UNITEDSTATES
SECURITIESAND EXCHANGE COMMISSION
WASHINGTON,D.C. 20549
FORM
| QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
Forthe quarterly period ended
OR
| TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
Forthe transition period from to
Commissionfile number:
(Exactname of registrant as specified in its charter)
| (State or Other Jurisdiction of | (I.R.S. Employer | |
| Incorporation or Organization) | Identification No.) | |
| (Address of Principal Executive Office) | (Zip Code) |
Registrant’stelephone number, including area code:
Indicateby check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities ExchangeAct of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2)has been subject to such filing requirements for the past 90 days.
Indicateby check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule405 of Regulation S-T (Sec.232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant wasrequired to submit such files).
Indicateby check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reportingcompany, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,”“smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act. (Check one):
| Large accelerated filer | ☐ | Accelerated filer | ☐ |
| ☒ | Smaller reporting company | ||
| Emerging growth company |
Ifan emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complyingwith any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicateby check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes ☐ No
Securitiesregistered pursuant to Section 12(b) of the Act:
| Title of Each Class | Trading Symbol(s) | Name of each exchange on which registered | ||
(The Nasdaq Capital Market) |
Asof August 12, 2025, the number of outstanding shares of the registrant’s common stock, par value $ per share, was approximately.
COCRYSTALPHARMA, INC.
FORM10-Q FOR THE QUARTER ENDED JUNE 30, 2025
INDEX
| 2 |
PartI – FINANCIAL INFORMATION
COCRYSTALPHARMA, INC.
CONDENSEDCONSOLIDATED BALANCE SHEETS
(inthousands, except per share data)
| June 30, 2025 | December 31, 2024 | |||||||
| (unaudited) | ||||||||
| Assets | ||||||||
| Current assets: | ||||||||
| Cash | $ | $ | ||||||
| Restricted cash | ||||||||
| Tax credit receivable | ||||||||
| Prepaid expenses and other current assets | ||||||||
| Total current assets | ||||||||
| Property and equipment, net | ||||||||
| Deposits | ||||||||
| Operating lease right-of-use assets, net (including $ | ||||||||
| Total assets | $ | $ | ||||||
| Liabilities and stockholders’ equity | ||||||||
| Current liabilities: | ||||||||
| Accounts payable and accrued expenses | $ | $ | ||||||
| Current maturities of operating lease liabilities (including $ | ||||||||
| Total current liabilities | ||||||||
| Long-term liabilities: | ||||||||
| Operating lease liabilities (including $ | ||||||||
| Total long-term liabilities | ||||||||
| Total liabilities | ||||||||
| Commitments and contingencies | ||||||||
| Stockholders’ equity: | ||||||||
| Common stock, $ a par value: shares authorized as of June 30, 2025, and December 31, 2024; shares issued and outstanding as of June 30, 2025 and December 31, 2024 | ||||||||
| Additional paid-in capital | ||||||||
| Accumulated deficit | ( | ) | ( | ) | ||||
| Total stockholders’ equity | ||||||||
| Total liabilities and stockholders’ equity | $ | $ | ||||||
Seeaccompanying notes to condensed consolidated financial statements.
| F-1 |
COCRYSTALPHARMA, INC.
CONDENSEDCONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited)
(inthousands, except per share data)
| Three months ended June 30, | Six months ended June 30, | |||||||||||||||
| 2025 | 2024 | 2025 | 2024 | |||||||||||||
| Operating expenses: | ||||||||||||||||
| Research and development | ||||||||||||||||
| General and administrative | ||||||||||||||||
| Total operating expenses | ||||||||||||||||
| Loss from operations | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Other income (expense): | ||||||||||||||||
| Interest income, net | ||||||||||||||||
| Foreign exchange gain (loss) | ( | ) | ( | ) | ||||||||||||
| Total other income, net | ||||||||||||||||
| Net loss | $ | ( | ) | $ | ( | ) | ( | ) | ( | ) | ||||||
| Net loss per common share, basic and diluted | $ | ) | $ | ) | ) | ) | ||||||||||
| Weighted average number of common shares outstanding, basic and diluted | ||||||||||||||||
Seeaccompanying notes to condensed consolidated financial statements.
| F-2 |
COCRYSTALPHARMA, INC.
CONDENSEDCONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY
(unaudited)
(inthousands)
| Common Stock | Additional Paid-in | Accumulated | Total Stockholders’ | |||||||||||||||||
| Shares | Amount | Capital | Deficit | Equity | ||||||||||||||||
| Balance as of December 31, 2024 | $ | $ | $ | ( | ) | $ | ||||||||||||||
| Stock-based compensation | - | |||||||||||||||||||
| Net loss | - | ( | ) | ( | ) | |||||||||||||||
| Balance as of March 31, 2025 | $ | $ | $ | ( | ) | $ | ||||||||||||||
| Stock-based compensation | - | |||||||||||||||||||
| Net loss | - | ( | ) | ( | ) | |||||||||||||||
| Balance as of June 30, 2025 | $ | $ | $ | ( | ) | $ | ||||||||||||||
| Common Stock | Additional Paid-in | Accumulated | Total Stockholders’ | |||||||||||||||||
| Shares | Amount | Capital | Deficit | Equity | ||||||||||||||||
| Balance as of December 31, 2023 | $ | $ | $ | ( | ) | $ | ||||||||||||||
| Stock-based compensation | - | |||||||||||||||||||
| Net loss | - | ( | ) | ( | ) | |||||||||||||||
| Balance as of March 31, 2024 | $ | $ | $ | ( | ) | $ | ||||||||||||||
| Stock-based compensation | - | |||||||||||||||||||
| Net loss | - | ( | ) | ( | ) | |||||||||||||||
| Balance as of June 30, 2024 | $ | $ | $ | ( | ) | $ | ||||||||||||||
Seeaccompanying notes to condensed consolidated financial statements.
| F-3 |
COCRYSTALPHARMA, INC.
CONDENSEDCONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited)
(inthousands)
| Six months ended June 30, | ||||||||
| 2025 | 2024 | |||||||
| Operating activities: | ||||||||
| Net loss | $ | ( | ) | $ | ( | ) | ||
| Adjustments to reconcile net loss to net cash used in operating activities: | ||||||||
| Depreciation and amortization expense | ||||||||
| Stock-based compensation | ||||||||
| Changes in operating assets and liabilities: | ||||||||
| Prepaid expenses and other current assets | ||||||||
| Deposits | ( | ) | ||||||
| Tax credit receivable | ( | ) | ( | ) | ||||
| Decrease in right of use assets | ||||||||
| Accounts payable and accrued expenses | ( | ) | ( | ) | ||||
| Operating lease liabilities | ( | ) | ( | ) | ||||
| Net cash used in operating activities | ( | ) | ( | ) | ||||
| Investing activities: | ||||||||
| Purchases of property and equipment | ( | ) | ||||||
| Net cash used in investing activities | ( | ) | ||||||
| Net decrease in cash and restricted cash | ( | ) | ( | ) | ||||
| Cash and restricted cash at beginning of period | ||||||||
| Cash and restricted cash at end of period | $ | $ | ||||||
Seeaccompanying notes to condensed consolidated financial statements.
| F-4 |
COCRYSTALPHARMA, INC.
NOTESTO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
FORTHE SIX MONTHS ENDED JUNE 30, 2025 AND 2024
(unaudited)
1.Organization and Business
CocrystalPharma, Inc. (“we”, the “Company” or “Cocrystal”), a clinical stage biopharmaceutical company incorporatedin Delaware, has been developing novel technologies and approaches to antiviral drug candidates.Our focus is to pursue the development and commercialization of broad-spectrum antiviral drug candidates that will transform the treatmentand prophylaxis of viral diseases in humans. By concentrating our research and development efforts on viral replication inhibitors, weplan to leverage our infrastructure and expertise in these areas.
TheCompany’s activities since inception have principally consisted of acquiring product and technology rights, raising capital, andperforming research and development. Successful completion of the Company’s development programs, obtaining regulatory approvalsof its products and, ultimately, the attainment of profitable operations is dependent on future events, including, among other things,its ability to access potential markets, secure financing, develop a customer base, attract, retain and motivate qualified personnel,and develop strategic alliances.
