Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

You should read the following discussion and analysis of our financial condition and results of operations together with our financial statements and the related notes appearing at the end of this Annual Report on Form 10-K. Some of the information contained in this discussion and analysis or set forth elsewhere in this Annual Report on Form 10-K, including information with respect to our plans and strategy for our business and related financing, includes forward-looking statements that involve risks and uncertainties. You should read “Cautionary Note Regarding Forward-Looking Statements” and Item 1A. Risk Factors of this Annual Report on Form 10-K for a discussion of important factors that could cause actual results to differ materially from the results described in or implied by the forward-looking statements contained in the following discussion and analysis.

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Overview

Company Overview

We are a late-stage clinical drug platform company addressing neurodegeneration, such as Alzheimer’s disease (“AD”) and Parkinson’s disease (“PD”). We are developing our lead product candidate, buntanetap, which is designed to address AD, PD, and potentially other chronic neurodegenerative diseases. Buntanetap is a synthetically produced small molecule, orally administered, brain penetrant compound. In several studies, buntanetap was observed to inhibit the synthesis of neurotoxic proteins — APP/Aβ (“APP”), tau/phospho- tau (“tau”) and α-Synuclein (“αSYN”) — that are some of the main causes of neurodegeneration. High levels of neurotoxic proteins lead to reduced axonal transport, which is responsible for the communication between and within nerve cells. When that communication is compromised, the immune system is activated and attacks the nerve cells, eventually killing them. We have observed in our clinical studies in early AD and early PD patients and pre-clinical studies in mice and rats that buntanetap lowered neurotoxic protein levels leading to improved axonal transport, reduced inflammation, lower nerve cell death and improved affected function.

We designed the studies by applying our understanding of the underlying neurodegenerative disease states, and measured both target and pathway validation in the spinal fluid of patients to determine whether patients underlying disease condition improved following treatment. In addition to meeting their primary endpoints of safety and tolerability and secondary endpoint of pharmacokinetics (“PK”) of buntanetap, our AD/PD Trials also met exploratory endpoints of measures of biomarkers and improvements in cognition in AD patients, as well as function in PD patients. We believe that the AD/PD Trials represent the first double-blind, placebo-controlled study that showed improvements in AD patients, as measured by ADAS-Cog, and in PD patients, as measured by UPDRS. Following completion of the AD/PD Trials, we submitted our data to the U.S. Food and Drug Administration (“FDA”) and requested direction to further pursue the development of buntanetap in early PD patients. With the FDA’s guidance, we initiated a Phase 3 study in early PD patients in August 2022 (our “Phase 3 PD Study”). In the Phase 3 PD Study, early PD patients were defined as those at Hoehn & Yahr stages 1, 2 or 3 and OFF times of less than two hours per day. OFF time refers to periods when PD motor and/or non-motor symptoms occur between medication doses. We also submitted a proposed protocol for the treatment of moderate AD to the FDA, and after receiving permission to proceed, we initiated a Phase 2/3 study in mild to moderate AD patients in February 2023 (our “Phase 2/3 AD Study”). In the Phase 2/3 AD Study, mild to moderate AD patients were defined as those with a MMSE score between 14 and 24. Our Phase 3 PD Study and Phase 2/3 AD Study each had built in interim analyses.

Our Phase 3 PD Study incorporated an interim analysis at two months, the results of which were disclosed on March 31, 2023. The pre-planned interim analysis was conducted by our data analytics provider based on 132 patients from all cohorts collectively, for which baseline and two-month data was available. Based on the results of the interim analysis, we proceeded with the Phase 3 PD Study as planned in accordance with the previously established protocol. The study was completed on December 4, 2023, and we released the topline PD Study efficacy data on July 2, 2024. The study data showed that in two subgroups, buntanetap improved UPDRS 2, 3, 2+3 and total. It also showed that in the entire intent to treat (“ITT”) population, buntanetap stopped the loss of cognition and that in the 12% of patients that already had cognitive issues, buntanetap improved cognition in a dose-dependent, statistically significant way. We expect to discuss the Phase 3 PD data with the FDA at an end-of-study meeting during 2025. During that meeting, we plan to propose continued development of buntanetap with an additional, pivotal Phase 3 trial.

With respect to the Phase 2/3 AD Study, we disclosed the results of the interim analysis on October 23, 2023, and similar to our PD study, based on the outcome of the interim analysis, we proceeded with the study as planned. The Phase 2/3 AD study was completed on February 13, 2024, and on April 29, 2024, we announced topline efficacy data. The data showed that in early AD patients, buntanetap improved ADAS-Cog11 in a dose-dependent fashion and was statistically significant from placebo and from baseline.

On October 10, 2024, the Company met with the FDA in an end-of-phase 2 meeting to discuss its Phase 2/3 AD data and to agree on a regulatory path forward. Annovis and the FDA have aligned on a development path for buntanetap towards the filing of New Drug Applications (“NDAs”), one for short-term and one for long-term efficacy. The Phase 3 AD program will investigate buntanetap in patients with early AD and will consist of one study that first incorporates a 6-month study period aimed at confirming buntanetap’s symptomatic effects, then later transitioning into an 18-month study period, designed to demonstrate potential disease-modifying effects. While the overall study will span the combined 18-month treatment period, the completion of the first 6-month period, if well-designed and well-executed, may be sufficient to support an NDA filing, potentially within one year of the 6-month treatment period initiation.

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During the end-of-phase 2 meeting for AD, the FDA raised no concerns with the Company’s data on buntanetap’s safety, including impact on liver enzymes, drug interactions, dose selection, pharmacokinetics and population pharmacokinetics. Further, the FDA confirmed that future development can proceed using the new crystal form of buntanetap.

We believe that we are the only company developing a drug for AD and PD that is designed to inhibit more than one neurotoxic protein and has a mechanism of action designed to restore nerve cell axonal and synaptic activity. By improving brain function, our goal is to treat memory loss and dementia associated with AD, as well as body and brain function issues associated with PD. Based on pre-clinical and clinical data collected to date, we believe that buntanetap has the potential to be the first drug to interfere with the underlying mechanism of neurodegeneration, potentially enabling buntanetap to be the only drug to improve cognition in AD and motor function in PD. The industry has historically encountered challenges in specifically targeting one neurotoxic protein, be it APP, tau or αSYN, indicating that doing so does not change the underlying course of neurodegeneration. Our ultimate goal is to develop a disease modifying drug (“DMD”) for patients with neurodegeneration by leveraging our clinical and pre-clinical data, which shows inhibition of the most relevant neurotoxic proteins. Studies have found that AD and PD are the most common neurodegenerative diseases in the U.S., and accordingly these diseases present two unmet needs of the aging population and two potentially large U.S. markets, if a DMD is developed and approved.

We believe that we are the only company developing a drug for AD and PD that is designed to inhibit more than one neurotoxic protein and has a mechanism of action designed to restore nerve cell axonal and synaptic activity. By improving brain function, our goal is to treat memory loss and dementia associated with AD, as well as body and brain function issues associated with PD. Based on pre-clinical and clinical data collected to date, we believe that buntanetap has the potential to be the first drug to interfere with the underlying mechanism of neurodegeneration, potentially enabling buntanetap to be the only drug to improve cognition in AD and motor function in PD. The industry has historically encountered challenges in specifically targeting one neurotoxic protein, be it APP, tau or αSYN, indicating that doing so does not change the underlying course of neurodegeneration. Our ultimate goal is to develop a disease modifying drug (“DMD”) for patients with neurodegeneration by leveraging our clinical and pre-clinical data, which shows inhibition of the most relevant neurotoxic proteins. Studies have found that AD and PD are the most common neurodegenerative diseases in the U.S., and accordingly, these diseases present two unmet needs of the aging population and two potentially large U.S. markets, if a DMD is developed and approved.

We have never been profitable and have incurred net losses since inception. Our accumulated deficit at December 31, 2024 was $134.8 million. We expect to incur losses for the foreseeable future, and we expect these losses to increase as we continue our development of, and seek regulatory approvals for, our product candidates. Because of the numerous risks and uncertainties associated with product development, we are unable to predict the timing or amount of increased expenses or when we will be able to achieve or maintain profitability, if at all.

Financial Operations Overview

The following discussion sets forth certain components of our statements of operations as well as factors that impact those items.

Segment Information

As of December 31, 2024, we viewed our operations and managed our business as one operating segment consistent with how our chief operating decision-maker, our Chief Executive Officer, makes decisions regarding resource allocation and assessing performance. As of December 31, 2024, substantially all of our assets were located in the United States. Our headquarters are located in Malvern, Pennsylvania.

