# EDGAR Filing Document

**Accession Number:** 0001053691
**File Stem:** 0001437749-25-025570
**Filing Date:** 2025-8
**Character Count:** 248444
**Document Hash:** de6d375abcbf62d45a56c7f2bd2c8ee6
**Contains OCR:** False
**Source Format:** 

## Filing Content

## Filing Summary
**0001437749-25-025570.hdr.sgml**: 20250808

**ACCESSION NUMBER**: 0001437749-25-025570

**CONFORMED SUBMISSION TYPE**: 10-Q

**PUBLIC DOCUMENT COUNT**: 63

**CONFORMED PERIOD OF REPORT**: 20250630

**FILED AS OF DATE**: 20250808

**DATE AS OF CHANGE**: 20250808

**FILER**: 

**COMPANY DATA:**
- **COMPANY CONFORMED NAME:** CervoMed Inc.
- **CENTRAL INDEX KEY:** 0001053691
- **STANDARD INDUSTRIAL CLASSIFICATION:** PHARMACEUTICAL PREPARATIONS [2834]
- **ORGANIZATION NAME:** 03 Life Sciences
- **EIN:** 300645032
- **STATE OF INCORPORATION:** DE
- **FISCAL YEAR END:** 1231

**FILING VALUES:**
- **FORM TYPE:** 10-Q
- **SEC ACT:** 1934 Act
- **SEC FILE NUMBER:** 001-37942
- **FILM NUMBER:** 251196450

**BUSINESS ADDRESS:**
- **STREET 1:** 20 PARK PLAZA
- **STREET 2:** SUITE 424
- **CITY:** BOSTON
- **STATE:** MA
- **ZIP:** 02116
- **BUSINESS PHONE:** (617) 744-4400

**MAIL ADDRESS:**
- **STREET 1:** 20 PARK PLAZA
- **STREET 2:** SUITE 424
- **CITY:** BOSTON
- **STATE:** MA
- **ZIP:** 02116

**FORMER COMPANY:**
- **FORMER CONFORMED NAME:** Diffusion Pharmaceuticals Inc.
- **DATE OF NAME CHANGE:** 20160115

**FORMER COMPANY:**
- **FORMER CONFORMED NAME:** RestorGenex Corp
- **DATE OF NAME CHANGE:** 20140307

**FORMER COMPANY:**
- **FORMER CONFORMED NAME:** Stratus Media Group, Inc
- **DATE OF NAME CHANGE:** 20080722

?xml version='1.0' encoding='ASCII'? crvo20250630_10q.htm

------

**UNITED STATES**

**SECURITIES AND EXCHANGE COMMISSION**

**Washington, D.C. 20549**

**FORM 10-Q**

(Mark one)

**☒** **QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934**

**For the quarterly period ended June 30, 2025**

**☐** **TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934**

For the transition period from ___________ to ______________.

**Commission file number: 001-37942**![cervologo.jpg](cervologo.jpg)

**CervoMed Inc.** 

(Exact name of registrant as specified in its charter)

---

| | |
|:---|:---|
| **Delaware** | **30-0645032** |
| (State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) |

---

---

| | |
|:---|:---|
| **20 Park Plaza, Suite 424** |  |
| **Boston, Massachusetts** | **02116** |
| (Address of principal executive offices) | (Zip Code) |

---

&nbsp;&nbsp;&nbsp;&nbsp;**(617) 744-4400** 

(Registrant's telephone number including area code)

**Securities registered pursuant to Section 12(b) of the Act:**

---

| | | |
|:---|:---|:---|
| **<u>Title of each class</u>** | **<u>Trading Symbol(s)</u>** | **<u>Name of each exchange on which registered</u>** |
| Common Stock, par value $0.001 per share | CRVO | NASDAQ Capital Market |

---

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act 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. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, 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.

---

| | |
|:---|:---|
| Large accelerated filer ☐ | Accelerated filer ☐ |
| Non-accelerated filer ☒ | Smaller reporting company ☒ |
|  | Emerging growth company ☐ |

---

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act).Yes ☐ No ☒

The number of shares of common stock outstanding at August 6, 2025 was 9,252,719 shares.

------

**CervoMed Inc.** 

---

| | | |
|:---|:---|:---|
|  |  | <u>Page No.</u> |
| Part I | PART I – FINANCIAL INFORMATION | 1 |
| Item 1: | &nbsp;&nbsp;&nbsp;&nbsp; ITEM 1.&nbsp;&nbsp;&nbsp;&nbsp; FINANCIAL STATEMENTS  | 1 |
| Item 2: | &nbsp;&nbsp;&nbsp;&nbsp; ITEM 2.&nbsp;&nbsp;&nbsp;&nbsp; MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS  | 20 |
| Item 3: | &nbsp;&nbsp;&nbsp;&nbsp; ITEM 3.&nbsp;&nbsp;&nbsp;&nbsp; QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK  | 29 |
| Item 4: | &nbsp;&nbsp;&nbsp;&nbsp; ITEM 4.&nbsp;&nbsp;&nbsp;&nbsp; CONTROLS AND PROCEDURES  | 29 |
| Part II | PART II – OTHER INFORMATION  | 31 |
| Item 1: | &nbsp;&nbsp;&nbsp;&nbsp; ITEM 1.&nbsp;&nbsp;&nbsp;&nbsp; LEGAL PROCEEDINGS  | 31 |
| Item 1A: | &nbsp;&nbsp;&nbsp;&nbsp; ITEM 1A. RISK FACTORS  | 31 |
| Item 2: | &nbsp;&nbsp;&nbsp;&nbsp; ITEM 2.&nbsp;&nbsp;&nbsp;&nbsp; UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS  | 31 |
| Item 3: | &nbsp;&nbsp;&nbsp;&nbsp; ITEM 3.&nbsp;&nbsp;&nbsp;&nbsp; DEFAULTS UPON SENIOR SECURITIES  | 31 |
| Item 4: | &nbsp;&nbsp;&nbsp;&nbsp; ITEM 4.&nbsp;&nbsp;&nbsp;&nbsp; MINE SAFETY DISCLOSURES | 31 |
| Item 5: | &nbsp;&nbsp;&nbsp;&nbsp; ITEM 5.&nbsp;&nbsp;&nbsp;&nbsp; OTHER INFORMATION  | 31 |
| Item 6: | &nbsp;&nbsp;&nbsp;&nbsp; ITEM 6.&nbsp;&nbsp;&nbsp;&nbsp; EXHIBITS | 32 |
| Signatures | Signatures | 33 |

---

i

------

**INTRODUCTORY NOTES**

**Note Regarding Company References and Other Defined Terms**

As previously disclosed in our Current Report on Form 8-K filed on August 17, 2023 with the SEC, on August 16, 2023, the Delaware corporation formerly known as "Diffusion Pharmaceuticals Inc." completed a merger transaction in accordance with the terms and conditions of the Agreement and Plan of Merger, dated March 30, 2023 (the "Merger Agreement"), by and among Diffusion Pharmaceuticals Inc. ("Diffusion"), Dawn Merger Sub Inc., a wholly-owned subsidiary of Diffusion ("Merger Sub") and EIP Pharma, Inc. ("EIP"), pursuant to which Merger Sub merged with and into EIP, with EIP surviving the Merger a wholly-owned subsidiary of Diffusion (the "Merger"). Additionally, on August 16, 2023, Diffusion changed its name from "Diffusion Pharmaceuticals Inc." to "CervoMed Inc."

For accounting purposes, the Merger is treated as a reverse recapitalization under U.S. GAAP and EIP is considered the accounting acquirer. Accordingly, EIP's historical results of operations are deemed the Company's historical results of operations for all periods prior to the Merger and, for all periods following the Merger, the results of operations of the combined company will be included in the Company's financial statements. Following the completion of the Merger, the business conducted by the Company became primarily the business conducted by EIP.

Accordingly, unless the context otherwise requires, all references in this Quarterly Report to "CervoMed," the "Company," "we," "our," or "us," refer to the business of EIP for all dates and periods prior to August 16, 2023 and to the business of CervoMed for all dates and periods subsequent to (and including) August 16, 2023.

We have also used several other defined terms in this Quarterly Report on Form 10-Q (the "Quarterly Report"), many of which are explained or defined below:

---

| | |
|:---|:---|
| **Term** | **Definition** |
| 2015 Equity Plan | CervoMed Inc. 2015 Equity Incentive Plan, as amended |
| 2018 Plan | CervoMed Inc. 2018 Employee, Director and Consultant Equity Incentive Plan, as amended |
| 2025 Equity Plan | CervoMed Inc. 2025 Equity Incentive Plan |
| 2024 Private Placement | our private placement of an aggregate of 2,532,285 units, each consisting of (i) (A) one share of common stock or (B) one Pre-Funded Warrant in lieu thereof and (ii) one Series A Warrant, for aggregate gross proceeds of up to approximately $149.4 million, completed on April 1, 2024 |
| 401(k) Plan | CervoMed Inc. 401(k) Defined Contribution Plan |
| AD | Alzheimer's Disease |
| Annual Report | our Annual Report on Form 10-K for the year ended December 31, 2024, filed with the SEC on March 17, 2025 |
| ADCS-CGIC | the Alzheimer's Disease Cooperative Study — Clinical Global Impression of Change |
| ASC | Accounting Standard Codification of the FASB |
| ASU 2023-09 | ASU No. 2023-09, Income Taxes (Topic 740): "Improvements to Income Tax Disclosures" |
| AscenD-LB Trial | our Phase 2a clinical trial evaluating neflamapimod for the treatment of patients with DLB, completed in the second half of 2021 |
| ASU | Accounting Standards Update |
| BFC | basal forebrain cholinergic |
| Board | the board of directors of the Company |
| CDMO | contract development and manufacturing organization |
| CDR-SB | Clinical Dementia Rating Sum of Boxes test |

---

ii

------

---

| | |
|:---|:---|
| CMC | chemistry, manufacturing and controls |
| CODM | chief operating decision maker |
| common stock | the Company's common stock, par value $0.001 per share |
| CRO | contract research organization |
| DLB | dementia with Lewy bodies |
| DLB without AD co-pathology | DLB without concomitant AD-related pathology. May also be referred to as "pure" DLB. |
| EIP Common Stock | the common stock, par value $0.001, of EIP issued and outstanding prior to the Merger |
| Exchange Act | Securities Exchange Act of 1934, as amended |
| Extension or Extension Phase | with respect to the RewinD-LB Trial, the 32-week extension phase of the trial from which 16-week results were reported in March 2025 |
| FASB | Financial Accounting Standards Board |
| FDA | U.S. Food and Drug Administration |
| Former COO | the Company's former Chief Operating Officer |
| FTD | frontotemporal dementia |
| GFAP | glial fibrillary acidic protein |
| Initial Phase | with respect to the RewinD-LB Trial, the initial 16-week double-blind, placebo controlled phase of the trial from which topline results were reported in December 2024 |
| IT | information technology |
| Nasdaq | the Nasdaq Stock Market, LLC |
| New Capsules | the batch of neflamapimod drug product capsules manufactured in March 2023 and administered for the majority of the RewinD-LB Trial Extension phase |
| NIA | the National Institute on Aging of the National Institutes of Health |
| NIA Grant | the $21.3 million grant awarded to us by the NIA to support the RewinD-LB Trial, $21.0 million of which was awarded in January 2023 and an additional $0.3 million of which was awarded in August 2024 |
| NIH | National Institutes of Health |
| Old Capsules | the batch of neflamapimod drug product capsules manufactured in October 2020 and administered for the Initial Phase of the RewinD-LB Trial and a portion of the Extension |
| p38α | p38 mitogen-activated protein kinase alpha |
| Pre-Funded Warrants | the pre-funded warrants each to purchase one share of common stock at a purchase price of $0.001 per share issued in connection with the 2024 Private Placement |
| PPA | primary progressive aphasia |
| ptau181 | plasma phosphorylated tau at position 181 |
| Regulation S-K | Regulation S-K promulgated under the Securities Act |
| Restore Trial | our ongoing Phase 2a clinical trial evaluating neflamapimod for the treatment of patients recovering from ischemic stroke, which we expect to initiate in the second quarter of 2025 |
| RewinD-LB Trial | our ongoing Phase 2b clinical trial evaluating neflamapimod for the treatment of patients with DLB, initiated in the second quarter of 2023 |
| ROU | right-of-use |
| Sales Agreement | Sales Agreement, dated May 12, 2025, by and between the Company and Leerink Partners LLC |
| SEC | U.S. Securities and Exchange Commission |
| Securities Act | Securities Act of 1933, as amended |
| Separation Agreement | the Separation Agreement, effective July 1, 2025, by and between the Company and the Former COO |
| Series A Warrants | the warrants to purchase an aggregate of 2,532,285 shares of common stock at a purchase price of $39.24 per share issued in connection with the 2024 Private Placement |
| U.S. | United States of America |
| U.S. GAAP | U.S. generally accepted accounting principles |
| Vertex | Vertex Pharmaceuticals Incorporated |
| Vertex Agreement | the Option and License Agreement, dated as of August 27, 2012, by and between EIP Pharma LLC and Vertex, as amended |

---

iii

------

**Note Regarding Forward-Looking Statements**

This Quarterly Report (including, for purposes of this Note Regarding Forward-Looking Statements, any information or documents incorporated herein by reference) includes express and implied forward-looking statements. By their nature, forward-looking statements involve risks and uncertainties because they relate to events, competitive dynamics and industry change, and depend on the economic circumstances that may or may not occur in the future or may occur on longer or shorter timelines than anticipated. Although we believe that we have a reasonable basis for each forward-looking statement contained in this Quarterly Report, we caution you that forward-looking statements are not guarantees of future performance and that our actual results of operations, financial condition, liquidity, and prospects may differ materially from the forward-looking statements contained in this Quarterly Report. In addition, even if our results of operations, financial condition, liquidity, and prospects are consistent with the forward-looking statements contained in this Quarterly Report, they may not be predictive of actual results or reflect unanticipated developments in future periods.

Forward-looking statements appear in a number of places throughout this Quarterly Report. We may, in some cases, use terms such as "believes," "estimates," "anticipates," "expects," "plans," "aims," "seeks," "intends," "may," "might," "could," "will," "should," "approximately," "potential," "target," "project," "contemplate," "predict," "forecast," "continue," or other words that convey uncertainty of future events or outcomes to identify these forward-looking statements. Forward-looking statements also include statements regarding our intentions, beliefs, projections, outlook, analyses or expectations concerning, among other things:

● our cash balances and our ability to obtain additional financing in the future;

● the success and timing of our ongoing and planned clinical trials and preclinical studies, including our ability to enroll participants in our studies at anticipated rates and our ability to manufacture an adequate amount of drug supply for our studies;

● obtaining and maintaining intellectual property protection for our current or future product candidates and our proprietary technology;

● the performance of third parties, including CROs, manufacturers, suppliers, and outside consultants, to whom we outsource certain operational, staff and other functions;

● our ability to obtain and maintain regulatory approval of our current or future product candidates and, if approved, our products, including the labeling under any approval we may obtain;

● our plans and ability to develop and commercialize our current or future product candidates and the outcomes of our research and development activities;

● our estimates regarding expenses, future revenues, capital requirements, and needs for additional financing;

● our future obligations under the Vertex Agreement;

● our failure to recruit or retain key scientific or management personnel or to retain our executive officers;

● the accuracy of our estimates of the size and characteristics of the potential markets for our current or future product candidates, the rate and degree of market acceptance of any of our current or future product candidates that may be approved in the future, and our ability to serve those markets;

● the success of products that are or may become available which also target the potential markets for our current or future product candidates;

● our ability to operate our business without infringing the intellectual property rights of others and the potential for others to infringe upon our intellectual property rights;

● any significant breakdown, infiltration, or interruption of our IT systems and infrastructure;

● our ability to remediate our previously disclosed material weaknesses in our internal controls over financial reporting in a timely manner;

● recently enacted and future legislation related to the healthcare system;

● other regulatory developments in the U.S., European Union, and other foreign jurisdictions;

iv

------

● our ability to satisfy the continued listing requirements of the Nasdaq or any other exchange on which our securities may trade in the future;

● uncertainties related to general economic, political, business, industry, and market conditions, including the continued availability of funding for the NIA to support disbursements under our previously received grant and

● other risks and uncertainties, including those discussed under the heading "Risk Factors" herein and in our other public filings.

As a result of these and other factors, known and unknown, actual results could differ materially from our intentions, beliefs, projections, outlook, analyses, or expectations expressed in any forward-looking statements in this Quarterly Report. Accordingly, we cannot assure you that the forward-looking statements contained in this Quarterly Report will prove to be accurate or that any such inaccuracy will not be material. You should also understand that it is not possible to predict or identify all such factors, and you should not consider any such list to be a complete set of all potential risks or uncertainties. In light of the foregoing and the significant uncertainties in these forward-looking statements, you should not regard these statements as a representation or warranty by us or any other person that we will achieve our objectives and plans in any specified time frame, or at all. For all forward-looking statements, we claim the protection of the safe harbor for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995.

Any forward-looking statements that we make in this Quarterly Report speak only as of the date of such statement, and, except as required by applicable law or by the rules and regulations of the SEC, we undertake no obligation to update such statements to reflect events or circumstances after the date of this Quarterly Report or to reflect the occurrence of unanticipated events. Comparisons of current and any prior period results are not intended to express any ongoing or future trends or indications of future performance, unless explicitly expressed as such, and should only be viewed as historical data.

**Note Regarding Trademarks, Trade Names, and Service Marks**

This Quarterly Report includes trademarks, trade names, and service marks owned by us or other companies. All trademarks, service marks and trade names included in this Quarterly Report are the property of their respective owners. To the extent any such terms appear without the trade name, trademark, or service mark notice, such presentation is for convenience only and should not be construed as being used in a descriptive or generic sense.

v

------

**PART I** – **FINANCIAL INFORMATION**

---

| | |
|:---|:---|
| **ITEM 1.** | **FINANCIAL STATEMENTS** |

---

**CervoMed Inc.**

**Condensed Consolidated Balance Sheets**

&nbsp;&nbsp;&nbsp;&nbsp;**(unaudited)**

---

| | | |
|:---|:---|:---|
|  | **June 30,**<br> **2025** | **December 31,**<br> **2024** |
| **Assets** |  |  |
| Current assets: |  |  |
| Cash and cash equivalents | $8320713 | $8999496 |
| Marketable securities | 25210453 | 29922523 |
| Prepaid expenses and other current assets | 1964327 | 1905360 |
| Deferred offering costs | 224931 |  |
| Grant receivable | 2360975 | 2254231 |
| Total current assets | 38081399 | 43081610 |
| Total assets | $38081399 | $43081610 |
| **Liabilities and Stockholders**' **Equity** |  |  |
| Current liabilities: |  |  |
| Accounts payable | $1845609 | $1511440 |
| Accrued expenses and other current liabilities | 2796011 | 2367842 |
| Total liabilities | 4641620 | 3879282 |
| Commitments and Contingencies (Note 8) |  |  |
| Stockholders' Equity: |  |  |
| Series A preferred stock $0.001 par value: 30,000,000 authorized at June 30, 2025 and December 31, 2024, 0 shares issued and outstanding at June 30, 2025 and December 31, 2024 |  |  |
| Common stock, $0.001 par value: 1,000,000,000 shares authorized at June 30, 2025 and December 31, 2024: 9,252,719 and 8,702,719 shares issued and outstanding at June 30, 2025 and December 31, 2024, respectively | 9252 | 8702 |
| Additional paid-in capital | 115315232 | 109868913 |
| Accumulated other comprehensive (loss) income | (783) | 56197 |
| Accumulated deficit | (81883922) | (70731484) |
| Total stockholders' equity | 33439779 | 39202328 |
| Total liabilities and stockholders' equity | $38081399 | $43081610 |

---

See accompanying notes to unaudited condensed consolidated interim financial statements

------

**CervoMed Inc.**

**Condensed Consolidated Statements of Operations and Comprehensive Loss**

&nbsp;&nbsp;&nbsp;&nbsp;**(unaudited)**

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **Three Months Ended**<br> **June 30,** | **Three Months Ended**<br> **June 30,** | **Six Months Ended**<br> **June 30,** | **Six Months Ended**<br> **June 30,** |
|  | <br> **2025** | **2024** | **2025** | **2024** |
| Grant revenue | $1757724 | $3288971 | $3675215 | $5636221 |
| Operating expenses: |  |  |  |  |
| Research and development | 5108625 | 3772391 | 9946423 | 6586649 |
| General and administrative | 3265374 | 2511679 | 5647951 | 4639609 |
| Total operating expenses | 8373999 | 6284070 | 15594374 | 11226258 |
| Loss from operations | (6616275) | (2995099) | (11919159) | (5590037) |
| Other income (expense): |  |  |  |  |
| Other expense | (10256) | (247) | (10391) | (277) |
| Interest income | 368127 | 678441 | 777112 | 759074 |
| Total other income, net | 357871 | 678194 | 766721 | 758797 |
| Net loss | $(6258404) | $(2316905) | $(11152438) | $(4831240) |
| Per share information: |  |  |  |  |
| Net loss per share of common stock, basic and diluted | $(0.70) | $(0.27) | $(1.26) | $(0.65) |
| Weighted average shares outstanding, basic and diluted | 8950521 | 8702764 | 8827305 | 7436633 |
| Net loss: |  |  |  |  |
| Net unrealized loss on marketable securities | (22006) | (19702) | (56980) | (19702) |
| Total comprehensive loss | $(6280410) | $(2336607) | $(11209418) | $(4850942) |

---

See accompanying notes to unaudited condensed consolidated interim financial statements

------

**CervoMed Inc.**

**Condensed Consolidated Statements of Stockholders**' **Equity**

&nbsp;&nbsp;&nbsp;&nbsp;**(unaudited)**

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
|  | **Three Month Period Ended June 30, 2025** | **Three Month Period Ended June 30, 2025** | **Three Month Period Ended June 30, 2025** | **Three Month Period Ended June 30, 2025** | **Three Month Period Ended June 30, 2025** | **Three Month Period Ended June 30, 2025** |
|  | **Common Stock** | **Common Stock** | **Additional**<br> **Paid-in** | **Accumulated** **other** <br> **comprehensive**  | **Accumulated** | **Total** **Stockholders'** |
|  | **Shares** | **Amount** | **Capital** | **(loss) income** | **Deficit** | **Equity** |
| Balance at March 31, 2025 | 8702719 | $8702 | $110230080 | $21223 | $(75625518) | $34634487 |
| Unrealized loss on marketable securities |  |  |  | (22006) |  | (22006) |
| Stock-based compensation expense |  |  | 497015 |  |  | 497015 |
| Sale of common stock, net of issuance costs | 550000 | 550 | 4588137 |  |  | 4588687 |
| Net loss |  |  |  |  | (6258404) | (6258404) |
| Balance at June 30, 2025 | 9252719 | $9252 | $115315232 | $(783) | $(81883992) | $33439779 |

---

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
|  | **Six Month Period Ended June 30, 2025** | **Six Month Period Ended June 30, 2025** | **Six Month Period Ended June 30, 2025** | **Six Month Period Ended June 30, 2025** | **Six Month Period Ended June 30, 2025** | **Six Month Period Ended June 30, 2025** |
|  | **Common Stock** | **Common Stock** | **Additional**<br> **Paid-in** | **Accumulated** **other** <br> **comprehensive** | **Accumulated** | **Total** **Stockholders'** |
|  | **Shares** | **Amount** | **Capital** | **(loss) income** | **Deficit** | **Equity** |
| Balance at December 31, 2024 | 8702719 | $8702 | $109868913 | $56197 | $(70731484) | $39202328 |
| Unrealized loss on marketable securities |  |  |  | (56980) |  | (56980) |
| Stock-based compensation expense |  |  | 858182 |  |  | 858182 |
| Sale of common stock, net of issuance costs | 550000 | 550 | 4588137 |  |  | 4588687 |
| Net loss |  |  |  |  | (11152438) | (11152438) |
| Balance at June 30, 2025 | 9252719 | $9252 | $115315232 | $(783) | $(81883992) | $33439779 |

