As filed with the Securities and Exchange Commission on September 28, 2023

Registration No. 333-   

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM S-4

REGISTRATION STATEMENT

UNDER

THE SECURITIES ACT OF 1933

ZEVRA THERAPEUTICS, INC.

(Exact name of registrant as specified in its charter)

1180 Celebration Boulevard, Suite 103 Celebration, FL 34747

(321) 939-3416

(Address, including zip code, and telephone number, including area code, of registrant’s principal executive offices)

R. LaDuane Clifton, CPA

Chief Financial Officer, Secretary and Treasurer

Zevra Therapeutics, Inc.

1180 Celebration Boulevard, Suite 103

Celebration, FL 34747

(321) 939-3416

(Name, address, including zip code, and telephone number, including area code, of agent for service)

Copies to:

Approximate date of commencement of proposed sale to the public: As soon as practicable after this registration statement becomes effective and upon completion of the transactions described in the enclosed prospectus.

If the securities being registered on this Form are being offered in connection with the formation of a holding company and there is compliance with General Instruction G, check the following box. ☐

If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ☐

If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 7(a)(2)(B) of the Securities Act. ☐

If applicable, place an X in the box to designate the appropriate rule provision relied upon in conducting this transaction:

Exchange Act Rule 13e-4(i) (Cross-Border Issuer Tender Offer) ☐

Exchange Act Rule 14d-1(d) (Cross-Border Third-Party Tender Offer) ☐

The registrant hereby amends this Registration Statement on such date or dates as may be necessary to delay its effective date until the registrant shall file a further amendment which specifically states that this Registration Statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933 or until this Registration Statement shall become effective on such date as the Commission, acting pursuant to said Section 8(a), may determine.

The information in this proxy statement/prospectus is not complete and may be changed. A registration statement relating to the securities described in this proxy statement/prospectus has been filed with the Securities and Exchange Commission. These securities may not be sold until the registration statement filed with the Securities and Exchange Commission is effective. This proxy statement/prospectus is not an offer to sell and it is not soliciting an offer to buy these securities in any jurisdiction where the offer or sale is not permitted.

PRELIMINARY—SUBJECT TO COMPLETION—DATED September 28, 2023

ACER THERAPEUTICS INC.

One Gateway Center, Suite 356

300 Washington Street

Newton, Massachusetts 02458

[•], 2023

PROPOSED MERGER—YOUR VOTE IS VERY IMPORTANT

To the Stockholders of Acer Therapeutics Inc.:

You are cordially invited to attend a special meeting of stockholders (the “Acer Special Meeting”) of Acer Therapeutics Inc., a Delaware corporation (“Acer”), to be held on [●], 2023, at [●], Eastern Time. The Acer Special Meeting will be a virtual meeting conducted via live audio webcast to provide a safe and convenient experience for our stockholders. You will be able to attend the Acer Special Meeting via the Internet at [●].

At the Acer Special Meeting, you will be asked to consider and vote on a proposal to adopt the Agreement and Plan of Merger (as it may be amended from time to time, the “Merger Agreement”), dated August 30, 2023, by and among Zevra Therapeutics, Inc., a Delaware corporation (“Zevra”), Aspen Z Merger Sub, Inc., a Delaware corporation and a direct wholly-owned subsidiary of Zevra (“Merger Sub”), and Acer. Upon satisfaction or waiver of the conditions to the closing set forth in the Merger Agreement, Merger Sub will, at the closing (the “Closing” and the date on which the Closing occurs, the “Closing Date”), merge with and into Acer (the “Merger”), and Acer will become a wholly-owned subsidiary of Zevra upon the filing of the certificate of merger with the Delaware Secretary of State (the “Effective Time”). At the Acer Special Meeting, you will also be asked to consider and vote on a non-binding, advisory proposal to approve compensation that will or may become payable to Acer’s named executive officers in connection with the Merger and a proposal for the adjournment of the Acer Special Meeting, if necessary or appropriate, in order to solicit additional votes to approve the adoption of the Merger Agreement.