Liquidityand going concern
TheCompany’s consolidated financial statements are prepared using generally accepted accounting principles in the United States ofAmerica applicable to a going concern, which contemplates the realization of assets and the satisfaction of liabilities in the normalcourse of business. The Company has incurred net losses and negative operating cash flows since inception. For the six months ended June30, 2025, the Company recorded a net loss of approximately $
OnJune 30, 2025, the Company had cash and restricted cash of approximately $
TheCompany’s activities since inception have principally consisted of acquiring product and technology rights, raising capital, andperforming research and development. Successful completion of the Company’s development programs, obtaining regulatory approvalsof its products and, ultimately, the attainment of profitable operations is dependent on future events, including, among other things,its ability to access potential markets, secure financing, develop a customer base, attract, retain and motivate qualified personnel,and develop strategic alliances. Through June 30, 2025, the Company has primarily funded its operations through equity offerings.
TheCompany will need to continue obtaining adequate capital to fund operating losses until it becomes profitable. The Company can give noassurances that the additional capital it is able to raise, if any, will be sufficient to meet its needs, or that any such financingwill be obtainable on acceptable terms. Our future cash requirements, and the timing of those requirements, will depend on a number offactors, including economic conditions, the approval and success of our products in development, the continued progress of research anddevelopment of our product candidates, the timing and outcome of clinical trials and regulatory approvals, the costs involved in preparing,filing, prosecuting, maintaining, defending, and enforcing patent claims and other intellectual property rights, the status of competitiveproducts, the availability of financing, our success in developing markets for our product candidates and legal proceedings that mayarise. We have historically not generated sustained positive cash flow and if we are not able to secure additional funding when needed,we may have to delay, reduce the scope of, or eliminate one or more of our clinical trials or research and development programs. If theCompany is unable to obtain adequate capital, it could be forced to cease operations or substantially curtail its drug development activities.The Company expects to continue incurring substantial operating losses and negative cash flows from operations over the next severalyears during its pre-clinical and clinical development phases.
2.Basis of Presentation and Significant Accounting Policies
Basisof Presentation
Theaccompanying condensed consolidated financial statements have been prepared in accordance with United States generally accepted accountingprinciples (“U.S. GAAP”) for interim financial information, the instructions to Form 10-Q and Article 10 of Regulation S-Xset forth by the Securities and Exchange Commission (“SEC”). They do not include all of the information and notes requiredby U.S. GAAP for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals)considered necessary for a fair presentation have been included. The results of operations for the interim periods presented are notnecessarily indicative of the results of operations for the entire fiscal year. For further information, refer to the consolidated financialstatements and footnotes thereto included in the Company’s annual report on Form 10-K for the year ended December 31, 2024 filedon March 31, 2025 (“Annual Report”).
Principlesof Consolidation
Theconsolidated financial statements include the accounts of Cocrystal Pharma, Inc. and its wholly owned subsidiaries: Cocrystal Discovery,Inc., Cocrystal Pharma Australia Pty Ltd. (“Cocrystal Australia”), RFS Pharma, LLC and Cocrystal Merger Sub, Inc. Intercompanytransactions and balances have been eliminated. Cocrystal Discovery, Inc. conducts all of the Company’s research and developmentactivities and oversees ongoing clinical trials conducted by others. Cocrystal Australia operates clinical trials in Australia. The othertwo subsidiaries are inactive.
Segments
TheCompany’s Co-Chief Executive Officer and President (“CEO”) is our chief operating decision maker (“CODM”)and evaluates performance and makes operating decisions about allocating resources based on financial data presented on a consolidatedbasis. Because our CODM evaluates financial performance on a consolidated basis, the Company has determined that it operates as a singlereportable segment composed of the consolidated financial results of Cocrystal Pharma, Inc. The measure of segment assets is reportedon the consolidated balance sheets as total assets (see Note 9).
| F-5 |
Useof Estimates
Preparationof the Company’s consolidated financial statements in conformance with U.S. GAAP requires the Company’s management to makeestimates and assumptions that impact the reported amounts of assets, liabilities, revenues and expenses, and the disclosure of contingentassets and liabilities in the Company’s consolidated financial statements and accompanying notes.
Themost significant estimates in the Company’s consolidated financial statements relate to clinical trial costs and accruals forpotential liabilities, the tax credit receivables and the fair value of stock-based compensation. The Company bases estimates andassumptions on historical experience, when available, and on various factors that it believes to be reasonable under thecircumstances. The Company evaluates its estimates and assumptions on an ongoing basis, and its actual results may differ fromestimates made under different assumptions or conditions.
Concentrationsof Credit Risk
Financialinstruments that potentially subject the Company to significant concentrations of credit risk consist primarily of cash deposited inaccounts held at two U.S. financial institutions, which may, at times, exceed federally insured limits of $
Risksand uncertainties
TheCompany’s future results of operations involve a number of risks and uncertainties. Factors that could affect the Company’sfuture operating results and cause actual results to vary materially from expectations include, but are not limited to, rapid technologicalchange, ability to obtain regulatory approvals, competition from currently available treatments and therapies, competition from largercompanies, effective protection of proprietary technology, maintenance of strategic relationships, and dependence on key individuals.
Productsdeveloped by the Company will require clearances from the U.S. Food and Drug Administration (the “FDA”) and other internationalregulatory agencies prior to commercial sales in their respective markets. The Company’s products may not receive the necessaryclearances and if they are denied clearance, clearance is delayed, or the Company is unable to maintain clearance, the Company’sbusiness could be materially, adversely impacted.
SeeItem 1A- Risk Factors in our Annual Report on Form 10-K for the year ended December 31, 2024 for more information on the risks and uncertaintieswe face.
ForeignCurrency Transactions
TheCompany and its subsidiaries use the U.S. dollar as functional currency. Foreign currency transactions are initially measured and recordedin the functional currency using the exchange rate on the date of the transaction. Foreign exchange gains and losses arising from settlementof foreign currency transactions are recognized in profit and loss.
CocrystalAustralia maintains its records in Australian dollars. The monetary assets and liabilities of Cocrystal Australia are remeasured intothe functional currency using the closing rate at the end of every reporting period. All nonmonetary assets and liabilities and relatedprofit and loss accounts are remeasured into the functional currency using the historical exchange rates. Profit and loss accounts, otherthan those that are remeasured using the historical exchange rates, are remeasured into the functional currency using the average exchangerate for the period. Foreign exchange gains and losses arising from the remeasurement into the functional currency is recognized in profitand loss.
FairValue Measurements
FASBAccounting Standards Codification (“ASC”) 820 defines fair value, establishes a framework for measuring fair value underU.S. GAAP and enhances disclosures about fair value measurements. Fair value is defined under ASC 820 as the exchange price that wouldbe received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset orliability in an orderly transaction between market participants on the measurement date. Valuation techniques used to measure fair valueunder ASC 820 must maximize the use of observable inputs and minimize the use of unobservable inputs. The standard describes a fair valuehierarchy based on three levels of inputs, of which the first two are considered observable and the last unobservable, that may be usedto measure fair value which are the following:
| Level 1 — quoted prices in active markets for identical assets or liabilities. | |
| Level 2 — other significant observable inputs for the assets or liabilities through corroboration with market data at the measurement date. | |
| Level 3 — significant unobservable inputs that reflect management’s best estimate of what market participants would use to price the assets or liabilities at the measurement date. |
| F-6 |
AtJune 30, 2025 and December 31, 2024, the carrying amounts of financial assets and liabilities, such as cash, other current assets, andaccounts payable and accrued expenses approximate their fair values due to their short-term nature. The carrying values of leases payableapproximate their fair values due to the fact that the interest rates on these obligations are based on prevailing market interest rates.
Long-LivedAssets
TheCompany regularly reviews the carrying value and estimated lives of its long-lived assets, including property and equipment, to determinewhether indicators of impairment may exist which warrant adjustments to carrying values or estimated useful lives. The determinants usedfor this evaluation include management’s estimate of the asset’s ability to generate positive income from operations andpositive cash flow in future periods as well as the strategic significance of the assets to the Company’s business objective. Shouldan impairment exist, the impairment loss would be measured based on the excess of the carrying amount over the asset’s fair value.
Researchand Development Expenses
Researchand development costs consist primarily of fees paid to consultants and outside service providers, and other expenses relating to theacquisition, design, development and testing of the Company’s clinical products. All research and development costs are expensedas incurred. Research and development costs are presented net of tax credits.