---

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
|  | **Three Month Period Ended June 30, 2024** | **Three Month Period Ended June 30, 2024** | **Three Month Period Ended June 30, 2024** | **Three Month Period Ended June 30, 2024** | **Three Month Period Ended June 30, 2024** | **Three Month Period Ended June 30, 2024** |
|  | **Common Stock** | **Common Stock** | **Additional**<br> **Paid-in** | **Accumulated** **other** <br> **comprehensive**  | **Accumulated** | **Total** **Stockholders'** |
|  | **Shares** | **Amount** | **Capital** | **loss** | **Deficit** | **Equity** |
| Balance at March 31, 2024 | 6170479 | $6170 | $62285332 | $— | $(56955124) | $5336378 |
| Issuance of common stock, pre-funded warrants and common stock warrants, net of offering costs | 2083262 | 2083 | 46396478 |  |  | 46398561 |
| Stock-based compensation expense |  |  | 578581 |  |  | 578581 |
| Unrealized loss on marketable securities |  |  |  | (19702) |  | (19702) |
| Net loss |  |  |  |  | (2316905) | (2316905) |
| Balance at June 30, 2024 | 8253741 | $8253 | $109260391 | $(19702) | $(59272029) | $49976913 |

---

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
|  | **Six Month Period Ended June 30, 2024** | **Six Month Period Ended June 30, 2024** | **Six Month Period Ended June 30, 2024** | **Six Month Period Ended June 30, 2024** | **Six Month Period Ended June 30, 2024** | **Six Month Period Ended June 30, 2024** |
|  | **Common Stock** | **Common Stock** | **Additional**<br> **Paid-in** | **Accumulated** **other** <br> **comprehensive**  | **Accumulated** | **Total** **Stockholders'** |
|  | **Shares** | **Amount** | **Capital** | **loss** | **Deficit** | **Equity** |
| Balance at December 31, 2023 | 5674520 | $5674 | $61811889 | $— | $(54440789) | $7376774 |
| Issuance of common stock, pre-funded warrants and common stock warrants, net of offering costs | 2083262 | 2083 | 46396478 |  |  | 46398561 |
| Stock options granted in lieu of compensation |  |  | 255724 |  |  | 255724 |
| Cashless exercise of pre-funded warrants | 495959 | 496 | (496) |  |  |  |
| Stock-based compensation expense |  |  | 796796 |  |  | 796796 |
| Unrealized loss on marketable securities |  |  |  | (19702) |  | (19702) |
| Net loss |  |  |  |  | (4831240) | (4831240) |
| Balance at June 30, 2024 | 8253741 | $8253 | $109260391 | $(19702) | $(59272029) | $49976913 |

---

See accompanying notes to unaudited condensed consolidated interim financial statements

------

**CervoMed Inc.**

**Condensed Consolidated Statements of Cash Flows**

&nbsp;&nbsp;&nbsp;&nbsp;**(unaudited)**

---

| | | |
|:---|:---|:---|
|  | **Six Months Ended June 30,** | **Six Months Ended June 30,** |
|  | **2025** | **2024** |
| Cash flows from operating activities: |  |  |
| Net loss | $(11152438) | $(4831240) |
| Adjustments to reconcile net loss to net cash used in operating activities: |  |  |
| Accretion of discount on marketable securities, net | (486494) | (338208) |
| Stock-based compensation expense | 858182 | 796796 |
| Changes in operating assets and liabilities: |  |  |
| Prepaid expenses and other assets | (58967) | (1028399) |
| Deferred offering costs | (163354) |  |
| Accounts payable | 272592 | 63383 |
| Accrued expenses and other current liabilities | 428169 | (604556) |
| Grant receivable | (106744) | 915404 |
| Deferred grant revenue |  | 1401501 |
| Net cash used in operating activities | (10409054) | (3625319) |
| Cash flows from investing activities: |  |  |
| Purchase of marketable securities | (16858416) | (40570256) |
| Maturities of marketable securities | 22000000 |  |
| Net cash provided by (used in) investing activities | 5141584 | (40570256) |
| Cash flows from financing activities: |  |  |
| Proceeds from the sale of common stock, prefunded warrants and common stock warrants, net of offering costs |  | 46411946 |
| Sale of common stock under Open Market Sales Agreement, net of issuance costs | 4588687 |  |
| Net cash provided by financing activities | 4588687 | 46411946 |
| Net (decrease) increase in cash and cash equivalents | (678783) | 2216371 |
| Cash and cash equivalents at beginning of period | 8999496 | 7792846 |
| Cash and cash equivalents at end of period | $8320713 | $10009217 |
| Supplemental disclosure of non-cash investing and financing activities: |  |  |
| Unrealized loss on marketable securities | $(56980) | $19702 |
| Stock options granted in lieu of cash bonus | $— | $255724 |
| Deferred offering costs in accounts payable | $61577 | $13385 |
| Cashless exercise of prefunded warrants | $— | $496 |

---

See accompanying notes to unaudited condensed consolidated interim financial statements

------

CervoMed Inc.

Notes To Unaudited Condensed Consolidated Interim Financial Statements

**1. The Company and Description of Business**

The Company is a corporation organized under the laws of the state of Delaware and headquartered in Boston, Massachusetts. The Company is a clinical-stage biotechnology company focused on developing treatments for age-related neurologic disorders. The Company is currently focused on the development of its lead drug candidate, neflamapimod, an investigational, orally administered, small molecule brain penetrant that inhibits p38α in the neurons of people with neurodegenerative diseases. The Company believes neflamapimod has the potential to treat synaptic dysfunction, the reversible aspect of the underlying disease processes in DLB and certain other major neurological disorders. The Company recently completed its RewinD-LB Trial, a Phase 2b study of neflamapimod in patients with DLB funded primarily by a $21.3 million grant from the NIA.

**2. Liquidity and Capital Resources**

The Company has generated negative cash flows from operations and, as of June 30, 2025, had an accumulated deficit of $81.9 million. Based on its current operating plan, the Company believes its existing cash and cash equivalents and marketable securities on hand of $33.5 million as of June 30, 2025, along with remaining funds to be received from the NIA Grant, will enable the Company to fund its operating expenses and capital expenditure requirements for at least twelve months from the issuance of these unaudited condensed consolidated interim financial statements. The Company has based this estimate on assumptions that may prove to be wrong, and it could utilize its available capital resources sooner than it currently expects. The Company will continue to require additional financing to advance its current product candidates through clinical development, to develop, acquire or in-license other potential product candidates and to fund operations for the foreseeable future. The Company intends to continue to seek funds through equity offerings, debt financings or other capital sources, including potential collaborations, licenses and other similar arrangements. However, the Company may be unable to raise additional funds or enter into such other arrangements when needed, on favorable terms, or at all. If the Company does raise additional capital through public or private equity offerings, the ownership interest of its existing stockholders will be diluted, and the terms of such securities may include liquidation or other preferences that adversely affect the Company's stockholders' rights. If the Company raises additional capital through a debt financing, it may be subject to covenants limiting or restricting the Company's ability to take specific actions, such as incurring additional debt, making capital expenditures or declaring dividends. Any failure to raise capital as and when needed could have a negative impact on the Company's financial condition and on its ability to pursue its business plans and strategies. If the Company is unable to raise sufficient capital when needed, it may need to delay, reduce or terminate planned activities to reduce costs, including development or commercialization activities for neflamapimod. The Company might also be required to seek funds through arrangements with third parties that require it to relinquish certain of its rights to neflamapimod or otherwise agree to terms unfavorable to the Company.

Operations of the Company are subject to certain additional risks and uncertainties as well, and any one or more of these factors could materially affect the Company's financial condition, future operations and liquidity needs. Many of these risks and uncertainties are outside of the Company's control, including internal and external factors that may affect the success or failure of the Company's research and development efforts, the length of time and cost of developing and commercializing the Company's current or future product candidates, whether and when any such product candidates become approved drugs, and how significant a drug's market share will be, if approved, among others.

**3. Summary of Significant Accounting Policies**

***Basis of presentation***

The unaudited condensed consolidated interim financial statements have been prepared in conformity with U.S. GAAP as defined by the FASB.

***Unaudited condensed consolidated interim financial statements***

The accompanying unaudited condensed consolidated interim financial statements have been prepared by the Company in accordance with U.S. GAAP for interim information and pursuant to the rules and regulations of the SEC. Accordingly, certain information and footnote disclosures normally included in audited consolidated financial statements prepared in accordance with U.S. GAAP have been condensed or omitted pursuant to such rules and regulations. These unaudited condensed consolidated interim financial statements should be read in conjunction with the audited consolidated financial statements and related notes for the year ended December 31, 2024, filed as part of the Company's Annual Report.

------

CervoMed Inc.

Notes To Unaudited Condensed Consolidated Interim Financial Statements

These unaudited condensed consolidated interim financial statements have been prepared on the same basis as the audited consolidated financial statements and, in management's opinion, include all adjustments, consisting of only normal recurring adjustments, necessary for the fair presentation of the financial information for the interim periods. However, the results of operations for any interim period are not necessarily indicative of the results to be expected for the full fiscal year.

***Consolidation***

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

***Use of estimates***

The preparation of unaudited condensed consolidated interim financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, grant revenue, expenses, and related disclosures. On an ongoing basis, the Company's management evaluates its estimates, including estimates related to money market accounts, clinical trial accruals, stock-based compensation expense, grant revenue, and expenses during the reporting period. The Company bases its estimates on historical experience and other market-specific or relevant assumptions that it believes to be reasonable under the circumstances. Actual results may differ significantly from those estimates or assumptions.

***Concentration of Credit Risk***

Financial instruments that potentially subject the Company to significant concentration of credit risk consist primarily of cash and cash equivalents and marketable securities. The Company maintains deposits in a financial institution in excess of government insured limits. Management believes that the Company is not exposed to significant credit risk as the Company's deposits are held at a financial institution that management believes to be of high credit quality, and the Company has not experienced any losses on these deposits. Management also believes that the Company is not exposed to significant credit risk as it relates to marketable securities because the Company invests in U.S. government securities and commercial paper.

***Cash and Cash Equivalents***

The Company considers all highly-liquid investments with original maturities of 90 days or less at the date of purchase to be cash and cash equivalents. Cash equivalents, which consist of amounts invested in money market funds, are stated at fair value. There are *de minimis* unrealized losses on the money market funds for the period ended June 30, 2025.

***Marketable Securities***

The Company classifies its marketable securities as available-for-sale, which include commercial paper and U.S. government debt securities with original maturities of greater than 90 days from date of purchase. These securities are carried at fair value, with unrealized gains and losses reported on the condensed consolidated statement of operations and comprehensive loss and accumulated other comprehensive (loss) income within stockholders' equity until realized. Purchase discounts are accreted using the effective interest method over the term of the related security and such accretion is included in interest income on the accompanying condensed consolidated statements of operations and comprehensive loss.

------

CervoMed Inc.

Notes To Unaudited Condensed Consolidated Interim Financial Statements

The Company evaluates its investments in marketable securities for impairment at each reporting period when the fair value is below amortized cost. If the Company intends to sell the security, or it is more likely than not the Company will be required to sell the security before recovery of amortized cost, the entire impairment is included in earnings. The Company did not record any impairment on marketable securities during the three and six months ended June 30, 2025 and 2024. There was no allowance for credit losses as of June 30, 2025 or December 31, 2024.

***Equity issuance costs***

The Company capitalizes costs directly associated with equity financings as deferred offering costs on its consolidated balance sheet. These costs remain capitalized until such financings are consummated, at which time such costs are recorded against the gross proceeds from the applicable financing. With respect to financings conducted on an ongoing basis, such as at-the-market offerings, costs are recognized ratably as funds are received in proportion to the aggregate offering amount. If a financing is abandoned, any remaining deferred offering costs are expensed.

As of June 30, 2025, there were $0.2 million of deferred offering costs related to the Sales Agreement. There were no deferred offering costs as of December 31, 2024, as the Sales Agreement was entered into in May 2025.

***Fair Value of Financial Instruments***

The Company utilizes valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs to the extent possible. The Company determines the fair value of its financial instruments based on assumptions that market participants would use in pricing an asset or liability in the principal or most advantageous market. When considering market participant assumptions in fair value measurements, the following fair value hierarchy distinguishes between observable and unobservable inputs, which are categorized in one of the following levels:

*Level 1* – Inputs are unadjusted, quoted prices in active markets for identical assets or liabilities at the measurement date;

*Level 2* – Inputs are observable, unadjusted quoted prices in active markets for similar assets or liabilities, unadjusted quoted prices for identical or similar assets or liabilities in markets that are not active, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the related assets or liabilities; and

*Level 3* – Unobservable inputs that are significant to the measurement of the fair value of the assets or liabilities that are supported by little or no market data.

***Leases***

The Company accounts for leases in accordance with ASC Topic 842, Leases, which requires a lessee to recognize an ROU asset and corresponding lease liability on the balance sheet for all leases with a term longer than 12 months. Leases will be classified as finance or operating, with classification affecting the pattern and expense recognition in the statement of operations and comprehensive loss as well as the reduction of the ROU asset. The standard provides a number of optional practical expedients in transition. The Company has elected to apply (i) the practical expedient, which allows us to not separate lease and non-lease components, for new leases and (ii) the short-term lease exemption for all leases with an original term of less than 12 months, for purposes of applying the recognition and measurements requirements in the standard.

At the inception of an arrangement, the Company determines whether the arrangement is or contains a lease based on specific facts and circumstances, the existence of an identified asset(s), if any, and the Company's control over the use of the identified asset(s), if applicable. Operating lease liabilities and their corresponding ROU assets are recorded based on the present value of future lease payments over the expected lease term. The interest rate implicit in lease contracts is typically not readily determinable. As such, the Company utilizes the incremental borrowing rate, which is the rate incurred to borrow on a collateralized basis over a similar term an amount equal to the lease payments in a similar economic environment.

------

CervoMed Inc.

Notes To Unaudited Condensed Consolidated Interim Financial Statements

The Company has elected to combine lease and non-lease components as a single component. Operating leases are recognized on the unaudited interim condensed consolidated balance sheet as ROU assets, lease liabilities, current and lease liabilities, non-current. Fixed rent payments are included in the calculation of the lease balances, while variable costs paid for certain operating and pass-through costs are excluded. Lease expense is recognized over the expected term on a straight-line basis.

***Research and Development***

Research and development costs are expensed as incurred and consist primarily of new product development. Research and development costs include salaries and benefits, consultants' fees, process development costs and stock-based compensation, as well as fees paid to third parties that conduct certain research and development activities on the Company's behalf.

A substantial portion of the Company's ongoing research and development activities are conducted by third-party service providers. The Company records accrued expenses for estimated preclinical study and clinical trial expenses. Estimates are based on the services performed pursuant to contracts with research institutions, CROs in connection with clinical studies, investigative sites in connection with clinical studies, vendors in connection with preclinical development activities, and CDMOs in connection with the production of materials for clinical trials. Further, the Company accrues expenses related to clinical trials based on the level of subject enrollment and activity according to the related agreement. The Company monitors subject enrollment levels and related activity to the extent reasonably possible and makes judgments and estimates in determining the accrued balance in each reporting period. Payments for these activities are based on the terms of the individual arrangements, which may differ from the pattern of costs incurred, and are reflected in the unaudited condensed consolidated financial statements as prepaid or accrued research and development.

If the Company underestimates or overestimates the level of services performed or the costs of these services, actual expenses could differ from estimates. To date, the Company has not experienced significant changes in its estimates of preclinical studies and clinical trial costs.

***Patent Costs***

All patent-related costs incurred in connection with filing and prosecuting patent applications are expensed as incurred due to the uncertainty about the recovery of the expenditure. Amounts incurred are classified as general and administrative expenses in the unaudited interim condensed consolidated statement of operations and comprehensive loss.

***Stock-based Compensation***

Stock-based compensation for employee and non-employee awards is measured on the grant date based on the fair value of the award and recognized on a straight-line basis over the requisite service period. The fair value of stock options to purchase common stock are measured using the Black-Scholes option pricing model. The Company accounts for forfeitures as they occur.

The fair value of stock options is determined by the Company using the methods and assumptions discussed below. Each of these inputs is subjective and generally requires judgment and estimation by management.

------

CervoMed Inc.

Notes To Unaudited Condensed Consolidated Interim Financial Statements

*Expected Term*—The expected term represents the period that stock-based awards are expected to be outstanding. The Company uses the "simplified method" to estimate the expected term of stock option grants. Under this approach, the weighted-average expected life is presumed to be the average of the contractual term of ten years and the weighted-average vesting term of the Company stock options, taking into consideration multiple vesting tranches. The Company utilizes this method due to lack of historical data and the plain-vanilla nature of the Company's stock-based awards.

*Expected Volatility*—The Company has limited information on the volatility of its common stock as the shares were not actively traded on any public markets until recently. The expected volatility is derived from the historical stock volatility of comparable peer public companies within its industry. These companies are considered to be comparable to the Company's business over a period equivalent to the expected term of the stock-based awards.

*Risk-Free Interest Rate*—The risk-free interest rate is based on the U.S. Treasury yield curve in effect at the date of grant for zero-coupon U.S. Treasury notes with maturities approximately equal to the expected term.

*Expected Dividend Rate*—The expected dividend is zero as the Company has not paid, nor does it anticipate paying, any dividends on its stock options in the foreseeable future.

***Grant Revenue***

The Company generates revenue from government contracts that reimburse the Company for certain allowable costs for funded projects.

The Company recognizes funding received from the NIA Grant as grant revenue, rather than as a reduction of research and development expenses, because the Company is the principal in conducting the research and development activities and these contracts are central to its ongoing operations. Revenue is recognized as the qualifying expenses related to the contracts are incurred. Revenue recognized upon incurring qualifying expenses in advance of receipt of funding is recorded in the Company's unaudited interim condensed consolidated balance sheets as grant receivable. Amounts received in advance of services rendered are recorded as deferred grant revenue on the Company's unaudited interim condensed consolidated balance sheets. The related costs incurred by the Company are included in research and development expense in the Company's unaudited interim condensed consolidated statements of operations and comprehensive loss.

***Income Taxes***

The Company accounts for income taxes under the asset and liability method, which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the unaudited condensed consolidated interim financial statements. Under this method, deferred tax assets and liabilities are determined on the basis of the differences between the financial statement and tax basis of assets and liabilities by using enacted tax rates in effect for the year in which the differences are expected to recover or settle. The effect of a change in tax rates on deferred tax assets and liabilities is recognized on the statement of operations and comprehensive loss for the period that includes the enactment date.

The deferred tax assets are recognized to the extent the Company believes that these assets are more likely than not to be realized. A valuation allowance is provided when it is more likely than not that some portion or all of a deferred tax asset will not be realized. Due to the Company's historical operating performance and the recorded cumulative net losses in prior fiscal periods, the net deferred tax assets have been fully offset by a valuation allowance.

The Company records uncertain tax positions using a two-step process. First, the Company determines whether it is more likely than not that the tax positions will be sustained on the basis of the technical merits of the position. Second, for those tax positions that meet the more-likely-than-not recognition threshold, the Company recognizes the largest amount of tax benefit that is more than 50% likely to be realized upon ultimate settlement with the related tax authority.

------

CervoMed Inc.

Notes To Unaudited Condensed Consolidated Interim Financial Statements

The Company recognizes interest and penalties, if any, related to unrecognized tax benefits on the interest expense line and other expense line, respectively, in the accompanying unaudited interim condensed consolidated statements of operations and comprehensive loss. Accrued interest and penalties are included on the related liability lines in the unaudited interim condensed consolidated balance sheet.

***Net Loss Per Share***

Basic net loss per share is computed by dividing net loss by the weighted-average number of shares of common stock outstanding during each period. Diluted net loss per share includes the effect, if any, from the potential exercise or conversion of securities such as common stock warrants and stock options which would result in the issuance of incremental shares of common stock. For diluted net loss per share, the weighted-average number of shares of common stock is the same for basic net loss per share due to the fact that, when a net loss exists, dilutive securities are not included in the calculation as the impact is anti-dilutive.

The following potentially dilutive securities outstanding have been excluded from the computation of diluted weighted average shares outstanding, as they would be anti-dilutive:

---

| | | |
|:---|:---|:---|
|  | **June 30,** | **June 30,** |
|  | **2025** | **2024** |
| Common stock warrants | 2601671 | 2633868 |
| Stock options | 995374 | 533304 |
|  | 3597045 | 3167172 |

---

***Segments***

In November 2023, the FASB issued ASU No. 2023-07, "Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures." This amended guidance applies to all public entities and aims to improve reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expenses, to enable investors to develop more decision-useful financial analyses. This guidance is effective for fiscal years beginning after December 15, 2023 and interim periods within fiscal years beginning after December 15, 2024. The Company adopted this ASU on January 1, 2024.

Operating segments are defined as components of an enterprise about which separate discrete information is available for evaluation by the CODM, or decision-making group, in deciding how to allocate resources in assessing performance. CervoMed Inc. has one reportable segment which consists of the development of clinical and preclinical product candidates for treatments for age-related neurologic disorders and other medical indications. The Company's CODM is the Chief Executive Officer.

The accounting policies of the Company's single segment are the same as those described in the summary of significant accounting policies. To date, the Company has not generated any product revenue. The Company expects to continue to incur significant expenses and operating losses for the foreseeable future as it advances product candidates through all stages of development and clinical trials and, ultimately, seek regulatory approval. The CODM assesses the financial performance for the Company's segment based on net loss. The CODM also uses internal budget versus forecasted expense and cash forecast models in making certain decisions. Such models are reviewed to assess the entity-wide/single-segment operating results and performance, including how long cash-on-hand is expected to be sufficient. The measure of segment assets is reported on the consolidated balance sheet as total assets. The segment measure of loss is reported on the unaudited interim condensed consolidated statement of operations and comprehensive loss as net loss.

------

CervoMed Inc.

Notes To Unaudited Condensed Consolidated Interim Financial Statements

***Recently Issued But Not Yet Adopted Accounting Pronouncements and Legislation***

In December 2023, the FASB issued ASU No. 2023-09, Income Taxes (Topic 740): "Improvements to Income Tax Disclosures". ASU 2023-09 is intended to improve income tax disclosure requirements by requiring (1) consistent categories and greater disaggregation of information in the rate reconciliation and (2) the disaggregation of income taxes paid by jurisdiction. The guidance makes several other changes to the income tax disclosure requirements as well. The guidance in ASU 2023-09 will be effective for annual reporting periods in fiscal years beginning after December 15, 2024. The Company is currently evaluating the impact that the adoption of ASU 2023-09 will have on its consolidated financial statements and disclosures.

In November 2024, the FASB issued ASU No. 2024-03, "Disaggregation of Income Statement Expenses" (ASU 2024-03). ASU 2024-03 requires additional disclosure of specific types of expenses included in the expense captions presented on the face of the statement of operations and comprehensive loss as well as disclosures about selling expenses. ASU 2024-03 is effective for fiscal years beginning after December 15, 2026, and interim periods beginning after December 15, 2027, with early adoption permitted. The requirements will be applied prospectively with the option for retrospective application. The Company is currently evaluating the impact that the adoption of ASU 2024-03 will have on its consolidated financial statements and disclosures.

On July 4, 2025, the U.S. government enacted The One Big Beautiful Bill Act of 2025 which includes, among other provisions, changes to the U.S. corporate income tax system including the allowance of immediate expensing of qualifying research and development expenses and permanent extensions of certain provisions within the Tax Cuts and Jobs Act. The Company is currently evaluating the future impact of these tax law changes on its consolidated financial statements and disclosures.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

**4. Fair Value of Financial Instruments**

The Company's financial instruments consist primarily of cash, cash equivalents, marketable securities, accounts payable, and accrued liabilities. The Company's cash, cash equivalents, accounts payable and accrued liabilities approximate fair value due to their relatively short maturities.

------

CervoMed Inc.