If the Merger is completed, you will be entitled to receive (A) 0.1210 validly issued, fully paid and non-assessable shares of Zevra Common Stock, $0.0001 par value per share (“Zevra Common Stock”), and (B) one non-transferable contingent value right, which will represent the right to receive one or more contingent payments, if any, upon the achievement of certain milestones, subject to and in accordance with the terms of the Contingent Value Rights Agreement (the “CVR Agreement”) (as described in the enclosed proxy statement/prospectus in the section titled “Agreements Related to the Merger—The Contingent Value Rights Agreement” beginning on page 135) for each share of Acer Common Stock, $0.0001 par value per share (“Acer Common Stock”), you own immediately prior to the Effective Time (other than certain excluded shares as defined in the Merger Agreement). On August 30, 2023, the last trading day before the public announcement of the signing of the Merger Agreement, the closing sale price per share of Zevra Common Stock on the Nasdaq Global Select Market was $5.30. Based on the closing price per share of Zevra Common Stock on the Nasdaq Global Select Market on September 25, 2023 of $4.79, and based on the exchange ratio used in the Merger, the Stock Consideration (as defined below) represented $0.58 in market value for each share of Acer Common Stock. Based on the number of shares of Zevra Common Stock and Acer Common Stock outstanding on September 25, 2023, upon completion of the Merger, it is estimated that continuing

Zevra shareholders will own approximately 9.24% of the issued and outstanding Zevra Common Stock, and former Acer Stockholders will own approximately 7.6% of the issued and outstanding Zevra Common Stock.

The board of directors of Acer (the “Acer Board”), after considering the factors more fully described in the enclosed proxy statement/prospectus, has unanimously (1) determined that the Merger Agreement and the transactions contemplated thereby are advisable and in the best interests of Acer and its stockholders; and (2) approved and adopted the Merger Agreement. The Acer Board recommends that you vote (1) “FOR” the adoption of the Merger Agreement; (2) “FOR” the adjournment of the Acer Special Meeting, if necessary or appropriate, in order to solicit additional votes to approve the adoption of the Merger Agreement; and (3) “FOR” the non-binding, advisory vote on the compensation that will or may become payable to Acer’s named executive officers in connection with the Merger.

The enclosed proxy statement/prospectus provides detailed information about the Acer Special Meeting, the Merger Agreement and the Merger. A copy of the Merger Agreement is attached as Appendix A to the proxy statement/prospectus. The proxy statement/prospectus also describes the actions and determinations of the Acer Board in connection with its evaluation of the Merger Agreement and the Merger. We encourage you to read the proxy statement/prospectus and its appendices, including all documents incorporated by reference into the enclosed proxy statement/prospectus, carefully and in their entirety, as they contain important information.

Only stockholders who owned Acer Common Stock at the close of business on [●], 2023 can vote at the Acer Special Meeting or any adjournments or postponements that may take place. All stockholders are cordially invited to attend the virtual meeting. However, to assure your representation at the meeting, you are urged to mark, sign and return the enclosed proxy as promptly as possible in the postage-prepaid envelope for that purpose or vote by Internet or by voting instruction form. Your stock will be voted in accordance with the instructions you have given. Any stockholder attending the virtual meeting may vote electronically even if he or she has previously returned a proxy. Please note, however, that if your shares are held of record by a broker, bank or other nominee and you wish to attend and vote at the meeting, you must obtain from the record holder a legal proxy issued in your name.

If you hold your shares in “street name,” you should instruct your bank, broker or other nominee how to vote your shares in accordance with the voting instruction form that you will receive from your bank, broker or other nominee. Your bank, broker or other nominee cannot vote on any of the proposals, including the proposal to adopt the Merger Agreement, without your instructions.

Acer Common Stock is listed on the Nasdaq Capital Market under the symbol “ACER”. Zevra Common Stock is listed on the Nasdaq Global Select Market under the symbol “ZVRA”. We urge you to obtain current market quotations for the shares of common stock of Acer and Zevra to have the most current information.

Your vote is very important, regardless of the number of shares that you own. We cannot complete the Merger unless the proposal to adopt the Merger Agreement (the “Merger Proposal”) is approved by the affirmative vote of the holders of a majority of the shares of Acer Common Stock outstanding as of the Record Date entitled to vote on the Merger Proposal. Information about the Acer Special Meeting, the Merger and the other business to be considered by Acer Stockholders at the Acer Special Meeting is contained in the enclosed proxy statement/prospectus.

We urge you to read this proxy statement/prospectus carefully. You should also carefully consider the risks that are described in the section titled “Risk Factors” beginning on page 19.

If you have any questions or need assistance voting your shares, please contact Acer’s proxy solicitor Advantage Proxy, by calling (877) 870-8565 (toll free).