Research and Development Expenses

Our research and development (“R&D”) expenses consist of expenses incurred in development and clinical studies relating to our product candidates, including:

● expenses associated with clinical development;

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Research and development costs are either expensed as incurred or recorded separately as a prepaid asset, whereby expense is recognized when the service is performed. Clinical development expenses for our product candidates are a significant component of our current research and development expenses. Product candidates in later stage clinical development generally have higher research and development expenses than those in earlier stages of development, primarily due to increased size (e.g., patient population) and duration of the clinical trials. We track and record information regarding external research and development expenses for each study or trial that we conduct. We often use third-party CROs, contractor laboratories and independent contractors to help us complete clinical studies. We recognize the expenses associated with third parties performing these services for us in our clinical studies based on the percentage of each study (or study activity) completed at the end of each reporting period.

Our research and development expenses in 2024 were primarily related to the wind-down and analysis of our Phase 3 study in early PD patients and our Phase 2/3 study in AD patients, as well as preparatory work for our pivotal Phase 3 AD study program in early AD patients. Our research and development expenses in 2023 were primarily related to the execution of our Phase 3 study in early PD patients and our Phase 2/3 study in AD patients. We expect that our research and development expenses in 2025 and for the next several years will continue to remain elevated as a result of costs associated with completing our Phase 3 trial for AD, our planned Phase 3 trial for PD and other subsequent planned activities leading up to a potential NDA filing(s) with the FDA. These expenditures are subject to numerous uncertainties regarding timing and cost to achieve completion. Completion of our clinical development and clinical trials may take several years or more and the length of time generally varies according to the type, complexity, novelty and intended use of our product candidates. The cost of clinical trials may vary significantly over the life of a project as a result of differences arising during clinical development.

Due to the ongoing and uncertain nature of our research and development, we are unable to accurately determine the duration or completion costs of our development of buntanetap. As a result of the difficulties of forecasting research and development costs of buntanetap as well as the other uncertainties discussed above, we are unable to determine when and to what extent we will generate revenues from the commercialization and sale of approved product candidates.

General and Administrative Expenses

General and administrative (“G&A”) expenses consist primarily of salaries, benefits and other related costs, including public company costs as well as stock-based compensation, for personnel serving in our executive, finance, accounting, and administrative functions. Our general and administrative expenses also include professional fees for legal services, including patent-related expenses, consulting, tax and accounting services, insurance, rent and general corporate expenses. We expect that our general and administrative expenses will increase as a result of the continued clinical development and potential commercialization of our product candidates.

Income Taxes

As of December 31, 2024, the Company had U.S. federal net operating loss (“NOL”) carryforwards of $54.1 million, which may be available to offset future income tax liabilities. Federal NOL carryforwards generated in 2017 and prior of $2.8 million will expire beginning 2032. The remaining federal NOL carryforwards generated beginning in 2018, do not expire. NOL carryforwards generated beginning in 2018 are permitted to offset 80% of taxable income in future years. As of December 31, 2024, the Company also had U.S. state NOL carryforwards of $56.6 million, which may be available to offset future income tax liabilities and will expire beginning in 2028.

NOL and tax credit carryforwards are subject to review and possible adjustment by the Internal Revenue Service (the “IRS”) and may become subject to an annual limitation in the event of certain cumulative changes in the ownership interest of significant shareholders over a three-year period in excess of 50% as defined under Sections 382 and 383 in the Internal Revenue Code. This could substantially limit the amount of tax attributes that can be utilized annually to offset future taxable income or tax liabilities. The amount of the annual limitation is determined based on our value immediately prior to the ownership change. Subsequent ownership

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changes may further affect the limitation in future years. We have not yet conducted a comprehensive study to assess whether a change of ownership as defined by Section 382 has occurred since our inception.

Results of Operations

Years ended December 31, 2024 and 2023

Operating expenses and other income (expense) were comprised of the following:

Year Ended

December 31,

(in thousands)

Operating expenses:

Other income (expense):

Other financing costs (1,853) - (1,853)

Research and Development Expenses

Research and development expenses decreased by $18.8 million for the year ended December 31, 2024 compared to the year ended December 31, 2023. The decrease was primarily the result of our Phase 3 PD and Phase 2/3 AD studies being active during the majority of 2023, whereas 2024 study activity was minimal because the aforementioned trials had been completed. This decrease related to timing of study costs was primarily offset by increases in statistics, bioanalytical and CMC costs during the year ended December 31, 2024. Year-over-year increases for these items took place as we analyzed data from our completed Phase 3 PD and Phase 2/3 AD studies and performed preparatory work for our pivotal Phase 3 AD study.

General and Administrative Expenses

General and administrative expenses increased by $0.5 million for the year ended December 31, 2024, compared to the year ended December 31, 2023. The increase was primarily a result of warrant exercise commissions expensed during the current year.

Interest Income

Interest income decreased by $0.3 million for the year ended December 31, 2024 compared to the year ended December 31, 2023. The decrease was primarily the result of lower cash and cash equivalent balances on hand year-over-year.

Other Financing Costs

Financing costs were $1.9 million for the year ended December 31, 2024. We did not incur any financing costs for the year ended December 31, 2023. The change was attributable to issuance costs as well as changes in derivative fair value associated with our ELOC financing with an ELOC Purchaser, described further below.

Change in Fair Value of Warrants

Change in fair value of warrants was a gain of $3.6 million for the year ended December 31, 2024 compared to a loss of $11.8 million the year ended December 31, 2023. This change was attributable to the fair value remeasurement with respect to our liability-classified Canaccord Warrants during 2024. The current year loss recorded in the statements of operations was primarily

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driven by warrant exercises made at higher stock prices during the third quarter of 2024, triggering remeasurement. The remaining change in fair value was primarily driven by the change in our stock price during 2024. For the year ended December 31, 2023, the change in fair value was primarily attributable to issuance of the liability-classified Canaccord Warrants and the increase in our stock price during the fourth quarter.

Liquidity and Capital Resources

Since our inception in 2008, we have devoted most of our cash resources to research and development and general and administrative activities. We have financed our operations primarily with the proceeds from the sale of common stock and warrants. To date, we have not generated any revenues from the sale of products, and we do not anticipate generating any revenues from the sales of products for the foreseeable future. We have incurred losses and generated negative cash flows from operations since inception. As of December 31, 2024, our principal source of liquidity was our cash and cash equivalents, which totaled $10.6 million.

Equity Financings

March 2024 Registered Direct Offerings

On March 15, 2024 and March 21, 2024, we entered into two separate securities purchase agreements with the same institutional investor. When aggregating the results of both purchase agreements, we issued 0.4 million shares for net proceeds of $3.9 million registered direct offerings.

April 2024 ELOC Purchase Agreement

On April 25, 2024, we entered into an ELOC Purchase Agreement with an ELOC Purchaser, whereby we could offer and sell, from time to time at our sole discretion, and whereby the ELOC Purchaser committed to purchase, up to 2.0 million shares of shares of our common stock. The term of the agreement was until the expiration of our active S-3 Registration Statement, unless earlier terminated or exhausted.

Upon execution of the ELOC Purchase Agreement, we agreed to issue 33,937 shares of common stock as commitment shares to the ELOC Purchaser. In addition to the commitment shares referenced above, as of the year ended December 31, 2024 we have sold 2.0 million shares of our common stock under the purchase agreement and received net proceeds of $14.6 million. There are no shares remaining to sell under this agreement after December 31, 2024.

January and July 2024 Warrant Exercises

During July of 2024, 0.8 million of our Canaccord warrants were exercised at $9.00 per share in a series of transactions. The exercises resulted in gross proceeds of $7.5 million. There were also 0.1 million warrants exercised in January of 2024, for gross proceeds of $0.5 million. Total warrant commissions payable to Canaccord for these exercises totaled $0.5 million, which was expensed in the Statements of Operations for the year ended December 31, 2024.

December 2024 ATM

On December 11, 2024, we entered into an Equity Distribution Agreement (“Distribution Agreement”) with Oppenheimer & Co. Inc. (“OpCo”), relating to the sale of shares of our common stock. In accordance with the terms of the Distribution Agreement, we may offer and sell shares of our common stock having an aggregate offering price of up to $50.0 million from time to time through or to OpCo, acting as our agent or principal.

During the year ended December 31, 2024, we have sold 26,788 shares of common stock pursuant to the Distribution Agreement for gross proceeds of $0.2 million before commissions.

February 2025 ThinkEquity Offering

On February 3, 2025, we entered into an Underwriting Agreement with ThinkEquity LLC, acting as representative of the underwriters with respect to an underwritten public offering of 5.3 million units of the Company. Each unit sold consisted of one share

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of common stock and one warrant to purchase one share of common stock (the “ThinkEquity Warrants”), at a per unit price of $4.00 (the “Offering”). Aggregate gross proceeds from the Offering were $21.0 million before deducting underwriting discounts and other estimated offering expenses. The Warrants have an exercise price of $5.00 per share, are immediately exercisable and expire five years from the date of issuance. The shares of Common Stock and Warrants were issued separately. We have agreed to suspend sales of our Common Stock under the OpCo ATM Facility for a period of six months after the closing of the Offering.