Notes To Unaudited Condensed Consolidated Interim Financial Statements

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

---

| | | | |
|:---|:---|:---|:---|
|  | **June 30, 2025** | **June 30, 2025** | **June 30, 2025** |
|  | **(Level 1)** | **(Level 2)** | **(Level 3)** |
| **Assets** |  |  |  |
| Cash equivalents (money market accounts) | $6859363 | $— | $— |
| Marketable securities: |  |  |  |
| Commercial paper |  | 17741598 |  |
| U.S. treasury bonds |  | 3995520 |  |
| U.S. government agency bonds |  | 1981780 |  |
| Corporate debt securities |  | 1491555 |  |
| Total assets measured at fair value | $6859363 | $25210453 | $— |

---

---

| | | | |
|:---|:---|:---|:---|
|  | **December 31, 2024** | **December 31, 2024** | **December 31, 2024** |
|  | **(Level 1)** | **(Level 2)** | **(Level 3)** |
| **Assets** |  |  |  |
| Cash equivalents (money market accounts) | $7559336 | $— | $— |
| Marketable securities: |  |  |  |
| Commercial paper |  | 18032943 |  |
| U.S. treasury bonds |  | 7951060 |  |
| U.S. government agency bonds |  | 3938520 |  |
| Total assets measured at fair value | $7559336 | $29922523 | $— |

---

The fair values of the Company's Level 2 marketable securities are estimated primarily based on benchmark yields, reported trades, market-based quotes, issuer spreads, two-sided markets, benchmark securities, bids, offers, and reference data including market research publications, which represent a market approach. In general, a market approach is utilized if there is readily available and relevant market activity for an individual security. This valuation technique may change from period to period, based on the relevance and availability of market data.

The following is a summary of the Company's marketable securities which provides a reconciliation of amortized cost basis to fair value including cumulative unrealized gains and losses as of June 30, 2025 and December 31, 2024:

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **June 30, 2025** | **June 30, 2025** | **June 30, 2025** | **June 30, 2025** |
|  | **Amortized Cost** | **Unrealized** <br> **gains** | **Unrealized**<br> **losses** | **Fair Value** |
| Commercial paper | $17745445 | $— | $(3847) | $17741598 |
| U.S. treasury bonds | 3993661 | 1859 |  | 3995520 |
| U.S. government agency bonds | 1979313 | 2467 |  | 1981780 |
| Corporate debt securities | 1492817 |  | (1262) | 1491555 |
| Total | $25211236 | $4326 | $(5109) | $25210453 |

---

------

CervoMed Inc.

Notes To Unaudited Condensed Consolidated Interim Financial Statements

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **December 31, 2024** | **December 31, 2024** | **December 31, 2024** | **December 31, 2024** |
|  | **Amortized Cost** | **Unrealized**<br> **gains** | **Unrealized**<br> **losses** | **Fair Value** |
| Commercial paper | $18019334 | $16393 | $(2784) | $18032943 |
| U.S. treasury bonds | 7920620 | 30440 |  | 7951060 |
| U.S. government agency bonds | 3926372 | 12148 |  | 3938520 |
| Total | $29866326 | $58981 | $(2784) | $29922523 |

---

There were no transfers among Level 1, Level 2 or Level 3 categories in the three and six months ended June 30, 2025 or the year ended December 31, 2024.

**5. Significant Agreements and Contracts**

*Vertex Option and License Agreement*

In August 2012, the Company entered the Vertex Agreement to acquire an exclusive license to develop and commercialize a drug candidate, "VX-745," from Vertex. In August 2014, the Company exercised its option to acquire the license and paid an option fee of $100,000, which was expensed as incurred as a component of research and development expense.

The Vertex Agreement granted the Company the exclusive worldwide use of VX-745 in the field of diagnosis, treatment and prevention of AD and related central nervous system disorders in humans.

As part of the Vertex Agreement, the Company is obligated to make certain payments totaling up to approximately $117.0 million upon achievement of certain regulatory and sales milestones, and royalties on net sales of products on indications covered by the Vertex Agreement. The first expected milestone events concern filing of an NDA with the FDA for marketing approval of neflamapimod in the U.S., or a similar filing for a non-U.S. major market, as specified in the Vertex Agreement, and such royalties will be on a sliding scale of percentages of net sales in the low- to mid-teens, depending on the amount of net sales in the applicable years. The Company is also obligated to make a milestone payment to Vertex upon net sales reaching a certain specified amount in any 12-month period. The Vertex Agreement states that royalties will be reduced by 50% during any portion of the royalty term when there is no valid claim of an issued patent within specified patent rights covering the licensed product. The Company also has the right to deduct, on a country by country basis, from royalties otherwise payable to Vertex under the terms of the Vertex Agreement, 50% of all royalties, upfront fees, milestones and other payments paid by the Company or any of the Company's affiliates or sublicensees to third parties under licenses that are necessary for the development, manufacture, sale or use of a licensed product, provided that in no event will the royalty payable to Vertex be reduced to less than 50% of the rates specified in the Vertex Agreement, subject to certain adjustments specified therein. The Company has made a total of $100,000 in payments to Vertex related to the Vertex Agreement. No payments were made during the three and six months ended June 30, 2025 and 2024.

*National Institute of Aging Grant*

In January 2023, the Company was awarded a $21.0 million grant from the NIA to support its RewinD-LB Trial, a Phase 2b study of neflamapimod in patients with DLB and, in August 2024, the Company was awarded an additional $0.3 million under the grant. The grant monies are expected to be received over a period of three years including $6.7 million in 2023, $8.4 million in 2024 and $6.2 million in 2025.

------

CervoMed Inc.

Notes To Unaudited Condensed Consolidated Interim Financial Statements

The total revenue recognized from the NIA Grant was $3.7 million and $5.6 million for the six months ended June 30, 2025 and 2024, respectively. The total revenue recognized from the NIA Grant was $1.8 million and $3.3 million for the three months ended June 30, 2025 and 2024, respectively. As of June 30, 2025, aggregate total cash funding of $18.2 million has been received from the NIA Grant, resulting in approximately $2.9 million in funding remaining. The Company has recorded $2.4 million as a receivable in the unaudited interim condensed consolidated balance sheet at June 30, 2025, for allowable expenses incurred in prior to June 30, 2025, which is expected to be received subsequent to June 30, 2025. As of December 31, 2024, $2.3 million was recorded as a receivable in the consolidated balance sheet, for allowable expenses incurred during the year ended December 31, 2024.

The Company received access to the current year 3 funding in the amount of $5.6 million in March 2025. In June 2025, the Company received access to an additional $0.5 million. The total $6.1 million access received in 2025 was 98% of the full year 3 amount 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 2% of the grant of current year funding is dependent upon and subject to U.S. congressional approval of a final appropriations bill. Funding of the remaining proceeds under the Company's NIA Grant is also subject to uncertainty as a result of ongoing administrative changes and political uncertainty at the NIH.

**6. Prepaid Expenses**

Prepaid expenses consisted of the following:

---

| | | |
|:---|:---|:---|
|  | **June 30, 2025** | **December 31, 2024** |
| Clinical expenses | $1602810 | $1149343 |
| Insurance | 96769 | 443141 |
| Professional services | 142365 | 95218 |
| Dues and memberships | 80642 | 11777 |
| Other | 41741 | 205881 |
| Total | $1964327 | $1905360 |

---

**7. Accrued Expenses and Other Current Liabilities**

Accrued expenses and other current liabilities consisted of the following:

---

| | | |
|:---|:---|:---|
|  | **June 30, 2025** | **December 31, 2024** |
| Employee compensation costs (a) | $1301907 | $803193 |
| Clinical development costs | 1055360 | 1158783 |
| Professional fees | 334604 | 249527 |
| State franchise and excise tax | 20456 | 40456 |
| Other | 83684 | 115883 |
| Total | $2796011 | $2367842 |

---

(a) On April 14, 2025, the Board approved the terms of the Separation Agreement with the Company's Former COO, pursuant to which the Former COO's employment with the Company concluded effective July 1, 2025. Pursuant to the Separation Agreement, the former COO received (in each case, subject to lawful deductions): (i) a lump-sum payment equal to twelve months gross base salary, (ii) a lump-sum payment equal to his pro-rated target annual bonus for the year ending December 31, 2025, and (iii) a lump-sum payment equal to the aggregate premium for 12 months of COBRA continuation coverage for the Former COO and his eligible dependents. Additionally, all Company stock options previously granted to the Former COO will remain exercisable and continue to vest in accordance with their respective vesting schedules through September 30, 2026. In connection with the departure of the Former COO, during the three and six months ended June 30, 2025, the Company recognized $0.6 million in severance related charges. For more information on the stock-based compensation expense associated with the modification of the Former COO's stock options, see Note 10 — Stock-Based Compensation Expense.

------

CervoMed Inc.

Notes To Unaudited Condensed Consolidated Interim Financial Statements

**8. Commitments and Contingencies**

*Operating Leases*

The Company has a short-term lease for office space in Boston, Massachusetts and previously had a short-term agreement to utilize membership-based co-working space in Charlottesville, Virginia, the latter of which was terminated during the three months ended March 31, 2024. Lease expense was approximately $19,660 and $17,892 for the six months ended June 30, 2025 and 2024, respectively. For the three months ended June 30, 2025 and 2024, lease expense was approximately $11,160 and $8,400, respectively.

*Research and Development Arrangements*

In the course of normal business operations, the Company enters into agreements with universities and CROs to assist in the performance of research and development activities and with CDMOs to assist with CMC related activities. Expenditures to CROs and other CDMOs represent a significant cost in clinical development for the Company. The Company could also enter into additional collaborative research, contract research, manufacturing, and supplier agreements in the future, which may require upfront payments and long-term commitments of cash.

*Defined Contribution Retirement Plan*

The Company has established its 401(k) Plan, which covers all employees who qualify under the terms of the plan. Eligible employees may elect to contribute to the 401(k) Plan up to 90% of their compensation, limited by the IRS-imposed maximum. The Company provides a safe harbor match with a maximum amount of 4% of the participant's compensation. There were total contributions under the 401(k) Plan of $0.3 million and a *de minimis* amount for the six months ended June 30, 2025 and 2024, respectively. There were total contributions under the 401(k) Plan of $0.1 million and a *de minimis* amount for the three months ended June 30, 2025 and 2024, respectively.

*Legal Proceedings*

On August 7, 2014, a complaint was filed in the Superior Court of Los Angeles County, California by Paul Feller, the former Chief Executive Officer of the Company's legal predecessor, under the caption Paul Feller v. RestorGenex Corporation, Pro Sports & Entertainment, Inc., ProElite, Inc. and Stratus Media Group, GmbH (Case No. BC553996). The complaint asserts various causes of action, including, among other things, promissory fraud, negligent misrepresentation, breach of contract, breach of employment agreement, breach of the covenant of good faith and fair dealing, violations of the California Labor Code and common counts. The plaintiff is seeking, among other things, compensatory damages in an undetermined amount, punitive damages, accrued interest and an award of attorneys' fees and costs. On December 30, 2014, the Company filed a petition to compel arbitration and a motion to stay the action. On April 1, 2015, the plaintiff filed a petition in opposition to the Company's petition to compel arbitration and a motion to stay the action. After a related hearing on April 14, 2015, the court granted the Company's petition to compel arbitration and a motion to stay the action. On January 8, 2016, the plaintiff filed an arbitration demand with the American Arbitration Association. On November 19, 2018 at an Order to Show Cause Re Dismissal Hearing, the court found sufficient grounds not to dismiss the case and an arbitration hearing was scheduled, originally for November 2020 but later postponed due to the COVID-19 pandemic and related restrictions on gatherings in the State of California. In addition, following the November 2018 hearing, an automatic stay was placed on the arbitration in connection with the plaintiff filing for personal bankruptcy protection. On October 22, 2021, following a determination by the bankruptcy trustee not to pursue the claims and release them back to the plaintiff, the parties entered into a stipulation to abandon arbitration and return the matter to state court. A case management conference was held on February 23, 2022 at which an initial trial date of May 24, 2023 was set, and the parties have agreed to stipulate to mediation in advance of the trial. On October 20, 2022, the parties filed a joint stipulation to continue the trial and certain deadlines related to the mediation in order to allow plaintiff's counsel to continue to seek treatment for an ongoing medical issue. On November 1, 2022, based on the parties' joint stipulation, the court entered an order continuing the trial date to October 25, 2023, on October 6, 2023, the court entered an order further continuing the trial date to April 24, 2024, and on March 3, 2024, based on an additional joint stipulation of the parties, the court entered an order continuing the trial date to October 23, 2024. On September 4, 2024, due to certain delays in discovery as a result of, among other things, plaintiff's counsel's health complications, the parties filed a joint stipulation to continue the trial and certain deadlines related thereto. On October 9, 2024, based on the parties' joint stipulation, the court entered an order continuing the trial date to April 30, 2025. On January 6, 2025, the Company filed a Motion for Summary Adjudication against plaintiff's claims for promissory fraud, negligent misrepresentation, and common counts. On February 21, 2025, the parties filed a joint stipulation to continue the trial and certain deadlines related thereto and, on March 12, 2025, the court entered an order continuing the trial date to November 26, 2025.

------

CervoMed Inc.

Notes To Unaudited Condensed Consolidated Interim Financial Statements

The Company is defending itself vigorously against the claims alleged in this matter. However, at this stage, the Company is unable to predict the outcome and possible loss or range of loss, if any, associated with its resolution or any potential effect the matter may have on the Company's financial position. Depending on the outcome or resolution of this matter, it could have a material adverse effect on the Company's financial position, results of operations and cash flows.

**9. Stockholders' Equity and Common Stock Warrants**

*April 2024 Private Placement*

On April 1, 2024, pursuant to and in accordance with the terms of a securities purchase agreement with certain purchasers named therein, the Company completed the 2024 Private Placement of an aggregate of 2,083,262 common shares, 2,532,285 Series A Warrants and 449,023 Pre-Funded Warrants. The aggregate upfront gross proceeds from the 2024 Private Placement were approximately $50.0 million, before deducting approximately $3.6 million of offering fees and expenses.

The Pre-Funded Warrants and Series A Warrants were classified as a component of stockholders' equity within additional paid-in capital. The Pre-Funded Warrants and Series A Warrants are equity classified because they (i) are freestanding financial instruments that are legally detachable and separately exercisable from the equity instruments, (ii) are immediately exercisable, (iii) do not embody an obligation for the Company to repurchase its shares, (iv) permit the holders to receive a fixed number of shares of common stock upon exercise, (v) are indexed to the Company's common stock and (vi) meet the equity classification criteria.

*Warrants*

As of June 30, 2025, the Company had the following warrants outstanding to acquire shares of its common stock:

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
|  | **Outstanding** | **Range of exercise** <br> **price per share** | **Range of exercise** <br> **price per share** | **Range of exercise** <br> **price per share** | **Expiration dates** |
| Historical Diffusion common stock warrants | 25768 | $44.55 |  | $96.12 | November 2025 through<br> February 2026 |
| Historical EIP common stock warrants | 43618 |  | $19.81 |  | April 2028 |
| Series A common stock warrants | 2532285 |  | $39.24 |  | April 2027 |
|  | 2601671 |  |  |  |  |

---

------

CervoMed Inc.

Notes To Unaudited Condensed Consolidated Interim Financial Statements

*February 2024 Pre-Funded Warrant Exercise* 

On February 26, 2024, following the effectiveness of an amendment eliminating certain beneficial ownership limitations set forth therein, 499,995 previously outstanding pre-funded warrants to purchase common stock issued in connection with the closing of the Merger were exercised in full by the holder thereof pursuant to the cashless exercise provision of the pre-funded warrants. Upon exercise, 36 shares were withheld in lieu of a cash payment of the exercise price and the holder was issued 495,959 shares of common stock.

*December 2024 Pre-Funded Warrant Exercise*

On December 11, 2024, 449,023 Pre-Funded Warrants to purchase common stock issued in connection with the closing of the 2024 Private Placement were exercised in full by the holder thereof pursuant to the cashless exercise provision of the Pre-Funded Warrants. Upon exercise, 45 shares were withheld in lieu of a cash payment of the exercise price and the holder was issued 448,978 shares of common stock.

*May 2025 At-The-Market Offering*

On May 12, 2025, the Company entered into the Sales Agreement with Leerink Partners, LLC, as sales agent, pursuant to which the Company may offer and sell shares of common stock from time-to-time with an aggregate offering price of up to $50.0 million under an "at-the-market" offering program. During the three and six months ended June 30, 2025, the Company sold 550,000 shares of common stock to an institutional investor in a block sale for proceeds of $4.7 million, net of $0.1 million of issuance costs.

**10. Stock-Based Compensation Expense**

*2015 Equity Plan*

The 2015 Equity Plan provides for increases to the number of shares reserved for issuance thereunder each January 1 equal to 4.0% of the total shares of the Company's common stock outstanding as of the immediately preceding December 31, unless a lesser amount is stipulated by the Compensation Committee of the Company's Board. On January 1, 2025, the number of shares available for future issuance under the 2015 Equity Plan increased by 348,109. As of June 30, 2025, the term of the 2015 Equity Plan had expired and no additional shares will be issued thereunder.

*2018 Employee, Director and Consultant Equity Incentive Plan*

On March 28, 2018, EIP adopted the 2018 Plan, which was assumed by the Company pursuant to and in accordance with the terms of the Merger Agreement. Under the 2018 Plan, the Company may issue incentive stock options, non-qualified stock options, stock grants, and other stock-based awards to employees, directors, and consultants, as specified in the 2018 Plan and subject to applicable SEC and Nasdaq rules and regulations. The Board has the authority to determine to whom options or stock will be granted, the number of shares, the term, and the exercise price. Options granted under the 2018 Plan have a term of up to ten years and generally vest over a four-year period with 25% of the options vesting after one-year of service and the remainder vesting monthly thereafter. As of June 30, 2025, there were no shares available for issuance.

*Inducement Grants*

During the year ended December 31, 2024, the Company granted stock options to purchase an aggregate of 71,712 shares of common stock as material inducements to the employment of five new employees, in each case, in accordance with Nasdaq Listing Rule 5635(c)(4). Each such inducement option has a term of ten years and vests over a 36-month period commencing on the last day of the month in which the grant date occurred (subject to the employee's continued employment with the Company).

------

CervoMed Inc.

Notes To Unaudited Condensed Consolidated Interim Financial Statements

In June 2025, the Company granted a stock option to purchase an aggregate of 54,000 shares of common stock as material inducements to the employment of a new employee in accordance with Nasdaq Listing Rule 5635(c)(4). The inducement option has a term of ten years and vests over a 36-month period commencing on the last day of the month in which the grant date occurred (subject to the employee's continued employment with the Company).

*2025 Equity Plan*

On April 14, 2025, the Board approved the 2025 Equity Plan, and the 2025 Equity Plan was subsequently approved by the Company's stockholders at its 2025 Annual Meeting of Stockholders on June 23, 2025. As of June 30, 2025, there were 751,400 shares available for future issuance under the 2025 Equity Plan.

The Company recorded stock-based compensation expense in the following expense categories of its consolidated statements of operations and comprehensive loss:

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **Three Months Ended**<br> **June 30,** | **Three Months Ended**<br> **June 30,** | **Six Months Ended**<br> **June 30,** | **Six Months Ended**<br> **June 30,** |
|  | **2025** | **2024** | **2025** | **2024** |
| Research and development | $121159 | $40337 | $244861 | $104134 |
| General and administrative | 375856 | 538244 | 613321 | 692662 |
| Total stock-based compensation expense | $497015 | $578581 | $858182 | $796796 |

---

The following table summarizes the activity related to all stock option grants for the six months ended June 30, 2025:

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **Number of**<br> **Options** | **Weighted**<br> **average**<br> **exercise price**<br> **per share** | **Weighted**<br> **average**<br> **remaining**<br> **contractual life**<br> **(in years)** | **Aggregate** <br> **intrinsic value** |
| Balance at January 1, 2025 | 636802 | $19.38 | 7.6 |  |
| Granted | 375400 | 3.63 |  |  |
| Expired | (16828) | 60.14 |  |  |
| Outstanding at June 30, 2025 | 995374 | $12.75 | 7.7 |  |
| Exercisable at June 30, 2025 | 449540 | $20.65 | 6.6 |  |

---

The Black-Scholes option pricing model was used to estimate the grant date fair value of each stock option grant at the time of grant using the following weighted-average assumptions:

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **Six Months Ended June 30,**  | **Six Months Ended June 30,**  | **Six Months Ended June 30,**  | **Six Months Ended June 30,**  |
|  | **2025** | **2025** | **2024** | **2024** |
| Expected term (in years) | 5.24 | 5.76 | 5.25 | 5.76 |
| Risk-free interest rate | 3.93 | 4.35% | 4.06 | 4.46% |
| Expected volatility | 71.55 | 76.68% | 76.87 | 80.03% |
| Dividend yield |  |  |  |  |

---

At June 30, 2025, there was $2.1 million of unrecognized compensation expense that will be recognized over a weighted-average period of 2.1 years.

During the six months ended June 30, 2024, the Company granted 39,721 options in lieu of 2023 executive bonus compensation. No similar event occurred during the three or six months ended June 30, 2025.

------

CervoMed Inc.

Notes To Unaudited Condensed Consolidated Interim Financial Statements

Effective May 31, 2024, the Company separated from its former Chief Financial Officer. Based on the terms of his separation agreement, unvested shares under previously granted option awards will to continue to vest on the schedule provided for in the applicable option award agreement through September 30, 2025. The Company accounted for the change in vesting terms as an improbable-to-probable modification of his stock options and recognized $0.3 million of expense in relation to this modification during the three and six months ended June 30, 2024. In addition, the exercise period for any shares under previously granted option awards vested as of May 31, 2024 was extended to September 30, 2025. The Company accounted for the change in exercise terms as a probable-to-probable modification of his stock options and recognized $12,000 of expense in relation to this modification during the three and six months ended June 30, 2024.

On April 14, 2025, the Board approved the Separation Agreement with the Former COO, pursuant to which the Former COO's employment with the Company concluded effective July 1, 2025. Based on the terms of the Separation Agreement, unvested shares under previously granted option awards will to continue to vest on the schedule provided for in the applicable option award agreement through September 30, 2026. The Company accounted for the change in vesting terms of his unvested stock options as an improbable-to-probable modification of his stock options and recognized $0.1 million of expense in relation to this modification during the three and six months ended June 30, 2025. In addition, the exercise period for any shares under previously granted option awards vested as of April 14, 2025 was extended to September 30, 2026. The Company accounted for the change in exercise terms as probable-to-probable modification of his stock options and recognized $0.1 million of expense in relation to this modification during the three and six months ended June 30, 2025.

**11. Subsequent Events**

The Company has evaluated subsequent events through the filing of this Quarterly Report and determined that there have been no events that have occurred that would require adjustments to the disclosures in the condensed consolidated interim financial statements.

------

**ITEM 2. MANAGEMENT**'**S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATION**

*This discussion and analysis contains information related to historical and prospective events intended to enable you to assess our financial condition and results of operations. The information contained in this discussion and analysis should be read in conjunction with our unaudited condensed consolidated interim financial statements and the related notes contained elsewhere in this Quarterly Report, as well as the risks and uncertainties discussed under the headings, "Part II* — *Item 1A* — *Risk Factors" and* "*Note Regarding Forward-Looking Statements.*"

**Overview**

We are a clinical-stage biotechnology company focused on developing treatments for age-related neurologic disorders. We are currently focused on the development of our lead drug candidate, neflamapimod, an investigational, orally administered, small molecule brain penetrant that inhibits p38α in the neurons of people with neurodegenerative diseases. We believe neflamapimod has the potential to treat synaptic dysfunction, the reversible aspect of the underlying disease processes in DLB and certain other major neurological disorders. We recently completed our RewinD-LB Trial, a Phase 2b study of neflamapimod in patients with DLB funded primarily by a $21.3 million grant from the NIA.

Our novel approach focuses on reducing the impact of inflammation in the brain, or neuroinflammation, which we believe is a key factor in the manifestation of degenerative diseases of the brain, including DLB. Chronic activation of the enzyme p38α in the brains of people with certain neurodegenerative diseases is believed to impair how neurons communicate through synapses. This impairment, termed synaptic dysfunction, leads to deterioration of cognitive and motor abilities. Left untreated, synaptic dysfunction can result in irreversible neuronal loss that leads to devastating disabilities, significant reliance on a caretaker, long term care living, and, ultimately, death. However, before neuronal loss commences, disease progression in many major neurodegenerative disorders, including DLB, initially involves a protracted period of reversible functional loss, particularly with respect to the synapses. We believe that inhibiting p38α activity in the brain, by interfering with key pathogenic drivers of disease, has the potential to reverse the clinical progression observed in the early-stages of certain neurodegenerative diseases, as well as slow further progression by delaying permanent synaptic dysfunction and neuron death.

