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Redeemable Preferred Stock and Stockholders' Deficit | 3 Months Ended
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Mar. 31, 2026
Stockholders' Equity Note [Abstract] |
Redeemable Preferred Stock and Stockholders' Deficit | NOTE 6 — REDEEMABLE PREFERRED STOCK AND STOCKHOLDERS’ DEFICIT Private Placement of Series A Preferred Stock and Warrants On October 21, 2025, the Company entered into a securities purchase agreement (the “Securities Purchase Agreement”) with certain accredited investors, pursuant to which the Company agreed to issue and sell, in a private placement (the “Private Placement”), (i) 80,000 shares of Series A Convertible Preferred Stock, par value $0.0001 per share (“Series A Preferred Stock”), at a purchase price of $1,000 per share, (ii) tranche A warrants (the “Preferred Tranche A Warrants”) to acquire shares of Series A Preferred Stock (the “Tranche A Warrant Shares”) and (iii) tranche B warrants (the “Preferred Tranche B Warrants,” together with the Preferred Tranche A Warrants, the “Preferred Warrants”) to acquire shares of Series A Preferred Stock for an aggregate offering price of up to $200 million. The Private Placement closed on October 23, 2025 (the “Closing Date”), pursuant to which the Company received aggregate gross proceeds of $80.0 million, before deducting placement agent fees, financial advisor fees, and other offering expenses. The Company incurred approximately $5.7 million in offering costs, including deferred issuance costs included within accounts payable as of March 31, 2026, resulting in net proceeds of approximately $74.3 million. $3.1 million of the offering costs were allocated to the Preferred Warrants, which are classified as liabilities, and expensed as incurred. $2.6 million of the offering costs attributable to the issuance of Series A Preferred Stock were recorded as a reduction of the carrying value of the Preferred Stock. On the Closing Date, the Company recorded a loss on issuance of convertible preferred stock and warrants of $321.5 million, reflecting the initial fair values of the Series A Preferred Stock of $184.6 million and the warrants of $216.9 million, offset by $80.0 million in gross proceeds received from investors. The value of the Series A Preferred Stock at issuance was determined based on the contractual conversion ratio multiplied by the closing price of the Company’s common stock on the Closing Date. See Note 7 for additional information regarding the warrant liability and related valuation assumptions. On December 23, 2025, following the announcement of the stockholders’ approval of the issuance of common stock issuable upon conversion of the Series A Preferred Stock, the Company issued an aggregate of 36,280,992 shares of common stock upon the automatic conversion of an aggregate of 76,704 shares of Series A Preferred Stock in accordance with the terms set forth in the Certificate of Designation of Preferences, Rights and Limitations of the Series A Convertible Voting Preferred Stock (the “Certificate of Designation”). As of March 31, 2026, an aggregate of 3,296 shares of Series A Preferred Stock remain outstanding, which are convertible into an aggregate of 1,559,008 shares of common stock, subject to the limitations on conversion set forth in the Certificate of Designation. Each share of Series A Preferred Stock automatically converted into the number of shares of common stock at the conversion price of $2.11 per share, rounded down to the nearest whole share, subject to the terms and limitations contained in the Certificate of Designation, including that shares of Series A Preferred Stock shall not be convertible if the conversion would result in a holder beneficially owning more than 9.99% (the “Beneficial Ownership Limitation”) of the Company’s outstanding shares of common stock as of the applicable conversion date. By written notice to the Company, the holder may from time to time increase or decrease the Beneficial Ownership Limitation to any other percentage not in excess of 19.99% specified in such notice; provided, that any increase in the Beneficial Ownership Limitation will not be effective until the 61 st day after such notice is delivered to the Company. Each Preferred Tranche A Warrant has an exercise price of $1,000 and may only be exercised for cash. The Preferred Tranche A Warrants are immediately exercisable upon issuance for an aggregate of 80,000 shares of Series A Preferred Stock for an aggregate cash exercise price of up to $80 million until the tenth day following the date of the Company’s public announcement that it has achieved, on a statistically significant basis, the primary endpoint of its Phase 3 confirmatory trial of roluperidone in schizophrenia at the 