On behalf of the Acer Board, I thank you for your support and appreciate your consideration of this matter.

Sincerely,

/s/ Chris Schelling

Chris Schelling

Founder, President and Chief Executive Officer

Acer Therapeutics Inc.

Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities, or passed upon the adequacy or accuracy of this proxy statement/prospectus. Any representation to the contrary is a criminal offense.

This proxy statement/prospectus is dated [●], 2023 and, together with the enclosed form of proxy card, is first being mailed to stockholders on or about [●], 2023.

ACER THERAPEUTICS INC.

One Gateway Center, Suite 356

300 Washington Street

Newton, Massachusetts 02458

NOTICE OF SPECIAL MEETING OF STOCKHOLDERS

TO BE HELD ON [●], 2023

Notice is hereby given that a special meeting of stockholders (the “Acer Special Meeting”) of Acer Therapeutics Inc., a Delaware corporation (“Acer”), will be held on [●], 2023, at, [●] Eastern Time. The Acer Special Meeting will be a completely virtual meeting conducted via live audio webcast to provide a safe and convenient experience for our stockholders. You will be able to attend the Acer Special Meeting via the Internet at [●], at which you will be asked to consider and vote upon the following proposals:

1. Merger Proposal: To adopt the Agreement and Plan of Merger (as it may be amended from time to time, the “Merger Agreement”), dated August 30, 2023, by and among Zevra Therapeutics, Inc., a Delaware corporation (“Zevra”), Aspen Z Merger Sub, Inc., a Delaware corporation and a direct wholly-owned subsidiary of Zevra (“Merger Sub”), and Acer, pursuant to which, upon the satisfaction or waiver of the conditions to the closing set forth in the Merger Agreement, Merger Sub will merge with and into Acer (the “Merger”), with Acer surviving as a wholly-owned subsidiary of Zevra;

2. Adjournment Proposal: To adjourn the Acer Special Meeting, if necessary or appropriate, in order to solicit additional proxies if there are insufficient votes to adopt the Merger Agreement at the time of the Acer Special Meeting; and

3. Non-binding, advisory Merger-related compensation proposal: To approve, by non-binding, advisory vote, compensation that will or may become payable to Acer’s named executive officers in connection with the Merger.

The Acer Board has set [●], 2023 as the record date (“Record Date”) for the Acer Special Meeting. Only stockholders of record as of the close of business on the Record Date are entitled to notice of the Acer Special Meeting and to vote at the Acer Special Meeting or any adjournment, postponement or other delay thereof.

The Acer Board unanimously recommends that you vote (1) “FOR” the Merger Proposal; (2) “FOR” the Adjournment Proposal; and (3) “FOR” the non-binding, advisory Merger-related compensation proposal.

To assure your representation at the meeting, you are urged to mark, sign and return the enclosed proxy as promptly as possible in the postage-prepaid envelope for that purpose or vote by Internet or by voting instruction form. Your stock will be voted in accordance with the instructions you have given. Any stockholder attending the virtual meeting may vote electronically even if he or she has previously returned a proxy. Please note, however, that if your shares are held of record by a broker, bank or other nominee and you wish to attend and vote at the meeting, you must obtain from the record holder a legal proxy issued in your name. If you hold your shares in “street name,” you should instruct your bank, broker or other nominee how to vote your shares in accordance with the voting instruction form that you will receive from your bank, broker or other nominee. Your bank, broker or other nominee cannot vote on any of the proposals, including the proposal to adopt the Merger Agreement, without your instructions.

By Order of the Board of Directors,

/s/ Chris Schelling

Chris Schelling

Founder, President and Chief Executive Officer

[●], 2023

YOUR VOTE IS IMPORTANT

WHETHER OR NOT YOU PLAN TO ATTEND THE ACER SPECIAL MEETING, WE ENCOURAGE YOU TO SUBMIT YOUR PROXY AS PROMPTLY AS POSSIBLE (1) ELECTRONICALLY OVER THE INTERNET, OR (2) BY COMPLETING, SIGNING, DATING AND RETURNING THE ENCLOSED PROXY CARD BY MAIL IN THE POSTAGE-PAID ENVELOPE PROVIDED. YOU MAY REVOKE YOUR PROXY OR CHANGE YOUR VOTE AT ANY TIME BEFORE IT IS VOTED AT THE ACER SPECIAL MEETING.