Future Capital Requirements

We do not have sufficient capital on hand to fund our operations for the next 12 months and will need to raise additional capital to meet our obligations as they become due. We believe that our current cash and cash equivalents will be sufficient to fund our operating expenses and capital expenditure requirements into the fourth quarter of 2025. We will need to raise substantial additional capital to complete the development and commercialization of our product candidates through public or private equity offerings, debt financings, collaboration and licensing arrangements or other financing alternatives. However, there can be no assurance that we will be successful in raising additional capital or that such capital, if available, will be on terms that are acceptable to us. If we are unable to raise sufficient additional capital or defer sufficient operating expenses, we may be compelled to reduce the scope of our operations. Accordingly, we have concluded that substantial doubt exists with respect to our ability to continue as a going concern within one year after the date that these financial statements are issued.

We expect to incur significant operating losses for the foreseeable future. We also expect these losses to further increase, as we ramp up our clinical development programs and begin activities for commercial launch readiness. We may also encounter unforeseen expenses, difficulties, complications, delays and other currently unknown factors that could adversely affect our business.

Our future funding requirements, both near and long-term, will depend on many factors, including, but not limited to:

● the effects of competing technological and market developments;

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A change in the outcome of any of these or other variables with respect to the development of any of our product candidates could significantly change the costs and timing associated with the development of that product candidate. Furthermore, our operating plans may change in the future, and we will continue to require additional capital to meet operational needs and capital requirements associated with such operating plans. If we raise additional funds by issuing equity securities, our stockholders may experience dilution. Any future debt financing into which we enter may impose upon us additional covenants that restrict our operations, including limitations on our ability to incur liens or additional debt, pay dividends, repurchase our common stock, make certain investments or engage in certain merger, consolidation or asset sale transactions. Any debt financing or additional equity that we raise may contain terms that are not favorable to us or our stockholders.

Adequate funding may not be available to us on acceptable terms or at all. Our potential inability to raise capital when needed could have a negative impact on our financial condition and our ability to pursue our business strategies. If we are unable to raise additional funds as required, we may need to delay, reduce, or terminate some or all development programs and clinical trials. We may also be required to sell or license our rights to product candidates in certain territories or indications that we would otherwise prefer to develop and commercialize ourselves. If we are required to enter into collaborations and other arrangements to address our liquidity needs, we may have to give up certain rights that limit our ability to develop and commercialize our product candidates or may have other terms that are not favorable to us or our stockholders, which could materially and adversely affect our business and financial prospects. See the section of this Annual Report on Form 10-K titled “Risk Factors” for additional risks associated with our substantial capital requirements.

Cash Flows

The following table summarizes our cash flows from operating, investing and financing activities the years ended December 31, 2024 and 2023.

Year Ended

December 31,

(in thousands)

Total net cash (used in) provided by:

Net increase (decrease) in cash and cash equivalents $ 4,797 $ (22,623)

Operating Activities

For the year ended December 31, 2024, cash used in operations was $21.9 million compared to $40.0 million for the year ended December 31, 2023. The decrease in cash used in operations was primarily the result of our Phase 3 PD and Phase 2/3 AD studies being active during the majority of 2023, whereas 2024 study activity was minimal because the aforementioned trials had been substantially completed in 2023. The reduction in clinical activity during 2024 significantly reduced our operating cash burn year-over-year.

We expect cash used in operating activities to once again increase in 2025 as compared to 2024, due to an expected increase in our operating losses associated with continued development of our product candidates (i.e., pivotal Phase 3 AD Program) as well as planned increases in our personnel count.

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Financing Activities

Cash provided by financing activities was $26.7 million during the year ended December 31, 2024, which was primarily attributable to proceeds from issuance of common stock and warrants for capital raises, including our ELOC and ATM facilities, as well as proceeds from exercises of our Canaccord Warrants.

Cash provided by financing activities was $17.3 million during the year ended December 31, 2023, which was primarily attributable to proceeds from issuance of common stock and warrants for capital raises, including proceeds from our equity financing with Canaccord as well as proceeds from exercises of our Canaccord Warrants.

Off-Balance Sheet Arrangements

We did not have any off-balance sheet arrangements during the periods presented, and we do not currently have any off-balance sheet arrangements as defined in the rules and regulations of the SEC.

Critical Accounting Policies and Use of Estimates

We have based our management’s discussion and analysis of financial condition and results of operations on our financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States of America. The preparation of these financial statements requires us to make estimates that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements as well as the reported revenues and expenses during the reporting periods. On an ongoing basis, we evaluate our estimates and judgments, including those related to clinical development expenses, fair value of warrants and stock-based compensation. The clinical development cost to advance any of our product candidates to marketing approval is substantial and involves numerous risks and uncertainties associated with pharmaceutical product development. As a result, we are unable to accurately predict the timing or amount of increased expenses and, as a result, clinical development expense could be materially different as the costs are incurred. In determining warrant fair value, we maximize the use of quoted prices and observable inputs. Observable inputs are inputs that market participants would use in pricing the asset or liability based on market data obtained from independent sources. We measure and record stock compensation expense using the applicable accounting guidance for share-based payments using the Black-Scholes option pricing model to value option awards which requires the use of subjective assumptions, including the expected life of the option and expected share price volatility. These assumptions used in calculating the fair value of stock-based awards represent our best estimates and involve inherent uncertainties and the application of judgment. As a result, if factors change and we used different assumptions, stock-based compensation expense could be materially different for stock-based awards.

While our significant accounting policies are more fully discussed in Note 2 to our audited financial statements appearing at the end of this Annual Report on Form 10-K, we believe that the following accounting policies are critical to the process of making significant judgments and estimates in the preparation of our financial statements.

Research and Development Expenses and Clinical Trial Accruals

As part of the process of preparing the financial statements included elsewhere in this Annual Report on Form 10-K, we are required to estimate and record expenses, for which a large portion are research and development expenses. Research and development expenses include, among other categories - development, clinical trials, and regulatory compliance costs incurred with research organizations, contract manufacturers, and other third-party vendors. We rely on third-parties to conduct our clinical studies and to provide many of these services, including data and project management, statistical analysis and electronic compilation. At the end of each reporting period, the estimation process involves identifying services that have been performed on our behalf by third-parties, estimating and accruing expenses in our financial statements based on the evaluation of the progress to completion of specific tasks and the facts and circumstances known to us at the time of the estimate, and assessing the accuracy of these estimates going forward to determine if adjustments are required. We periodically collaborate with our third-party vendors to assist in determining our estimates. Payments for these activities performed by our third-party vendors are based on the terms of the individual arrangements with our third-party vendors, which may differ from the pattern of costs incurred, and are reflected in the financial statements as prepaid or accrued research and development expense, as applicable. We believe our estimates and assumptions are reasonable under the current conditions; however, actual results may differ from these estimates. Any changes to estimates will be recorded in the

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period in which a circumstance causing a change in estimate becomes known and the impact of any change in estimate could be material.

Stock-Based Compensation

We account for our stock-based compensation awards in accordance with the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 718, Compensation—Stock Compensation (“ASC 718”). We have issued stock-based compensation awards that are stock options, in accordance with ASC 718. ASC 718 requires all stock-based payments, including grants of stock options, to be recognized in the statements of operations based on their grant date fair values. We use the Black-Scholes option-pricing model to determine the fair value of options granted. We recognize forfeitures as they occur. Expense related to stock-based compensation awards are recorded to research and development expense or general and administrative expense based on the underlying function of the individual that was granted the stock-based compensation award. Estimating the fair value of stock options requires the input of subjective assumptions, including the expected term of the stock option, stock price volatility, the risk-free interest rate, and expected dividends. The assumptions used in our Black-Scholes option-pricing model represent our best estimates and involve a number of variables, uncertainties, assumptions, and the application of our judgment, as they are inherently subjective.

The assumptions used in our Black-Scholes option-pricing model for stock options are as follows:

Expected Term. As we do not have sufficient historical exercise data to provide a reasonable basis upon which to estimate expected term, the expected term of employee options is determined using the “simplified” method, as prescribed in SEC’s Staff Accounting Bulletin No. 107, whereby the expected term equals the arithmetic average of the vesting term and the original contractual term of the option.

Expected Volatility. The expected volatility is based on our historical volatilities and that of similar entities within our industry for periods commensurate with the assumed expected term.

Risk-Free Interest Rate. The risk-free interest rate is based on the interest rate payable on U.S. Treasury securities in effect at the time of grant for a period that is commensurate with the assumed expected term.