TheCompany’s Australian subsidiary is entitled to receive government assistance in the form of refundable and non-refundable researchand development tax credits (“Refundable Tax Credits”) from the federal and provincial taxation authorities, based on qualifyingexpenditures incurred during the fiscal year. The Refundable Tax Credits are from the provincial taxation authorities and are not dependenton its ongoing tax status or tax position and accordingly are not considered part of income taxes. The Company records Refundable TaxCredits as a reduction of research and development expenses when the Company can reasonably estimate the amounts and it is more likelythan not; they will be received. As of December 31, 2024, balance of Refundable Tax Credits was approximately $
IncomeTaxes
TheCompany accounts for income taxes under the asset and liability method. Under this method, deferred tax assets and liabilities are determinedbased on differences between financial reporting and tax bases of assets and liabilities and are measured using enacted tax rates andlaws that are expected to be in effect when the differences are expected to be recovered or settled. Realization of deferred tax assetsis dependent upon future taxable income. A valuation allowance is recognized if it is more likely than not that some portion or all ofa deferred tax asset will not be realized based on the weight of available evidence, including expected future earnings. The Companyrecognizes an uncertain tax position in its financial statements when it concludes that a tax position is more likely than not to besustained upon examination based solely on its technical merits. Only after a tax position passes the first step of recognition willmeasurement be required. Under the measurement step, the tax benefit is measured as the largest amount of benefit that is more likelythan not to be realized upon effective settlement. This is determined on a cumulative probability basis. The full impact of any changein recognition or measurement is reflected in the period in which such change occurs. The Company elects to accrue any interest or penaltiesrelated to income taxes as part of its income tax expense.
| F-7 |
Asof June 30, 2025, the Company assessed its income tax expense based on its projected future taxable income for the year ending December31, 2024 and therefore recorded no amount for income tax expense for the six months ended June 30, 2025. In addition, the Company hassignificant deferred tax assets available to offset income tax expense due to net operating loss carry forwards which are currently subjectto a full valuation allowance based on the Company’s assessment of future taxable income. Refer to our Annual Report on Form 10-Kfor the year ended December 31, 2024 for more information.
TheCompany recognizes compensation expense using a fair value-based method for costs related to stock-based payments, including stock options.The fair value of options awarded to employees is measured on the date of grant using the Black-Scholes option pricing model and is recognizedas expense over the requisite service period on a straight-line basis.
Useof the Black-Scholes option pricing model requires the input of subjective assumptions including expected volatility, expected term,and a risk-free interest rate. The Company estimates volatility using a blend of its own historical stock price volatility as well asthat of market comparable entities since the Company’s common stock has limited trading history and limited observable volatilityof its own. The expected term of the options is estimated by using the SEC Staff Bulletin No. 107’s Simplified Method for EstimateExpected Term. The risk-free interest rate is estimated using comparable published federal funds rates.
TheCompany accounts for and discloses net income (loss) per common share in accordance with FASB ASC Topic 260, Earnings Per Share.Basic income (loss) per common share is computed by dividing income (loss) attributable to common stockholders by the weighted averagenumber of common shares outstanding. Diluted net income (loss) per common share is computed by dividing net income (loss) attributableto common stockholders by the weighted average number of common shares that would have been outstanding during the period assuming theissuance of common stock for all potential dilutive common shares outstanding. Potential common shares consist of shares issuable uponthe exercise of stock options.
| June 30, | ||||||||
| 2025 | 2024 | |||||||
| Outstanding options to purchase common stock | ||||||||
| Unvested restricted stock units | ||||||||
| Total | ||||||||
| F-8 |
RecentAccounting Pronouncements
InNovember 2024, the Financial Accounting Standards Board (FASB) issued ASU No. 2024-03, Income Statement—Reporting ComprehensiveIncome—Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses which includes amendmentsthat require disclosure in the notes to financial statements of specified information about certain costs and expenses, including purchasesof inventory; employee compensation; and depreciation, amortization and depletion expenses for each caption on the income statement wheresuch expenses are included. The amendments are effective for the Company’s annual periods beginning January 1, 2027, with earlyadoption permitted, and should be applied either prospectively or retrospectively. The Company is in the process of evaluating this ASUto determine its impact on the Company’s disclosures.
Otherauthoritative guidance issued by the FASB (including technical corrections to the ASC), the American Institute of Certified Public Accountants,and the SEC did not, or are not expected to, have a material impact on the Company’s consolidated financial statements and relateddisclosures.
3.Property and Equipment
Propertyand equipment are recorded at cost and depreciated over the estimated useful lives of the underlying assets (three to
| June 30, 2025 | December 31, 2024 | |||||||
| Lab equipment (excluding equipment under finance leases) | $ | $ | ||||||
| Finance lease right-of-use lab equipment obtained in exchange for finance lease liabilities, net | ||||||||
| Computer and office equipment | ||||||||
| Total property and equipment | ||||||||
| Less: accumulated depreciation and amortization | ( | ) | ( | ) | ||||
| Property and equipment, net | $ | $ | ||||||
Totaldepreciation and amortization expense were approximately $
4.Accounts Payable and Accrued Expenses
Accountspayable and accrued expenses consisted of the following (in thousands) as of:
| June 30, 2025 | December 31, 2024 | |||||||
| Accounts payable | $ | $ | ||||||
| Accrued compensation | ||||||||
| Accrued other expenses | ||||||||
| Total accounts payable and accrued expenses | $ | $ | ||||||
Accountspayable and accrued other expenses contain unpaid general and administrative expenses and costs related to research and development thathave been billed and estimated unbilled, respectively, as of period-end.
5.Common Stock
Asof June 30, 2025, the Company has authorized shares of common stock, $ par value per share, and shares ofpreferred stock, $ par value per share.
TheCompany had shares of common stock and shares of preferred stock issued and outstanding as of June 30, 2025, and December31, 2024.
Theholders of common stock are entitled to one vote for each share of common stock held.
| F-9 |
EquityIncentive Plans
TheCompany adopted an equity incentive plan in 2015 (the “2015 Plan”) under which shares of common stock have been reservedfor issuance to employees, and non-employee directors and consultants of the Company. Recipients of incentive stock options granted underthe 2015 Plan shall be eligible to purchase shares of the Company’s common stock at an exercise price equal to no less than theestimated fair market value of such stock on the date of grant. The maximum term of options granted under the 2015 Plan is .On June 16, 2021, the Company’s stockholders voted to approve an amendment to the 2015 Plan to increase the number of shares ofcommon stock authorized for issuance under the 2015 Plan from to shares. The 2015 Plan expired on June 29, 2025 and nofurther equity awards will be issued under the 2015 Plan.
OnJune 25, 2025, our stockholders approved and ratified an Equity Incentive Plan (the “2025 Plan”). The 2025 Plan providesfor the grant of incentive stock options, qualified stock options, restricted stock awards, restricted stock units, stock appreciationrights, and performance shares or units and cash awards. Awards may be granted under the 2025 Plan to our employees, directors and independentcontractors. the aggregate number of shares of Common Stock which shall be available for grants or payments of Awards under the 2025Plan during its term shall initially be (the “Total Plan Shares”). The Total Plan Shares will automatically increaseon January 1st of each year, for a period of nine years commencing on January 1, 2026, in an amount equal to % of the total number ofshares of Common Stock outstanding as of December 31 of the preceding calendar year on a fully diluted basis.
The2025 Plan also provides that, notwithstanding the annual increase provision, in no event will the increase in Total Plan Shares availableunder the 2025 Plan pursuant to the increase provision exceed additional shares (or a total of up to Total Plan Shares),subject to adjustment as provided under the 2025 Plan.
OnApril 2, 2025, the Board of Directors of the Company approved and adopted the 2025 Plan, which has an effective date of March 31, 2025.On June 25, 2025, the 2025 Plan was approved by our stockholders at our annual meeting of stockholders.
Asof June 30, 2025 there have been no equity awards issued under the 2025 Plan.