If you hold your shares in “street name,” you should instruct your bank, broker or other nominee how to vote your shares in accordance with the voting instruction form that you will receive from your bank, broker or other nominee. Your bank, broker or other nominee cannot vote on any of the proposals, including the proposal to adopt the Merger Agreement, without your instructions.

If you fail to either (1) return your proxy card or (2) vote online or grant your proxy electronically over the Internet, your shares will not be counted for purposes of determining whether a quorum is present at the Acer Special Meeting and, if a quorum is present, will have the same effect as a vote “AGAINST” the proposal to adopt the Merger Agreement. Abstentions will have the same effect as a vote “AGAINST” the proposal to adopt the Merger Agreement.

We encourage you to read the accompanying proxy statement/prospectus and its appendices, including all documents incorporated by reference into the accompanying proxy statement/prospectus, carefully and in their entirety. If you have any questions concerning the Merger, the Acer Special Meeting or the accompanying proxy statement/prospectus, would like additional copies of the accompanying proxy statement/prospectus or need help voting your shares of Acer Common Stock, please contact Acer’s proxy solicitor, Advantage Proxy, at (877) 870-8565 (toll free).

ABOUT THIS PROXY STATEMENT/PROSPECTUS

This proxy statement/prospectus, which forms part of a registration statement on Form S-4 filed with the Securities and Exchange Commission (the “SEC”) by Zevra (File No. 333- ), constitutes a prospectus of Zevra under Section 5 of the Securities Act of 1933, as amended (the “Securities Act”), with respect to the shares of Zevra Common Stock, par value $0.0001 per share to be issued to Acer Stockholders pursuant to the Merger Agreement. This document also constitutes a notice of meeting and a proxy statement of Acer under Section 14(a) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), with respect to the Acer Special Meeting, at which Acer Stockholders will be asked to consider and vote on, among other proposals, a proposal to adopt the Merger Agreement.

You should rely only on the information contained in or incorporated by reference into this proxy statement/prospectus. No one has been authorized to provide you with information that is different from that contained in or incorporated by reference into this proxy statement/prospectus. This proxy statement/prospectus is dated [●], 2023, and you should not assume that the information contained in this proxy statement/prospectus is accurate as of any date other than the date hereof or any earlier date provided herein. Further, you should not assume that the information incorporated by reference into this proxy statement/prospectus is accurate as of any date other than the date of the incorporated document or any earlier date provided therein. Neither the mailing of this proxy statement/prospectus to Acer Stockholders nor the issuance by Zevra of Zevra Common Stock pursuant to the Merger Agreement will create any implication to the contrary.

This proxy statement/prospectus does not constitute an offer to sell, or a solicitation of an offer to buy, any securities, or the solicitation of a proxy, in any jurisdiction in which or from any person to whom it is unlawful to make any such offer or solicitation in such jurisdiction. Information contained in this proxy statement/prospectus regarding Zevra has been provided by Zevra and information contained in or incorporated by reference into this proxy statement/prospectus regarding Acer has been provided by Acer.

This proxy statement/prospectus incorporates by reference important business and financial information about Zevra from other documents that are not included in or delivered with this proxy statement/prospectus. This information is available to you without charge upon your request. You can obtain the documents incorporated by reference into this proxy statement/prospectus by requesting them in writing or by telephone from Zevra at the following address and telephone number:

Zevra Therapeutics, Inc.

1180 Celebration Boulevard, Suite 103

Celebration, FL 34747

Attn: Investor Relations

(321) 939-3416

In order to ensure timely delivery of these documents, you should make your request by [●], 2023, to receive them before the Acer Special Meeting.

If you have any questions about the Acer Special Meeting or need additional assistance in voting your shares, please contact Acer’s proxy solicitor Advantage Proxy, at (877) 870-8565 (toll free).

You can also obtain documents incorporated by reference into this proxy statement/prospectus through the website of the SEC at www.sec.gov. For a more detailed description of the information incorporated by reference into this proxy statement/prospectus and how you may obtain it, see “Where You Can Find More Information” beginning on page 233.