We believe we are a leader in the industry in developing a treatment for DLB, as neflamapimod is the only clinical drug candidate of which we are aware that has shown statistically significant improvements compared to placebo in a Phase 2a clinical trial (our AscenD-LB Trial) and improved outcomes (p < 0.001) on the trial's primary endpoint in a Phase 2b evaluation (16-week Extension data from our ongoing RewinD-LB Trial). We are also the only company of which we are aware that is specifically targeting the treatment of DLB patients who do not have concomitant AD-related co-pathology. Compared to patients with "pure" DLB – who may represent up to 50% of the total diagnosed DLB patient population at any given time – DLB patients with AD co-pathology have significant, irreversible neuronal loss in the hippocampus, which may be assessed via imaging or biomarker evidence of amyloid and/or tau pathology. DLB without AD co-pathology, however, is primarily a disease of reversible synaptic dysfunction in the BFC system and, based on available preclinical and clinical data, we believe if neflamapimod is given in the early stages of certain degenerative diseases of the brain, it may reverse synaptic dysfunction, improve neuron health and function, and slow further progression by delaying synaptic dysfunction and neuronal death. We believe this approach enhances the alignment of our development path with neflamapimod's mechanism of action, reduces the heterogeneity of our target patient population, and thereby has the potential to improve outcomes for patients.

------

Our recently completed RewinD-LB Trial is a Phase 2b study in 159 participants with DLB funded primarily by a $21.3 million grant from the NIA. Patients with AD co-pathology, as assessed by ptau181 levels at screening, were excluded from the trial. Intended to confirm the efficacy findings from the AscenD-LB Trial, we announced 16-week results from the Extension Phase of the RewinD-LB Trial in March 2025. In the first 16 weeks of the Extension, treatment with the New Capsules led to increased plasma drug concentrations and demonstrated improvement on the trial's primary outcome measure, change from baseline in CDR-SB (p<0.001 vs. Old Capsules; p=0.003 vs. placebo), and ADCS-CGIC, a secondary outcome measure in the trial (p=0.035 vs. Old Capsules; p=0.035 vs. placebo). We believe these results demonstrate proof-of-concept for neflamapimod as a potential treatment for DLB, and support our hypothesis that the failure of neflamapimod during the Initial Phase was the result of the Old Capsules delivering lower than expected plasma drug concentrations and effectively underdosing participants. Additional data from the Extension were presented at the 19th International Conference on Alzheimer's and Parkinson's Disease and Related Neurologic Disorders in April 2025, including that neflamapimod demonstrated improvements on endpoints measuring cognitive fluctuations and working memory.

In July 2025, we reported 32-week data from the Extension showing a 54% risk reduction in clinically significant worsening (≥ 1.5 point increase in CDR-SB) compared to control at Week 32 of New Capsule neflamapimod treatment (p=0.0037). This risk reduction improved to 64% (p=0.0001) among patients who have minimal evidence of AD co-pathology (ptau181 < 2.2 pg/mL at screening). In addition, we also reported a statistically significant reduction (p<0.0001) from baseline (i.e., start of extension) in plasma levels of the neurodegenerative disease activity marker GFAP in patients who received New Capsules for all 32 weeks, with a mean change of -18.4±4.0 pg/mL in all participants (N=107) and -21.2±4.4 pg/mL in participants with screening plasma ptau181 below 2.2 pg/mL (N=91). GFAP is an established plasma marker of neurodegeneration in patients with DLB. With these data in hand, which show a durable, meaningful slowing of clinical progression over 32 weeks of treatment with neflamapimod at the dose level evaluated, we plan to meet with the FDA in the fourth quarter of 2025 to align on the design of a Phase 3 clinical trial in DLB.

Additionally, our investigations into the cause of the failure of the Old Capsules to achieve expected plasma drug concentrations identified a mixture of polymorphic forms of neflamapimod's active drug ingredient contained in the current drug product, with a time dependent change in relative amounts of the individual forms. As the individual polymorphic forms have different physical chemistry properties, including solubility, and the Old Capsules were more than three years out from their manufacture date at the time of administration during the RewinD-LB Trial, we believe this time-dependent change (i,e., aging) accounts for the reduced performance of the Old Capsules. To mitigate the potential for this reduction in performance over time, we have now identified the most stable polymorphic form, as well as a means to manufacture drug product that contains this form, and currently plan to utilize drug product that only or predominantly includes this stable polymorphic form in our planned Phase 3 clinical trial in DLB.

In addition to neflamapimod's potential to treat DLB, we believe the benefit of targeting neuroinflammation-induced synaptic dysfunction in the BFC system can be applied to other neurologic indications in which treatment of BFC dysfunction and degeneration would be expected to be clinically beneficial, including as treatment for certain forms of FTD — for which the FDA granted neflamapimod Orphan Drug designation in November 2024 — and promoting recovery after ischemic stroke. Based upon this potential, we commenced enrollment of patients into our Restore Trial, a Phase 2 trial evaluating neflamapimod in up to 90 participants recovering from ischemic stroke, in the second quarter of 2025, and initiated a Phase 2a trial evaluating neflamapimod in up to 20 participants with the nonfluent/agrammatic variant of PPA, a subtype of FTD, in July 2025.

**Financial Summary**

As of June 30, 2025, we had cash and cash equivalents and marketable securities of approximately $33.5 million. To date, we have not had any products approved for sale and have not generated any revenue from product sales, and our ability to do so in the future will depend on the successful development and eventual commercialization of neflamapimod (or another product candidate that we could acquire or develop in the future). We do not expect to generate revenue from product sales until such time, if ever.

Our accumulated deficit as of June 30, 2025 was $81.9 million. We have never been profitable, and we will continue to require additional capital to develop neflamapimod and fund operations for the foreseeable future. We have historically incurred net losses in each year since inception. Our net loss was $11.2 million and $4.8 million in the six months ended June 30, 2025 and 2024, respectively. Our net loss was $6.3 million and $2.3 million in the three months ended June 30, 2025 and 2024, respectively. We expect our expenses will increase in connection with our ongoing activities, as we:

● advance neflamapimod through clinical trials, including a potential Phase 3 trial in DLB;

● manufacture supplies for our nonclinical studies and clinical trials;

● obtain, maintain, expand, and protect our intellectual property portfolio;

● hire additional personnel to support our operations and growth; and

● continue to operate as a public company.

------

Based on our current operating plan, we believe our existing cash and cash equivalents and marketable securities on hand as of June 30, 2025, along with the remaining funds to be received from the NIA Grant, will enable us to fund our operating expenses and capital expenditure requirements for at least twelve months from the issuance of the unaudited condensed consolidated interim financial statements included in this Quarterly Report.

**Financial Operations Overview**

***Revenue***

To date, we have not generated any revenue from product sales and we do not expect to do so in the near future. In January 2023, we were awarded our $21.0 million NIA Grant and, in August 2024, we were awarded an additional $0.3 million under our NIA Grant. Funding from the NIA Grant is recognized as grant revenue as the qualifying expenses related thereto are incurred. For the six months ended June 30, 2025 and 2024, $3.7 million and $5.6 million of grant funding was recognized, respectively. For the three months ended June 30, 2025 and 2024, $1.8 million and $3.3 million of grant funding was recognized, respectively.

***Research and Development Expenses***

Research and development expenses account for a significant portion of our operating expenses and primarily consist of costs incurred for the discovery and development of our product candidates, including:

● expenses incurred under agreements with CROs, preclinical testing organizations, consultants, and other third-party vendors, collaborators and service providers;

● costs related to production of clinical materials, including fees paid to CDMOs;

● vendor expenses related to the execution of preclinical studies and clinical trials;

● personnel-related expenses, including salaries, benefits, and stock-based compensation for personnel engaged in research and development functions;

● costs related to the preparation of regulatory submissions;

● third-party license fees; and

● expenses for rent and other supplies.

We recognize research and development expenses as incurred. Costs for certain development activities are recognized based on an evaluation of the progress to completion of specific tasks using information and data provided to us by our vendors, collaborators, and third-party service providers. Non-refundable advance payments made by us for future research and development activities are capitalized and expensed as the related goods are delivered and as services are performed.

Specific program expenses include expenses associated with the development of our lead product candidate, neflamapimod, including our ongoing Phase 2b RewinD-LB Trial in patients with DLB. Personnel and other operating expenses incurred for our research and development programs primarily relate to salaries and benefits, stock-based compensation, and facility expenses.

At this time, we cannot reasonably estimate or know the nature, timing, and estimated costs of the efforts that will be necessary to complete the development of, and obtain regulatory approval for, neflamapimod, or for any other product candidates that we may develop or acquire. We expect our research and development expenses to increase substantially for the foreseeable future as we continue to invest in research and development activities related to developing neflamapimod such as conducting larger clinical trials, seeking regulatory approval and incurring expenses associated with hiring personnel to support other research and development efforts. The process of conducting the necessary clinical research to obtain regulatory approval is costly and time-consuming, and the successful development of product candidates, including neflamapimod, is highly uncertain.

------

***General and Administrative Expenses***

General and administrative expenses consist primarily of personnel-related costs, including stock-based compensation for our personnel in executive, finance and accounting, and other administrative functions. General and administrative expenses also include legal fees relating to intellectual property and corporate matters, professional fees paid for accounting, auditing, consulting, and tax services, insurance costs, and facility costs.

We anticipate that our general and administrative expenses will increase in the future as we increase our headcount to support our continued research and development activities and as we continue development activities pursuant to the NIA Grant. We also anticipate that we will incur increased expenses as a result of operating as a public company, including expenses related to compliance with the rules and regulations of the SEC and those of any national securities exchange on which our securities are traded, legal, auditing, additional insurance expenses, investor relations activities, and other administrative and professional services.

***Interest Income***

Interest income consists of interest earned on our marketable securities and on our cash and cash equivalent balances held with financial institutions.

**Results of Operations** 

**Comparison of the Three Months Ended June 30, 2025 and 2024**

The following table summarizes our results of operations

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **Three Months Ended**<br> **June 30,** | **Three Months Ended**<br> **June 30,** |  |  |
|  | **2025** | **2024** | **$ Change** | **% Change** |
| Grant revenue | $1757724 | $3288971 | $(1531247) | (47)% |
| Operating expenses: |  |  |  |  |
| Research and development | 5108625 | 3772391 | 1336234 | 35% |
| General and administrative | 3265374 | 2511679 | 753695 | 30% |
| Total operating expenses | 8373999 | 6284070 | 2089929 | 33% |
| Loss from operations | (6616275) | (2995099) | (3621176) | 121% |
| Other income (expense): |  |  |  |  |
| Other expense | (10256) | (247) | (10009) | (a) |
| Interest income | 368127 | 678441 | (310314) | (46)% |
| Total other income, net | 357871 | 678194 | (320323) | (47)% |
| Net loss | $(6258404) | $(2316905) | $(4010142) | 170% |

---

\*(a) Not meaningful

*Grant Revenue*

Grant revenue was $1.8 million and $3.3 million for the three months ended June 30, 2025 and 2024, respectively. The decrease is due to the completion of the Initial Phase of the RewinD-LB Trial and transitioning to the Extension Phase in December 2024.

------

*Research and Development Expenses*

Research and development expenses were $5.1 million for the three months ended June 30, 2025, compared to $3.8 million for the three months ended June 30, 2024. The increase of $1.3 million was primarily due to an increase in costs related to CMC activities, increased non-clinical studies, increased headcount costs, and outsourced CRO costs related to clinical work for neflamapimod, including costs related to our Restore Trial and Phase 2a clinical trial in patients with the nonfluent/agrammatic variant of PPA, which were initiated in the second quarter of 2025.

*General and Administrative Expenses*

General and administrative expenses were $3.3 million for the three months ended June 30, 2025, compared to $2.5 million for the three months ended June 30, 2024. The increase of $0.8 million was primarily due to headcount costs and outsourced services.

*Other Income (Expense)*

There was a *de minimis* amount of other expenses for the three months ended June 30, 2025 and 2024.

*Interest income*

Interest income was $0.4 million for the three months ended June 30, 2025, compared to $0.7 million three months ended June 30, 2024. The decrease was primarily due to change in returns on investments.

**Comparison of the Six Months Ended June 30, 2025 and 2024**

The following table summarizes our results of operations

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **Six Months Ended**<br> **June 30,** | **Six Months Ended**<br> **June 30,** |  |  |
|  | **2025** | **2024** | **$ Change** | **% Change** |
| Grant revenue | $3675215 | $5636221 | $(1961006) | (35)% |
| Operating expenses: |  |  |  |  |
| Research and development | 9946423 | 6586649 | 3359774 | 51% |
| General and administrative | 5647951 | 4639609 | 1008342 | 22% |
| Total operating expenses | 15594374 | 11226258 | 4368116 | 39% |
| Loss from operations | (11919159) | (5590037) | (6329122) | 113% |
| Other income (expense): |  |  |  |  |
| Other expense | (10391) | (277) | (10114) | (a) |
| Interest income | 777112 | 759074 | 18038 | 2% |
| Total other income, net | 766721 | 758797 | 7924 | 1% |
| Net loss | $(11152438) | $(4831240) | $(6321198) | 131% |

---

\*(a) Not meaningful

------

*Grant Revenue*

Grant revenue was $3.7 million and $5.6 million for the six months ended June 30, 2025 and 2024, respectively. The decrease is due to the completion of the Initial Phase of the RewinD-LB Trial and transitioning to the Extension Phase in December 2024.

*Research and Development Expenses*

Research and development expenses were $9.9 million for the six months ended June 30, 2025, compared to $6.6 million for the six months ended June 30, 2024. The increase of $3.4 million was primarily due to an increase in costs related to CMC activities, increased non-clinical studies, increased headcount costs, and outsourced CRO costs related to clinical work for neflamapimod, including costs related to our Restore Trial and Phase 2b trial in the nonfluent/agrammatic variant of PPA, which were initiated in the second quarter of 2025.

*General and Administrative Expenses*

General and administrative expenses were $5.6 million for the six months ended June 30, 2025, compared to $4.6 million for the six months ended June 30, 2024. The increase of $1.0 million was primarily due to headcount costs and outsourced services.

*Other Expense*

There was a *de minimis* amount of other expense for the six months ended June 30, 2025 and 2024.

*Interest income*

Interest income was $0.8 million for the six months ended June 30, 2025 as compared to $0.8 million for the six months ended June 30, 2024. The interest income was flat period over period due to the higher average cash balance for 2025 being offset by lower interest rates as compared to prior year.

**Liquidity and Capital Resources**

***Capital Requirements***

From the date of our inception through June 30, 2025, our operations have primarily been financed through the issuance of common stock, convertible preferred stock and convertible debt financings. As of June 30, 2025, we had approximately $33.5 million of cash and cash equivalents and marketable securities. We have not generated positive cash flows from operations and as of June 30, 2025, we had an accumulated deficit of approximately $81.9 million. In January 2023, we were awarded a $21.0 million grant from the NIA to support the RewinD-LB Trial, which is expected to be received over a three-year period. In August 2024, we received an additional $0.3 million from the NIA. As of June 30, 2025, total cash funding of $18.2 million had been received from the NIA Grant and approximately $2.9 million in funding is remaining. In March 2025, the Company received access to 90% of the current year funding and in June 2025, the Company received access to additional funds for an aggregate of 98% of the current year 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 2% of current year funding is dependent upon and subject to U.S. congressional approval of a final appropriations bill.

On April 1, 2024, pursuant to and in accordance with the terms of a securities purchase agreement with certain purchasers named therein, we completed the 2024 Private Placement of an aggregate of 2,532,285 units, each comprised of (i) (A) one share of common stock or (B) one Pre-Funded Warrant and (ii) one Series A Warrant. The aggregate upfront gross proceeds from the 2024 Private Placement were approximately $50.0 million, before deducting offering fees and expenses, and additional gross proceeds of up to approximately $99.4 million may be received if the Series A Warrants are exercised in full for cash.

------

On May 21, 2025, the Company entered into the Sales Agreement with Leerink Partners, LLC, as sales agent, pursuant to which the Company may offer and sell shares of common stock from time-to-time with an aggregate offering price of up to $50.0 million under an "at-the-market" offering program. During the three and six months ended June 30, 2025, the Company sold 550,000 shares of common stock to an institutional investor in a block sale for proceeds of $4.7 million, net of $0.1 million of issuance costs.

Our primary uses of cash are to fund our operations, which consist primarily of research and development expenditures related to our programs and, to a lesser extent, general and administrative expenditures. Cash used to fund operating expenses is impacted by the timing of when we pay these expenses, as reflected in the change in our outstanding accounts payable and accrued expenses.

Any product candidates we may develop may never achieve commercialization, and we anticipate that we will continue to incur losses for the foreseeable future. We expect that our research and development expenses, general and administrative expenses, and capital expenditures will continue to increase. In addition, we expect to incur costs associated with operating as a public company. As a result, until such time, if ever, as we can generate substantial product revenue, we expect to finance our cash needs through a combination of equity offerings, debt financings or other capital sources, including potential collaborations, licenses and other similar arrangements. Our primary uses of capital are, and we expect will continue to be, costs related to clinical research, manufacturing and development services; compensation and related expenses; costs relating to the build-out of our headquarters, other offices and laboratories; license payments or milestone obligations that may arise; laboratory expenses and costs for related supplies; manufacturing costs; legal and other regulatory expenses and general overhead costs.

Based on our current operating plan, we believe our existing cash and cash equivalents and marketable securities on hand as of June 30, 2025, along with remaining funds to be received from the NIA Grant, will enable us to fund our operating expenses and capital expenditure requirements for at least twelve months from the issuance of the unaudited condensed consolidated interim financial statements included in this Quarterly Report. We have based this estimate on assumptions that may prove to be wrong, and we could utilize our available capital resources sooner than we currently expect. We will continue to require additional financing to advance our current product candidates through clinical development, to develop, acquire or in-license other potential product candidates and to fund operations for the foreseeable future. We will continue to seek funds through equity offerings, debt financings or other capital sources, including potential collaborations, licenses and other similar arrangements. However, we may be unable to raise additional funds or enter into such other arrangements when needed on favorable terms or at all. If we do raise additional capital through public or private equity offerings, the ownership interest of our existing stockholders will be diluted, and the terms of these securities may include liquidation or other preferences that adversely affect our stockholders' rights. If we raise additional capital through a debt financing, we may be subject to covenants limiting or restricting our ability to take specific actions, such as incurring additional debt, making capital expenditures or declaring dividends. Any failure to raise capital as and when needed could have a negative impact on our financial condition and on our ability to pursue our business plans and strategies. If we are unable to raise capital, we may need to delay, reduce or terminate planned activities to reduce costs, including our development or commercialization activities for neflamapimod. We might also be required to seek funds through arrangements with third parties that require us to relinquish certain of our rights to neflamapimod or otherwise agree to terms unfavorable to us.

------

Because of the numerous risks and uncertainties associated with research, development and commercialization of product candidates, we are unable to estimate the exact amount of our operating capital requirements. Our future capital requirements will depend on, and could increase significantly as a result of, many factors, including:

● the enrollment, progress, timing, costs and results of our clinical trials and other development activities for neflamapimod;

● the outcome, timing and cost of meeting regulatory requirements established by the FDA and other comparable foreign regulatory authorities;

● our ability to reach certain milestone events set forth in our collaboration agreements and the timing of such achievements, triggering our obligation to make applicable payments;

● the hiring of additional clinical, scientific and commercial personnel to pursue our development plans, as well the increased costs of internal and external resources as to support our operations as a public reporting company;

● the cost and timing of securing manufacturing arrangements for clinical or commercial production;

● the cost of establishing, either internally or in collaboration with others, sales, marketing and distribution capabilities to commercialize neflamapimod, if approved;

● the cost of filing, prosecuting, enforcing, and defending our patent claims and other intellectual property rights, including defending against any patent infringement actions brought by third parties against us;

● the ability to receive additional non-dilutive funding, including grants from organizations and foundations, as well as whether and when we receive the remaining 10% of anticipated year 3 funding under our previously awarded NIA Grant;

● our ability to establish strategic collaborations, licensing or other arrangements with other parties on favorable terms, if at all; and

● the extent to which we may in-license or acquire other product candidates or technologies.

A change in the outcome of any of these or other variables could significantly alter the costs and timing associated with the development of neflamapimod. Furthermore, our operating plans may change in the future, and we may need additional funds to meet operational needs and capital requirements associated with such operating plans.

***Cash Flows***

---

| | | |
|:---|:---|:---|
|  | **Six Months Ended June 30,** | **Six Months Ended June 30,** |
|  | **2025** | **2024** |
| Net cash used in operating activities | $(10409054) | $(3625319) |
| Net cash provided by (used in) investing activities | 5141584 | (40570256) |
| Net cash provided by financing activities | 4588687 | 46411946 |
| Net (decrease) increase in cash and cash equivalents | $(678783) | $2216371 |

---

*Operating Activities*

For the six months ended June 30, 2025, cash used in operating activities was $10.4 million. The net cash outflow from operations primarily resulted from net loss of $11.2 million and accretion of discount on marketable securities of $0.5 million, partially offset by changes in operating assets and liabilities of $0.4 million and by a non-cash expense of $0.9 million for stock-based compensation.

For the six months ended June 30, 2024, cash used in operating activities was $3.6 million. The net cash outflow from operations primarily resulted from net loss of $4.8 million and accretion of discount on marketable securities of $0.3 million, partially offset by changes in operating assets and liabilities of $0.7 million and by a non-cash expense of $0.8 million for stock-based compensation.

*Investing Activities*

For the six months ended June 30, 2025, cash used in investing activities was $5.1 million due to the purchase of marketable securities.

------

For the six months ended June 30, 2024, cash used in investing activities was $40.6 million due to the purchase of marketable securities following the completion of the 2024 Private Placement on April 1, 2024.

*Financing Activities*

For the six months ended June 30, 2025, cash provided by financing activities was $4.6 million due to proceeds from the sale of common stock for $4.6 million, in connection with the Sales Agreement.

For the six months ended June 30, 2024, cash provided by financing activities was $46.4 million due to proceeds from the sale of common stock for approximately $46.4 million, partially offset by the payment of issuance costs related to the sale of common stock in connection with the 2024 Private Placement.

**Contractual Obligations and Other Commitments**

We enter into contracts in the normal course of business with third-party contract organizations for clinical trials, nonclinical studies and manufacturing, and other services for operating purposes. The amount and timing of contractual obligations may vary based on the timing of services. We can generally elect to discontinue the work under these agreements at any time. In the future, we could also enter into additional collaborative research, contract research, manufacturing and supplier agreements which may require upfront payments or long-term commitments of cash.

**Off-Balance Sheet Arrangements**

We do not have any off-balance sheet arrangements, as defined by the rules and regulations of the SEC that have or are reasonably likely to have a material effect on our financial condition, changes in financial condition, revenue or expenses, results of operations, liquidity, capital expenditures or capital resources. As a result, we are not materially exposed to any financing, liquidity, market or credit risk that could arise if we had engaged in these arrangements.

**Critical Accounting Policies and Estimates**

During the six months ended June 30, 2025, there were no material changes to our critical accounting policies and estimates from those described under the heading "Management's Discussion and Analysis of Financial Condition and Results of Operations" in our Annual Report.

**Recently Adopted Accounting Pronouncements**

A description of recently issued accounting pronouncements that may potentially impact our financial position and results of operations is disclosed in *Note 3, Summary of Significant Accounting Policies,* in the notes accompanying the unaudited condensed consolidated interim financial statements included in Part I, Item 1 of this Quarterly Report.

------

---

| | |
|:---|:---|
| **ITEM 3.** | **QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK** |

---

As a "smaller reporting company" as defined by Item 10 of Regulation S-K, promulgated by the SEC under the Securities Act, we are not required to provide the information required by this Item 3.

---

| | |
|:---|:---|
| **ITEM 4.** | **CONTROLS AND PROCEDURES** |

---

**Evaluation of Disclosure Controls and Procedures**

We maintain disclosure controls and procedures (as defined in Rules 13a-15I and 15d-15(e) promulgated under the Exchange Act) that are designed to provide reasonable assurance that information required to be disclosed by us in the reports we file or submit under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in the SEC's rules and forms and that such information is accumulated and communicated to our management, including our principal executive and principal financial officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure. In designing and evaluating our disclosure controls and procedures, we recognize that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives, and we are required to apply our judgment in evaluating the cost-benefit relationship of possible internal controls. Our management evaluated, with the participation of our principal executive officer and principal financial officer, the effectiveness of the design and operation of our disclosure controls and procedures as of the end of the period covered in this report. Based on that evaluation, our principal executive officer and principal financial officer concluded that our disclosure controls and procedures are ineffective due to the material weakness noted below in the subsequent paragraph.