CommonStock Reserved for Future Issuance
Thefollowing table presents information concerning common stock available for future issuance (in thousands) as of June 30, 2025:
Shares Available for Grant | ||||
| Balance at December 31, 2024 | ||||
| Cancelled or forfeited | ||||
| 2025 Plan addition | ||||
| Balance at June 30, 2025 | $ | |||
StockOptions
| Total Options Outstanding | Weighted Average Exercise Price | Aggregate Intrinsic Value | ||||||||||
| Balance at December 31, 2024 | $ | $ | ||||||||||
| Exercised | - | |||||||||||
| Granted | - | |||||||||||
| Cancelled | ( | ) | - | |||||||||
| Balance at June 30, 2025 | $ | $ | ||||||||||
| F-10 |
RestrictedStock Units
OnAugust 12, 2024, the Company’s Compensation Committee approved the issuance of restricted stock unit (“RSU”)awards to non-employee directors, officers, consultants and employees. The aggregate fair value of the restricted stock unit awards grantedwas estimated to be $ using the market price of the stock on the date of the grant which is expensed using the straight-line methodover the vesting period.
| Total Restricted Stock Units Outstanding | Weighted Average Fair Value | Aggregate Intrinsic Value | ||||||||||
| Unvested December 31, 2024 | $ | $ | ||||||||||
| Granted | ||||||||||||
| Forfeited | ( | ) | ||||||||||
| Vested | ||||||||||||
| Unvested and expected to vest at June 30, 2025 | $ | $ | ||||||||||
TheCompany accounts for share-based awards to employees and nonemployee directors and consultants in accordance with the provisions ofASC 718, Compensation—Stock Compensation., and under the recently issued guidance following FASB’s pronouncement, ASU2018-07, Compensation—Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting. Under ASC718, and applicable updates adopted, share-based awards are valued at fair value on the date of grant and that fair value isrecognized over the requisite service, or vesting, period. The Company values its equity awards using the Black-Scholes optionpricing model, and accounts for forfeitures when they occur. For the three and six months ended June 30, 2025 and 2024, equity-basedcompensation expense recorded on vested options and RSU’s was approximately $and $and $and $,respectively.
Asof June 30, 2025, there was approximately $ of total unrecognized compensation expense related to non-vested stock options thatis expected to be recognized over a weighted average period of years. For options granted and outstanding, there were optionsoutstanding which were fully vested or expected to vest, with an aggregate intrinsic value of $, a weighted average exercise priceof $ and weighted average remaining contractual term of years at June 30, 2025. For vested and exercisable options, outstandingshares totaled , with an aggregate intrinsic value of $. These options had a weighted average exercise price of $ pershare and a weighted-average remaining contractual term of years at June 30, 2025.
Theaggregate intrinsic value of outstanding and exercisable options at June 30, 2025 was calculated based on the closing price of the Company’scommon stock as reported on The Nasdaq Capital Market on June 30, 2025 of $ per share less the exercise price of the options. Theaggregate intrinsic value is calculated based on the positive difference between the closing fair market value of the Company’scommon stock and the exercise price of the underlying options.
7.Commitments and Contingencies
Commitments
In the ordinary course of business, the Company enters into non-cancellable leases to purchase equipment and for its facilities, includingrelated party leases (see Note 8 – Transactions with Related Parties). Leases are accounted for as operating leases or financeleases, in accordance with ASC 842, Leases.
OperatingLeases
TheCompany leases office space in Miami, Florida and research and development laboratory space in Bothell, Washington under operating leasesthat expire on September 30, 2027 and January 31, 2031, respectively. For operating leases, the weighted average discount rate is
| F-11 |
Thefollowing table summarizes the Company’s maturities of operating lease liabilities, by year and in aggregate, as of June 30, 2025(table in thousands):
| 2025 (excluding the six months ended June 30, 2025) | $ | |||
| 2026 | ||||
| 2027 | ||||
| 2028 | ||||
| 2029 and thereafter | ||||
| Total operating lease payments | ||||
| Less: present value discount | ( | ) | ||
| Total operating lease liabilities | $ |
Asof June 30, 2025, the total operating lease liability of $
InApril 2023, the Company renewed its lease for the unit 100 at the Bothel, Washington facility (“Bothel 100”) for an 84-month(7 years) term, starting February 1, 2024, and ending on January 31, 2031. The Company classified the amended lease as an operating leasepursuant to the provisions of ASC 842 and calculated the discounted value of the total lease payments to be approximately $
InSeptember 2023, following the renewal of the Bothell 100 facility lease, the Company amended the agreement to expand the premises toinclude Suite 200 (“Bothell 200 facility”). The lease for the Bothell 200 facility has a 60-month (5-year) term, runningfrom February 1, 2024, through January 31, 2029. The Company classified the lease as an operating lease and calculated the discountedvalue of the total lease payments to be approximately $
InAugust 2024, the Company renewed its lease for the Miami, Florida location for a 36-month term, starting from October 1, 2024, and endingon September 30, 2027, with an optional two-year extension. At the time of renewal, the Company classified the lease as an operatinglease pursuant to the provisions of ASC 842 and calculated the discounted value of the total lease payments to be approximately $
Theoperating lease liabilities summarized above do not include variable common area maintenance (the “CAM”) charges, which arecontractual liabilities under the Company’s Bothell, Washington lease. CAM charges for the Bothell, Washington facility are calculatedannually based on actual common expenses for the building incurred by the lessor and proportionately billed to tenants based on leasedsquare footage.
Forthe six months ended June 30, 2025 and 2024, operating lease expense, excluding short-term leases, finance leases and CAM charges, totaledapproximately $
Thelessor of the Miami, Florida lease is a limited liability company controlled by Dr. Phillip Frost, a director and a principal stockholderof the Company.
Phase2a Clinical Trial
OnAugust 3, 2022 the Company engaged hVIVO, a subsidiary of London-based Open Orphan plc (AIM: ORPH), a rapidly growing specialist contractresearch organization (“CRO”), to conduct a Phase 2a clinical trial with the Company’s novel, broad-spectrum, orallyadministered antiviral influenza candidate. The Company prepaid a reservation fee of $
Thetotal cost of the agreement (including the reservation fee) is approximately $
| F-12 |
Contingencies
Fromtime to time, the Company is a party to, or otherwise involved in, legal proceedings arising in the normal course of business. As ofthe date of this report, except as described below, the Company is not aware of any proceedings, threatened or pending, against it which,if determined adversely, would have a material effect on its business, results of operations, cash flows or financial position.
8.Transactions with Related Parties
OnAugust 14, 2024, the Company entered into a three-year lease extension with a limited liability company controlled by Dr. Phillip Frost,a director and a principal stockholder of the Company. On an annualized basis, straight-line rent expense is approximately $
TheCompany paid a lease deposit of $
9.Segment Information
TheCompany operates and manages its business as one reportable and operating segment dedicated to the researchand development Company’s novel orally administered antiviral influenza candidate. The measure of segment assets is reported onthe balance sheet as total consolidated assets. In addition, the Company manages the business activities on a consolidated basis.
TheCompany’s CODM reviews financial information presented on a consolidated basis and decides how to allocate resources based on netincome (loss).
Significantsegment expenses include research and development, salaries, insurance, and stock-based compensation. Operating expenses include allremaining costs necessary to operate our business, which primarily include external professional services and other administrative expenses.The following table presents the significant segment expenses and other segment items regularly reviewed by our CODM (table in thousands):
| Six months ended June, | ||||||||
| 2025 | 2024 | |||||||
| Revenue | $ | $ | ||||||
| Less: | ||||||||
| Research and development | ||||||||
| Salaries and personnel costs | ||||||||
| Insurance | ||||||||
| Stock-based compensation | ||||||||
| Operating expenses | ||||||||
| Other income | ( | ) | ( | ) | ||||
| Net loss | $ | $ | ||||||
| F-13 |
ITEM2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Overview
CocrystalPharma, Inc. (the “Company” or “Cocrystal”) is a clinical-stage biotechnology company seeking to discover anddevelop novel antiviral therapeutics as treatments for serious and/or chronic viral diseases. We employ unique structure-based technologiesand Nobel Prize winning expertise to create antiviral drugs. These technologies are designed to efficientlydeliver small molecule therapeutics that are safe, effective and convenient to administer. We have identified promising preclinical andclinical-stage antiviral compounds for unmet medical needs including influenza virus, coronavirus, norovirus, and hepatitis C virus (“HCV”).
Impactof Inflation
TheCompany believes that inflation has not had a material effect on its operations to date, other than the impact of inflation on the generaleconomy. However, there is a risk that the Company’s operating costs could become subject to inflationary pressures in the futureparticularly based upon United States tariff policy, which could have a material effect on increasing the Company’s operating costs,and which would put additional stress on the Company’s working capital resources.
Researchand Development Update
Duringthe three months ended June 30, 2025 and more recently the Company continued to focus its research and development efforts primarilyin three areas of norovirus, coronavirus and influenza.
InfluenzaProgram
Wehave several candidates under development for the treatment of influenza infection. CC-42344, a novel PB2 inhibitor, was selected asa preclinical lead as an oral or inhaled treatment of pandemic and seasonal influenza A. This candidate binds to a highly conserved PB2site of influenza polymerase complex (PB1: PB2: PA) and exhibits a novel mechanism of action. CC-42344 showed excellent in vitro antiviralactivity against influenza A strains, including avian pandemic strains and Tamiflu® and Xofluza® resistant strains, and has favorablepharmacokinetic and drug resistance profiles.
