Company: CRVO
Filing Date: 2025-03-17
Form Type: 10-K
Source: 0001437749-25-007829
Chunk: 131

Company: CervoMed Inc.
Filing Date: 2025-03-17
Form: 10-K
Item: Item 8
Chunk 131
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 the Board immediately following the Merger and (iii) former EIP management holding the majority of key positions of management, including the Chief Executive Officer and Board Chair positions, immediately following the Merger. The Merger was also accounted for as a reverse recapitalization under U. S. GAAP because the primary assets of the Company immediately prior to the Merger were cash and cash equivalents. Accordingly, (i) for all periods prior to the Merger, EIP’s historical financial statements and results of operations replace and are deemed to be the Company’s financial statement and results of operations for such periods, (ii) the Merger was treated as the equivalent of EIP issuing shares of common stock to the holders of the Company's common stock immediately prior to the Merger as consideration to acquire the net assets of the Company, and (iii) the net assets of the Company as of immediately prior to the Merger were recorded at their acquisition-date fair value in the consolidated financial statements of EIP. Immediately after the Merger, there were approximately5,674,277shares of the Company’s common stock outstanding.

The following table shows the net assets acquired in the Merger:

                                                        August 16, 2023                   
 ──────────────────────────────────────────────────────────────────────────────────────────
  Cash and cash equivalents                             $                     12,705,140  
  Prepaid and other assets                                                       406,488  
  Accounts payable and accrued expenses                                      ( 1,223,871  
  Total net assets assumed                                                    11,887,757  
  Minus: Transaction costs                                                   ( 1,548,643  
  Total net assets assumed minus transaction costs      $                     10,339,114  

Note 5. Fair Value of Financial Instruments

The Company’s financial instruments consist primarily of cash, cash equivalents, marketable securities, accounts payable, previously outstanding convertible notes and accrued liabilities. The Company’s cash, cash equivalents, accounts payable and accrued liabilities approximate fair value due to their relatively short maturities. The Company determined the fair value of its previously outstanding convertible notes as described in Note 9.

The following table presents the Company’s assets that are measured at fair value on a recurring basis:

                                                December 31, 2024                                                               
                                                (Level 1)                             (Level 2)                      (Level 3)  
 ────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────
  Assets                                                                                                                        
  Cash equivalents (money market