Chordia Therapeutics Inc.

Pharmaceutical research and development requires substantial investment and long timeframes, and may be delayed or discontinued due to insufficient efficacy in clinical trials, serious adverse events, or failure to obtain regulatory approval. In particular, for rogocekib, three fatal cases have occurred for which a causal relationship with administration cannot be ruled out, and if serious adverse events continue, development discontinuation may result. If development delays or additional trials become necessary, unplanned additional financing would be required, which itself entails funding uncertainty.

Following the termination in April 2025 of the license agreement with Ono Pharmaceutical concerning the MALT1 inhibitor CTX-177, the Company currently holds no license agreement from which milestone income can be expected. The Company's business revenue depends on upfront payments, milestone income, and royalty income from license agreements to be concluded in the future; if the Company does not receive the anticipated valuation from pharmaceutical companies or is unable to out-license on the expected timeline, this may have a material impact on its business results and financial condition. Regarding the existing license agreement with Takeda Pharmaceutical, the risk of contract termination due to breach clauses or similar provisions also remains.

In the CLK inhibitor space, Biosplice Therapeutics and BlossomHills Therapeutics; in the MALT1 inhibitor space, AbbVie, Schrödinger, and Novartis; and in the CDK12 inhibitor space, Carrick Therapeutics and others are conducting clinical trials, resulting in an intense competitive environment. If competing products are marketed ahead of the Company's pipeline, this could reduce the competitiveness of the Company's pipeline, delay subject enrollment, and create risk of license agreement termination. Announcements of safety concerns by competitors may also affect the development plans for the Company's pipeline.

The Company's headquarters function is located within an open facility inside Shonan Health Innovation Park, creating a risk that important information may be leaked due to intentional acts by third parties or cyberattacks. If confidential information at the research and development stage or personal information is leaked, this could adversely affect research and development activities, impair intellectual property rights, and damage the Company's social credibility. While the Company seeks to reduce this risk through the establishment of information security management regulations and outsourcing to external experts, complete prevention is difficult.

The Company has recorded continuous operating losses and negative operating cash flow, and there exist material events that raise substantial doubt about the going concern assumption. As of the end of FY2025 (ending August 2025), cash and deposits stood at ¥2,548 million, and operating cash flow was ¥(1,836) million; negative operating cash flow is expected to continue in the following period and beyond. In September 2025, the Company issued the 9th, 10th, and 11th series of stock acquisition rights through a third-party allotment to secure funds; however, if out-licensing activities or fundraising do not proceed as anticipated, material concerns regarding the continuation of the business may arise.

The research, development, manufacturing, and sale of pharmaceuticals must comply with pharmaceutical regulations in each country, including GLP, GMP, and GCP, and regulatory revisions or additional guidelines may require further organizational adjustments. If the Company is unable to appropriately respond to regulations, or if substantial costs are required, this could lead to delays or failure to obtain regulatory approval, which may have a material impact on business results. The Company seeks to manage this risk through prior consultation with regulatory authorities such as the PMDA and with experts.

Regarding the substance patent for the CLK inhibitor (PCT/JP2017/016717), there were deficiencies in part of the patent specification at the time of filing, and it cannot be ruled out that opposition proceedings or invalidation trials may be requested in the future based on these deficiencies. There is also no guarantee that all pending patent applications will be registered, and invalidation of patent rights could result in loss of exclusivity. If patent infringement litigation or rights claims are brought by third parties, this may require substantial effort, time, and expense, and could have a material impact on business results and financial condition.

As of the end of August 2025, against 68,988,800 shares issued, the number of potential shares from stock acquisition rights was 5,727,000 (potential dilution rate of 7.7%), which would dilute the per-share value upon exercise. Furthermore, in September 2025, the Company issued additional stock acquisition rights including exercise price adjustment provisions, and further capital increases for fundraising are expected going forward. In addition, venture capital firms hold 38.6% of issued shares, and there is a risk of share price decline due to sales timed to fund redemption schedules.

In the United States, the Inflation Reduction Act (IRA) of 2022 granted the federal government authority to set Medicare drug prices, and in May 2025, an executive order regarding the introduction of Most Favored Nation (MFN) pricing was issued. In Japan, periodic drug price reductions and policies promoting the use of generic drugs continue, and there is a possibility that the sales prices or drug prices anticipated by the Company will not be approved. These changes in healthcare insurance systems could significantly impair future royalty income and business viability.

As of the end of August 2025, the Company is a small organization with 6 directors and 20 employees, with high dependence on the founder and Representative Director Hiroshi Miyake and each division head. If key officers or employees become unable to perform their duties, complete coverage is difficult despite the establishment of a business continuity plan (BCP) and succession arrangements, which may have a material impact on business results and financial condition. If the Company is unable to secure and retain excellent research and development personnel and experts as planned, this may also affect the business.