Inaddition to the oral candidate of CC-42344, inhaled CC-42344 is being developed for the potential prophylactic treatment of pandemicand seasonal influenza infections. Dry powder inhalation development and toxicology studies have been completed.
Wereceived authorization from the United Kingdom Medicines and Healthcare Products Regulatory Agency (MHRA) to conduct a Phase 2a humanchallenge study with oral CC-42344 as a potential treatment for pandemic and seasonal influenza A. This randomized, double-blind, placebo-controlledstudy is designed to evaluate the safety, tolerability, viral and clinical measurements of healthy subjects infected with the influenzaA virus dosed with oral CC-42344 treatment. In May 2024 we announced the completion of enrollment of 78 subjects.
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InDecember 2024, the Company announced plans to extend enrollment for the oral CC-42344 Phase 2a study due to an unexpectedly low influenzainfection among study participants. Specifically, management determined that an extension of the study is necessary due to low infectivityrate of the challenge influenza strain used in this study, as the establishment of robust influenza infection in healthy, uninfectedstudy subjects is critical to determine clinical endpoints for evaluating antiviral molecule, and the low infectivity obtained in thisstudy hindered antiviral data analysis. The Company is currently in continuing discussions with the clinical research organization toaddress this study and determine a course forward with respect thereto, including potentially preparing a protocol amendment or a resubmissionfor approval by the MHRA in order to seek enrollment of additional healthy subjects infected with the influenza A virus to ensure necessaryinfection rates to secure sufficient data for analysis. CC-42344 has demonstrated favorable safety and tolerability profile from thePhase 2a study to date, with no SAEs and no drug-related discontinuations by study participants.
InJune 2024, we reported the potential efficacy of CC-42344 against the Texas avian flu strain from in vitro studies with the recentlypublished genome sequence for H5N1. Using our proprietary structure-based platform technology, the Company reported a high-resolutioncocrystal structure of this avian PB2 protein complexed with CC-42344 and confirmed that CC-42344 binds to its highly conserved PB2 region.The in vitro data using purified Texas avian H5N1 PB2 protein further showed in vitro affinity of CC-42344 similar to thatof previous data using pandemic avian and seasonal influenza A PB proteins. In May 2025, we further demonstrated the in vitroefficacy of CC-42344 against the highly pathogenic H5N1 avian influenza A strain (A/Texas/37/2024). The data showed that CC-42344 ishighly potent against the H5N1 avian influenza strain (EC50, 0.003 µM), consistent with the previous biochemical data.
Wealso continue developing novel broad-spectrum influenza antivirals targeting replication enzymes of pandemic and seasonal influenzaA and B strains. In January 2019 our influenza A/B antiviral preclinical development assets were licensed pursuant to acollaboration agreement (“Collaboration”) with Merck Sharp & Dohme Corp. (“Merck”). The propertydeveloped in the Collaboration is jointly owned by Cocrystal and Merck. Upon completion and termination of the Collaboration inDecember 2023, our preclinical development assets property that was licensed under the Collaboration was returned to us where wecontinue preclinical development activities to further our influenza A/B program. We believe our influenza A/B program is materialto the future development of a comprehensive influenza antiviral program.
Norovirusand Coronavirus Programs
Wedeveloped the novel protease inhibitor CDI-988 as an oral pan-viral treatment of noroviruses and coronaviruses, including SARS-CoV-2and its variants. CDI-988 was specifically designed and developed using our proprietary structure-based drug discovery platform technologyas a broad-spectrum antiviral inhibitor to a highly conserved region in the active site of noroviruses, coronaviruses and other 3CL viralproteases. We believe CDI-988 represents a viable antiviral for the treatment of viral gastroenteritis caused by norovirusesand of coronaviruses, including SARS-CoV-2 and its variants.
OralCDI-988 is being clinically evaluated for safety, tolerability and pharmacokinetics including a food-effect cohort in healthy volunteersin a single-center, randomized, double-blind, placebo-controlled Phase 1 study being conducted in Australia. We expect that the oralCDI-988 Phase 1 data will support future norovirus and coronavirus studies.
InJuly 2024, we announced favorable safety and tolerability results from the single-ascending dose (SAD) cohorts of the Phase 1 study withCDI-988. Study participants in the SAD cohorts received CDI-988 in doses ranging from 100 mg to 600 mg. All participants completed thestudy with no discontinuations. There were no serious adverse events or severe treatment-emergent adverse events. No clinically significantobservations were noted in laboratory assessments, physical exams or electrocardiograms.
InSeptember 2024, we initiated dosing of the first subjects in the multiple-ascending dose (MAD) portion of the Phase 1 study with CDI-988.In January 2025, we reported topline results from the MAD portion of the Phase 1 study showing that CDI-988 administered at 800 mg, thehighest dose tested, for 10 consecutive days was safe and well tolerated. We also announced an additional cohort for a higher dose of1,200 mg and a shorter treatment duration of five consecutive days to further assess CDI-988’s safety, tolerability and pharmacokinetics.
InApril 2025 we reported that CDI-988 exhibits broad-spectrum activity against newly circulating GII.17 norovirus strains. The highly conservedbinding mode of CDI-988 was also demonstrated using the Company’s drug discovery platform technology.
In August 2025, the Company announcedPhase 1 results including the higher 1,200 dose, with data indicating that all doses, ranging from 100 mg to 1200 mg, were well tolerated.Specifically, overall treatment-emergent adverse events among CDI-988 subjects were 28% (10/36) compared with 40% (4/10) among placebosubjects for the SAD cohorts, and 53% (19/36) and 92% (11/12), respectively, for the MAD cohorts. Headache was the most common adverseevent. All subjects in the SAD cohorts and all but one in the MAD cohorts completed the study. No severe treatment-emergent adverse events,no clinically relevant ECG changes and no clinically significant pathology results were reported from the CDI-988 Phase 1 single-ascending(SAD) and multiple-ascending (MAD) cohorts.
| 4 |
TherapeuticTargets
Influenza:A worldwide public health problem, including the potential for pandemic Avian Flu
Influenzais a severe respiratory illness, caused in humans primarily by influenza A or B viruses. Influenza A viruses are the only influenza virusesknown to cause influenza pandemics. Each year there are approximately 1 billion cases of seasonal influenza worldwide, with 3-5 millionsevere illnesses and up to 650,000 deaths, according to the World Health Organization (“WHO”). On average about 8% of theU.S. population contracts influenza each season, according to the Centers for Disease Control and Prevention (“CDC”). Inaddition to the health risk, influenza is responsible for approximately $10.4 billion in direct medical costs in the U.S. annually, accordingto the National Institutes of Health (“NIH”).
Currentlyapproved antiviral treatments for influenza are effective but burdened with significant viral resistance. Strains of influenza virusresistant to the approved treatments oseltamivir phosphate (Tamiflu®), zanamavir (Relenza®) and baloxavir marboxil (Xofluza®)have appeared and in some cases are predominant. For example, the predominant strain of the 2009 swine influenza pandemic was resistantto oseltamivir. Oseltamivir inhibits influenza neuraminidase enzymes, which are not highly conserved between viral strains. Accordingto the WHO, approximately 15% of the H1N1 isolates circulating worldwide were oseltamivir resistant. Also, treatment-emergent resistanceto recently approved baloxavir has been observed during clinical trials and the potential transmission of resistant influenza variantscould significantly diminish baloxavir effectiveness.
Norovirus:A worldwide public health problem responsible for close to 90% of the global epidemic, non-bacterial outbreaks of gastroenteritis withno effective treatment or vaccine
Norovirusis a very common and highly contagious virus that causes symptoms of acute gastroenteritis among people of all ages including nausea,vomiting, stomach pain and diarrhea as well as fatigue, fever and dehydration. Norovirus infection can be significantly more severe andprolonged in specific risk groups including infants, children, the elderly and people with immunodeficiency. In immunosuppressed patients,chronic norovirus infection can lead to a debilitating illness with extended periods of nausea, vomiting and diarrhea. Norovirus outbreaksoccur most commonly in semi-closed communities and have become notorious for their occurrence in hospitals, nursing homes, childcarefacilities, cruise ships, schools, disaster relief sites and military settings.
Inthe U.S. noroviruses are the leading cause of vomiting and diarrhea from acute gastroenteritis among people of all ages and responsiblefor an estimated 21 million cases annually, including 109,000 hospitalizations, 465,000 emergency department visits and an estimated900 deaths, according to the CDC. The NIH estimates the annual societal burden to the U.S, at $10.6 billion.
Accordingto the CDC, noroviruses average 685 million cases of acute gastroenteritis worldwide. Noroviruses are responsible for up to 1.1 millionhospitalizations and 218,000 deaths annually in children in the developing world.