12-week timepoint (the “Milestone Event”). As of March 31, 2026, an aggregate of 78,800 Preferred Tranche A Warrants remaining outstanding. Each Preferred Tranche B Warrant has an exercise price of $1,000 and may be exercised by a cashless exercise. The Preferred Tranche B Warrants are exercisable for an aggregate of 40,000 shares of Series A Preferred Stock for an aggregate cash exercise price of up to $40 million commencing on the earlier of (i) the Company’s public announcement of the Milestone Event and (ii) the three year anniversary of the Closing Date. The Preferred Tranche B Warrants will expire on the four (4)-year anniversary of the Closing Date. As of March 31, 2026, an aggregate of 40,000 Preferred Tranche B Warrants remaining outstanding. The Preferred Warrants are subject to forfeiture in the event the applicable holder engages in any Short Sales (as defined in the Securities Purchase Agreement) involving the Company’s securities during the 48-months period following the Closing Date. In addition, the shares of common stock and/or Series A Preferred Stock, as applicable, underlying the Preferred Tranche B Warrants are subject to reduction if the applicable holder sells or transfers any shares of Series A Preferred Stock or shares of common stock received upon conversion of the Series A Preferred Stock before the Exercisability Date (as defined therein), except to affiliates for no consideration. Pursuant to the Certificate of Designation, no fractional shares or scrip representing fractional shares of common stock shall be issued upon the conversion of the Series A Preferred Stock. All fractional shares shall be rounded down to the nearest whole shares of common stock. Holders of Series A Preferred Stock are not entitled to receive any dividends except to the extent that dividends are paid on the Company’s common stock. If dividends are paid on shares of common stock, holders of Series A Preferred Stock are entitled to participate in such dividends on an as-converted basis. Upon the liquidation, dissolution, or winding up of the Company, each holder of Series A Preferred Stock will participate pari passu with any distribution of proceeds to holders of common stock. Holders of the Series A Preferred Stock are entitled to vote together with the holders of common stock on an as-if-converted basis on all matters submitted to a vote of stockholders. Pursuant to the Securities Purchase Agreement, the Company filed a registration statement on Form S-3 (File No. 333-292410), which was declared effective by the SEC on January 6, 2026, covering the resale of the Registrable Securities (as such term is defined in the Securities Purchase Agreement). The Company has agreed to take all steps necessary to keep such registration statement effective at all times until all Registrable Shares have been resold, or there remains no Registrable Shares. Series A Convertible Preferred Stock In accordance with ASC 480, Distinguishing Liabilities from Equity, and ASC 815, Derivatives and Hedging, the Series A Preferred Stock was classified as temporary equity. Pursuant to the Certificate of Designation, in the event of any voluntary or involuntary liquidation, dissolution or winding up of the Company, including a change of control transaction, or Deemed Liquidation Event (any such event, a “Liquidation”), the assets of the Company available for distribution to its stockholders shall be distributed among the holders of the shares of Series A Preferred Stock and Common Stock, pro rata based on the number of shares held by each such holder, treating for this purpose all shares of Series A Preferred Stock as if they had been converted to Common Stock pursuant to the terms of the Certificate of Designation immediately prior to such Liquidation, without regard to any limitations on conversion set forth in the Certificate of Designation or otherwise. However, there will be no Liquidation Preference on the shares of Series A Preferred Stock. Warrant Exercises In March 2026, 1,200 Preferred Tranche A Warrants were exercised at an exercise price of $1,000 per share, resulting in total proceeds of $1,200,000 to the Company. The warrants were converted into Series A Preferred Stock, which were immediately converted into 567,600 shares of the Company’s common stock. Following these exercises, 78,800 Preferred Tranche A Warrants remain outstanding. Preferred Stock The Company is authorized to issue 100,000,000 shares of preferred stock, $0.0001 par value per share, including 200,000 shares of Series A Preferred Stock, $0.0001 par value per share. No preferred shares were issued or outstanding as of March 31, 2026 and December 31, 2025, other than shares of the Series A Preferred Stock.

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