Company: CRVO
Filing Date: 2025-03-17
Form Type: 10-K
Source: 0001437749-25-007829
Chunk: 41

Company: CervoMed Inc.
Filing Date: 2025-03-17
Form: 10-K
Item: Item 1A
Chunk 41
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 to continue its clinical programs may be impaired and delayed, and the Company may otherwise need to seek additional financing. For example, in March 2025, the Company was granted access to 90% of the full amount of the third year of funding provided for in the NIA Grant, due to current NIA policy as a result of the U. S. government currently being funded on the basis of a continuing resolution. The timing of the Company’s receipt of the remaining 10% of the grant of current year funding is dependent upon and subject to U. S. congressional approval of a final appropriations bill.

In addition, on January 20, 2025, President Trump was inaugurated and signed Executive Order 14158 - Establishing and Implementing the President’s “ Department of Government Efficiency”. In the weeks that have followed, media has reported widely on extensive government-wide cuts enacted under the purported authority of the Department of Government Efficiency resulting in speculation regarding if and to what extent existing contractual and payment obligations will continue to be honored by certain U. S. federal agencies, including the NIA. In particular, the Trump administration has attempted to prevent the NIH from effectively reviewing and awarding grants, or paying out funds under already awarded grants. If this hold on government grants continues, or if the U. S. government takes any other actions to limit funds available for life science or healthcare research or other projects, it may have a material and adverse impact on our revenue, business, financial condition and results of operations.

The Company could be subject to audit and repayment of the NIA Grant.

In connection with the NIA Grant, the Company may be subject to routine audits by certain government agencies. As part of an audit, these agencies may review the Company’s performance, cost structures and compliance with applicable laws, regulations, policies and standards and the terms and conditions of the applicable NIA Grant. If any of the Company’s expenditures are found to be unallowable or allocated improperly or if the Company has otherwise violated terms of the NIA Grant, the expenditures may not be reimbursed and/or it may be required to repay funds already disbursed. Any such audit may result in a material adjustment to the Company’s results of operations and financial condition and harm the Company’s ability to operate in accordance with its business plan.

The Company may be required to make significant payments to Vertex in connection with the Company’s license agreement.

Pursuant to the Vertex Agreement, the Company previously acquired an exclusive license to develop and commercialize neflamapimod