Expected Dividends. The expected dividend yield is 0% because we have not historically paid, and do not expect for the foreseeable future to pay, a dividend on our common stock.

Stock-based compensation expense was $3.8 million and $4.6 million for the years ended December 31, 2024 and 2023, respectively. As of December 31, 2024, we had $2.4 million of unrecognized stock-based compensation expense, related to service-based options, which will be recognized over a remaining weighted-average period of 1.0 years.

Valuation of Common Stock Warrant Liabilities

The fair value of Common Stock Warrant Liabilities is determined using a Black-Scholes option-pricing model. Determining the appropriate fair value model and calculating the fair value of Common Stock Warrants requires considerable judgment. Any change in the estimates used may cause the value to be higher or lower than that reported. The Common Stock Warrants are not traded in an active market and the fair value is determined using valuation techniques. The estimates may be significantly different from those recorded in the financial statements because of the use of judgment and the inherent uncertainty in estimating the fair value of these instruments that are not quoted in an active market. All changes in the fair value are recorded in the statements of operations each reporting period.

Recently Adopted Accounting Pronouncements

Effective January 1, 2024, the Company retrospectively adopted Accounting Standards Update (“ASU”) 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures (“ASU 2023-07”) on an annual basis, which requires public entities to disclose information about their reportable segments’ significant expenses and other segment items. ASU 2023-07 also requires public entities with a single reportable segment to apply the disclosure requirements in ASU 2023-07, as well as all existing segment disclosures and reconciliation requirements in FASB ASC Topic 280, Segment Reporting. This guidance is effective for

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fiscal years beginning after December 15, 2023 and interim periods within fiscal years beginning after December 15, 2024. See Note 11 for additional disclosures made as a result of adopting ASU 2023-07.

Recent Accounting Pronouncements

In December 2023, the FASB issued ASU No. 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures (“ASU 2023-09”), which improves income tax disclosures by requiring: (1) consistent categories and greater disaggregation of information in the rate reconciliation, and (2) income taxes paid disaggregated by jurisdiction. It also includes certain other amendments to improve the effectiveness of income tax disclosures. ASU 2023-09 is effective for annual periods beginning after December 15, 2024. Early adoption is permitted. The ASU indicates that all entities will apply the guidance prospectively with an option for retroactive application to each period presented in the financial statements. The Company has not determined the impact ASU 2023-09 may have on the Company’s financial statement disclosures but is not expecting material impacts.

In November 2024, the FASB issued ASU 2024-03, Income Statement — Reporting Comprehensive Income — Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses (“ASU 2024-03”), which requires public entities, at annual and interim reporting periods, to disclose in a tabular format additional information about specific expense categories in the notes to the financial statements. ASU 2024-03 is effective for annual reporting periods beginning after December 15, 2026, and interim reporting periods beginning after December 15, 2027, with early adoption permitted. The Company is still evaluating the impacts of this ASU on its future financial statements and disclosures.

JOBS Act

Section 107 of the JOBS Act also provides that an “emerging growth company” can take advantage of the extended transition period provided in Section 7(a)(2)(B) of the Securities Act for complying with new or revised accounting standards. In other words, an “emerging growth company” can delay the adoption of new or revised accounting standards until those standards would otherwise apply to private companies. We have irrevocably elected not to avail ourselves of this exemption from new or revised accounting standards and, therefore, we will be subject to the same new or revised accounting standards as other public companies that are not emerging growth companies.

Item 7A. Quantitative and Qualitative Disclosures About Market Risk.

This item is not required for smaller reporting companies.

Item 8. Financial Statements and Supplementary Data.

Our financial statements, accompanying notes and Report of Independent Registered Public Accounting Firm are included in this Annual Report on Form 10-K beginning on page F-1, which are incorporated in this Item 8 by reference.

Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure.

None.

Item 9A. Controls and Procedures.

Evaluation of Disclosure Controls and Procedures

Our management, with the participation of our Chief Executive Officer, has evaluated the effectiveness of our disclosure controls and procedures (as such term is defined in Rules 13a-15I and 15d-15(e) under the Exchange Act) as of the end of the period covered by this Annual Report on Form 10-K. Management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving their objectives and management necessarily applies its judgment in evaluating the cost benefit relationship of possible controls and procedures. Based on such evaluation, our Chief Executive Officer has concluded that, as of the end of the period covered by this report, our disclosure controls and procedures were effective to ensure that the information required to be disclosed by us in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in SEC rules and forms, and that information required to be disclosed in

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the reports we file or submit under the Exchange Act is accumulated and communicated to our management, including our Chief Executive Officer, as our interim principal financial and accounting officer, to allow timely decisions regarding required disclosures.

Management’s Report on Internal Control Over Financial Reporting

Management is responsible for establishing and maintaining adequate internal control over financial reporting as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act. Our internal control over financial reporting is a process designed 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. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Management utilized the criteria established in the Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”) to assess the effectiveness of our internal control over financial reporting as of December 31, 2024. Based on the assessment, management has concluded that, as of December 31, 2024, our internal control over financial reporting was effective.

As an emerging growth company, management’s assessment of internal control over financial reporting was not subject to attestation by our independent registered public accounting firm.

Changes in Internal Control Over Financial Reporting

There have been no changes in our internal control over financial reporting during our most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

Item 9B. Other Information.

During the three months ended December 31, 2024, the following directors or officers (as defined in Rule 16a-1(f) of the Exchange Act) adopted or terminated a “Rule 10b5-1 trading arrangement” or “non-Rule 10b5-1 trading arrangement,” as each term is defined in Item 408(c) of Regulation S-K:

Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections.

Not Applicable.

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PART III

Item 10. Directors, Executive Officers and Corporate Governance.

We incorporate the information required by this Item 10 by reference to the definitive proxy statement for our 2025 annual meeting of shareholders, to be filed with the SEC.

Item 11. Executive Compensation.

We incorporate the information required by this Item 11 by reference to the definitive proxy statement for our 2025 annual meeting of shareholders, to be filed with the SEC.

Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.

We incorporate the information required by this Item 12 by reference to the definitive proxy statement for our 2025 annual meeting of shareholders, to be filed with the SEC.

Equity Compensation Plan Information

Number of

securities to be issued Number of securities remaining

upon exercise of Weighted-average available for future issuance under

(a) (b) (c)

Equity compensation plans not approved by security holders 310,733 $ 8.99 —

Item 13. Certain Relationships and Related Transactions and Director Independence.

We incorporate the information required by this Item 13 by reference to the definitive proxy statement for our 2025 annual meeting of shareholders, to be filed with the SEC.

Item 14. Principal Accountant Fees and Services.

We incorporate the information required by this Item 14 by reference to the definitive proxy statement for our 2025 annual meeting of shareholders, to be filed with the SEC.

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PART IV

Item 15. Exhibits and Financial Statement Schedules.

(a) Documents filed as part of this report:

3. Exhibits. See (b) below.

(b) Exhibits:

ExhibitNumber Description of Exhibit

4.5 Description of Registrant’s Securities.

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ExhibitNumber Description of Exhibit

19.1 Insider Trading Policy

23.1 Consent of Ernst & Young LLP

31.1 Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

32.1 Certification Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

101.SCH XBRL Taxonomy Extension Schema Document

101.CAL XBRL Taxonomy Extension Calculation Linkbase Document

101.DEF XBRL Taxonomy Extension Definition Linkbase Document

101.LAB XBRL Taxonomy Extension Labels Linkbase Document

101.PRE XBRL Taxonomy Extension Presentation Linkbase Document

+ Indicates management contract or compensatory plan.

None.

Item 16. Form 10-K Summary.

Not Applicable.

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ANNOVIS BIO, INC.

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Page(s)

Report of Independent Registered Public Accounting Firm (PCAOB ID No. 42) F-2

Statements of Operations for the Years Ended December 31, 2024 and 2023 F-4

Statements of Cash Flows for the Years Ended December 31, 2024 and 2023 F-6

Notes to Financial Statements F-7

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Report of Independent Registered Public Accounting Firm

To the Shareholders and the Board of Directors of Annovis Bio, Inc.

Opinion on the Financial Statements

We have audited the accompanying balance sheets of Annovis Bio, Inc. (the Company) as of December 31, 2024 and 2023, the related statements of operations, changes in stockholders’ equity (deficit) and cash flows for each of the two years in the period ended December 31, 2024, and the related notes (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company at December 31, 2024 and 2023, and the results of its operations and its cash flows for each of the two years in the period ended December 31, 2024, in conformity with U.S. generally accepted accounting principles.

The Company's Ability to Continue as a Going Concern

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 1 to the financial statements, the Company has suffered recurring losses from operations and has stated that substantial doubt exists about the Company’s ability to continue as a going concern. Management's evaluation of the events and conditions and management’s plans regarding these matters are also described in Note 1. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

Basis for Opinion

These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting. Accordingly, we express no such opinion.

Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.

/s/ Ernst & Young LLP

We have served as the Company’s auditor since 2023.

Philadelphia, Pennsylvania

March 21, 2025

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ANNOVIS BIO, INC.

Balance Sheets

As of December 31,

Assets

Current assets:

Liabilities and stockholders’ equity (deficit)

Current liabilities:

Non-current liabilities:

Commitments and contingencies (Note 6)

Stockholders’ equity (deficit) :

See accompanying notes to financial statements.

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ANNOVIS BIO, INC.

Statements of Operations

Year Ended December 31,

Operating expenses:

Other income (expense):

Other financing costs (Note 7) (1,853,189) —

Net loss per share (Note 9)

See accompanying notes to financial statements.

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ANNOVIS BIO, INC.

Statements of Changes in Stockholders’ Equity (Deficit)

Stockholders’ Equity (Deficit)

Additional Total

Common Stock Paid-In Accumulated Stockholders’ Equity

Shares Amount Capital Deficit (Deficit)

Stock-based compensation expense — — 4,628,406 — 4,628,406

Cashless exercise of stock options 220,339 22 (22) — —

See accompanying notes to financial statements.

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ANNOVIS BIO, INC.

Statements of Cash Flows

Year Ended December 31,

Cash flows from operating activities:

Changes in operating assets and liabilities:

Cash flows from financing activities:

Proceeds from exercise of stock options — 8,385

Net increase (decrease) in cash and cash equivalents 4,797,196 (22,622,973)

Supplemental disclosure of cash flow information:

Cash paid for financing costs $ 50,000 $ —

See accompanying notes to financial statements.

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Annovis Bio, Inc.

Notes to Financial Statements

December 31, 2024 and 2023

(1) Nature of Business and Management’s Plans

Annovis Bio, Inc. (the “Company” or “Annovis”) was incorporated on April 29, 2008, under the laws of the State of Delaware. Annovis is a clinical-stage drug platform company addressing neurodegeneration such as Alzheimer’s disease (“AD”) and Parkinson’s disease (“PD”). The toxic cascade in neurodegeneration begins with high levels of neurotoxic proteins which lead to impaired axonal transport, inflammation, death of nerve cells and loss of cognition and motor function. The Company’s lead product candidate, buntanetap, is a small molecule administered orally that is designed to attack neurodegeneration by entering the brain and inhibiting the translation of multiple neurotoxic proteins thereby impeding the toxic cascade.

Going Concern

Since its founding, the Company has been engaged in organizational activities, including raising capital, and research and development activities. The Company has not generated substantial revenues and has not yet achieved profitable operations, nor has it ever generated positive cash flows from operations. There is no assurance that profitable operations, if achieved, could be sustained on a continuing basis. The Company is subject to those risks associated with any clinical stage pharmaceutical company that has substantial expenditures for research and development. There can be no assurance that the Company’s research and development projects will be successful, that products developed will obtain necessary regulatory approval, or that any approved product will be commercially viable. In addition, the Company operates in an environment of rapid technological change and is largely dependent on the services of its employees and consultants. Further, the Company’s future operations are dependent on the success of the Company’s efforts to raise additional capital.

The Company has a history of incurring net losses and anticipates incurring additional losses until such time, if ever, that it can generate significant revenue from its product candidates currently in development. The Company’s primary source of capital has been the issuance of common stock and warrants to purchase common stock.

Since the Company’s inception, the Company has incurred losses and negative cash flows from operations. At December 31, 2024, the Company had cash and cash equivalents of $10.6 million and an accumulated deficit of $134.8 million. The Company’s net loss was $24.6 million and $56.2 million for the years ended December 31, 2024 and 2023, respectively. In addition, the Company’s operating loss was $26.7 million and $45.0 million for the years ended December 31, 2024 and 2023, respectively. The Company follows the provisions of Financial Accounting Standards Board, or FASB, Accounting Standards Codification, or ASC, Topic 205-40, Presentation of Financial Statements-Going Concern, or ASC 205-40, which requires management to assess the Company’s ability to continue as a going concern for one year after the date the financial statements are issued. The Company expects that its existing balance of cash and cash equivalents as of December 31, 2024, combined with cash raised in the first quarter of 2025 in connection with its December 2024 ATM with OpCo and February 2025 stock offering with ThinkEquity, is not sufficient to fund operations for the period through one year after the date of this filing and therefore management has concluded that substantial doubt exists about the Company’s ability to continue as a going concern. Management’s plans to mitigate this risk include raising additional capital through equity financings, debt or other potential alternatives. Management’s plans may also include the deferral of certain operating expenses unless and until additional capital is received. However, there can be no assurance that the Company will be successful in raising additional capital or that such capital, if available, will be on terms that are acceptable to the Company, or that the Company will be successful in deferring certain operating expenses. As such, management concluded that such plans do not alleviate the substantial doubt. If the Company is unable to raise sufficient additional capital or defer sufficient operating expenses, the Company may be compelled to reduce the scope of its operations.

The accompanying financial statements have been prepared on a going concern basis, which contemplates the realization of assets and satisfaction of liabilities in the normal course of business, and do not include any adjustments relating to recoverability and classification of recorded asset amounts or the amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern.

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(2) Summary of Significant Accounting Policies

(a) Basis of Presentation

The accompanying financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”). Any reference in these notes to applicable guidance is meant to refer to U.S. GAAP as found in the Accounting Standards Codification (“ASC”) and Accounting Standards Update (“ASU”) of the Financial Accounting Standards Board (“FASB”).

(b) Use of Estimates

In preparing the financial statements in conformity with GAAP, management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements, as well as the reported amounts of expenses during the reporting period. Due to the inherent uncertainty involved in making estimates, actual results reported in future periods may be affected by changes in these estimates. On an ongoing basis, the Company evaluates its estimates and assumptions. These estimates and assumptions include those used in the accounting for research and development contracts, including clinical trial accruals, common stock warrant liabilities, derivative liabilities and the accounting and fair value measurement of equity awards.

As of December 31, 2024, the Company viewed its operations and managed its business as one operating segment consistent with how the Company's chief operating decision-maker, the Company's Chief Executive Officer, makes decisions regarding resource allocation and assesses performance. As of December 31, 2024, substantially all of the Company's assets were located in the United States. Refer to Note 11 for additional information

(d) Basic and Diluted Net Income per Share

Basic net loss per share is determined using 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 stock options and warrants, which would result in the issuance of incremental shares of common stock. The computation of diluted net loss per shares does not include the conversion or exercise of securities that would have an anti-dilutive effect.

(e) Cash and Cash Equivalents

The Company considers all highly-liquid investments with original maturities of three months or less to be cash equivalents. Cash equivalents may include bank demand deposits and money market funds that invest primarily in certificates of deposit, commercial paper, and U.S. government agency securities and treasuries. The Company records interest income received on cash and cash equivalents to other income (expense), net in the statements of operations. The Company has significant cash balances at financial institutions which throughout the year regularly exceed the federally insured limit of $250,000. Any loss incurred or a lack of access to such funds could have a significant adverse effect on the Company’s financial condition, results of operations, and cash flows.

(f) Issuance Costs Associated with Equity Issuances

Issuance costs incurred in connection with the Company’s equity issuances, which primarily consist of direct incremental legal, printing, listing and accounting fees, are offset against proceeds received in the issuances and charged to additional paid-in capital in the period the equity issuance is completed. Issuance costs related to the Equity Line of Credit (“ELOC”) Purchase Agreement are expensed as incurred as prescribed by ASC 815.

(g) Derivative Liability

The Company evaluates all features contained in financing agreements to determine if there are any embedded derivatives that require separate accounting from the underlying agreement under ASC 815 – Derivatives and Hedging. An embedded derivative

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that requires separation is accounted for as a separate liability or asset from the host agreement. The separated embedded derivative is accounted for at fair market value, with changes in fair value recognized in the statements of operations within the other financing costs line item. The Company determined that certain features under the ELOC Purchase Agreement (See Note 7 — Stockholders’ Equity (Deficit)) collectively qualified as an embedded derivative. The derivative was accounted for separately from the underlying ELOC Purchase Agreement and is accounted for at fair value. As of December 31, 2024, the liability balance was zero because the ELOC facility had been exhausted and all shares from the equity line had been sold.