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TABLE OF CONTENTS

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QUESTIONS AND ANSWERS ABOUT THE ACER SPECIAL MEETING AND THE MERGER

The following questions and answers briefly address some commonly asked questions that you, as a stockholder of Acer, may have in connection with the Merger, the Merger Agreement and the Acer Special Meeting. Zevra and Acer urge you to read carefully this entire proxy statement/prospectus, including the appendices and the documents incorporated by reference into this proxy statement/prospectus because the information in this section does not provide all the information that might be important to you. You may obtain the information incorporated by reference in this proxy statement/prospectus without charge by following the instructions under the section titled “Where You Can Find More Information” beginning on page 233.

This proxy statement/prospectus contains important information about Zevra, Acer, the Acer Special Meeting, the Merger Agreement and the Merger. This document constitutes both a proxy statement of Acer and a prospectus of Zevra. It is a proxy statement because the Acer Board is soliciting proxies from Acer Stockholders. It is a prospectus because Zevra will issue shares of Zevra Common Stock in exchange for outstanding shares of Acer Common Stock in connection with the Merger.

You are receiving this proxy statement/prospectus because you have been identified as a stockholder of Acer and may be entitled to vote at the upcoming Acer Special Meeting. You should read this proxy statement/prospectus carefully.

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There can be no assurance that any payment will be made under the CVRs. The amounts to be received in connection with the CVRs, and the timing of any payments of any such amounts, are contingent upon the occurrence of certain events which may or may not occur, and which may be outside the control of Zevra or Acer. There may be no cash consideration ultimately paid in respect of the CVRs. The CVRs will be non-transferable and, accordingly, will not be listed on any securities exchange.

See “Agreements Related to the Merger—The Contingent Value Rights Agreement” beginning on page 135. A form of the CVR Agreement is attached as Appendix B to this proxy statement/prospectus. Acer stockholders are encouraged to read the entire form of CVR Agreement carefully because it is the principal document governing the CVRs.

Approval of the Merger Proposal is required for completion of the Merger. Approval of the Adjournment Proposal or the non-binding, advisory Merger-related compensation proposal is not a condition to the obligations of Acer or Zevra to complete the Merger.

Adjournment Proposal: The affirmative vote of a majority of the shares of stock entitled to vote, present in person or represented by proxy at the Acer Special Meeting. An abstention, broker non-vote, or a failure to vote will have no effect on the outcome of this proposal.

Non-binding, advisory Merger-related compensation proposal: The affirmative vote of a majority of the shares of stock entitled to vote, present in person or represented by proxy at the Acer Special Meeting. An abstention, broker non-vote, or a failure to vote will have no effect on the outcome of this proposal. The vote with respect to the non-binding, advisory Merger-related compensation proposal is an advisory vote and will not be binding on Acer. If the Merger Agreement is adopted by the stockholders and the Merger is

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completed, the compensation that will or may become payable by Acer to its named executive officers in connection with the Merger may be paid to Acer’s named executive officers even if stockholders fail to approve the non-binding, advisory Merger-related compensation proposal.

Shares of Acer Common Stock held in “street name” through a bank, broker or other nominee with respect to which the beneficial owner fails to give voting instructions to the bank, broker or other nominee will not be deemed present for the purpose of determining whether a quorum exists at the Acer Special Meeting.

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Brokers, banks, or other nominees who hold shares of Acer Common Stock in “street name” have the authority to vote in their discretion on “routine” proposals when they have not received instructions on how to vote from the beneficial owner. However, brokers, banks and other nominees are not allowed to exercise their voting discretion on matters that are “non-routine” without specific instructions on how to vote from the beneficial owner. None of the proposals, including the Merger Proposal, that will be voted on at the Acer Special Meeting, is “routine.” Therefore, brokers, banks and other nominees do not have discretionary authority to vote on any of the proposals.

A broker non-vote would occur if (i) the holder of a share of Acer Common Stock held by a broker, bank or other nominee is present, in person or represented by proxy, at the Acer Special Meeting, (ii) the beneficial owner of that share has not instructed his, her or its broker, bank or other nominee on how to vote on a particular proposal, and (iii) the broker, bank or other nominee does not have discretionary voting power on such proposal. Since brokers, banks and other nominees do not have discretionary voting authority with respect to any of the proposals that will be voted on at the Acer Special Meeting, if a beneficial owner of shares of Acer Common Stock held in “street name” does not give voting instructions to the broker, bank or other nominee, then those shares will not be present in person or represented by proxy at the Acer Special Meeting. As a result, Acer does not expect there to be any broker non-votes at the Acer Special Meeting.