***Material Weaknesses in Internal Control over Financial Reporting***

In connection with the audit of the Company's consolidated financial statements for the years ended December 31, 2024, 2023, and 2022, a material weakness in the Company's internal control over financial reporting was identified in relation to the absence of effective controls regarding the accurate identification, evaluation and proper recording of various expense accounts.

A material weakness is a deficiency or combination of deficiencies in internal control over financial reporting such that there is a reasonable possibility that a material misstatement of our consolidated financial statements would not be prevented or detected on a timely basis. The identified material weaknesses, if not remediated, could result in a material misstatement to the Company's consolidated financial statements that may not be prevented or detected. A material weakness will not be considered remediated until a remediation plan has been fully implemented, the applicable controls operate for a sufficient period of time, and it has been concluded, through testing, that the newly implemented and enhanced controls are operating effectively.

On August 16, 2023, we completed the Merger. For financial reporting purposes, EIP was determined to be the accounting acquirer and, accordingly, 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. While Diffusion was previously subject to the provisions of the Sarbanes-Oxley Act of 2002, EIP, as a private, non-reporting operating company prior to the Merger, was not. Accordingly, upon consummation of the Merger, we began the process of integrating the pre-Merger business of EIP into Diffusion's pre-established public company, internal control framework, including internal controls and information systems and we continue to implement measures designed to improve our internal control over financial reporting to remediate the remaining material weakness. As of the date of this Quarterly Report, we continue to be actively engaged in these efforts through, among other things, adding additional review procedures by qualified personnel over complex accounting matters and, during the year ended December 31, 2024, we completed our remediation plan with respect to a material weakness related to the recording of significant complex transactions previously identified in connection with the audit of the Company's consolidated financial statements for the years ended December 31, 2023 and 2022. We currently expect to complete the remediation plan with respect to the remaining material weakness related to the absence of effective controls regarding the accurate identification, evaluation and proper recording of various expense accounts during the year ending December 31, 2025. However, the Company cannot predict the success of such efforts or the outcome of its assessment of the remediation efforts and the Company's efforts may not remediate this material weakness in its internal control over financial reporting, or additional material weaknesses may be identified in the future.

------

Notwithstanding the material weaknesses in internal control over financial reporting described above, our management has concluded that our consolidated financial statements included in this Quarterly Report are fairly stated in all material respects in accordance with U.S. GAAP.

**Change in Internal Control Over Financial Reporting**

Except as set forth above, there were no changes in our internal control over financial reporting (as such term is defined in Exchange Act Rule 13a-15(f)) that occurred during the quarter ended June 30, 2025 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

------

**PART II** – **OTHER INFORMATION**

---

| | |
|:---|:---|
| **ITEM 1.** | **LEGAL PROCEEDINGS** |

---

Please refer to *Note 8, Commitments and Contingencies* in the notes accompanying the unaudited condensed consolidated interim financial statements included in Part I, Item 1 of this Quarterly Report, which is incorporated herein by reference.

---

| | |
|:---|:---|
| **ITEM 1A.** | **RISK FACTORS** |

---

As of the date of this Quarterly Report, there have been no material changes to our risk factors previously disclosed in our Annual Report.

---

| | |
|:---|:---|
| **ITEM 2.** | **UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS** |

---

None.

---

| | |
|:---|:---|
| **ITEM 3.** | **DEFAULTS UPON SENIOR SECURITIES** |

---

None.

---

| | |
|:---|:---|
| **ITEM 4.** | **MINE SAFETY DISCLOSURES** |

---

Not applicable.

---

| | |
|:---|:---|
| **ITEM 5.** | **OTHER INFORMATION** |

---

During the three months ended June 30, 2025, none of our directors or officers (as defined in Rule 16a-1(f) of the Exchange Act), adopted, terminated or modified a Rule 10b5-1 trading arrangement or non-Rule 10b5-1 trading arrangement (as such terms are defined in Item 408 of Regulation S-K).

------

---

| | |
|:---|:---|
| **ITEM 6.** | **EXHIBITS** |

---

---

| | | |
|:---|:---|:---|
| <u>Exhibit No.</u> | <u>Description</u> | <u>Method of Filing</u> |
| 10.1 | [Sales Agreement, by and between the Company and Leerink Partners, LLC, dated May 12, 2025](http://www.sec.gov/Archives/edgar/data/1053691/000143774925016131/ex_815690.htm) | Incorporated by reference to Exhibit 1.1 to the Company's Current Report on Form 8-K filed on May 12, 2025. |
| 10.2# | [Amended & Restated Employment Agreement, by and between the Company and Kelly Blackburn, MHA, effective as of April 16, 2025](http://www.sec.gov/Archives/edgar/data/1053691/000143774925012337/ex_803313.htm) | Incorporated by reference to Exhibit 10.1 to the Company's Current Report on Form 8-K filed on April 18, 2025. |
| 10.3# | [Employment Agreement, by and between the Company and Mark De Rosch, PhD, FRAPS, effective as of May 1, 2025](http://www.sec.gov/Archives/edgar/data/1053691/000143774925012337/ex_803314.htm) | Incorporated by reference to Exhibit 10.1 to the Company's Current Report on Form 8-K filed on April 18, 2025. |
| 10.4# | [Separation Agreement, by and between the Company and Robert J. Cobuzzi, PhD, dated July 1, 2025](ex_850102.htm) | Filed herewith. |
| 10.5# | [CervoMed 2025 Equity Incentive Plan](ex_850097.htm) | Filed herewith. |
| 31.1 | [Certification of the Principal Executive Officer pursuant to Rule 13a-14(a) or Rule 15d-14(a)](ex_850098.htm) | Filed herewith. |
| 31.2 | [Certification of the Principal Financial Officer pursuant to Rule 13a-14(a) or Rule 15d-14(a)](ex_850099.htm) | Filed herewith. |
| 32.1 | [Certification of Principal Executive Officer pursuant to Rule 13a-14(b) or Rule 15d-14(b)](ex_850100.htm) | Furnished herewith. |
| 32.2 | [Certification of Principal Financial Officer pursuant to Rule 13a-14(b) or Rule 15d-14(b)](ex_850101.htm) | Furnished herewith. |
| 101.INS\* | Inline XBRL Instance Document | Filed herewith. |
| 101.SCH\* | Inline XBRL Taxonomy Extension Schema Document | Filed herewith. |
| 101.CAL\* | Inline XBRL Taxonomy Extension Calculation Linkbase Document | Filed herewith. |
| 101.DEF\* | Inline XBRL Taxonomy Extension Definition Linkbase Document | Filed herewith. |
| 101.LAB\* | Inline XBRL Taxonomy Extension Label Linkbase Document | Filed herewith. |
| 101.PRE\* | Inline XBRL Taxonomy Extension Presentation Linkbase Document | Filed herewith. |
| 104 | Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibits 101) | Filed herewith. |

---

# Indicates a management contract or compensatory plan or arrangement.

\* XBRL (Extensible Business Reporting Language) information is furnished and not filed or a part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act, is deemed not filed for purposes of Section 18 of the Exchange Act, and otherwise is not subject to liability under these sections.

------

**SIGNATURES**

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

---

| | | |
|:---|:---|:---|
|  |  | **CervoMed Inc.** |
| Date: August 8, 2025 | By: | /s/ John Alam |
|  |  | John Alam |
|  |  | President and Chief Executive<br> Officer |
|  |  | (Principal Executive Officer) |
| Date: August 8, 2025 | By: | /s/ William Elder |
|  |  | William Elder |
|  |  | Chief Financial Officer and<br> General Counsel |
|  |  | (Principal Financial Officer) |

---

## Exhibit 10.4

**Exhibit 10.4**

![logo2.jpg](logo2.jpg)

Separation Agreement

The proposed terms and conditions of your separation from employment are as follows:

1. Your separation from CervoMed is effective as of the Separation Date.

2. If you elect to sign this Agreement, you will be eligible for the following payments and benefits (in addition to those stated above) in exchange for your undertakings set forth in Paragraph 3 below:

a. Separation payments under Section 4.2.3 of your Amended & Restated Employment Agreement with CervoMed effective February 1, 2024 (the "Employment Agreement"). More specifically:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) twelve (12) months pay at a gross annual rate of Four Hundred Seventy-Nine Thousand Seven Hundred Twenty-Three Dollars ($479,723), subject to lawful deductions, with such net amount to be paid in cash as a lump-sum on the first Company payroll date after the Effective Date (as defined below);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) a lump-sum amount equal to One Hundred Nineteen Thousand Six Hundred Two Dollars ($119,602), subject to lawful deductions, to compensate you for the Annual Bonus for the year ending December 31, 2025 pro-rated through the Separation Date, with such net amount to be paid in cash as a lump-sum on the first Company payroll date after the Effective Date;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) in lieu of the COBRA Benefit (as defined in your Employment Agreement), a lump-sum amount equal to Twenty Seven Thousand Four Hundred Three Dollars ($27,403), subject to lawful deductions, representing potential future premium payments for continued coverage in the Company's group health plans pursuant to the Massachusetts Mini-COBRA law (G.L. c. 176J, §9), to be paid in cash as a lump-sum on the first Company payroll date after the Effective Date

The Employment Agreement is attached hereto as Exhibit 1.

b. You have been granted stock options in accordance with Stock Option Agreements dated as of January 7, 2020; June 17, 2020; September 8, 2020; March 1, 2021; March 1, 2021; January 27, 2022; September 15, 2023; January 26, 2024; and January 26, 2024 (collectively, "Stock Options"). Notwithstanding any provision to the contrary contained in the 2015 Equity Incentive Plan and the applicable Stock Option award agreement, each Stock Option will continue to vest in accordance with the vesting schedule in the applicable Stock Option award agreement and, to the extent vested or upon vesting, shall remain exercisable, in each case, until 5:00 pm Eastern Time on September 30, 2026.

------

3. (a) In consideration for CervoMed's undertakings set forth above in Paragraph 2, you agree, intending to be legally bound, to release and forever discharge CervoMed, from any and all causes of action or claims of any kind, known or unknown, which you now have or hereafter may have against CervoMed arising out of any matter, occurrence or event existing or occurring prior to the execution of this Agreement, including, without limitation:

-any claims relating to or arising out of your employment with and/or termination of employment by CervoMed;

-any claims of retaliation, or of discrimination and/or harassment based on sex, pregnancy, military/veteran's status, race, religion, color, creed, disability, handicap, citizenship, national origin, age, or any other factor prohibited by federal, state, or local law, such as Title VII of the Civil Rights Act, the Age Discrimination in Employment Act ("ADEA"), and the Americans with Disabilities Act ("ADA");

-any claims for retaliation or wrongful discharge;

-any claims under the Corporate and Criminal Fraud Accountability Act of 2002, also known as the Sarbanes Oxley Act;

-any claims under the Employee Retirement Income Security Act (ERISA);

-any claims under the Lilly Ledbetter Fair Pay Act;

-any claims under the Family and Medical Leave Act (FMLA);

-any claims under the Fair Labor Standards Act (FLSA);

-any claims under the False Claims Act;

-any claims for overtime;

-any claims for unpaid or withheld wages, severance, benefits, bonuses and/or other compensation of any kind;

-any claims for attorneys' fees, costs, or expenses;

-any other statutory or common law claims, now existing or hereinafter recognized, including, but not limited to, breach of contract (including, but not limited to, under the Employment Agreement), quasi-contract, detrimental reliance, libel, slander, fraud, wrongful discharge, promissory estoppel, equitable estoppel, misrepresentation or intentional infliction of emotional distress, negligence, and/or gross negligence;

-any claims under the Connecticut Fair Employment Practices Act, Conn. Gen. Stat. § 46a-51, et seq.;

------

-any claims under the Massachusetts Civil Rights Act, the Massachusetts Equal Pay Act, the Massachusetts Equal Rights Act, the Massachusetts Fair Employment Practices Law, the Massachusetts Family and Medical Leave Law, claims for unpaid minimum wages and/or overtime under the Massachusetts Minimum Fair Wage Law, the Massachusetts Meal Break Law, the Massachusetts Earned Sick Time Law, the Massachusetts Domestic Violence Leave Act, the Massachusetts Privacy Statute, the Massachusetts Sexual Harassment Statute, claims for unpaid wages, commissions, bonuses, and/or any other form of compensation under the Massachusetts Wage Act including specifically (but without limitation) all claims under the Wage Act for (a) non-payment of wages (M.G.L. c. 149, § 148), (b) retaliation (M.G.L. c. 149, § 148A), and (c) misclassification (M.G.L. c. 149, § 148B), the Massachusetts Prevailing Wage Act, other claims that may be released under Massachusetts labor statutes, M.G.L. c. 149, the Massachusetts Non-Competition Agreement Act, the Massachusetts Parental Leave Act, and the Massachusetts Pregnant Workers Fairness Act; and

-any claims under the Pennsylvania Human Relations Act; the Pennsylvania Minimum Wage Act; and the Pennsylvania Whistleblower Law.

The identification of specific statutes is for purposes of example only, and the omission of any specific statute or law shall not limit the scope of this general release in any way.

You acknowledge that this release shall not extend or apply to any claims that cannot be released by private agreement under applicable law, nor does it apply to claims that arise after the execution of this Agreement.

(b) The release in Paragraph 3 applies fully to protect the members, directors, owners, shareholders, partners, officers, employees, and agents, and any benefit plans of CervoMed and its parent, subsidiaries, and/or affiliates and their past and present members, directors, owners, stockholders, partners, officers, employees, agents, and representatives of any kind including any benefit plans of CervoMed and/or its affiliates ("Releasees"). Further, the release in Paragraph 3 applies fully to release the rights of your heirs, agents, attorneys, successors, assigns, and spouse concerning your employment or its termination.

4. Paragraph 3 above does not apply to any claims to enforce this Agreement.

5. You shall not be eligible for any CervoMed-paid compensation or benefits subsequent to the effective date of the termination of your employment, except as set forth in this letter and Agreement. By signing this Agreement, you acknowledge and agree that you have been paid all wages, bonuses, commissions, leave, stock options, stock, benefits and other compensation due and owing to you from CervoMed, including without limitation all accrued but unused vacation time, holiday time and PTO, and you agree to make no claims for any further wages, bonuses, commissions, leave, benefits and other compensation. Further, you acknowledge and agree that CervoMed's undertakings in Paragraph 2 above are not required by any policy, plan, or prior agreement (except the Employment Agreement, and subject to its conditions), and that you would not receive the consideration specified in Paragraph 2 except for your execution of this Agreement and the fulfillment of the promises contained herein.

------

6. (a) Except as stated in Paragraph 6(b) below, this Agreement embodies the complete understanding and agreement between you and CervoMed, and supersedes any and all prior agreements, oral or written, express or implied. This Agreement may not be modified, altered or changed except upon express written consent of both you and CervoMed, making specific reference to this Agreement. Should any provision of this Agreement be declared illegal or unenforceable by any court of competent jurisdiction and cannot be modified to be enforceable, such provision shall immediately become null and void, leaving the remainder of this Agreement in full force and effect.

(b)(i) The parties entered into the Employment Agreement, which is attached hereto as Exhibit 1. The provisions of the Employment Agreement that apply to the parties after the end of your employment, will apply to the parties after the end of your employment on the Separation Date (including, without limitation, Sections 4.3 through 4.17 and Section 5 thereof). You acknowledge that you have been (or will be under this Separation Agreement) paid in full all compensation owed to you by CervoMed as an employee under that Employment Agreement. You further acknowledge that you will be paid no money by CervoMed, except as stated in Paragraph 2 of this Separation Agreement.

(b)(ii) The parties entered into agreements as of various dates with respect to your Stock Options (copies of which Stock Option Agreements have been provided to you contemporaneous with this Separation Agreement). Your rights and obligations as to your Stock Options will continue to be controlled by the Stock Option Agreements and related 2015 Equity Incentive Plan, except as expressly stated in Paragraph 2 above. You acknowledge that you shall have no further right to acquire any further stock options, common stock, equity or other interest in CervoMed.

7. This Agreement shall be governed by and construed in accordance with the laws of the State of Delaware.

8. Nothing in this Agreement shall be construed as an admission or concession of liability or wrongdoing by you or by CervoMed. Rather, the proposed Agreement is being offered for the sole purpose of resolving and concluding amicably all possible matters between us.

9. (a) You agree that, at all times, the terms of Paragraph 2 of this Agreement will be kept secret and confidential and will not be disclosed voluntarily to any third party, except to the extent required by law, to enforce this Agreement, or to an attorney, accountant, and/or tax advisor with whom you consult regarding your consideration of this Agreement;

------

(b) Nothing in this Agreement shall prohibit or restrict you from (a) making any disclosure of information required by law; (b) providing documents or information to, or testifying or otherwise assisting or responding to enquiries in connection with any investigation or proceeding brought by any federal or state regulatory or law enforcement agency or legislative body, and any self-regulatory organization, or CervoMed's legal or compliance departments, or otherwise requires you to notify the Company of your communications with or inquiries regarding the foregoing; (c) testifying, participating in or otherwise assisting in a proceeding or investigation relating to alleged violation of Sarbanes-Oxley Act or any federal, state or municipal law relating to fraud, whistleblowing, or any rule or regulation of the Securities and Exchange Commission or any self-regulatory organization, or your right to receive an award for information provided in connection with the foregoing, or (d) filing a charge or complaint with the Equal Employment Opportunity Commission or state or local equivalent, the National Labor Relations Board, the Occupational Safety and Health Administration, the Securities and Exchange Commission or any other federal, state or local governmental agency or commission.

10. Except as set forth herein with respect to computers and electronic equipment, you represent that you have returned to CervoMed all documents, materials, and any other property or data which are the property of CervoMed . You agree that this Paragraph 10 is a material term of this Agreement and that compliance with this Paragraph 10 no later than the Effective Date (as defined below) is a condition of you receiving the payments and benefits described in Paragraph 2 above.

11. You may revoke this Agreement for a period of seven (7) days following the day you sign it. If you revoke it, you must do so in writing and the writing must be received within those seven (7) days by John Alam at the e-mail address set forth below. This Agreement shall not become effective or enforceable until this revocation period has expired (such date, the "Effective Date").

12. You agree to cooperate with the Company Group (as defined in your Employment Agreement) in any internal investigation, any administrative, regulatory, or judicial proceeding or any dispute with a third party concerning issues about which you have knowledge or that may relate to you or your employment or service with any member of the Company Group. Your obligation to cooperate hereunder includes, without limitation, being available to the Company Group upon reasonable notice for interviews and factual investigations, appearing in any forum at the Company Group's request to give testimony (without requiring service of a subpoena or other legal process), volunteering to the Company Group pertinent information, and turning over to the Company Group all relevant documents which are or may come into your possession. The Company will promptly reimburse you for the reasonable out-of-pocket expenses incurred by you in connection with such cooperation.

------

13. <u>Taxation and Section 409A</u>. All payments made to you under this Agreement are subject to withholding for all applicable income and employment taxes. All amounts payable under this Agreement are intended to comply with the "short term deferral" exception from Section 409A of the Internal Revenue Code ("Section 409A") specified in Treas. Reg. § 1.409A-1(b)(4) (or any successor provision) or the "separation pay plan" exception specified in Treas. Reg. § 1.409A-1(b)(9) (or any successor provision), or both of them, and shall be interpreted in a manner consistent with the applicable exceptions. Notwithstanding the foregoing, to the extent that any amounts payable in accordance with this Agreement are subject to Section 409A, this Agreement shall be interpreted and administered in such a way as to comply with Section 409A to the maximum extent possible. Each installment payment of compensation under this Agreement shall be treated as a separate payment of compensation for purposes of applying Section 409A. "Termination of employment," "resignation," or words of similar import as used in this Agreement shall mean, with respect to any payments subject to Section 409A, your "separation from service" as defined by Section 409A. If payment of any amount subject to Section 409A is triggered by a separation from service that occurs while you are a "specified employee" (as defined by Section 409A), and if such amount is scheduled to be paid within six (6) months after such separation from service, the amount shall accrue without interest and shall be paid the first business day after the end of such six-month period, or, if earlier, within 30 days following your death. Nothing in this Agreement shall be construed as a guarantee of any particular tax treatment to you. You shall be solely responsible for the tax consequences with respect to all amounts payable under this Agreement, and in no event shall CervoMed have any responsibility or liability if this Agreement does not meet any applicable requirements of Section 409A.

14. You agree and represent that:

-you have read carefully the terms of this Agreement, including the General Release;

-you have had an opportunity to and have been encouraged to review this Agreement, including the General Release, with an attorney;

-you understand the meaning and effect of the terms of this Agreement, including the General Release;

-you were given as much time as you needed to determine whether you wished to enter into this Agreement, including the General Release;

-you understands that any modifications, material or otherwise, made to this Agreement, do not restart or affect in any manner the original 21-day review period referenced herein;

-the entry into and execution of this Agreement, including the General Release, is of your own free and voluntary act without compulsion of any kind; and

-no promise or inducement not expressed herein has been made to you.

If you agree with the proposed terms of the Agreement as set forth above, please sign this letter, indicating your understanding and agreement to be bound, and send the signed Agreement to me, John Alam, at the e-mail address set forth below. If you sign this Agreement prior to the Separation Date, you agree (i) you will continue to diligently and conscientiously devote the your business time, attention, energy, skill, and best efforts to the business and affairs of CervoMed through the Separation Date, (ii) to sign a Supplemental Separation Agreement and General Release which will restate the terms of the Release through and including the Separation Date and (iii) that CervoMed's obligations with respect to the Separation Payment will not apply until and unless you sign such Supplemental Separation Agreement and General Release.

------

---

| | |
|:---|:---|
| Very truly yours, | Very truly yours, |
| CERVOMED INC. | CERVOMED INC. |
| BY: | /s/ John Alam |
|  | John Alam |
|  | President & Chief Executive Officer |
|  | E-mail: jj.alam@cervomed.com |

---

I UNDERSTAND THE SEPARATION AGREEMENT AND HEREBY AGREE TO ENTER INTO IT AND BE LEGALLY BOUND BY IT:

---

| |
|:---|
| /s/ Robert J. Cobuzzi, Jr., Ph.D. |
| Robert J. Cobuzzi, Jr., Ph.D. |

---

## Exhibit 10.5

**Exhibit 10.5**

**CERVOMED INC.**

**2025 EQUITY INCENTIVE PLAN**

1. <u>Purpose of Plan</u>.

The purpose of the CervoMed Inc. 2025 Equity Incentive Plan (the "Plan") is to advance the interests of CervoMed Inc. (the "Company") and its stockholders by enabling the Company and its Subsidiaries to attract and retain qualified individuals to perform services for the Company and its Subsidiaries, providing incentive compensation for such individuals that is linked to the growth and profitability of the Company and increases in stockholder value, and aligning the interests of such individuals with the interests of its stockholders through opportunities for equity participation in the Company.

2. <u>Definitions</u>.

The following terms will have the meanings set forth below, unless the context clearly otherwise requires. Terms defined elsewhere in the Plan will have the same meaning throughout the Plan.

2.1 "<u>Adverse Action</u>" means any action by a Participant that the Committee, in its sole discretion, determines to be injurious, detrimental, prejudicial or adverse to the interests of the Company or any Subsidiary, including: (a) disclosing confidential information of the Company or any Subsidiary to any person not authorized by the Company or Subsidiary to receive it, (b) engaging, directly or indirectly, in any commercial activity that in the judgment of the Committee competes with the business of the Company or any Subsidiary or (c) interfering with the relationships of the Company or any Subsidiary and their respective employees, independent contractors, customers, prospective customers and vendors.

2.2 "<u>Board</u>" means the Board of Directors of the Company.

2.3 "<u>Cause</u>" means "cause" as defined in any employment or other agreement or policy applicable to the Participant, or if no such agreement or policy exists, will mean (a) dishonesty, fraud, misrepresentation, embezzlement or deliberate injury or attempted injury, in each case related to the Company or any Subsidiary, (b) any unlawful or criminal activity of a serious nature, (c) any intentional and deliberate breach of a duty or duties that, individually or in the aggregate, are material in relation to the Participant's overall duties, or (d) any material breach by a Participant of any employment, service, consulting, confidentiality, assignment of inventions, non-compete or non-solicitation agreement or similar agreement entered into with the Company or any Subsidiary or any material written policy of the Company or any Subsidiary.