(h) Common Stock Warrants

On October 31, 2023, the Company completed an underwritten offering whereby the Company sold (i) 1,250,000 shares of common stock and (ii) warrants to purchase an aggregate of 1,250,000 shares of common stock at an exercise price of $9.00 per share (“Canaccord Warrants”). The warrants are liability classified as they contain certain cash settlement adjustment features that are outside of the Company’s control or not deemed to be indexed to the Company’s stock. The warrant liabilities are recorded at fair value regardless of the timing of the redemption feature, the redemption price, or the likelihood of redemption. These warrants are subject to re-measurement at each balance sheet date and any change in fair value is recognized as a component of change in fair value of warrant liability in the statements of operations. The Company will continue to adjust the liability for changes in fair value until the earlier of the exercise, expiration, or other settlement of the warrants. The warrants are classified as Level 3 liabilities.

(i) Research and Development

Research and development costs are either expensed as incurred, or recorded separately as a prepaid asset where expense is recognized when the service is performed. These costs are primarily comprised of personnel-related expenses and external research and development expenses incurred under arrangements with third parties, such as contract research organizations and consultants. At the end of each reporting period, the Company compares the payments made to each service provider to the estimated progress towards completion of the related project. Factors that the Company considers in preparing these estimates include the number of patients enrolled in studies, milestones achieved, and other criteria related to the efforts of its vendors. These estimates will be subject to change as additional information becomes available. Depending on the timing of payments to vendors and estimated services provided, the Company will record net prepaid or accrued expenses related to these costs. Prepaid clinical expenses represent valid future economic benefits based on the Company’s contracts with its vendors and are realized in the ordinary course of business.

(j) 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.

(k) Stock-Based Compensation

The Company accounts for its stock-based compensation awards in accordance with FASB ASC Topic 718, Compensation—Stock Compensation (“ASC 718”). The Company has issued stock-based compensation awards, including stock options. ASC 718 requires all stock-based payments, including grants of stock options, to be recognized in the financial statements based on their grant date fair values. The Company uses the Black-Scholes option-pricing model to determine the fair value of stock options granted. The Company recognizes forfeitures as they occur.

Expense related to stock-based compensation awards granted with service-based vesting conditions is recognized on a straight-line basis based on the grant date fair value over the associated service period of the award, which is generally the vesting term. Stock options have a contractual term of 10 years. Expense for stock-based compensation awards with performance-based vesting conditions is only recognized when the performance-based vesting condition is deemed probable to occur. Expense related to stock-based compensation awards are recorded in research and development expense or general and administrative expense based on the underlying function of the individual that was granted the stock-based compensation award.

Estimating the fair value of stock options requires the input of subjective assumptions, including the expected term of the stock option, stock price volatility, the risk-free interest rate, and expected dividends. The assumptions used in the Company’s Black-Scholes option-pricing model represent Management’s best estimates and involve a number of variables, uncertainties, assumptions,

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and the application of Management’s judgment, as they are inherently subjective. If any assumptions change, the Company’s stock-based compensation expense could be materially different in the future.

The assumptions used in the Company’s Black-Scholes option-pricing model for stock options are as follows:

Expected Term. As Annovis does not have sufficient historical exercise data to provide a reasonable basis upon which to estimate expected term, the expected term of employee stock options subject to service-based vesting conditions is determined using the “simplified” method, as prescribed in SEC’s Staff Accounting Bulletin No. 107, whereby the expected term equals the arithmetic average of the vesting term and the original contractual term of the stock option.

Expected Volatility. The expected volatility is based on historical volatilities of Annovis and similar entities within the Company’s industry for periods commensurate with the assumed expected term.

Expected Dividends. The expected dividend yield is 0% because Annovis has not historically paid, and does not expect for the foreseeable future to pay, a dividend on its common stock.

(l) Income Taxes

The Company provides for income taxes using the asset and liability approach. Deferred tax assets and liabilities are recorded based on the differences between the financial statement and tax bases of assets and liabilities and the tax rates in effect when these differences are expected to reverse. Deferred tax assets are reduced by a valuation allowance if, based on the weight of available evidence, it is more likely than not that some or all of the deferred tax assets will not be realized. As of December 31, 2024 and 2023, the Company had a full valuation allowance against its deferred tax assets.

The Company is subject to the provisions of ASC 740, Income Taxes, which prescribes a more likely-than-not threshold for the financial statement recognition of uncertain tax positions. ASC 740 clarifies the accounting for income taxes by prescribing a minimum recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. There are currently no open federal or state tax audits. The Company has not recorded any liability for uncertain tax positions as of December 31, 2024 or 2023.

(m) Recently Adopted Accounting Pronouncements

Effective January 1, 2024, the Company retrospectively adopted Accounting Standards Update (“ASU”) 2023-07, Segment Reporting(Topic 280): Improvements to Reportable Segment Disclosures (“ASU 2023-07”) on an annual basis, which requires public entities to disclose information about their reportable segments’ significant expenses and other segment items. ASU 2023-07 also requires public entities with a single reportable segment to apply the disclosure requirements in ASU 2023-07, as well as all existing segment disclosures and reconciliation requirements in FASB ASC Topic 280, Segment Reporting. This guidance is effective for fiscal years beginning after December 15, 2023 and interim periods within fiscal years beginning after December 15, 2024. See Note 11 for additional disclosures made as a result of adopting ASU 2023-07.

(n) Recent Accounting Pronouncements

In December 2023, the FASB issued ASU No. 2023-09, Income Taxes(Topic 740): Improvements to Income Tax Disclosures (“ASU 2023-09”), which improves income tax disclosures by requiring: (1) consistent categories and greater disaggregation of information in the rate reconciliation, and (2) income taxes paid disaggregated by jurisdiction. It also includes certain other amendments to improve the effectiveness of income tax disclosures. ASU 2023-09 is effective for annual periods beginning after December 15, 2024. Early adoption is permitted. The ASU indicates that all entities will apply the guidance prospectively with an option for retroactive application to each period presented in the financial statements. The Company has not determined the impact ASU 2023-09 may have on the Company’s financial statement disclosures, but it does not anticipate material impacts.

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(3) Fair Value Measurements

The Company measures certain assets and liabilities at fair value in accordance with ASC 820, Fair Value Measurements and Disclosures. ASC 820 defines fair value as the price that would be received to sell an asset or paid to transfer a liability (the exit price) in an orderly transaction between market participants at the measurement date. The guidance in ASC 820 outlines a valuation framework and creates a fair value hierarchy that serves to increase the consistency and comparability of fair value measurements and the related disclosures. In determining fair value, the Company maximizes the use of quoted prices and observable inputs. Observable inputs are inputs that market participants would use in pricing the asset or liability based on market data obtained from independent sources. The fair value hierarchy is broken down into three levels based on the source of inputs as follows:

Level 1—Valuations based on unadjusted quoted prices in active markets for identical assets or liabilities.

Level 2—Valuations based on observable inputs and quoted prices in active markets for similar assets and liabilities.

Level 3—Valuations based on unobservable inputs and models that are supported by little or no market activity.

The following tables provides the carrying value and fair value of certain financial assets and liabilities of the Company measured at fair value on a recurring basis as of December 31, 2024 and 2023:

Fair Value Measurement at

Carrying Value Level 1 Level 2 Level 3

Assets:

Liabilities:

Fair Value Measurement at

Carrying Value Level 1 Level 2 Level 3

Assets:

Liabilities:

The Company did not transfer any financial instruments into or out of Level 3 classification, during the year ended December 31, 2024 or 2023.

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(a) Canaccord Warrants

The common stock warrants issued in connection with the Company’s equity financing in November 2023 (“Canaccord Warrants”) were classified as liabilities at the time of issuance due to certain cash settlement adjustment features that are outside of the Company’s control or not deemed to be indexed to the Company’s stock. The Canaccord Warrant liability is remeasured each reporting period with the change in fair value recorded to other income (expense), net in the statements of operations until the warrants are exercised, expired, reclassified, or otherwise settled. From their date of issuance until the period ended June 30, 2024, the fair value of the Canaccord Warrants was estimated using a Monte Carlo simulation model, given the performance conditions outlined further below. However, during the quarter ended September 30, 2024, the Company determined that certain performance conditions could not be met and that going forward, their use as inputs for determining fair value was no longer appropriate. As such, after the period ended June 30, 2024, the fair value of the Canaccord Warrants is estimated using a Black-Scholes option-pricing model.

The estimated fair value of the Canaccord Warrants is determined using Level 3 inputs. Inherent in both a Monte Carlo simulation model and a Black-Scholes option-pricing model are assumptions related to expected stock-price volatility, expected life, risk-free interest rate and other inputs. The Company estimates the volatility of its warrants based on an implied asset volatility calculated and believed to be reasonable for the Company over the holding period remaining. The risk-free interest rate is based on the market yield of U.S. Treasuries over a term commensurate with the remaining term to expiration. Any changes in these assumptions can change the associated valuation significantly.