Thereis currently no effective treatment or effective vaccine for norovirus, and the ability to curtail outbreaks is limited. We are developinga novel norovirus antiviral candidate for the prophylactic and therapeutic treatment of norovirus infection that is currently completinga Phase 1 clinical study. A few companies have been developing vaccines and are in stages of clinical testing, including Vaxart Pharmaceutical,Moderna, Hillevax, Takeda Pharmaceuticals, Anhui Zhifei Longcom Biopharmaceutical (China) and National Vaccine and Serum Institute (China).
Coronavirus:COVID-19 continues to be a global pandemic fueled by an emergence of new strains
COVID-19is a global health concern responsible for more than 778 million reported cases globally, including more than 7 million deaths, as ofJune 2025, according to data reported by the WHO.
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Coronaviruses(CoV) are a large family of RNA viruses that historically have been associated with illness ranging from mild symptoms similar to thecommon cold to more severe respiratory disease. Infection with the novel SARS-CoV-2 has been associated with a wide range of responses,from no symptoms to more severe disease that has included pneumonia, severe acute respiratory syndrome, kidney failure, and death. SARS-CoV-2,like other RNA viruses, is prone to mutate over time, resulting in the emergence of multiple variants. Adaptive mutations in the viralgenome can alter the virus’s pathogenic potential. Even a single amino acid exchange can drastically affect a virus’s abilityto evade the immune system and complicate the vaccine and antibody therapeutics development against the virus. Based on an epidemiologicalupdate by the WHO, five SARS-CoV-2 VOCs (variants of concern) have been identified since the beginning of the pandemic. Also, as demonstratedin the Delta, Omicron and other variants, some variations allow the virus to spread more easily and make it resistant to the treatmentsand vaccines.
OnOctober 22, 2020, the U.S. Food and Drug Administration (“FDA”) approved the antiviral drug Veklury® (remdesivir) forthe treatment of COVID-19 requiring hospitalization. Remdesivir is a nucleotide prodrug that inhibits viral replication and was previouslyevaluated in clinical trials for Ebola treatment in 2014. On May 25, 2023, the FDA approved Paxlovid™ (nirmatrelvir tablets andritonavir tablets, co-packaged for oral use) for the treatment of mild-to-moderate COVID-19 in adults who are at high risk for progressionto severe COVID-19, including hospitalization or death. For certain hospitalized adults with COVID-19, the FDA has also approved Olumiant®(baricitinib) and Actemra® (tocilizumab). In addition, the FDA issued emergency use authorization (EUA) for several antibody andantiviral therapeutics, including and Lagevrio™ (molnupiravir).
Wecontinue pursuing the development of novel antiviral compounds for the treatment of coronavirus infections using our established proprietarydrug discovery platform. By targeting the viral replication enzymes and protease, we believe it is possible to develop an effective treatmentfor all coronavirus diseases including COVID-19, Severe Acute Respiratory Syndrome (SARS), and Middle East Respiratory Syndrome (MERS).
HepatitisC: A large competitive market with opportunity for shorter treatment regimens
HCVis a highly competitive and changing market. Since 2014, several combinations of direct-acting antiviral agents (“DAAs”)have been approved for the treatment of HCV infection. These include Harvoni (sofosbuvir/ledipasvir) 12 weeks of treatment, Viekira Pak(ombitasvir/paritaprevir/ritonavir, dasabuvir) 12 weeks of treatment, Epclusa (sofosbuvir/velpatasvir) 12 weeks of treatment, Zepatier(elbasvir/grazoprevir) 12 weeks of treatment and Mavyret (glecaprevir/pibrentasvir) eight weeks of treatment. We believe the next improvementsin HCV treatment will be ultra-short combination oral treatments of four to six weeks, which is the goal of our program.
Weanticipate a significant global HCV market opportunity that will persist through at least 2036, given the large prevalence of HCV infectionworldwide. The 2024 World Health Organization Global Hepatitis Report estimates that 50 million people worldwide have chronic HCV infectionswith about 1 million new infections occurring per year and an estimated 3.2 million adolescents and children with chronic HCV infection.In July 2023, WHO published that globally, an estimated 58 million people have chronic HCV infection, with about 1.5 million new infectionsoccurring per year, and an estimated 3.2 million adolescents and children with chronic HCV infection.
Weare targeting the viral NS5B polymerase with an NNI, which could be developed as part of an all-oral, pan-genotypic combination regimen.Our focus is on developing what is now called ultrashort treatment regimens from four to six weeks in length. Such a combination treatmentCC-31244 with different classes of approved DAAs has the potential to change the paradigm of treatment for HCV with a shorter durationof treatment. Combination strategies with approved drugs could allow us to expand CC-31244 into the HCV antiviral therapeutic area globallyand could lead to a high and fast cure rate, to improved compliance, and to reduced treatment duration. To our knowledge no competingcompany has yet developed a short HCV treatment of less than 8 weeks with a high (>95%) sustained virologic response (SVR) at week12.
CC-31244,an HCV NNI, is a potential viable pan-genotypic inhibitor of NS5B polymerase for the treatment of HCV. The Company completed arandomized, double-blinded, Phase 1a/b study in healthy volunteers and HCV-infected subjects in Canada in September 2016, with favorablesafety results. Cocrystal presented the interim results from the Phase1a/b study at the APASL in February 2017. HCV-infected subjectstreated with CC-31244 had a rapid and marked decline in HCV RNA levels, and slow viral rebound after treatment. Results of this studysuggest that CC-31244 could be an important component in a shortened duration all-oral HCV combination therapy. The Company completeda Phase 2a study in HCV genotype 1 subjects in the U.S. with final study report filed with the FDA. See “Item 1 – Business– Research and Development Update – Hepatitis C” in our Annual Report on Form 10-K for the year ended December 31,2024 for more information.
TheCompany has been seeking a partner for further clinical development of CC-31244 since completing Phase 2a trials.
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Resultsof Operations for the Three and Six Months Ended June 30, 2025 compared to the Three and Six Months Ended June 30,2024
Researchand Development Expense
Researchand development expense consists primarily of compensation-related costs for our employees dedicated to research and development activitiesand clinical trials, as well as lab supplies, lab services, and facilities and equipment costs related to our research and developmentprograms.
Totalresearch and development expenses for the three months ended June 30, 2025, and 2024 were $1,122,000 and $4,308,000, respectively. Thedecrease of $3,186,000 was primarily due to costs associated with our Influenza CC-42344 product candidate entering into a Phase 2a clinicaltrial and our norovirus and coronavirus candidate CDI-988 entering into a Phase 1 clinical trial in 2024.
Totalresearch and development expenses for the six months ended June 30, 2025, and 2024 were $2,482,000 and $7,258,000, respectively. Thedecrease of $4,776,000 was primarily due a reduction on ongoing clinical trial expense as described above and employee related expenses.
| For the Six Months Ended | ||||||||
| June 30, | ||||||||
| 2025 | 2024 | |||||||
| Influenza Program | $ | 662 | $ | 4,708 | ||||
| Norovirus and Coronavirus Programs | 1,093 | 1,372 | ||||||
| Other discoveries | 203 | 220 | ||||||
| Total external cost | 1,958 | 6,300 | ||||||
| Indirect allocations: | ||||||||
| Salaries, Stock based compensation and other employee expenses | 467 | 864 | ||||||
| Depreciation and other cost | 57 | $ | 94 | |||||
| Total research and development expenses | $ | 2,482 | 7,258 | |||||
Generaland Administrative Expense
Generaland administrative expenses include compensation-related costs for our employees dedicated to general and administrative activities,legal fees, audit and tax fees, consultants and professional services, and general corporate expenses.
Generaland administrative expenses for the three months ended June 30, 2025, and 2024 were $986,000 and $1,140,000, respectively. The decreaseof $154,000 was primarily due to a reduction salaries and wages.
Generaland administrative expenses for the six months ended June 30, 2025, and 2024 were $1,967,000 and $2,348,000, respectively. The decreaseof $381,000 was primarily due to wage reductions, legal and in other general and administrative costs.
| For the Six Months Ended | ||||||||
| June 30, | ||||||||
| 2025 | 2024 | |||||||
| Salaries and Wages | $ | 482 | $ | 751 | ||||
| Professional/outside services | 216 | 154 | ||||||
| Legal Consultants | 318 | 357 | ||||||
| Rental Expense | 347 | 335 | ||||||
| Investor and Public relations | 189 | 222 | ||||||
| Business Insurance | 126 | 158 | ||||||
| Public Company expenses | 99 | 155 | ||||||
| Travel and other Expense | 190 | 216 | ||||||
| Total G&A expense | $ | 1,967 | $ | 2,348 | ||||
InterestIncome, Net
Interestincome for the three months ended June 30, 2025 and 2024 was $28,000 and $151,000, respectively, and for the six months ended June 30,2025 and 2024 was $65,000 and $371,000, respectively. The interest income was primarily earned on cash held in interest bearing bankaccounts.