Because approval of the Merger Proposal requires the affirmative vote of holders of a majority of the shares of Acer Common Stock outstanding as of the Record Date entitled to vote on the Merger Proposal, if you fail to vote or you mark your proxy “abstain” with regard to the Merger Proposal, that will have the same effect as a vote “AGAINST” the Merger Proposal. Failure to vote, or voting “abstain,” will have no effect on the outcome of the vote on the Adjournment Proposal or the non-binding, advisory Merger-related compensation proposal.

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Registered Acer Stockholders may revoke their proxy and change their vote:

The most recent proxy card or Internet proxy is the one that is counted. Virtual attendance at the Acer Special Meeting by itself will not revoke a proxy unless an Acer Stockholder gives written notice of revocation to the secretary of Acer before their proxy is voted.

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Stockholders should consult with their tax advisors with regard to the tax consequences of the Merger to them in light of their own particular circumstances.

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The method by which you submit a proxy will in no way limit your right to vote at the Acer Special Meeting if you later decide to attend the meeting in person. Your vote as an Acer Stockholder is important. Accordingly, please sign and return the enclosed proxy card whether or not you plan to attend the Acer Special Meeting in person.

However, if your shares of Acer Common Stock are held in the name of a broker or other nominee, you must obtain a legal proxy, executed in your favor, from your broker or other nominee, to be able to vote in person at the Acer Special Meeting.

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COMPARATIVE PER SHARE MARKET PRICE AND DIVIDEND INFORMATION

Market Prices

The following table sets forth the closing price per share of Zevra Common Stock and per share of Acer Common Stock as reported on the Nasdaq Global Select Market and the Nasdaq Capital Market, respectively, on August 30, 2023, the last trading day prior to public announcement of the Merger, and on [●], 2023, the most recent practicable trading day prior to the date of this proxy statement/prospectus for which this information was available. The table also shows the implied value of the Stock Consideration for each share of Acer Common Stock as of the same dates. This implied value was calculated by multiplying the closing price of a share of Acer Common Stock on the relevant date by the exchange ratio.

The market prices of shares of Zevra Common Stock and Acer Common Stock have fluctuated since the date of the announcement of the Merger Agreement and will continue to fluctuate from the date of this proxy statement/prospectus to the date of the Acer Special Meeting and the date the Merger is completed. No assurance can be given concerning the market prices of shares of Zevra Common Stock and shares of Acer Common Stock before completion of the Merger or shares of Zevra Common Stock after completion of the Merger. Because the exchange ratio will not be adjusted for changes in the market price of either Zevra Common Stock or Acer Common Stock, the market value of the shares of Zevra Common Stock that holders of Acer Common Stock will have the right to receive on the Effective Date may vary significantly from the market value of the shares of Zevra Common Stock that holders of Acer Common Stock would receive if the Merger were completed on the date of this proxy statement/prospectus. As a result, you should obtain recent market prices of Zevra Common Stock and Acer Common Stock prior to voting your shares. See “Risk Factors—Risks Related to the Merger” beginning on page 19.

Dividends

Acer has never declared or paid any cash dividends on shares of Acer Common Stock. Under the terms of the Merger Agreement, during the period before completion of the Merger, Acer is not permitted to declare, set aside, make or pay any dividend or other distribution, other than dividends or distributions by wholly-owned subsidiaries of Acer to Acer or another wholly-owned subsidiary of Acer.

Zevra has never declared or paid any cash dividends on shares of Zevra Common Stock. Zevra anticipates that it will retain all of its future earnings, if any, for use in the operation and expansion of Zevra’s business and does not anticipate paying cash dividends in the foreseeable future.

After completion of the Merger, any former Acer Stockholder who holds shares of Zevra Common Stock into which shares of Acer Common Stock have been converted in connection with the Merger will receive whatever dividends are declared and paid on Zevra Common Stock. Notwithstanding the foregoing, any determination to pay cash dividends subsequent to the Merger will be at the discretion of the Zevra Board and will depend upon a number of factors, including Zevra’s results of operations, financial condition, future prospects, contractual restrictions, restrictions imposed by applicable law and other factors the Zevra Board deems relevant. There can be no assurance that any future dividends will be declared or paid by Zevra or as to the amount or timing of those dividends, if any.