2.5 "<u>Change in Control</u>" means an event described in Section 15.1 of the Plan; provided, however, that if any payment or benefit payable hereunder upon or following a Change in Control would be required to comply with the limitations of Section 409A(a)(2)(A)(v) of the Code in order to avoid an additional tax under Section 409A of the Code, such payment or benefit shall be made only if such Change in Control constitutes a change in ownership or control of the Company, or a change in ownership of the Company's assets in accordance with Section 409A of the Code.

------

2.6 "<u>Code</u>" means the Internal Revenue Code of 1986, as amended. Any reference to a section of the Code in the Plan will be deemed to include a reference to any applicable rules and regulations thereunder and any successor or amended section of the Code.

2.7 "<u>Committee</u>" means the group of individuals administering the Plan, as provided in Section 3 of the Plan.

2.8 "<u>Common Stock</u>" means the common stock of the Company, par value $0.001 per share, or the number and kind of shares of stock or other securities into which such Common Stock may be changed in accordance with Section 4.3 of the Plan.

2.9 "<u>Company</u>" means CervoMed Inc., a Delaware corporation, and any successor thereto as provided in Section 21.7 of the Plan.

2.10 "<u>Consultant</u>" means a person engaged to provide consulting or advisory services (other than as an Employee or a Director) to the Company or any Subsidiary that: (a) are not in connection with the offer and sale of the Company's securities in a capital raising transaction and (b) do not directly or indirectly promote or maintain a market for the Company's securities.

2.11 "<u>Director</u>" means a member of the Board.

2.12 "<u>Disability</u>" means the disability of the Participant such as would entitle the Participant to receive disability income benefits pursuant to the long-term disability plan of the Company or Subsidiary then covering the Participant or, if no such plan exists or is applicable to the Participant, the permanent and total disability of the Participant within the meaning of Section 22(e)(3) of the Code; provided, however, that if distribution of an Incentive Award subject to Section 409A of the Code is triggered by an Eligible Recipient's Disability, such term will mean that the Eligible Recipient is disabled as defined by Section 409A of the Code.

2.13 "<u>Effective Date</u>" means June 23, 2025 or such later date as the Plan is initially approved by the Company's stockholders.

2.14 "<u>Eligible Recipients</u>" means (a) for the purposes of granting Incentive Stock Options, all Employees and (b) for the purposes of granting Non-Statutory Stock Options and other Incentive Awards, means all Employees, Directors and Consultants.

2.15 "<u>Employee</u>" means any individual performing services for the Company or a Subsidiary and designated as an employee of the Company or a Subsidiary on the payroll records thereof. An Employee will not include any individual during any period he or she is classified or treated by the Company or Subsidiary as an independent contractor, a consultant, or any employee of an employment, consulting or temporary agency or any other entity other than the Company or Subsidiary, without regard to whether such individual is subsequently determined to have been, or is subsequently retroactively reclassified as a common-law employee of the Company or Subsidiary during such period. An individual will not cease to be an Employee in the case of: (a) any leave of absence approved by the Company, or (b) transfers between locations of the Company or between the Company or any Subsidiaries. For purposes of Incentive Stock Options, no such leave may exceed three (3) months, unless reemployment upon expiration of such leave is guaranteed by statute or contract. If reemployment upon expiration of a leave of absence approved by the Company or a Subsidiary, as applicable, is not so guaranteed, then six (6) months following the commencement of such leave, any Incentive Stock Option held by a Participant will cease to be treated as an Incentive Stock Option and will be treated for tax purposes as a Non-Statutory Stock Option. Neither service as a Director nor payment of a Director's fee by the Company will be sufficient to constitute "employment" by the Company.

------

2.16 "<u>Exchange Act</u>" means the Securities Exchange Act of 1934, as amended. Any reference to a section of the Exchange Act in the Plan will be deemed to include a reference to any applicable rules and regulations thereunder and any successor or amended section of the Exchange Act.

2.17 "<u>Fair Market Value</u>" means, with respect to the Common Stock, as of any date: (a) the closing sale price of the Common Stock as of such date at the end of the regular trading session, as reported by The NASDAQ Stock Market, The New York Stock Exchange, NYSE MKT LLC or any national securities exchange on which the Common Stock is then listed (or, if no shares were traded on such date, as of the next preceding date on which there was such a trade); or (b) if the Common Stock is not so listed, admitted to unlisted trading privileges, or reported on any national securities exchange, the closing sale price as of such date at the end of the regular trading session, as reported by OTC Bulletin Board or the OTC Markets Group Inc. or other comparable service (or, if no shares were traded or quoted on such date, as of the next preceding date on which there was such a trade or quote); or (c) if the Common Stock is not so listed or reported, such price as the Committee determines in good faith, in the exercise of its reasonable discretion, and consistent with the definition of "fair market value" under Section 409A of the Code and in conformity with generally accepted accounting principles in the United States. If determined by the Committee, such determination will be final, conclusive and binding for all purposes and on all persons, including the Company, the stockholders of the Company, the Participants and their respective heirs and other successors-in-interest. No member of the Committee will be liable for any determination regarding the fair market value of the Common Stock that is made in good faith.

2.18 "<u>Full Value Award</u>" means an Incentive Award other than in the form of an Option or Stock Appreciation Right, and which is settled by the issuance of shares of Common Stock.

2.19 "<u>Grant Date</u>" means the date an Incentive Award is granted to a Participant pursuant to the Plan and as determined pursuant to Section 5 of the Plan.

2.20 "<u>Incentive Award</u>" means an Option, Stock Appreciation Right, Restricted Stock Award, Restricted Stock Unit, Performance Award, Stock Bonus or Other Stock-Based Award granted to an Eligible Recipient pursuant to the Plan.

2.21 "<u>Incentive Award Agreement</u>" means either: (a) a written or electronic (as provided in Section 21.10) agreement entered into by the Company and a Participant setting forth the terms and provisions applicable to an Incentive Award granted under the Plan, including any amendment or modification thereof, or (b) a written or electronic (as provided in Section 21.10) statement issued by the Company to a Participant describing the terms and provisions of such an Incentive Award, including any amendment or modification thereof. The Committee may provide for the use of electronic, internet or other non-paper Incentive Award Agreements, and the use of electronic, internet or other non-paper means for the acceptance thereof and actions thereunder by a Participant.

------

2.22 "<u>Incentive Stock Option</u>" means a right to purchase shares of Common Stock granted to an Employee pursuant to Section 6 of the Plan that is designated as and intended to meet the requirements of an "incentive stock option" within the meaning of Section 422 of the Code.

2.23 "<u>Non-Statutory Stock Option</u>" means a right to purchase shares of Common Stock granted to an Eligible Recipient pursuant to Section 6 of the Plan that is not intended to meet the requirements of or does not qualify as an Incentive Stock Option.

2.24 "<u>Option</u>" means an Incentive Stock Option or a Non-Statutory Stock Option.

2.25 "<u>Other Stock-Based Award</u>" means an equity-based or equity-related Incentive Award not otherwise described by the terms of the Plan, granted pursuant to Section 11 of the Plan.

2.26 "<u>Participant</u>" means an Eligible Recipient who receives one or more Incentive Awards under the Plan.

2.27 "<u>Performance Award</u>" means a right granted to an Eligible Recipient pursuant to Section 9 of the Plan to receive an amount of cash, a number of shares of Common Stock, or a combination of both, contingent upon and the value of which at the time it is payable is determined as a function of the extent of the achievement of specified performance objectives during a specified period. A Performance Award is also commonly referred to as a "performance unit" or "performance share."

2.28 "<u>Previously Acquired Shares</u>" means shares of Common Stock that are already owned by the Participant or, with respect to any Incentive Award, that are to be issued to the Participant upon the grant, exercise, vesting or settlement of such Incentive Award.

2.29 "<u>Restricted Stock Award</u>" means an award of shares of Common Stock granted to an Eligible Recipient pursuant to Section 8 of the Plan that is subject to restrictions on transferability and a risk of forfeiture.

2.30 "<u>Restricted Stock Unit</u>" means an award denominated in shares of Common Stock granted to an Eligible Recipient pursuant to Section 8 of the Plan to receive an amount of cash, a number of shares of Common Stock, or a combination of both, contingent upon the achievement of specified performance objectives or that the Participant remain in the continuous employment or service with the Company for a certain period or other conditions.

2.31 "<u>Retirement</u>" means unless otherwise defined in the Incentive Award Agreement or in a written employment, services or other agreement between the Participant and the Company or a Subsidiary, means "Retirement" as defined from time to time for purposes of the Plan by the Committee or by the Company's chief human resources officer or other person performing that function or, if not so defined, means voluntary termination of employment or service by the Participant on or after the date the Participant reaches age fifty-five (55) with the present intention to leave the Company's industry or to leave the general workforce and completion of at least ten (10) years of continuous service with the Company or a Subsidiary.

------

2.32 "<u>Securities Act</u>" means the Securities Act of 1933, as amended. Any reference to a section of the Securities Act in the Plan will be deemed to include a reference to any applicable rules and regulations thereunder and any successor or amended section of the Securities Act.

2.33 "<u>Stock Appreciation Right</u>" means a right granted to an Eligible Recipient pursuant to Section 7 of the Plan to receive a payment from the Company, in the form of shares of Common Stock, cash or a combination of both, equal to the difference between the Fair Market Value of one or more shares of Common Stock and a specified exercise price of such shares.

2.34 "<u>Stock Bonus</u>" means an award of shares of Common Stock granted to an Eligible Recipient pursuant to Section 10 of the Plan.

2.35 "<u>Subsidiary</u>" means any entity that is directly or indirectly controlled by the Company or any entity in which the Company has a significant equity interest, as determined by the Committee, provided the Company has a "controlling interest" in the Subsidiary as defined in Treas. Reg. Sec. 1.409A-1(b)(5)(iii)(E)(1).

2.36 "<u>Tax Date</u>" means the date any withholding tax obligation arises under the Code for a Participant with respect to an Incentive Award.

3. <u>Plan Administration</u>.

3.1 <u>The Committee</u>. The Plan will be administered by the Board or by a committee of the Board. So long as the Company has a class of its equity securities registered under Section 12 of the Exchange Act, any committee administering the Plan will consist solely of two or more members of the Board who are "non-employee directors" within the meaning of Rule 16b-3 under the Exchange Act and who are "independent directors" as required by the Listing Rules of The NASDAQ Stock Market (or other applicable exchange or market on which the Company's Common Stock may be traded or quoted). Such a committee, if established, will act by majority approval of the members (but may also take action by the written consent of all of the members of such committee), and a majority of the members of such a committee will constitute a quorum. As used in the Plan, "Committee" will refer to the Board or to such a committee, if established.

3.2 <u>Authority of the Committee</u>. In accordance with and subject to the provisions of the Plan, the Committee will have the authority to determine all provisions of Incentive Awards as the Committee may deem necessary or desirable and as consistent with the terms of the Plan, including the following: (a) the Eligible Recipients to be selected as Participants; (b) the nature and extent of the Incentive Awards to be made to each Participant (including the number of shares of Common Stock to be subject to each Incentive Award, any exercise price, the manner in which Incentive Awards will vest or become exercisable and whether Incentive Awards will be granted in tandem with other Incentive Awards) and the form of Incentive Award Agreement; (c) the time or times when Incentive Awards will be granted; (d) the duration of each Incentive Award; and (e) the restrictions and other conditions to which the payment or vesting of Incentive Awards may be subject. In addition, the Committee will have the authority to: (i) interpret, administer, reconcile any inconsistency in, correct any defect in and/or supply any omission in the Plan and any instrument or agreement relating to, or Incentive Award granted under, the Plan; (ii) establish, amend, suspend or waive any rules and regulations and appoint such agents as the Committee may deem appropriate for the proper administration of the Plan; and (iii) make any other determination and take any other action that the Committee may deem necessary or desirable for the administration of the Plan. In addition, the Committee will have the authority under the Plan in its sole discretion to pay the economic value of any Incentive Award in the form of cash, Common Stock or any combination of both. The Committee may exercise its duties, power and authority under the Plan in its sole discretion without the consent of any Participant or other party, unless the Plan specifically provides otherwise. The Committee will not be obligated to treat Participants or Eligible Recipients uniformly, and determinations made under the Plan may be made by the Committee selectively among Participants or Eligible Recipients, whether or not such Participants and Eligible Recipients are similarly situated. Each determination, interpretation or other action made or taken by the Committee pursuant to the provisions of the Plan will be final, conclusive and binding for all purposes and on all persons, and no member of the Committee will be liable for any action or determination made in good faith with respect to the Plan or any Incentive Award granted under the Plan.

------

3.3 <u>Delegation</u>. Except to the extent prohibited by applicable law or the applicable rules and regulations of any securities exchange or inter-dealer quotation system on which the securities of the Company are listed or traded, the Committee may allocate all or any portion of its responsibilities and powers to any one or more of its members and may delegate all or any part of its responsibilities and powers to any person or persons selected by it. Any such allocation or delegation may be revoked by the Committee at any time. Without limiting the generality of the foregoing and to the extent consistent with the applicable corporate law of the Company's jurisdiction of incorporation, the Committee may, by resolution, authorize one or more Directors or one or more officers of the Company to do one or both of the following on the same basis as can the Committee: (a) designate Eligible Recipients to be recipients of Incentive Awards pursuant to the Plan; and (b) determine the size of any such Incentive Awards; provided, however, that (x) the Committee will not delegate such responsibilities to any such Director(s) or officer(s) for any Incentive Awards granted to an Eligible Recipient who is subject to the reporting and liability provisions of Section 16 under the Exchange Act; (y) the resolution providing such authorization will set forth the type of Incentive Awards and total number of each type of Incentive Awards such Director(s) or officer(s) may grant; and (z) such Director(s) or officer(s) will report periodically to the Committee regarding the nature and scope of the Incentive Awards granted pursuant to the authority delegated.

3.4 <u>No Re-Pricing</u>. Notwithstanding any other provision of the Plan other than Section 4.3, the Committee may not, without prior approval of the Company's stockholders, seek to effect any re-pricing of any previously granted, "underwater" Option or Stock Appreciation Right by: (a) amending or modifying the terms of the Option or Stock Appreciation Right to lower the exercise price; (b) canceling the underwater Option or Stock Appreciation Right in exchange for (i) cash; (ii) replacement Options or Stock Appreciation Rights having a lower exercise price; or (iii) other Incentive Awards; or (c) repurchasing the underwater Options or Stock Appreciation Rights and granting new Incentive Awards under the Plan. For purposes of this Section 3.4, Options and Stock Appreciation Rights will be deemed to be "underwater" at any time when the Fair Market Value of the Common Stock is less than the exercise price of the Option or Stock Appreciation Right.

------

3.5 <u>Participants Based Outside the United States</u>. In addition to the authority of the Committee under Section 3.2 of the Plan and notwithstanding any other provision of the Plan, the Committee may, in its sole discretion, amend the terms of the Plan or Incentive Awards with respect to Participants resident outside of the United States or employed by a non-U.S. Subsidiary in order to comply with local legal requirements, to otherwise protect the Company's or Subsidiary's interests, or to meet objectives of the Plan, and may, where appropriate, establish one or more sub-plans (including the adoption of any required rules and regulations) for the purposes of qualifying for preferred tax treatment under foreign tax laws. The Committee will have no authority, however, to take action pursuant to this Section 3.5 of the Plan: (a) to reserve shares or grant Incentive Awards in excess of the limitations provided in Section 4.1 of the Plan; (b) to effect any re-pricing in violation of Section 3.4 of the Plan; (c) to grant Options or Stock Appreciation Rights having an exercise price less than 100% of the Fair Market Value of one share of Common Stock on the Grant Date in violation of Section 6.3 or 7.3 of the Plan, as the case may be; or (d) for which stockholder approval would then be required pursuant to Section 422 of the Code or the Listing Rules of The NASDAQ Stock Market (or other applicable exchange or market on which the Company's Common Stock may be traded or quoted).

4. <u>Shares Available for Issuance</u>.

4.1 <u>Maximum Number of Shares Available</u>. Certain Restrictions on Awards. Subject to adjustment as provided in Section 4.3 of the Plan, the maximum number of shares of Common Stock that will be available for issuance under the Plan will be the sum of:

(a) 800,000 (the "<u>Base Amount</u>");

(b) the number of shares issued or Incentive Awards granted under the Plan in connection with the settlement, assumption or substitution of outstanding awards or obligations to grant future awards as a condition of the Company and/or any Subsidiary(ies) acquiring, merging or consolidating with another entity; and

(c) the number of shares that are unallocated and available for grant under a stock plan assumed by the Company or any Subsidiary(ies) in connection with the merger, consolidation, or acquisition of another entity by the Company and/or any of its Subsidiaries, based on the applicable exchange ratio and other transaction terms, but only to the extent that such shares may be utilized by the Company or its Subsidiaries following the transaction pursuant to the rules and regulations of The NASDAQ Stock Market (or other applicable exchange or market on which the Company's Common Stock may be traded or quoted).

The shares available for issuance under the Plan may, at the election of the Committee, be either treasury shares or shares authorized but unissued, and, if treasury shares are used, all references in the Plan to the issuance of shares will, for corporate law purposes, be deemed to mean the transfer of shares from treasury.

------

Notwithstanding any other provisions of the Plan to the contrary, (i) no more than 800,000 shares of Common Stock may be issued pursuant to the exercise of Incentive Stock Options granted under the Plan; and (ii) no Participant may be granted Incentive Awards covering more than 400,000 shares of Common Stock during any one calendar year. All of the foregoing share limits are subject, in each case, to adjustment as provided in Section 4.3 of the Plan. Incentive Stock Options issued as a result of the Company's assumption or substitution of like awards issued by any acquired, merged or consolidated entity pursuant to applicable provisions of the Code will not count towards the limit in clause (i). Incentive Awards issued as a result of the Company's assumption or substitution of like awards issued by any acquired, merged or consolidated entity will not count towards the limit in clause (ii).

The maximum aggregate grant date fair value (determined in accordance with ASC 718) of Incentive Awards to be granted and other cash compensation paid to any non-employee director in any calendar year may not exceed $750,000, increased to $1,000,000 in the year in which such non-employee director initially joins the Board.

4.2 <u>Accounting for Incentive Awards</u>. Shares of Common Stock that are issued under the Plan or that are subject to outstanding Incentive Awards will be applied to reduce the maximum number of shares of Common Stock remaining available for issuance under the Plan. All shares so subtracted from the amount available under the Plan with respect to an Incentive Award that lapses, expires, is forfeited (including issued shares forfeited under a Restricted Stock Award) or for any reason is terminated unexercised or unvested or is settled or paid in cash or any form other than shares of Common Stock will automatically again become available for issuance under the Plan. Any shares of Common Stock withheld to satisfy tax withholding obligations on Incentive Awards issued under the Plan, any shares of Common Stock withheld to pay the exercise price of Incentive Awards under the Plan and any shares of Common Stock not issued or delivered as a result of the "net exercise" of an outstanding Option pursuant to Section 6.5 of the Plan or settlement of a Stock Appreciation Right in shares of Common Stock pursuant to Section 7.7 of the Plan will be counted against the shares of Common Stock authorized for issuance under the Plan and will not be available again for grant under the Plan. Any shares of Common Stock repurchased by the Company on the open market using the proceeds from the exercise of an Incentive Award will not increase the number of shares available for future grant of Incentive Awards. Any shares of Common Stock related to Incentive Awards under the Plan that terminate by expiration, forfeiture, cancellation or otherwise without the issuance of shares of Common Stock, or are settled in cash in lieu of shares, or are exchanged with the Committee's permission, prior to the issuance of shares, for Incentive Awards not involving shares, will be available again for grant under the Plan.

4.3 <u>Adjustments to Shares and Incentive Awards</u>.

(a) In the event of any reorganization, merger, consolidation, recapitalization, liquidation, reclassification, stock dividend, stock split, combination of shares, rights offering, divestiture or extraordinary dividend (including a spin-off) or any other similar change in the corporate structure or shares of the Company, the Committee (or, if the Company is not the surviving corporation in any such transaction, the board of directors of the surviving corporation) will make appropriate adjustment (which determination will be conclusive) as to the number and kind of securities or other property (including cash) available for issuance or payment under the Plan, including the sub-limits set forth in Section 4.1 of the Plan and, in order to prevent dilution or enlargement of the rights of Participants, (a) the number and kind of securities or other property (including cash) subject to outstanding Incentive Awards, and (b) the exercise price of outstanding Incentive Awards. The determination of the Committee as to the foregoing adjustments, if any, will be final, conclusive and binding on Participants under the Plan.

------

(b) Notwithstanding anything else in the Plan to the contrary, without affecting the number of shares of Common Stock reserved or available under the Plan, including the sub-limits in Section 4.1 of the Plan, the Committee may authorize the issuance or assumption of benefits under the Plan in connection with any merger, consolidation, acquisition of property or stock or reorganization upon such terms and conditions as it may deem appropriate, subject to compliance with the rules under Sections 422, 424 and 409A of the Code, as and where applicable.

5. <u>Participation</u>.

Participants in the Plan will be those Eligible Recipients who, in the judgment of the Committee, have contributed, are contributing or are expected to contribute to the achievement of objectives of the Company or its Subsidiaries. Eligible Recipients may be granted from time to time one or more Incentive Awards, singly or in combination or in tandem with other Incentive Awards, as may be determined by the Committee in its sole discretion. Incentive Awards will be deemed to be granted as of the date specified in the grant resolution of the Committee, which date will be the Grant Date of any related Incentive Award Agreement with the Participant.

6. <u>Options</u>.

6.1 <u>Grant</u>. An Eligible Recipient may be granted one or more Options under the Plan, and such Options will be subject to such terms and conditions, consistent with the other provisions of the Plan, as may be determined by the Committee in its sole discretion. The Committee may designate whether an Option is to be considered an Incentive Stock Option or a Non-Statutory Stock Option. An Option will be an Incentive Stock Option only if the Eligible Recipient receiving the Option is an Employee of the Company or a Subsidiary in accordance with Section 422 of the Code. To the extent that any Incentive Stock Option (or portion thereof) granted under the Plan ceases for any reason to qualify as an "incentive stock option" for purposes of Section 422 of the Code, such Incentive Stock Option (or portion thereof) will continue to be outstanding for purposes of the Plan but will thereafter be deemed to be a Non-Statutory Stock Option. Options may be granted to an Eligible Recipient for services provided to a Subsidiary only if, with respect to such Eligible Recipient, the underlying shares of Common Stock constitute "service recipient stock" within the meaning of Treas. Reg. Section 1.409A-1(b)(5)(iii).

6.2 <u>Incentive Award Agreement</u>. Each Option grant will be evidenced by an Incentive Award Agreement that will specify the exercise price of the Option, the maximum duration of the Option, the number of shares of Common Stock to which the Option pertains, the conditions upon which an Option will become vested and exercisable, and such other provisions as the Committee will determine which are not inconsistent with the terms of the Plan. The Incentive Award Agreement also will specify whether the Option is intended to be an Incentive Stock Option or a Non-Statutory Stock Options.

------

6.3 <u>Exercise Price</u>. The per share price to be paid by a Participant upon exercise of an Option granted pursuant to this Section 6 will be determined by the Committee in its sole discretion at the time of the Option grant; provided, however, that such price will not be less than 100% of the Fair Market Value of one share of Common Stock on the date of grant (or 110% of the Fair Market Value of one share of Common Stock on the date of grant of an Incentive Stock Option if, at the time the Incentive Stock Option is granted, the Participant owns, directly or indirectly, more than 10% of the total combined voting power of all classes of stock of the Company or any parent or subsidiary corporation of the Company). Notwithstanding the foregoing, to the extent that Options are granted under the Plan as a result of the Company's assumption or substitution of Options issued by any acquired, merged or consolidated entity, the exercise price for such Options will be the price determined by the Committee pursuant to the conversion terms applicable to the transaction.

6.4 <u>Exercisability and Duration</u>. An Option will become exercisable at such times and in such installments and upon such terms and conditions as may be determined by the Committee in its sole discretion at the time of grant, including (a) the achievement of one or more specified performance objectives; and/or that (b) the Participant remain in the continuous employment or service with the Company or a Subsidiary for a certain period; provided, however, that no Option may be exercised after ten (10) years from the Grant Date (five years from the Grant Date in the case of an Incentive Stock Option if, at the time the Incentive Stock Option is granted, the Participant owns, directly or indirectly, more than 10% of the total combined voting power of all classes of stock of the Company or any parent or subsidiary corporation of the Company).