ForeignExchange Loss
In2022, the Company established a wholly owned subsidiary in Australia, making it subject to foreign exchange rate fluctuations. Therewas a foreign exchange gain during the six months ended June 30, 2025 of $28,000 and a foreign exchange loss of $64,000 during the sixmonths ended June 30, 2024.
IncomeTaxes
Noincome tax benefit or expense was recognized for the three and six months ended June 30, 2025 and 2024. The Company’s effectiveincome tax rate was 0.00% and 0.00% for the three and six months ended June 30, 2025 and 2024. As a result of the Company’s cumulativelosses, management has concluded that a full valuation allowance against the Company’s net deferred tax assets is appropriate.
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NetLoss
Asa result of the above factors, net loss for the three and six months ended June 30, 2025 was $2,055,000 and $4,356,000, compared witha net loss of $5,343,000 and $9,299,000 for the three and six months ended June 30, 2024, respectively, primarily as a result of operationsdescribed above.
Liquidityand Capital Resources
Netcash used in operating activities was $5,094,000 for the six months ended June 30, 2025 compared with net cash used in operating activitiesof $8,202,000 for the same period in 2024. The decrease was primarily due to reduced period expenses related to our clinical trials.
Nocash was used for investing activities during the six months ended June 30, 2025 compared with $8,000 net cash used for the same periodin 2024. For the six months ended June 30, 2025 the level of investments decreased compared with June 30, 2024 due to comparative reductionin purchases of laboratory equipment in 2024.
Nocash was used for financing activities for the six months ended June 30, 2025 and 2024.
TheCompany has not yet established an ongoing source of revenue sufficient to cover its operating costs. The Company had $4,766,000 unrestrictedcash on June 30, 2025. We expect that our reported cash balance is not be sufficient to support the Company’s working capital needsfor the 12 months following the filing of this report, taking into account our intended research and development efforts in the remainderof 2025 and beyond.
Developingpharmaceutical products, including conducting preclinical studies and clinical trials, is capital-intensive. As a rule, research anddevelopment expenses increase substantially as a company advances a product candidate toward clinical programs. Historically, we havefinanced our operations with the proceeds from public and private equity and debt offerings, including additional investments by certainexisting stockholders, and entered into strategic partnerships and collaborations for the research, development and commercializationof product candidates.
Wehave focused our efforts on research and development activities, including through collaborations with suitable partners. We have beenprofitable on a quarterly basis but have never been profitable on an annual basis. We have no products approved for sale and have incurredoperating losses and negative operating cash flows on an annual basis since inception.
TheCompany’s interim consolidated financial statements are prepared using generally accepted accounting principles in the United Statesof America applicable to a going concern, which contemplates the realization of assets and the satisfaction of liabilities in the normalcourse of business. Historically, public and private equity offerings have been our principal source of liquidity.
TheCompany is party to the At-The-Market Offering Agreement, dated July 1, 2020 (“ATM Agreement”) with H.C. Wainwright &Co., LLC (“Wainwright”), pursuant to which the Company may issue and sell over time and from time to time, to or throughWainwright, up to $10,000,000 of shares of the Company’s common stock. On May 24, 2023, the Company filed a prospectussupplement covering sales under the ATM Agreement under which we may offer and sell shares of our common stock having an aggregate offeringprice of up to $7,250,000 from time to time through Wainwright. There were no sales under the ATM Agreement during the six months endedJune 30, 2025. As of the date of this report, the Company has sold a total 1,115,076 shares of its common stock for total net proceeds of approximately$2,226,000 pursuant to the ATM Agreement.
Asthe Company continues to incur losses, achieving profitability is dependent upon the successful development, approval and commercializationof its product candidates, and achieving a level of revenues adequate to support the Company’s cost structure. The Company maynever achieve profitability, and unless and until it does, the Company will continue to need to raise additional capital. Managementintends to fund future operations through additional private or public equity offerings and through arrangements with strategic partnersor from other sources. There can be no assurances, however, that additional funding will be available on terms acceptable to the Company,or at all, and any equity financing may be very dilutive to existing stockholders.
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CautionaryNote Regarding Forward-Looking Statements
Thisreport includes forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including statementsregarding the future effectiveness of our product candidates, our plans for the future development of preclinical and clinical drug candidates,the progress and expected or potential timelines of achieving certain value driving milestones in our programs, progressing our programsin the clinical development process generally, our expectations regarding future operating results and liquidity. The words “believe,”“may,” “estimate,” “continue,” “anticipate,” “intend,” “should,”“plan,” “could,” “target,” “potential,” “is likely,” “will,”“expect” and similar expressions, as they relate to us, are intended to identify forward-looking statements. We have basedthese forward-looking statements largely on our current expectations and projections about future events and financial trends that webelieve may affect our financial condition, results of operations, business strategy and financial needs.
Theresults anticipated by any or all of these forward-looking statements might not occur. Important factors that could cause actualresults to differ from those in the forward-looking statements include the risks and uncertainties arising from our need foradditional capital to fund our ongoing operations and our ability to obtain such capital on favorable terms or at all, the risksarising from inflation, interest rate increases, the possibility of a recession and the economic impact of such events and the warsin Israel and Ukraine on our Company, our collaboration partners, and on the U.S., U.K., Australia and global economies, includingdownturns in economic activity and capital markets, manufacturing and research delays arising from raw materials and laborshortages, supply chain disruptions and other business interruptions including any adverse impacts on our ability to obtain rawmaterials and test animals as well as similar problems with our vendors and our current and any future contract researchorganizations (CROs) and contract manufacturing organizations (CMOs), the ability of our CROs to recruit volunteers for, and toproceed with, clinical studies, and our collaboration partners’ technology and software performing as expected, financialdifficulties experienced by certain partners, the results of the studies for CC-42344 and CDI-988 and any future preclinical andclinical trials we or our strategic partners undertake including any adverse findings or delays, general risks arising from clinical trials, receipt of regulatoryapprovals, regulatory changes, development of effective treatments and/or vaccines by competitors, including as part of the programsfinanced by governmental authorities and potential mutations in a virus we are targeting which may result in variants that areresistant to a product candidate we develop. Further information on our risk factors is contained in our filings with the SEC,including our Annual Report on Form 10-K for the year ended December 31, 2024. We undertake no obligation to publicly update orrevise any forward-looking statements, whether as the result of new information, future events or otherwise.
CriticalAccounting Policies and Estimates
Inour Annual Report on Form 10-K for the year ended December 31, 2024, we disclosed our critical accounting policies and estimates uponwhich our financial statements are derived.
Accountingestimates. The preparation of financial statements in conformity with accounting principles generally accepted in the U.S. requiresmanagement to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingentassets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reportingperiod. Actual results could differ significantly from these estimates.
Readersare encouraged to review these disclosures in the Company’s Annual Report on Form 10-K for the year ended December 31, 2024 inconjunction with the review of this report.
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ITEM3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Notapplicable.
ITEM4. CONTROLS AND PROCEDURES
Evaluationof Disclosure Controls and Procedures
Wecarried out an evaluation, under the supervision and with the participation of our management, including our Co-Chief Executive Officersand Chief Financial Officer, of the effectiveness of our disclosure controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e)of the Securities Exchange Act of 1934 (the “Exchange Act”) as of the end of the period covered by this report. Based onthat evaluation, our Co-Chief Executive Officers and Chief Financial Officer have concluded that our disclosure controls and proceduresas of June 30, 2025 were effective to ensure that information required to be disclosed by us in reports that we file or submit underthe Exchange Act is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission’srules and forms.
Changesin Internal Control over Financial Reporting
Therewere no material changes in our internal controls over financial reporting or in other factors that could materially affect, or are reasonablylikely to affect, our internal controls over financial reporting during the quarter ended June 30, 2025. Because of its inherent limitations,internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectivenessto future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree ofcompliance with the policies or procedures may deteriorate.
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PARTII — OTHER INFORMATION
ITEM1. LEGAL PROCEEDINGS
Fromtime to time, the Company is a party to, or otherwise involved in, legal proceedings arising in the normal course of business. Duringthe reporting period, there have been no material changes to the description of legal proceedings set forth in our Annual Report on Form10-Q for the year ended June 30, 2025.
