” included in our Annual Report on Form 10-K for the year ended December 31, 2025, as filed with the SEC on March 12, 2026.

Current wording

There have been no material changes to our critical accounting estimates during the six months ended June 30, 2026 from those described in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” included in our Annual Report on Form 10-K for the year ended December 31, 2025, as filed with the SEC on March 12, 2026.

Previous wording

Results of Operations–** Three Months Ended March 31, 2026 and 2025**

Current wording

Results of Operations–** Three and Six Months Ended June 30, 2026 and 2025**

Previous wording

Research and development expenses were $4.5 million and $13.7 million during the three months ended March 31, 2026 and 2025, respectively. This 67% decrease was due primarily to the phase out of the Alzheimer's disease development program, which was completed in the second quarter of 2025.

Current wording

Research and development expenses were $3.3 million and $5.1 million during the three months ended June 30, 2026 and 2025, respectively. This 35% decrease was due primarily to the phase out of the Alzheimer's disease development program, which was completed in the second quarter of 2025.

Previous wording

General and administrative expenses were $6.6 million and $10.9 million during the three months ended March 31, 2026 and 2025, respectively. The 39% decrease was due primarily to legal loss contingencies of $3.0 million recorded in the first quarter of 2025 not being repeated in 2026.

Current wording

General and administrative expenses were $6.1 million and $40.3 million during the three months ended June 30, 2026 and 2025, respectively. The 85% decrease was due primarily to a $31.3 million securities litigation loss contingency recorded in the second quarter of 2025 not being repeated in 2026.

Previous wording

Interest income was $0.8 million and $1.3 million during the three months ended March 31, 2026 and 2025, respectively. The decrease in interest income was due primarily to lower interest rates and cash balances in 2026 compared to 2025.

Current wording

Interest income was $0.7 million and $1.2 million during the three months ended June 30, 2026 and 2025, respectively. The decrease in interest income was due primarily to lower interest rates and cash balances in 2026 compared to 2025.

Previous wording

We expect interest income to decrease in future quarters as we utilize cash in our operations and realize the impact of a lower interest rate environment.

Current wording

We expect interest income to decrease in future quarters as we continue to utilize cash in our operations.

Previous wording

We record the activities related to leasing office space to third parties in buildings we own as other income (loss), net, as leasing is not core to the Company’s operations. Other income (loss), net, was $48,000 and $(82,000) during the three months ended March 31, 2026 and 2025, respectively.

Current wording

We record the activities related to leasing office space to third parties in buildings we own as other income (loss), net, as leasing is not core to the Company’s operations. Other income (loss), net, was $43,000 and $(46,000) during the three months ended June 30, 2026 and 2025, respectively.

Previous wording

We recorded other income in the three months ended March 31, 2026 due to improved occupancy rates in 2026 compared to the prior year period. We expect to record modest net income on leasing activities in 2026 due to improved occupancy.

Current wording

We recorded other income in the three and six months ended June 30, 2026 due to improved occupancy rates in 2026 compared to the prior year period. We expect to record modest net income on leasing activities in 2026 due to improved occupancy.

Previous wording

Since inception, we have financed our operations primarily through public and private stock offerings, payments received under collaboration 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 March 31, 2026, cash and cash equivalents were $86.6 million.

Current wording

Since inception, we have financed our operations primarily through public and private stock offerings, payments received under collaboration 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 June 30, 2026, cash and cash equivalents were $82.7 million. Subsequent to June 30, 2026, we paid our accrued securities litigation loss contingency liability of $31.25 million into a plaintiff's escrow account pursuant to the terms of the Stipulation of Settlement in the Consolidated Securities Action discussed in Note 10 to the "Condensed Consolidated Financial Statements".

Previous wording

There were no common stock sales under the ATM during the three months ended March 31, 2026 or the year ended December 31, 2025.

Current wording

There were no common stock sales under the ATM during the six months ended June 30, 2026 or the year ended December 31, 2025.

Previous wording

Net cash used in operating activities was $8.9 million for the three months ended March 31, 2026, resulting primarily from a net loss of $10.3 million as well as decreases in accounts payable and accrued expenses of $2.5 million and accrued compensation and benefits of $1.4 million. These factors were partially offset by a decrease in prepaid and other current assets of $0.9 million. There was also a non-cash adjustment for stock-based compensation expense of $4.1 million.

Current wording

Net cash used in operating activities was $12.7 million for the six months ended June 30, 2026, resulting primarily from a net loss of $18.9 million as well as decreases in accounts payable and accrued expenses of $2.4 million and accrued compensation and benefits of $1.2 million. These factors were partially offset by a decrease in prepaid and other current assets of $1.2 million. There was also a non-cash adjustment for stock-based compensation expense of $8.1 million.

Previous wording

Net cash used in operating activities was $11.3 million for the three months ended March 31, 2025, resulting primarily from a net loss of $23.4 million. Impacts from this net loss were partially offset by an increase in accrued development expense of $1.6 million, a decrease in prepaid and other current assets of $5.1 million, and non-cash adjustment for stock-based compensation expense of $5.2 million.

Current wording

Net cash used in operating activities was $16.3 million for the six months ended June 30, 2025, resulting primarily from a net loss of $67.6 million. This change was partially offset by an increase in accrued development expense of $1.3 million, an increase in accounts payable and accrued expenses of $35.2 million and a decrease in prepaid and other current assets of $5.5 million. There was also a non-cash adjustment for stock-based compensation expense of $9.8 million.

Previous wording

There was no net cash used in investing activities during the three months ended March 31, 2026 and 2025.

Current wording

There was minimal or no net cash used in investing activities during the six months ended June 30, 2026 and 2025.

Previous wording

Net cash used in financing activities during the three months ended March 31, 2026 was $51,000 for costs related to the ATM. There were no sales of common stock under the ATM during the three months ended March 31, 2026.

Current wording

Net cash used in financing activities during the six months ended June 30, 2026 was $67,000 for costs related to the ATM. There were no sales of common stock under the ATM during the six months ended June 30, 2026.

Previous wording

Net cash provided by financing activities during the three months ended March 31, 2025 was $90,000 of proceeds from the exercise of stock options.

Current wording

Net cash provided by financing activities during the six months ended June 30, 2025 was $90,000 of proceeds from the exercise of stock options.

Previous wording

We have an accumulated deficit of $506.4 million as of March 31, 2026. 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 drug candidates, the resources we devote to researching and developing, formulating, manufacturing, commercializing and supporting our products and other corporate needs. We believe that our current cash and cash equivalents will 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. However, there are no assurances that additional financing will be available on favorable terms, or at all.

Current wording

We have an accumulated deficit of $515.0 million as of June 30, 2026. 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 drug candidates, the resources we devote to researching and developing, formulating, manufacturing, commercializing and supporting our products and other corporate needs. We believe that our current cash and cash equivalents will 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. However, there are no assurances that additional financing will be available on favorable terms, or at all.