6.5 <u>Payment of Exercise Price</u>.

(a) The total purchase price of the shares of Common Stock to be purchased upon exercise of an Option must be paid entirely in cash (including check, bank draft or money order); provided, however, that the Committee, in its sole discretion and upon terms and conditions established by the Committee, may allow such payments to be made, in whole or in part, (i) in accordance with a cashless exercise program established with a securities brokerage firm, and approved by the Committee; (ii) by tender, either by actual delivery or attestation as to ownership, of Previously Acquired Shares that are acceptable to the Committee; (iii) by a "net exercise" of the Option (as further described in paragraph (b), below); (iv) by a combination of such methods; or (v) by any other method approved or accepted by the Committee in its sole discretion.

(b) In the case of a "net exercise" of an Option, the Company will not require a payment of the exercise price of the Option from the Participant but will reduce the number of shares of Common Stock issued upon the exercise by the largest number of whole shares that has a Fair Market Value on the exercise date that does not exceed the aggregate exercise price for the shares exercised under this method. Shares of Common Stock will no longer be outstanding under an Option (and will therefore not thereafter be exercisable) following the exercise of such Option to the extent of (i) shares used to pay the exercise price of an Option under the "net exercise," (ii) shares actually delivered to the Participant as a result of such exercise and (iii) any shares withheld for purposes of tax withholding pursuant to Section 14.1 of the Plan.

------

(c) For purposes of such payment, Previously Acquired Shares tendered or covered by an attestation will be valued at their Fair Market Value on the exercise date of the Option.

6.6 <u>Manner of Exercise</u>. An Option (or any part or installment thereof) shall be exercised by giving written notice to the Company or its designee (in a form acceptable to the Committee, which may include electronic notice), together with provision for payment of the total exercise price for the shares of Common Stock to be purchased in accordance with Section 6.5 of the Plan, and upon compliance with any other condition(s) set forth in the Incentive Award Agreement. Such notice shall be signed by the person exercising the Option (which signature may be provided electronically in a form acceptable to the Committee), shall state the number of shares of Common Stock with respect to which the Option is being exercised and shall contain any representation required by the Plan or the Incentive Award Agreement.

7. <u>Stock Appreciation Rights</u>.

7.1 <u>Grant</u>. An Eligible Recipient may be granted one or more Stock Appreciation Rights under the Plan, and such Stock Appreciation Rights will be subject to such terms and conditions, consistent with the other provisions of the Plan, as may be determined by the Committee in its sole discretion. The Committee will have the sole discretion to determine the form in which payment of the economic value of Stock Appreciation Rights will be made to a Participant (i.e., cash, shares of Common Stock or any combination thereof) or to consent to or disapprove the election by a Participant of the form of such payment. Stock Appreciation Rights may be granted to an Eligible Recipient for services provided to a Subsidiary only if, with respect to such Eligible Recipient, the underlying shares of Common Stock constitute "service recipient stock" within the meaning of Treas. Reg. Section 1.409A-1(b)(5)(iii).

7.2 <u>Incentive Award Agreement</u>. Each Stock Appreciation Right will be evidenced by an Incentive Award Agreement that will specify the exercise price of the Stock Appreciation Right, the term of the Stock Appreciation Right, and such other provisions as the Committee will determine which are not inconsistent with the terms of the Plan.

7.3 <u>Exercise Price</u>. The exercise price of a Stock Appreciation Right will be determined by the Committee, in its sole discretion, at the Grant Date; provided, however, that such price may not be less than 100% of the Fair Market Value of one share of Common Stock on the Grant Date. Notwithstanding the foregoing, to the extent that Stock Appreciation Rights are granted under the Plan as a result of the Company's assumption or substitution of stock appreciation rights issued by any acquired, merged or consolidated entity, the exercise price for such Stock Appreciation Rights will be the price determined by the Committee pursuant to the conversion terms applicable to the transaction.

7.4 <u>Exercisability and Duration</u>. A Stock Appreciation Right will become exercisable at such times and in such installments as may be determined by the Committee in its sole discretion at the time of grant; provided, however, that no Stock Appreciation Right may be exercisable after ten (10) years from its Grant Date.

------

7.5 <u>Manner of Exercise</u>. A Stock Appreciation Right will be exercised by giving notice in the same manner as for Options, as set forth in Section 6. 6 of the Plan, subject to any other terms and conditions consistent with the other provisions of the Plan as may be determined by the Committee in its sole discretion.

7.6 <u>Settlement</u>. Upon the exercise of a Stock Appreciation Right, a Participant will be entitled to receive payment from the Company in an amount determined by multiplying:

(a) The excess of the Fair Market Value of a share of Common Stock on the date of exercise over the per share exercise price; by

(b) The number of shares of Common Stock with respect to which the Stock Appreciation Right is exercised.

7.7 <u>Form of Payment</u>. Payment if any, with respect to a Stock Appreciation Right settled in accordance with Section 7.6 of the Plan will be made in accordance with the terms of the applicable Incentive Award Agreement, in cash, shares of Common Stock or a combination thereof, as the Committee determines in its sole discretion.

8. <u>Restricted Stock Awards and Restricted Stock Units</u>.

8.1 <u>Grant</u>. An Eligible Recipient may be granted one or more Restricted Stock Awards or Restricted Stock Units under the Plan, and such awards will be subject to such terms and conditions, consistent with the other provisions of the Plan, as may be determined by the Committee in its sole discretion. Restricted Stock Units will be similar to Restricted Stock Awards except that no shares of Common Stock are actually awarded to the Participant on the Grant Date of the Restricted Stock Units. Restricted Stock Units will be denominated in shares of Common Stock but paid in cash, shares of Common Stock or a combination of cash and shares of Common Stock as the Committee, in its sole discretion, will determine, and as provided in the Incentive Award Agreement.

8.2 <u>Incentive Award Agreement</u>. Each Restricted Stock Award or Restricted Stock Unit will be evidenced by an Incentive Award Agreement that will specify the type of Incentive Award, the period(s) of restriction, the number of shares of restricted Common Stock, or the number of Restricted Stock Units granted, and such other provisions as the Committee will determine which are not inconsistent with the terms of the Plan.

8.3 <u>Vesting Requirements and Restrictions</u>. The Committee will impose such restrictions or conditions, not inconsistent with the provisions of the Plan, to the vesting of such Restricted Stock Awards or Restricted Stock Units as it deems appropriate, including (a) the achievement of one or more specified performance objectives; or that (b) the Participant remain in the continuous employment or service with the Company or a Subsidiary for a certain period. If any vesting requirements of a Restricted Stock Award or Restricted Stock Unit are not satisfied, the Restricted Stock Award or Restricted Stock Unit will be forfeited and the shares of Common Stock subject to the Restricted Stock Award will be returned to the Company and no shares of Common Stock or other consideration will be issued with respect to the forfeited Restricted Stock Unit. If the Participant paid any purchase price with respect to such forfeited shares, unless otherwise provided by the Committee in the Incentive Award Agreement evidencing the Restricted Stock Award, the Company will refund to the Participant the lesser of (4) such purchase price and (y) the Fair Market Value of such shares on the date of forfeiture. Notwithstanding the foregoing, Restricted Stock Awards may in the sole discretion of the Committee be granted without any restrictions or conditions.

------

8.4 <u>Rights as a Shareholder</u>. Except as provided in Sections 8.1, 8.5 and 8.6 of the Plan, upon a Participant becoming the holder of record of shares of Common Stock issued under a Restricted Stock Award pursuant to this Section 8, the Participant will have all voting, dividend, liquidation and other rights with respect to such shares (other than the right to sell or transfer such shares) as if such Participant were a holder of record of shares of unrestricted Common Stock. A Participant will have no voting, dividend, liquidation and other rights with respect to any shares of Common Stock underlying any Restricted Stock Units granted hereunder unless and until the shares of Common Stock are issued under the terms thereof and the Participant becomes the holder of record of such shares.

8.5 <u>Dividends and Distributions</u>.

(a) Dividends or distributions paid with respect to shares of Common Stock subject to the unvested portion of a Restricted Stock Award will be subject to the same restrictions as the shares to which such dividends or distributions relate. The Committee will determine in its sole discretion whether any interest will be paid on such dividends or distributions.

(b) Unless the Committee determines otherwise in its sole discretion (either in the Incentive Award Agreement evidencing the Restricted Stock Unit at the time of grant or at any time after the grant of the Restricted Sock Unit), any Restricted Stock Unit shall carry with it a right to "dividend equivalents" (as defined in Section 12 of the Plan).

8.6 <u>Enforcement of Restrictions</u>. To enforce the restrictions referred to in this Section 8, the Committee may place a legend on the stock certificates or book-entry notation representing Restricted Stock Awards referring to such restrictions and may require the Participant, until the restrictions have lapsed, to keep any stock certificates, together with duly endorsed stock powers, in the custody of the Company or its transfer agent, or to maintain evidence of stock ownership, together with duly endorsed stock powers, in a certificateless book-entry stock account with the Company's transfer agent. Alternatively, Restricted Stock Awards may be held in non-certificated form pursuant to such terms and conditions as the Company may establish with its registrar and transfer agent or any third-party administrator designated by the Company to hold Restricted Stock Awards on behalf of Participants.

8.7 <u>Lapse of Restrictions; Settlement</u>. Except as otherwise provided in this Section 8, shares of Common Stock underlying a Restricted Stock Award will become freely transferable by the Participant after all conditions and restrictions applicable to such shares have been satisfied or lapse (including satisfaction of any applicable tax withholding obligations). Upon the vesting of a Restricted Stock Unit, the Restricted Stock Unit will be settled, subject to the terms and conditions of the applicable Incentive Award Agreement, (a) in cash, based upon the Fair Market Value of the vested underlying shares of Common Stock, (b) in shares of Common Stock or (c) a combination thereof, as provided in the Incentive Award Agreement, except to the extent that a Participant has properly elected to defer income that may be attributable to a Restricted Stock Unit under a Company deferred compensation plan or arrangement.

------

8.8 <u>Section 83(b) Election for Restricted Stock Award</u>. If a Participant makes an election pursuant to Section 83(b) of the Code with respect to a Restricted Stock Award, the Participant must file, within thirty (30) days following the Grant Date of the Restricted Stock Award, a copy of such election with the Company and with the Internal Revenue Service, in accordance with the regulations under Section 83 of the Code. The Committee may provide in the Incentive Award Agreement that the Restricted Stock Award is conditioned upon the Participant's making or refraining from making an election with respect to the award under Section 83(b) of the Code.

9. <u>Performance Awards</u>.

9.1 <u>Grant</u>. An Eligible Recipient may be granted one or more Performance Awards under the Plan, and such awards will be subject to such terms and conditions, consistent with the other provisions of the Plan, as may be determined by the Committee in its sole discretion, including the achievement of one or more specified performance objectives.

9.2 <u>Incentive Award Agreement</u>. Each Performance Award will be evidenced by an Incentive Award Agreement that will specify the amount of cash, shares of Common Stock or combination of both to be received by the Participant upon payout of the Performance Award, any performance objectives upon which the Performance Award is subject, any performance period during which any such performance objectives must be achieved and such other provisions as the Committee will determine which are not inconsistent with the terms of the Plan.

9.3 <u>Vesting</u>. The Committee may impose such restrictions or conditions, not inconsistent the vesting of such Performance Awards as it deems appropriate, including the achievement of one or more specified performance objectives.

9.4 <u>Form and Timing of Performance Award Payment</u>. Subject to the terms of the Plan, after the applicable performance period has ended, the holder of Performance Awards will be entitled to receive payment on the value and number of Performance Awards earned by the Participant over the performance period, to be determined as a function of the extent to which the corresponding performance objectives have been achieved. Payment of earned Performance Awards will be as determined by the Committee and as evidenced in the Incentive Award Agreement. Subject to the terms of the Plan, the Committee, in its sole discretion, may pay earned Performance Awards in the form of cash or in shares of Common Stock (or in a combination thereof) equal to the value of the earned Performance Awards at the close of the applicable performance period. Payment of any Performance Award will be made as soon as practicable after the Committee has determined the extent to which the applicable performance objectives have been achieved and not later than the March 15<sup>th</sup> immediately following the end of the performance period, or earlier than the January 1<sup>st</sup> preceding such March 15, except to the extent that a Participant has properly elected to defer payment that may be attributable to a Performance Award under a Company deferred compensation plan or arrangement. The determination of the Committee with respect to the form of payment of Performance Awards will be set forth in the Incentive Award Agreement pertaining to the grant of the award. Any shares of Common Stock issued in payment of earned Performance Awards may be granted subject to any restrictions deemed appropriate by the Committee, including that the Participant remain in the continuous employment or service with the Company with the provisions of the Plan, to or a Subsidiary for a certain period.

------

10. <u>Stock Bonuses</u>.

An Eligible Recipient may be granted one or more Stock Bonuses under the Plan, and such Stock Bonuses will be subject to such terms and conditions, if any, consistent with the other provisions of the Plan, as may be determined by the Committee in its sole discretion, including the achievement of one or more specified performance objectives.

11. <u>Other Stock-Based Awards</u>.

11.1 <u>Other Stock-Based Awards</u>. Subject to such terms and conditions, consistent with the other provisions of the Plan, as may be determined by the Committee in its sole discretion, the Committee may grant Other Stock-Based Awards not otherwise described by the terms of the Plan (including the grant or offer for sale of unrestricted shares of Common Stock) in such amounts and subject to such terms and conditions as the Committee will determine. Such Incentive Awards may involve the transfer of actual shares of Common Stock to Participants or payment in cash or otherwise of amounts based on the value of shares of Common Stock, and may include Incentive Awards designed to comply with or take advantage of the applicable local laws of jurisdictions other than the United States.

11.2 <u>Value of Other Stock-Based Awards</u>. Each Other Stock-Based Award will be expressed in terms of shares of Common Stock or units based on shares of Common Stock, as determined by the Committee. The Committee may establish performance objectives in its sole discretion for any Other Stock-Based Award. If the Committee exercises its discretion to establish performance objectives for any such Incentive Awards, the number or value of Other Stock-Based Awards that will be paid out to the Participant will depend on the extent to which the specified performance objectives are met.

11.3 <u>Payment of Other Stock-Based Awards</u>. Payment, if any, with respect to an Other Stock-Based Award will be made in accordance with the terms of the Incentive Award and in cash or shares of Common Stock, as the Committee determines, except to the extent that a Participant has properly elected to defer payment that may be attributable to an Other Stock-Based Award under a Company deferred compensation plan or arrangement.

12. <u>Dividend Equivalents</u>.

Any Participant selected by the Committee may be granted dividend equivalents based on the dividends declared on shares of Common Stock that are subject to any Incentive Award, to be credited as of dividend payment dates, during the period between the Grant Date of the Incentive Award and the date the Incentive Award is exercised, vests, is settled or expires, as determined by the Committee. Such dividend equivalents will be converted to cash or additional shares of Common Stock by such formula and at such time and subject to such limitations as may be determined by the Committee. Notwithstanding the foregoing, dividends or dividend equivalents will be paid out with respect to any Incentive Award only to the extent that the shares of Common Stock subject to the Incentive Award vest.

------

13. <u>Effect of Termination of Employment or Other Service</u>.

13.1 <u>Termination Due to Death, Disability or Retirement</u>. Unless otherwise expressly provided by the Committee in its sole discretion in an Incentive Award Agreement, and subject to Sections 13.3, 13.4, 13.5 and 13.6 of the Plan, in the event a Participant's employment or other service with the Company and all Subsidiaries is terminated by reason of death, Disability or Retirement:

(a) All outstanding Options and Stock Appreciation Rights then held by the Participant will, to the extent exercisable as of such termination, remain exercisable in full for a period of one year after such termination (but in no event after the expiration date of any such Option or Stock Appreciation Right). Options and Stock Appreciation Rights not exercisable as of such termination will be forfeited and terminate.

(b) All Restricted Stock Awards then held by the Participant that have not vested as of such termination will be terminated and forfeited; and

(c) All outstanding but unpaid Restricted Stock Units, Performance Awards, Stock Bonuses and Other Stock-Based Awards then held by the Participant will be terminated and forfeited; provided, however, that with respect to any such Incentive Awards the vesting of which is based on the achievement of specified performance objectives, if a Participant's employment or other service with the Company or any Subsidiary, as the case may be, is terminated by reason of death or Disability prior to the end of the performance period of such Incentive Award, but after the conclusion of a portion of the performance period (but in no event less than one year), the Committee may, in its sole discretion, cause shares of Common Stock to be delivered or payment made with respect to the Participant's Incentive Award, but only if otherwise earned for the entire performance period and only with respect to the portion of the applicable performance period completed at the date of such event, with proration based on full fiscal years only and no shares to be delivered for partial fiscal years. The Committee will consider the provisions of Sections 13.6 and 13.7 of the Plan and will have the discretion to consider any other fact or circumstance in making its decision as to whether to deliver such shares of Common Stock or other payment, including whether the Participant again becomes employed.

------

13.2 <u>Termination for Reasons Other than Death, Disability or Retirement</u>. Unless otherwise expressly provided by the Committee in its sole discretion in an Incentive Award Agreement, and subject to Sections 13.3, 13.4, 13.5 and 13.6 of the Plan, in the event a Participant's employment or other service with the Company and all Subsidiaries is terminated for any reason other than death, Disability or Retirement, or a Participant is in the employment or service with a Subsidiary and the Subsidiary ceases to be a Subsidiary of the Company (unless the Participant continues in the employment or service with the Company or another Subsidiary):

(a) All outstanding Options and Stock Appreciation Rights then held by the Participant will, to the extent exercisable as of such termination, remain exercisable in full for a period of three months after such termination (but in no event after the expiration date of any such Option or Stock Appreciation Right). Options and Stock Appreciation Rights not exercisable as of such termination will be forfeited and terminate;

(b) All Restricted Stock Awards then held by the Participant that have not vested as of such termination will be terminated and forfeited; and

(c) All outstanding but unpaid Restricted Stock Unit, Performance Awards, Stock Bonuses and Other Stock-Based Awards then held by the Participant will be terminated and forfeited.

13.3 <u>Modification of Rights Upon Termination</u>. Notwithstanding the other provisions of this Section 13, upon a Participant's termination of employment or other service with the Company and all Subsidiaries, the Committee may, in its sole discretion (which may be exercised at any time on or after the Grant Date, including following such termination), except as provided below, cause Options or Stock Appreciation Rights (or any part thereof) then held by such Participant to terminate, become or continue to become exercisable and/or remain exercisable following such termination of employment or service, and Restricted Stock Awards, Restricted Stock Units, Performance Awards, Stock Bonuses or Other Stock-Based Awards then held by such Participant to terminate, vest, settle or become free of restrictions and conditions to payment, as the case may be, following such termination of employment or service, in each case in the manner determined by the Committee; provided, however, that no Option or Stock Appreciation Right may remain exercisable beyond its expiration date and any such action adversely affecting any outstanding Incentive Award will not be effective without the consent of the affected Participant (subject to the right of the Committee to take whatever action it deems appropriate under Sections 4.3, 13.5, 13.6 and 15 of the Plan).

13.4 <u>Determination of Termination of Employment or Other Service</u>. Unless otherwise expressly provided by the Committee in its sole discretion in an Incentive Award Agreement:

(a) The change in a Participant's status from that of an Employee to that of a Consultant will, for purposes of the Plan, be deemed to result in a termination of such Participant's employment with the Company and its Subsidiaries, unless the Committee otherwise determines in its sole discretion.

(b) The change in a Participant's status from that of a Consultant to that of an Employee will not, for purposes of the Plan, be deemed to result in a termination of such Participant's service as a Consultant, and such Participant will thereafter be deemed to be an Employee, in which event such Participant will be governed by the provisions of the Plan relating to termination of employment or service (subject to paragraph (a) above).

(c) Unless the Committee otherwise determines in its sole discretion, a Participant's employment or other service will, for purposes of the Plan, be deemed to have terminated on the date recorded on the personnel or other records of the Company or the Subsidiary for which the Participant provides employment or other service, as determined by the Committee in its sole discretion based upon such records.

------

(d) Notwithstanding the foregoing, if payment of an Incentive Award that is subject to Section 409A of the Code is triggered by a termination of a Participant's employment or other service, such termination must also constitute a "separation from service" within the meaning of Section 409A of the Code, and any change in employment status that constitutes a "separation from service" under Section 409A of the Code will be treated as a termination of employment or service, as the case may be.

13.5 <u>Effect of Actions Constituting Cause or Adverse Action</u>. Notwithstanding anything in the Plan to the contrary and in addition to the other rights of the Committee under this Section 13, if a Participant is determined by the Committee, acting in its sole discretion, to have taken any action that would constitute Cause or an Adverse Action during or after the termination of employment or other service with the Company or a Subsidiary, irrespective of whether such action or the Committee's determination occurs before or after termination of such Participant's employment or other service with the Company or any Subsidiary and irrespective of whether or not the Participant was terminated as a result of such Cause or Adverse Action, (a) all rights of the Participant under the Plan and any Incentive Award Agreements evidencing an Incentive Award then held by the Participant will terminate and be forfeited without notice of any kind, and (b) the Committee in its sole discretion will have the authority to rescind the exercise, vesting, settlement or issuance of, or payment in respect of, any Incentive Awards of the Participant that were exercised, vested, settled or issued, or as to which such payment was made, and to require the Participant to pay to the Company, within ten (10) days of receipt from the Company of notice of such rescission, any amount received or the amount of any gain realized as a result of such rescinded exercise, vesting, settlement, issuance or payment (including any dividends paid or other distributions made with respect to any shares of Common Stock subject to any Incentive Award). The Company may defer the exercise of any Option or Stock Appreciation Right for a period of up to six (6) months after receipt of the Participant's written notice of exercise or the issuance of share certificates upon the vesting of any Incentive Award for a period of up to six (6) months after the date of such vesting in order for the Committee to make any determination as to the existence of Cause or an Adverse Action. The Company will be entitled to withhold and deduct from future wages of the Participant (or from other amounts that may be due and owing to the Participant from the Company or a Subsidiary) or make other arrangements for the collection of all amounts necessary to satisfy such payment obligations. Unless otherwise provided by the Committee in an applicable Incentive Award Agreement, this Section 13.5 will not apply to any Participant following a Change in Control.

13.6 <u>Clawback/Forfeiture of Incentive Awards.</u> Notwithstanding anything to the contrary contained in this Plan, the Company may recover from a Participant any compensation received from any Incentive Award (whether or not settled) or cause a Participant to forfeit any Incentive Award (whether or not vested) in the event that the Company's Clawback Policy as then in effect is triggered.

------

14. <u>Payment of Withholding Taxes</u>.

14.1 <u>General Rules</u>. The Company is entitled to (a) withhold and deduct from future wages of the Participant (or from other amounts that may be due and owing to the Participant from the Company or a Subsidiary), or make other arrangements for the collection of, an amount the Company reasonably determines to be the minimum statutory amount necessary to satisfy any and all federal, foreign, state and local withholding and employment-related tax requirements attributable to an Incentive Award; (b) withhold cash paid or payable or shares of Common Stock from the shares of Common Stock issued or otherwise issuable to the Participant in connection with an Incentive Award; or (c) require the Participant promptly to remit the amount of such withholding to the Company before taking any action, including issuing any shares of Common Stock or paying any cash amounts, with respect to an Incentive Award. Shares of Common Stock issued or otherwise issuable to the Participant in connection with an Incentive Award that gives rise to the tax withholding obligation that are withheld for purposes of satisfying the Participant's withholding or employment-related tax obligation, will be valued at their Fair Market Value on the Tax Date. When withholding for taxes is effected under the Plan, it will be withheld only up to the minimum required tax withholding rates or such other rate that will not trigger a negative accounting impact on the Company.

14.2 <u>Special Rules</u>. The Committee may, in its sole discretion and upon terms and conditions established by the Committee, permit or require a Participant to satisfy, in whole or in part, any withholding or employment-related tax obligation described in Section 14.1 of the Plan by withholding shares of Common Stock underlying an Incentive Award, by electing to tender, or by attestation as to ownership of, Previously Acquired Shares, in accordance with a sell-to-cover program established with a securities brokerage firm and approved by the Committee, or a combination of such methods. For purposes of satisfying a Participant's withholding or employment-related tax obligation, shares of Common Stock withheld by the Company or Previously Acquired Shares tendered or covered by an attestation will be valued at their Fair Market Value on the Tax Date.