The following tables provide quantitative information regarding Level 3 fair value measurements inputs as of their respective measurement dates. The table for the year ending December 31, 2024 presents inputs used under a Black-Scholes option-pricing model. The table for the year ending December 31, 2023 presents inputs used under a Monte Carlo simulation model:

Exercise price $ 9.00 $ 9.00

Closing stock price $ 5.03 $ 18.70

Phase III data probability of success — % 60 %

Volatility 80 % 55 %

Term (time to expiration in years) 3.84 4.84

Redemption hurdle price $ — $ 14.25

Risk-free rate 4.3 % 3.9 %

The Canaccord Warrants were exercisable immediately at an exercise price of $9.00 per unit, and redeemable at the Company’s option, in whole or in part, at a redemption price equal to $0.001 per Warrant upon 30 days’ prior written notice, at any time after:

During the year ended December 31, 2024, the Company released topline data from its Phase 3 study in patients with Parkinson’s Disease. It was determined that based on the data, both criteria required for redemption of the Canaccord Warrants were not met. As such, the probability of success and redemption hurdle price inputs were no longer used in the Black-Scholes option-pricing model outlined above for the year ending December 31, 2024.

The Warrants were exercisable immediately and will expire on November 2, 2028, five years from the date of issuance. See Note 7 – Stockholders’ Equity (Deficit) for additional background.

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(4) Prepaid Expenses and Other Current Assets

Prepaid expenses and other current assets consisted of the following:

As of December 31,

Total prepaid expenses and other current assets $ 3,373,717 $ 4,453,544

(5) Accrued Expenses

Accrued expenses consisted of the following:

As of December 31,

(6) Commitments and Contingencies

(a) Research & Development

The Company has entered contracts with CROs and CMOs related the Company’s clinical trials. The contracts require upfront payments, milestone payments, and pass-through cost reimbursements, to be made. While the contracts are generally cancellable with (written) notice, the Company is obligated to make payments for services rendered through the termination date of the project with any applicable CRO/CMO.

(b) Leases

The Company maintains one short-term lease associated with occupying its corporate headquarters. Total rental expense was $0.1 million and $0.1 million for the years ended December 31, 2024 and 2023, respectively.

The Company has an agreement with its Chief Executive Officer that provides for severance payments upon termination of the agreement by the Company for any reason other than for cause, death or disability or by the employee for good reason. The maximum aggregate severance payments under the agreement was estimated to be $1.1 million at December 31, 2024.

(d) Litigation

The Company is subject, from time to time, to claims by third parties under various legal disputes. The defense of such claims, or any adverse outcome relating to any such claims, could have a material adverse effect on the Company’s liquidity, financial condition and cash flows.

For both the years ended December 31, 2024 and December 31, 2023 the Company did not have any pending legal actions deemed to be material.

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(7) Stockholders’ Equity (Deficit)

(a) Overview

The Company’s Amended and Restated Certificate of Incorporation was adopted on January 31, 2020, in conjunction with the closing of the Company’s initial public offering (the “IPO”) and amended on June 15, 2023 to increase the authorized number of shares. Currently, there are two classes of stock authorized which are designated, respectively, common stock and preferred stock. The total number of shares which the Company is authorized to issue is 72,000,000, each with a par value of $0.0001 per share. Of these shares, 70,000,000 is designated as common stock and 2,000,000 is preferred stock.

(b) Common Stock

Dividends

Subject to the rights of holders of all classes of Company stock outstanding having rights that are senior to or equivalent to holders of common stock, the holders of the common stock are entitled to receive dividends when and as declared by the Board of Directors.

Liquidation

Subject to the rights of holders of all classes of stock outstanding having rights that are senior to or equivalent to holders of common stock as to liquidation, upon the liquidation, dissolution or winding up of the Company, the assets of the Company will be distributed to the holders of common stock.

Voting

The holders of common stock are entitled to one vote for each share of common stock held. There is no cumulative voting.

Preferred stock may be issued from time to time by the Board in one or more series. There was no preferred stock issued or outstanding as of December 31, 2024 or December 31, 2023.

(d) IPO Warrants

In conjunction with the closing of the Company’s Initial Public Offering (“IPO”), the Company granted its underwriters 0.1 million warrants to purchase shares of Company common stock (“IPO Warrants”) at an exercise price of $7.50 per share, which was 125% of the IPO price. The IPO Warrants have a five-year term and were exercisable as of January 29, 2021 and have been classified by the Company as a component of stockholders’ equity. At both December 31, 2024 and December 31, 2023, 2,400 of the IPO Warrants were outstanding. No IPO Warrants were exercised during the years ended December 31, 2024 or 2023.

(e) March 2023 ATM

On March 31, 2023, the Company, entered into an At the Market (“ATM”) Equity Offering Sales Agreement (the “Sales Agreement” or “March 2023 ATM”) with BofA Securities, Inc. (“BofA”) and ThinkEquity LLC (“ThinkEquity” and, together with BofA, the “Sales Agents”), as sales agents, pursuant to which the Company could offer and sell, from time to time through the Sales Agents, shares of the Company’s common stock, par value $0.0001 per share (the “Common Stock”), having an aggregate offering price of up to $50.0 million.

On April 4, 2023, the Company delivered written notice to BofA and ThinkEquity to terminate the Sales Agreement, effective April 9, 2023. The Company was not subject to any termination penalties related to the termination of the Sales Agreement.

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Prior to termination of the Sales Agreement, the Company sold 0.7 million shares of Common Stock pursuant to the Sales Agreement at a price of $10.88 per share, for gross proceeds of $7.6 million before commissions. As a result of the termination of the Sales Agreement, the Company will not offer or sell any additional shares of Common Stock under the Sales Agreement.

(f) April 2023 Private Placement

On April 7, 2023, the Company sold 0.1 million shares of its common stock in a private placement to individual members of its Board of Directors and management at a price of $12.61 per share, for aggregate proceeds of $1.1 million.

(g) November 2023 Equity Offering and Warrant Issuance

On October 31, 2023, the Company entered into an underwritten offering with a Canaccord Genuity LLC whereby the Company sold (i) 1,250,000 shares of common stock and (ii) warrants (“Canaccord Warrants”) to purchase an aggregate of 1,250,000 shares of common stock at an exercise price of $9.00 per share. The offering closed on November, 2, 2023. The warrants were exercisable immediately on the date of issuance and will expire five years after the date of issuance. The Company received $6.8 million in net cash proceeds after deducting underwriter discount and fees, as well as other third-party costs. The Canaccord Warrants are liability classified as they contain certain cash settlement adjustment features that are outside of the Company’s control or not deemed to be indexed to the Company’s stock.

The following is a roll forward of the Common Stock Warrant Liability during the years ended December 31, 2023 and 2024, respectively:

Issuance of Canaccord Warrants $ 2,449,001

Change in fair value of warrant liabilities 11,837,200

Change in fair value of warrant liabilities (3,625,893)

(h) Warrant Summary

As of December 31, 2024, the Company had the following common stock warrants outstanding:

Outstanding Outstanding Exercise

December 31, Exercised or December 31, price per Expiration

Classification 2023 Granted Expired 2024 share date

(i) November 2023 Private Placement

On November 27, 2023, the Company sold 0.2 million shares of its common stock in a private placement to individual members of its Board of Directors and management at a price of $6.10 per share, for aggregate proceeds of $1.3 million.

(j) March 2024 Registered Direct Offerings

On March 15, 2024 and March 21, 2024, the Company entered into two separate securities purchase agreements with the same institutional investor. When aggregating the results of both purchase agreements, the Company issued 0.4 million shares for net proceeds of $3.9 million in registered direct offerings.

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(k) April 2024 ELOC Purchase Agreement

On April 25, 2024, the Company entered into an ELOC Purchase Agreement with an ELOC Purchaser, whereby we could offer and sell, from time to time at our sole discretion, and whereby the ELOC Purchaser committed to purchase, up to 2.0 million shares of shares of the Company’s common stock. The term of the agreement was until the expiration of the Company’s active S-3 Registration Statement, unless earlier terminated or exhausted. Due to certain pricing and settlement provisions, the ELOC Purchase Agreement qualified as a standby equity purchase agreement and included an embedded put option and embedded forward option. The Company therefore accounted for the ELOC Purchase Agreement as a derivative measured at fair value, with changes in the fair value recognized in the statements of operations within other financing costs. The Company initially recognized a derivative liability of $1.7 million related to the purchased put option at inception of the ELOC Purchase Agreement. The Company then expensed the difference between the discounted purchase price of the settled forward and the fair value of shares on the date of settlement as a noncash financing issuance cost. The Company recognized $1.3 million of noncash financing costs during the year ended December 31, 2024 related to the discounted purchase price of the settled forward and the underlying fair value of the shares issued.