ITEM1.A RISK FACTORS
Not applicable. For smaller reporting companies.
ITEM2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
Allrecent sales of unregistered securities have been previously reported.
ITEM3. DEFAULTS UPON SENIOR SECURITIES
None.
ITEM4. MINE SAFETY DISCLOSURES
Notapplicable.
ITEM5. OTHER INFORMATION
Duringthe six months ended June 30, 2025, none of our directors or officers (as defined in Rule 16a-1(f) under the Exchange Act)
| 11 |
ITEM6. EXHIBITS
Theexhibits listed in the accompanying “Exhibit Index” are filed or incorporated by reference as part of this Form 10-Q.
EXHIBITINDEX
| Exhibit | Incorporated by Reference | Filed or Furnished | ||||||||
| No. | Exhibit Description | Form | Date | Number | Herewith | |||||
| 3.1 | Certificate of Incorporation, as amended | 10-Q | 8/16/21 | 3.1 | ||||||
| 3.1(a) | Certificate of Amendment to Certificate of Incorporation | 8-K | 10/3/22 | 3.1 | ||||||
| 3.1(b) | Certificate of Amendment to Certificate of Incorporation – reduce number of authorized shares | 8-K | 6/28/24 | 3.1 | ||||||
| 3.2 | Amended and Restated Bylaws | 8-K | 2/19/21 | 3.1 | ||||||
| 3.2(a) | Amendment No. 1 to Amended and Restated Bylaws | 8-K | 6/18/25 | 3.1 | ||||||
| 10.1 | 2025 Equity Incentive Plan | 8-K | 4/8/2025 | 10.1 | ||||||
| 31.1 | Certification of Principal Executive Officer (302) | Filed | ||||||||
| 31.2 | Certification of Principal Executive Officer (302) | Filed | ||||||||
| 31.3 | Certification of Principal Financial Officer (302) | Filed | ||||||||
| 32.1 | Certification of Principal Executive and Principal Financial Officer (906) | Furnished* | ||||||||
| 101.INS | Inline XBRL Instance Document | Filed | ||||||||
| 101.SCH | Inline XBRL Taxonomy Extension Schema Document | Filed | ||||||||
| 101.CAL | Inline XBRL Taxonomy Extension Calculation Linkbase Document | Filed | ||||||||
| 101.DEF | Inline XBRL Taxonomy Extension Definition Linkbase Document | Filed | ||||||||
| 101.LAB | Inline XBRL Taxonomy Extension Label Linkbase Document | Filed | ||||||||
| 101.PRE | Inline XBRL Taxonomy Extension Presentation Linkbase Document | Filed | ||||||||
| 104 | Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101) | Filed | ||||||||
*This exhibit is being furnished rather than filed and shall not be deemed incorporated by reference into any filing, in accordance withItem 601 of Regulation S-K.
Copiesof this report (including the financial statements) and any of the exhibits referred to above will be furnished at no cost to our stockholderswho make a written request to our Corporate Secretary at Cocrystal Pharma, Inc., 4400 Biscayne Blvd, Suite 101, Miami, FL 33137.
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SIGNATURES
Pursuantto the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf bythe undersigned, thereunto duly authorized.
| Cocrystal Pharma, Inc. | ||
| Dated: August 14, 2025 | By: | /s/ Sam Lee |
| Sam Lee | ||
| President and Co-Chief Executive Officer | ||
| (Principal Executive Officer) | ||
| Dated: August 14, 2025 | By: | /s/ James Martin |
| James Martin | ||
Chief Financial Officer and Co-Chief Executive Officer | ||
| (Principal Executive Officer and Principal Financial Officer) | ||
| 13 |
Exhibit31.1
CERTIFICATIONOF PRINCIPAL EXECUTIVE OFFICER
I,Sam Lee, certify that:
1.I have reviewed this quarterly report on Form 10-Q of Cocrystal Pharma, Inc.;
2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessaryto make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to theperiod covered by this report;
3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all materialrespects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in thisreport;
4.The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures(as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange ActRules 13a-15(f) and 15d-15(f)) for the registrant and have:
a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision,to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by otherswithin those entities, particularly during the period in which this report is being prepared;
b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed underour supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statementsfor external purposes in accordance with generally accepted accounting principles;
c)Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusionsabout the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation;and
d)Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’smost recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected,or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
5.The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control overfinancial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or personsperforming the equivalent functions):
a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which arereasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information;and
b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’sinternal control over financial reporting.
Date:August 14, 2025
| /s/ Sam Lee | |
| Sam Lee | |
| President and Co-Chief Executive Officer | |
| (Principal Executive Officer) |
Exhibit31.2
CERTIFICATIONOF PRINCIPAL EXECUTIVE OFFICER
I,James Martin, certify that:
1.I have reviewed this quarterly report on Form 10-Q of Cocrystal Pharma, Inc.;
2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessaryto make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to theperiod covered by this report;
3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all materialrespects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in thisreport;
4.The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures(as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange ActRules 13a-15(f) and 15d-15(f)) for the registrant and have:
a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision,to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by otherswithin those entities, particularly during the period in which this report is being prepared;
b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed underour supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statementsfor external purposes in accordance with generally accepted accounting principles;
c)Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusionsabout the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation;and
d)Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’smost recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected,or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
5.The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control overfinancial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or personsperforming the equivalent functions):
a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which arereasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information;and
b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’sinternal control over financial reporting.
Date:August 14, 2025
| /s/ James Martin | |
| James Martin | |
| Co-Chief Executive Officer | |
| (Principal Executive Officer) |
Exhibit 31.3
CERTIFICATION OF PRINCIPAL FINANCIAL OFFICER
I, James Martin, certify that:
1. I have reviewed this quarterly report on Form 10-Qof Cocrystal Pharma, Inc.;
2. Based on my knowledge, this report does not containany untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstancesunder which such statements were made, not misleading with respect to the period covered by this report;
3. Based on my knowledge, the financial statements,and other financial information included in this report, fairly present in all material respects the financial condition, results of operationsand cash flows of the registrant as of, and for, the periods presented in this report;
4. The registrant’s other certifying officer(s)and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e)and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrantand have:
a) Designed such disclosure controlsand procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material informationrelating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularlyduring the period in which this report is being prepared;
b) Designed such internal controlover financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonableassurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordancewith generally accepted accounting principles;
c) Evaluated the effectivenessof the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of thedisclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
d) Disclosed in this report anychange in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscalquarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonablylikely to materially affect, the registrant’s internal control over financial reporting; and
5. The registrant’s other certifying officer(s)and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditorsand the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
a) All significant deficienciesand material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adverselyaffect the registrant’s ability to record, process, summarize and report financial information; and
b) Any fraud, whether or not material,that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
Date: August 14, 2025
| /s/ James Martin | |
| James Martin | |
| Chief Financial Officer | |
| (Principal Financial Officer) |
Exhibit32.1
CERTIFICATIONPURSUANT TO 18 U.S.C. SECTION 1350,
ASADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
Inconnection with the quarterly report of Cocrystal Pharma, Inc. (the “Company”) on Form 10-Q for the quarter ended June 30,2025, as filed with the Securities and Exchange Commission on the date hereof, I, Sam Lee, certify, pursuant to 18 U.S.C. Sec.1350, asadopted pursuant to Sec.906 of the Sarbanes-Oxley Act of 2002, that to my knowledge:
1.The quarterly report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934 and
2.The information contained in the quarterly report fairly presents, in all material respects, the financial condition and results of operationsof the Company.
| /s/ Sam Lee | |
| Sam Lee | |
| President and Co-Chief Executive Officer | |
| (Principal Executive Officer) |
Dated:August 14, 2025
Inconnection with the quarterly report of Cocrystal Pharma, Inc. (the “Company”) on Form 10-Q for the quarter ended June 30,2025, as filed with the Securities and Exchange Commission on the date hereof, I, James Martin, certify, pursuant to 18 U.S.C. Sec.1350,as adopted pursuant to Sec.906 of the Sarbanes-Oxley Act of 2002, that to my knowledge:
1.The quarterly report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934 and
2.The information contained in the quarterly report fairly presents, in all material respects, the financial condition and results of operationsof the Company.
| /s/ James Martin | |
| James Martin | |
| Chief Financial Officer and Co-Chief Executive Officer | |
| (Principal Executive Officer and Principal Financial Officer) |
Dated:August 14, 2025