15. <u>Change in Control</u>.

15.1 A "<u>Change in Control</u>" will mean the occurrence of any one or more of the following: (i) the accumulation (if over time, in any consecutive twelve (12) month period), whether directly, indirectly, beneficially or of record, by any individual, entity or group (within the meaning of Section 13(d)(3) or 14(d)(2) of the Exchange Act) of 50.1% or more of the shares of the outstanding Common Stock of the Company, whether by merger, consolidation, sale or other transfer of shares of Common Stock (other than a merger or consolidation where the stockholders of the Company prior to the merger or consolidation are the holders of a majority of the voting securities of the entity that survives such merger or consolidation or the parent of such entity), (ii) a sale of all or substantially all of the assets of the Company or (iii) during any period of twelve (12) consecutive months, the individuals who, at the beginning of such period, constitute the Board, and any new director whose election by the Board or nomination for election by the Company's stockholders was approved by a vote of at least two-thirds (2/3) of the directors then still in office who either were directors at the beginning of the 12-month period or whose election or nomination for election was previously so approved, cease for any reason to constitute at least a majority of the Board; provided, however, that the following acquisitions shall not constitute a Change in Control for the purposes of this Plan: (A) any acquisitions of Common Stock or securities convertible, exercisable or exchangeable into Common Stock directly from the Company or (B) any acquisition of Common Stock or securities convertible, exercisable or exchangeable into Common Stock by any employee benefit plan (or related trust) sponsored by or maintained by the Company.

------

15.2 <u>Corporate Transactions</u>. In the event of a merger, consolidation, or sale of all or substantially all of the Company's assets or the acquisition of all of the outstanding voting stock of the Company (or similar transaction) in a single transaction or a series of related transactions by a single entity other than a transaction in which the Company is the surviving corporation (a "**Corporate Transaction**"), the Board or the Committee, or the board of directors of any entity assuming the obligations of the Company hereunder (the "**Successor Board**"), may, as to outstanding Options, take any of the following actions (i) make appropriate provision for the continuation of such Options by substituting on an equitable basis for the shares then subject to such Options either the consideration payable with respect to the outstanding shares of Common Stock in connection with the Corporate Transaction or securities of any successor or acquiring entity; or (ii) upon written notice to the Participants, provide that such Options must be exercised (either (A) to the extent then exercisable or, (B) at the discretion of the Board or the Committee, any such Options being made partially or fully exercisable for purposes of this clause), within a specified number of days of the date of such notice, at the end of which period such Options which have not been exercised shall terminate; or (iii) terminate such Options in exchange for payment of an amount equal to the consideration payable upon consummation of such Corporate Transaction to a holder of the number of shares of Common Stock into which such Option would have been exercisable (either (A) to the extent then exercisable or, (B) at the discretion of the Board or the Committee, any such Options being made partially or fully exercisable for purposes of this clause) <u>less</u> the aggregate exercise price thereof. For purposes of determining the payments to be made pursuant to subclause (iii) above, in the case of a Corporate Transaction the consideration for which, in whole or in part, is other than cash, the consideration other than cash shall be valued at the fair value thereof as determined in good faith by the Board. For the avoidance of doubt, if the per share exercise price of an Option or portion thereof is equal to or greater than the Fair Market Value of one share of Common Stock, such Option may be cancelled with no payment due hereunder or otherwise in respect thereof. Where a Corporate Transaction involves a tender offer that is reasonably expected to be followed by a merger (as determined by the Board or the Committee), the Corporate Transaction will be deemed to have occurred upon consummation of the tender offer.

With respect to outstanding Incentive Awards other than Options, the Board or the Committee or the Successor Board, shall make appropriate provision for the continuation of such Incentive Awards on the same terms and conditions by substituting on an equitable basis for the shares then subject to such Incentive Awards either the consideration payable with respect to the outstanding shares of Common Stock in connection with the Corporate Transaction or securities of any successor or acquiring entity. In lieu of the foregoing, in connection with any Corporate Transaction, the Board or the Committee may provide that, each outstanding Incentive Award shall be terminated in exchange for payment of an amount equal to the consideration payable upon consummation of such Corporate Transaction to a holder of the number of shares of Common Stock comprising such Incentive Award (to the extent such Incentive Award no longer subject to any forfeiture or repurchase rights then in effect or, at the discretion of the Board or the Committee, all forfeiture and repurchase rights being waived). For purposes of determining such payments, in the case of a Corporate Transaction the consideration for which, in whole or in part, is other than cash, the consideration other than cash shall be valued at the fair value thereof as determined in good faith by the Board. For the avoidance of doubt, if the purchase or base price of an Incentive Award or portion thereof is equal to or greater than the Fair Market Value of one share of Common Stock, such Incentive Award may be cancelled with no payment due hereunder or otherwise in respect thereof.

------

In taking any of the actions permitted under this Section 15.2, the Board or the Committee shall not be obligated by the Plan to treat all Incentive Awards held by a Participant, or all Incentive Awards of the same type, identically.

15.3 <u>Limitation on Change in Control Payments</u>. Notwithstanding anything in Section 15.2 of the Plan to the contrary, if, with respect to a Participant, the acceleration of the vesting of an Incentive Award or the payment of cash in exchange for all or part of an Incentive Award as provided in Section 15.2 of the Plan (which acceleration or payment could be deemed a "payment" within the meaning of Section 280G(b)(2) of the Code), together with any other "payments" that such Participant has the right to receive from the Company or any corporation that is a member of an "affiliated group" (as defined in Section 1504(a) of the Code without regard to Section 1504(b) of the Code) of which the Company is a member, would constitute a "parachute payment" (as defined in Section 280G(b)(2) of the Code), then the "payments" to such Participant pursuant to Section 15.2 of the Plan will be reduced (or acceleration of vesting eliminated) to the largest amount as will result in no portion of such "payments" being subject to the excise tax imposed by Section 4999 of the Code; provided, that such reduction will be made only if the aggregate amount of the payments after such reduction exceeds the difference between (a) the amount of such payments absent such reduction minus (b) the aggregate amount of the excise tax imposed under Section 4999 of the Code attributable to any such excess parachute payments; and provided further that such payments will be reduced (or acceleration of vesting eliminated) in the following order: (i) options with an exercise price above fair market value that have a positive value for purposes of Section 280G of the Code, (ii) pro rata among Incentive Awards that constitute deferred compensation under Section 409A of the Code, and (iii) finally, among the Incentive Awards that are not subject to Section 409A of the Code. Notwithstanding the foregoing sentence, if a Participant is subject to a separate agreement with the Company or an Affiliate or Subsidiary that expressly addresses the potential application of Section 280G or 4999 of the Code, then this Section 15.3 will not apply and any "payments" to a Participant pursuant to Section 15.2 of the Plan will be treated as "payments" arising under such separate agreement.

16. <u>Rights of Eligible Recipients and Participants; Transferability</u>.

16.1 <u>Employment or Service</u>. Nothing in the Plan or an Incentive Award Agreement will interfere with or limit in any way the right of the Company or any Subsidiary to terminate the employment or service of any Eligible Recipient or Participant at any time, nor confer upon any Eligible Recipient or Participant any right to continue in the employment or other service with the Company or any Subsidiary.

16.2 <u>No Rights to Awards</u>. No Participant or Eligible Individual will have any claim to be granted any Incentive Award under the Plan.

------

16.3 <u>Rights as a Stockholder</u>. As a holder of Incentive Awards (other than Restricted Stock Awards), a Participant will have no rights as a stockholder unless and until such Incentive Awards are exercised for, settled or paid in the form of, shares of Common Stock and the Participant becomes the holder of record of such shares.

16.4 <u>Restrictions on Transfer</u>.

(a) Except pursuant to testamentary will or the laws of descent and distribution or as otherwise expressly permitted by subsections (b) and (c) below, no right or interest of any Participant in an Incentive Award prior to the exercise (in the case of Options or Stock Appreciation Rights) or vesting, settlement or issuance (in the case of other Incentive Awards) of such Incentive Award will be assignable or transferable, or subjected to any lien, during the lifetime of the Participant, either voluntarily or involuntarily, directly or indirectly, by operation of law or otherwise.

(b) A Participant will be entitled to designate a beneficiary to receive an Incentive Award upon such Participant's death, and in the event of such Participant's death, payment of any amounts due under the Plan will be made to, and exercise of any Options or Stock Appreciation Rights (to the extent permitted pursuant to Section 13 of the Plan) may be made by, such beneficiary. If a deceased Participant has failed to designate a beneficiary, or if a beneficiary designated by the Participant fails to survive the Participant, payment of any amounts due under the Plan will be made to, and exercise of any Options or Stock Appreciation Rights (to the extent permitted pursuant to Section 13 of the Plan) may be made by, the Participant's legal representatives, heirs and legatees. If a deceased Participant has designated a beneficiary and such beneficiary survives the Participant but dies before complete payment of all amounts due under the Plan or exercise of all exercisable Options or Stock Appreciation Rights, then such payments will be made to, and the exercise of such Options or Stock Appreciation Rights may be made by, the legal representatives, heirs and legatees of the beneficiary.

(c) Upon a Participant's request, the Committee may, in its sole discretion, permit a transfer of all or a portion of an Incentive Award, other than for value, to such Participant's child, stepchild, grandchild, parent, stepparent, grandparent, spouse, former spouse, sibling, niece, nephew, mother-in-law, father-in-law, son-in-law, daughter-in-law, brother-in-law, or sister-in-law, any person sharing such Participant's household (other than a tenant or employee), a trust in which any of the foregoing have more than fifty percent of the beneficial interests, a foundation in which any of the foregoing (or the Participant) control the management of assets, and any other entity in which these persons (or the Participant) own more than 50% of the voting interests. Any permitted transferee will remain subject to all the terms and conditions applicable to the Participant prior to the transfer. A permitted transfer may be conditioned upon such requirements as the Committee may, in its sole discretion, determine, including, execution and/or delivery of appropriate acknowledgements, opinion of counsel, or other documents by the transferee.

------

16.5 <u>Non-Exclusivity of the Plan</u>. Nothing contained in the Plan is intended to modify or rescind any previously approved compensation plans or programs of the Company or create any limitations on the power or authority of the Board to adopt such additional or other compensation arrangements as the Board may deem necessary or desirable.

17. <u>Securities Law and Other Restrictions</u>.

Notwithstanding any other provision of the Plan or any Incentive Award Agreement entered into pursuant to the Plan, the obligation of the Company to issue any shares of Common Stock under the Plan or settle Incentive Awards in shares of Common Stock or other consideration will be subject to all applicable law, rules and regulations, and to such approvals by governmental agencies as may be required. Notwithstanding the generality of the foregoing and notwithstanding any other provision of the Plan or any Incentive Award Agreement entered into pursuant to the Plan, the Company will not be required to issue any shares of Common Stock under the Plan, and a Participant may not sell, assign, transfer or otherwise dispose of shares of Common Stock issued pursuant to Incentive Awards granted under the Plan, unless (a) there is in effect with respect to such shares a registration statement under the Securities Act and any applicable securities laws of a state or foreign jurisdiction or an exemption from such registration under the Securities Act and applicable state or foreign securities laws, and (b) there has been obtained any other consent, approval or permit from any other U.S. or foreign regulatory body which the Committee, in its sole discretion, deems necessary or advisable. The Company will be under no obligation to register for sale under the Securities Act any of the shares of Common Stock to be offered or sold under the Plan. The Company may condition such issuance, sale or transfer upon the receipt of any representations or agreements from the parties involved, and the placement of any legends on certificates representing shares of Common Stock, as may be deemed necessary or advisable by the Company in order to comply with such securities law or other restrictions.

18. <u>Deferred Compensation; Compliance with Section 409A</u>.

It is intended that all Incentive Awards issued under the Plan be administered in a manner that will comply with the requirements of Section 409A of the Code, or the requirements of an exception to Section 409A of the Code and the Incentive Award Agreements and the Plan will be construed and administered in a manner that is consistent with and give effect to such intent. The Committee is authorized to adopt rules or regulations deemed necessary or appropriate to qualify for an exception from or to comply with the requirements of Section 409A of the Code (including any transition or grandfather rules relating thereto). Notwithstanding anything in this Section 18 or Section 19 to the contrary, with respect to any Incentive Award subject to Section 409A of the Code, no amendment to or payment under such Incentive Award will be made except and only to the extent permitted under Section 409A of the Code. If any amount is payable with respect to an Incentive Award that is subject to Section 409A of the Code as a result of the Participant's "separation from service" at such time the Participant is a "specified employee" within the meaning of Section 409A of the Code, then no payment will be made, except as permitted under Section 409A of the Code, prior to the first business day after the earlier of (i) the date that is six months after the Participant's separation from service or (ii) the Participant's death.

------

19. <u>Amendment, Modification and Termination</u>.

19.1 <u>Generally</u>. Subject to other subsections of this Section 19 and Section 3.4 of the Plan, the Board at any time may suspend or terminate the Plan (or any portion thereof) or terminate any outstanding Incentive Award and the Committee, at any time and from time to time, may amend the Plan or amend or modify the terms of an outstanding Incentive Award and Incentive Award Agreement. The Committee's power and authority to amend or modify the terms of an outstanding Incentive Award and Incentive Award Agreement includes the authority to modify the number of shares of Common Stock or other terms and conditions of an Incentive Award, extend the term of an Incentive Award, accelerate the exercisability or vesting or otherwise terminate any restrictions relating to an Incentive Award, accept the surrender of any outstanding Incentive Award or, to the extent not previously exercised, settled or vested, authorize the grant of new Incentive Awards in substitution for surrendered Incentive Awards; provided, however that the amended or modified terms are permitted by the Plan as then in effect and that any Participant whose rights under a previously granted Incentive Award are adversely affected by such amended or modified terms has consented to such amendment or modification.

19.2 <u>Adjustment of Performance-Based Awards</u>. The Committee may amend or modify the vesting criteria (including any performance objectives or performance periods) of any outstanding Incentive Awards based in whole or in part on the financial performance of the Company (or any Subsidiary or division, business unit or other sub-unit thereof) in recognition of unusual or nonrecurring events (including the events described in Section 4.3(a) of the Plan) affecting the Company or the financial statements of the Company or of changes in applicable law, regulations or accounting principles, whenever the Committee determines that such adjustments are appropriate in order to prevent unintended dilution or enlargement of the benefits or potential benefits intended to be made available under the Plan. The determination of the Committee as to the foregoing adjustments, if any, will be final, conclusive and binding on Participants under the Plan.

19.3 <u>Stockholder Approval</u>. No amendments to the Plan will be effective without approval of the Company's stockholders if stockholder approval of the amendment is then required pursuant to Section 422 of the Code, the rules of the primary stock exchange or stock market on which the Common Stock is then traded, applicable U.S. state corporate laws or regulations, applicable U.S. federal laws or regulations, or the applicable laws of any foreign country or jurisdiction where Incentive Awards are, or will be, granted under the Plan.

19.4 <u>Incentive Awards Previously Granted</u>. Notwithstanding any other provision of the Plan to the contrary, no termination, suspension or amendment of the Plan may adversely affect the rights of a Participant under a previously granted Incentive Award without the consent of the affected Participant; provided, however, that this sentence will not impair the right of the Committee to take whatever action it deems appropriate under Sections 3.2, 4.3, 13, 15, 18 or 19.5 of the Plan.

19.5 <u>Amendments to Conform to Law</u>. Notwithstanding any other provision of the Plan to the contrary, the Committee may amend the Plan or an Incentive Award Agreement, to take effect retroactively or otherwise, as deemed necessary or advisable for the purpose of conforming the Plan or an Incentive Award Agreement to any present or future law relating to plans of this or similar nature, and to the administrative regulations and rulings promulgated thereunder. By accepting an Incentive Award under the Plan, a Participant agrees to any amendment made pursuant to this Section 19.5 to any Incentive Award granted under the Plan without further consideration or action.

------

20. <u>Effective Date and Duration of the Plan</u>.

The Plan will be effective as of the Effective Date and will terminate at midnight on the day before the date which is ten years from the earlier of the date of its adoption by the Board and the date of its approval by the shareholders and may be terminated prior to such time by Board action. No Incentive Award will be granted after termination of the Plan but Incentive Awards outstanding upon termination of the Plan will remain outstanding in accordance with their applicable terms and conditions and the terms and conditions of the Plan.

21. <u>Miscellaneous</u>.

21.1 <u>Usage</u>. In the Plan, except where otherwise indicated by clear contrary intention, (a) any masculine term used in the Plan also will include the feminine, (b) the plural will include the singular, and the singular will include the plural, (c) "including" (and with correlative meaning "include") means including without limiting the generality of any description preceding such term, and (d) "or" is used in the inclusive sense of "and/or".

21.2 <u>Unfunded Plan</u>. Participants will have no right, title or interest whatsoever in or to any investments that the Company or its Subsidiaries may make to aid it in meeting its obligations under the Plan. Nothing contained in the Plan, and no action taken pursuant to its provisions, will create or be construed to create a trust of any kind, or a fiduciary relationship between the Company and any Participant, beneficiary, legal representative, or any other individual. To the extent that any individual acquires a right to receive payments from the Company or any Subsidiary under the Plan, such right will be no greater than the right of an unsecured general creditor of the Company or the Subsidiary, as the case may be. All payments to be made hereunder will be paid from the general funds of the Company or the Subsidiary, as the case may be, and no special or separate fund will be established, and no segregation of assets will be made to assure payment of such amounts except as expressly set forth in the Plan.

21.3 <u>Relationship to Other Benefits</u>. No payment under the Plan will be taken into account in determining any benefits under any pension, retirement, savings, profit sharing, group insurance, welfare, or benefit plan of the Company or any Subsidiary unless provided otherwise in such plan.

21.4 <u>Fractional Shares</u>. No fractional shares of Common Stock will be issued or delivered under the Plan or any Incentive Award. The Committee will determine whether cash, other Incentive Awards or other property will be issued or paid in lieu of fractional shares of Common Stock or whether such fractional shares of Common Stock or any rights thereto will be forfeited or otherwise eliminated by rounding up or down.

21.5 <u>No Representations or Warranties Regarding Tax Effect</u>. Notwithstanding any provision of the Plan to the contrary, the Company, its Subsidiaries, the Board and the Committee neither represent nor warrant the tax treatment under any federal, state, provincial, local, foreign or other laws of any Incentive Award granted or amounts paid to any Participant under this Plan, including when and to what extent such Incentive Award or amounts may be subject to tax, penalties and interest.

------

21.6 <u>Governing Law; Venue</u>. Except to the extent expressly provided in the Plan, the validity, construction, interpretation, administration and effect of the Plan and any rules, regulations and actions relating to the Plan will be governed by and construed exclusively in accordance with the laws of the State of Delaware, notwithstanding the conflicts of laws principles of any jurisdictions. Unless otherwise provided in an Incentive Award Agreement, recipients of an Incentive Award under the Plan are deemed to submit to the exclusive jurisdiction and venue of the federal or state courts of the State of Delaware (including the Court of Chancery) to resolve any and all issues that may arise out of or relate to the Plan or any related Incentive Award Agreement.

21.7 <u>Waiver of Jury Trial</u>. By accepting or being deemed to have accepted an Incentive Award under the Plan, each Participant waives (or will be deemed to have waived), to the maximum extent permitted under applicable law, any right to a trial by jury in any action, proceeding or counterclaim concerning any rights under the Plan or any Incentive Award, or under any amendment, waiver, consent, instrument, document or other agreement delivered or which in the future may be delivered in connection therewith, and agrees (or will be deemed to have agreed) that any such action, proceedings or counterclaim will be tried before a court and not before a jury. By accepting or being deemed to have accepted an Incentive Award under the Plan, each Participant certifies that no officer, representative, or attorney of the Company has represented, expressly or otherwise, that the Company would not, in the event of any action, proceeding or counterclaim, seek to enforce the foregoing waivers. Notwithstanding anything to the contrary in the Plan, nothing herein is to be construed as limiting the ability of the Company and a Participant to agree to submit any dispute arising under the terms of the Plan or any ward to binding arbitration or as limiting the ability of the Company to require any individual to agree to submit such disputes to binding arbitration as a condition of receiving an Incentive Award hereunder.

21.8 <u>Successors</u>. All obligations of the Company under the Plan with respect to Incentive Awards granted hereunder will be binding on any successor to the Company, whether the existence of such successor is the result of a direct or indirect purchase, merger, consolidation or otherwise, of all or substantially all of the business or assets of the Company.

21.9 <u>Construction</u>. Wherever possible, each provision of the Plan and any Incentive Award Agreement evidencing an Incentive Award granted under the Plan will be interpreted so that it is valid under the applicable law. If any provision of the Plan or any Incentive Award Agreement evidencing an Incentive Award granted under the Plan is to any extent invalid under the applicable law, that provision will still be effective to the extent it remains valid. The remainder of the Plan and the Incentive Award Agreement also will continue to be valid, and the entire Plan and Incentive Award Agreement will continue to be valid in other jurisdictions.

21.10 <u>Delivery and Execution of Electronic Documents</u>. To the extent permitted by applicable law, the Company may: (a) deliver by email or other electronic means (including posting on a Web site maintained by the Company or by a third party under contract with the Company) all documents relating to the Plan or any Incentive Award hereunder (including prospectuses required by the Securities and Exchange Commission) and all other documents that the Company is required to deliver to its security holders (including annual reports and proxy statements), and (b) permit Participants to use electronic, internet or other non-paper means to execute applicable Plan documents (including Incentive Award Agreements) and take other actions under the Plan in a manner prescribed by the Committee.

## Exhibit 31.1

**Exhibit 31.1**

**CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER PURSUANT TO RULES 13a-14(a) AND 15d-14(a) UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED, AS ADOPTED PURSUANT TO SECTION 302 OF THE SARBANES OXLEY ACT OF 2002**

I, John J. Alam, MD, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of CervoMed 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 necessary to make the statements made, in light of the circumstances under 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 operations and 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 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 others within 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 under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for 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 conclusions about 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's most 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 over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably 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's internal control over financial reporting.

Date: August 8, 2025

---

| |
|:---|
| /s/ John J. Alam, MD |
| John J. Alam, MD |
| President and Chief Executive Officer |
| (Principal Executive Officer) |

---

## Exhibit 31.2

**Exhibit 31.2**

**CERTIFICATION OF PRINCIPAL FINANCIAL OFFICER PURSUANT TO RULES 13a-14(a) AND 15d-14(a) UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED, AS ADOPTED PURSUANT TO SECTION 302 OF THE SARBANES OXLEY ACT OF 2002**

I, William Elder, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of CervoMed 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 necessary to make the statements made, in light of the circumstances under 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 operations and 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 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 others within 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 under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for 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 conclusions about 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's most 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 over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably 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's internal control over financial reporting.

Date: August 8, 2025

---

| |
|:---|
| /s/ William Elder |
| William Elder |
| Chief Financial Officer & General Counsel |
| (Principal Financial Officer) |

---

## Exhibit 32.1

**Exhibit 32.1**

**CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER PURSUANT TO 18 U.S.C. SECTION 1350 AS ADOPTED PURSUANT TO SECTION 906 OF THE**

**SARBANES-OXLEY ACT OF 2002**

In connection with the Quarterly Report on Form 10-Q of CervoMed Inc. (the "Company") for the period ended June 30, 2025 as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to my knowledge:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: August 8, 2025

---

| |
|:---|
| /s/ John J. Alam, MD |
| John J. Alam, MD |
| President and Chief Executive Officer |
| (Principal Executive Officer) |

---

## Exhibit 32.2

**Exhibit 32.2**

**CERTIFICATION OF PRINCIPAL FINANCIAL OFFICER PURSUANT TO 18 U.S.C. SECTION 1350 AS ADOPTED PURSUANT TO SECTION 906 OF THE**

**SARBANES-OXLEY ACT OF 2002**

In connection with the Quarterly Report on Form 10-Q of CervoMed Inc. (the "Company") for the period ended June 30, 2025 as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to my knowledge:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: August 8, 2025

---

| |
|:---|
| /s/ William Elder |
| William Elder |
| Chief Financial Officer & General Counsel |
| (Principal Financial Officer) |

---