Upon execution of the ELOC Purchase Agreement, the Company agreed to issue to the ELOC Purchaser 33,937 shares of Common Stock as commitment shares (the “Commitment Shares”). The fair value of the Commitment Shares was $0.5 million, which was expensed within other financing costs in the statements of operations during the year ended December 31, 2024. The Company also incurred issuance costs of $0.1 million, consisting of legal costs incurred in connection with the ELOC Purchase Agreement, which were expensed within other financing costs in the statements of operations during the year ended December 31, 2024. The ELOC Purchaser agreed that during the term of the Purchase Agreement, neither it nor any of its affiliates would engage in any short sales or hedging transactions involving the Company’s common stock.

Under the ELOC Purchase Agreement, on any business day (the “Purchase Date”), if the Company’s stock price is greater than or equal to $5.00 per share, the Company could direct the ELOC Purchaser to purchase common stock. The ELOC Purchaser’s committed obligation under any single Fixed Purchase could not exceed the lower of 25,000 shares of Common Stock or $250,000 (“Fixed Purchases”).

In addition, the Company could also direct the ELOC Purchaser, on any trading day in which the Company submitted a Fixed Purchase notice for the maximum amount allowed for such Fixed Purchase, to purchase an additional amount of the Company’s common stock (a “VWAP Purchase”). The ELOC Purchaser’s committed obligation under any single VWAP Purchase could not exceed a number of shares of Common Stock equal to the lesser of (i) 300% of the number of Shares directed by the Company to be purchased by the Investor pursuant to the corresponding Fixed Purchase Notice and (ii) 30% of the trading volume in the Company’s Common Stock on the NYSE during the applicable VWAP Purchase Period on the applicable VWAP Purchase Date (“VWAP Purchase Maximum Amount”).

The Company could also direct the ELOC Purchaser, on any trading day for which a VWAP Purchase had been completed and all of the shares had been placed, to purchase an additional amount of the Company’s common stock (an “Additional VWAP Purchase”). The ELOC Purchaser’s committed obligation under any single Additional VWAP Purchase was the lesser of (i) 300% of the number of Shares directed by the Company to be purchased by the Investor pursuant to the corresponding Fixed Purchase Notice and (ii) a number of Shares equal to (A) the Additional VWAP Purchase Share Percentage multiplied by (B) the trading volume of shares of Common Stock traded during the applicable Additional VWAP Purchase Period on the applicable Additional VWAP Purchase Date for such Additional VWAP Purchase (“Additional VWAP Purchase Maximum Amount”). The applicable pricing structure for each purchase type is outlined below:

The purchase price per share for Fixed Purchases (“Fixed Purchase Price”) equals 95% of the lesser of:

The purchase price per share for VWAP Purchases (“VWAP Purchase Price”) equals 95% of the lesser of:

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The purchase price per share for Additional VWAP Purchases (“Additional VWAP Purchase Price”) equals 95% of the lesser of:

In addition to the commitment shares referenced above, a total of 2.0 million shares of the Company’s common stock were issued under the ELOC Purchase Agreement during the year ended December 31, 2024, for net proceeds of $14.6 million. The facility was fully exhausted during 2024 and no further shares are available to issue as of December 31, 2024.

The following is a roll-forward of the ELOC derivative liability from date of execution to December 31, 2024:

Settlements and changes in fair value of ELOC derivative liability (1,192,500)

Settlements and changes in fair value of ELOC derivative liability (62,500)

Settlements and changes in fair value of ELOC derivative liability (442,500)

Fair value at December 31, 2024 —

(l) December 2024 ATM

On December 11, 2024, the Company entered into an Equity Distribution Agreement (“Distribution Agreement”) with Oppenheimer & Co. Inc., (“OpCo”) relating to the sale of shares of the Company’s common stock. In accordance with the terms of the Distribution Agreement, The Company may offer and sell shares of its common stock having an aggregate offering price of up to $50.0 million from time to time through or to OpCo, acting as agent or principal.

During the year-ended December 31, 2024, the Company sold 26,788 million shares of common stock pursuant to the Distribution Agreement for gross proceeds of $0.2 million before commissions.

(8) Stock-Based Compensation

Effective upon the closing of the Company’s IPO on January 31, 2020, the Company’s 2019 Equity Incentive Plan (the “2019 Plan”) became effective, succeeding the Company’s previous equity incentive plan. No new options may be issued under the previous plan, although shares subject to grants which are cancelled or forfeited will again be available under the 2019 Plan. Effective June 12, 2024, the 2019 Plan was amended to increase the number of shares authorized from 2,000,000 to 3,000,000. As of December 31, 2024, the 2019 Plan contained 354,299 shares available for future grants.

The 2019 Plan provides for grants to employees, members of the Board, consultants and advisors to the Company, in the form of stock options, stock awards and other equity-based awards. The amount and terms of grants are determined by the Board, except when they are below previously approved thresholds allowing the Company’s CEO to grant awards on a discretionary basis. The Company’s stock options generally carry a maximum term of 10 years after date of grant and are exercisable in cash, or as otherwise determined by the Board.

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Stock-based compensation expense in the statements of operations, including the fair value of stock awards to consultants and advisors for services rendered, for the years ended December 31, 2024 and 2023 was as follows:

Year Ended

December 31,

The following table summarizes the Company’s stock option activity:

Weighted

Average

Remaining Aggregate

Weighted Contractual Intrinsic

Number of Average Term Value

Shares Exercise Price (Years) (In Thousands)

The weighted average grant date fair value of stock options granted during the years ended December 31, 2024 and 2023 was $5.16 and $7.39, respectively. During the year ended December 31, 2024 the Company received no cash proceeds from the exercises of stock options. For the year ended December 31, 2023, the Company received $8,385 cash proceeds from the exercises of stock options. As of December 31, 2024, there was unrecognized stock-based compensation expense related to unvested stock option awards, related to service-based options of $2.4 million, which will be recognized over a remaining weighted-average period of 1.0 years.

During the years ended December 31, 2024 and 2023, the Company issued 870,494 and 367,329 options, respectively. Under the grant agreements for the 2024 stock option grants, 382,282 of the options vested immediately and 468,212 of the options vest in substantially equal quarterly installments over two years from the date of grant. There are also 20,000 stock option grants that vest as consulting services are performed and awards are earned. Under the grant agreements for the 2023 stock option grants, 94,624 of the options vested immediately, and 272,705 of the options vest in substantially equal quarterly installments over two years from the date of grant. All of the options have a 10-year term prior to expiration.

The assumptions utilized in the fair value calculations for stock options granted during the years ended December 31, 2024 and 2023, respectively, were as follows:

Year Ended Year Ended

Weighted average risk-free interest rate 4.18 % 4.17 %

Weighted average expected option term (years) 5.3 5.5

Weighted average expected volatility 123 % 120 %

Expected dividend yield — —

Related Party Transaction

During the year ended December 31, 2024, the Company issued 20,000 non-qualified stock options to a member of its Board of Directors in consideration for the member’s agreement to serve as a consultant to the Company. The options were issued in one tranche, at a grant price of $5.27 per share. 8,069 of the awards became vested during the year ended December 31, 2024.

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(9) Net Loss Per Share

The Company has reported a net loss for the years ended December 31, 2024 and 2023, and the basic and diluted net loss per share attributable to common stockholders are the same for both years because all warrants and stock options have been excluded from the computation of diluted weighted-average shares outstanding because such securities would have an antidilutive impact.

The following table sets forth the computation of basic and diluted net loss per common share for the years ended December 31, 2024 and 2023:

Year Ended

December 31,

Net loss per share – Basic:

Numerator

Denominator

ANVS US Equity

ANVS · 10-K · period ended 2024-12-31

Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

Item 7A. Quantitative and Qualitative Disclosures About Market Risk.

Item 8. Financial Statements and Supplementary Data.

Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure.

Item 9A. Controls and Procedures.

Item 9B. Other Information.

Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections.

Item 10. Directors, Executive Officers and Corporate Governance.

Item 11. Executive Compensation.

Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.

Item 13. Certain Relationships and Related Transactions and Director Independence.

Item 14. Principal Accountant Fees and Services.

Item 15. Exhibits and Financial Statement Schedules.

Item 16. Form 10-K Summary.

ANVS US Equity☆

ANVS · 10-K · period ended 2024-12-31

Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

Item 7A. Quantitative and Qualitative Disclosures About Market Risk.

Item 8. Financial Statements and Supplementary Data.

Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure.

Item 9A. Controls and Procedures.

Item 9B. Other Information.

Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections.

Item 10. Directors, Executive Officers and Corporate Governance.

Item 11. Executive Compensation.

Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.

Item 13. Certain Relationships and Related Transactions and Director Independence.

Item 14. Principal Accountant Fees and Services.

Item 15. Exhibits and Financial Statement Schedules.

Item 16. Form 10-K Summary.

ANVS US Equity