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RISK FACTORS

In addition to the other information included in, or incorporated by reference into, this proxy statement/prospectus, including the matters addressed in the section titled “Cautionary Statement Concerning Forward-Looking Statements” beginning on page 80 and Zevra’s Annual Report on Form 10-K for the year ended December 31, 2022, and Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2023, each of which are filed with the SEC and incorporated by reference into this proxy statement/prospectus, you should carefully consider the following risk factors when evaluating whether to vote your shares to adopt the Merger Agreement and thereby to approve the transactions contemplated by the Merger Agreement, including the Merger. This summary of risks is not exhaustive. New risks may emerge from time to time and it is not possible to predict all risk factors, nor can Zevra and Acer assess the impact of all factors on the Merger and the combined company following the Merger or the extent to which any factor or combination of factors may cause actual results to differ materially from those contained in or implied by any forward-looking statements. Please also see “Where You Can Find More Information” beginning on page 233.

Risks Related to the Merger

The number of shares of Zevra Common Stock that Acer Stockholders will receive as Merger Consideration is based on a fixed exchange ratio and will not be adjusted in the event of any change in the price of either Zevra Common Stock or Acer Common Stock. Because the market price of Zevra Common Stock will fluctuate, Acer Stockholders cannot be certain of the value of the Merger Consideration that they will receive in the Merger.

At the Effective Time, each share of Acer Common Stock (other than shares held by Zevra, Acer or their respective direct or indirect wholly owned subsidiaries) issued and outstanding immediately prior to the Effective Time will be automatically converted into the right to receive (i) 0.1210 validly issued, fully paid and non-assessable shares of Zevra Common Stock, plus the right to receive cash in lieu of any fractional shares of Zevra Common Stock, and (ii) one CVR, which will represent the right to receive one or more contingent payments upon the achievement of certain milestones, if and to the extent achieved. See “The Merger Agreement—Merger Consideration” beginning on page 117. The exchange ratio is fixed in the Merger Agreement and will not be adjusted for changes in the market price of either Zevra Common Stock or Acer Common Stock. Changes in the market price of Zevra Common Stock prior to the Effective Time will affect the market value of the stock portion of the Merger Consideration that Acer Stockholders will receive upon the Closing. Stock price changes may result from a variety of factors (many of which are beyond the control of Zevra and Acer), including the following:

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The market price of Zevra Common Stock at the Closing may vary from its price on the date the Merger Agreement was executed, on the date of this proxy statement/prospectus and on the date of the Acer Special Meeting. As a result, the market value of the Merger Consideration represented by the exchange ratio will fluctuate until the Closing. Because the Merger will be completed after the date of the Acer Special Meeting, at the time of the Acer Special Meeting, you will not know the exact market value of the shares of Zevra Common Stock that Acer Stockholders will receive upon completion of the Merger. You should consider that if the market price of Zevra Common Stock declines between the date the Merger Agreement was signed or the date of the Acer Special Meeting and the Closing, including for any of the reasons described above, Acer Stockholders will receive shares of Zevra Common Stock that have a market value upon completion of the Merger that is less than the market value of such shares calculated pursuant to the exchange ratio on the date the Merger Agreement was signed or on the date of the Acer Special Meeting, respectively.

The consummation of the Merger is subject to a number of conditions, many of which are largely outside of the parties’ control, and, if these conditions are not satisfied or waived on a timely basis, the Merger Agreement may be terminated and the Merger may not be completed.

The Merger is subject to certain customary closing conditions, including: (i) obtaining the required stockholder approval; (ii) the waiting period, if any, applicable to the consummation of the Merger under the HSR Act, will have expired or been terminated; and (iii) the absence of any law or order of any governmental authority of competent jurisdiction that enjoins, prohibits or makes illegal the consummation of the Merger. In addition, each of Zevra’s and Acer’s obligations to complete the Merger is subject to certain other conditions, such as (a) the accuracy of the representations and warranties of the other party, subject to the standards set forth in the Merger Agreement; (b) compliance by the other party with its covenants in all material respects; and (c) the absence of a material adverse effect on Acer. See “The Merger Agreement—Conditions to Completion of the Merger” beginning on page 130. The failure to satisfy all of the required conditions could delay the completion of the Merger by a significant period of time or prevent it from occurring. Any delay in completing the Merger could cause the parties to not realize some or all of the benefits that are expected to be achieved if the Merger is successfully completed within the expected timeframe. There can be no assurance that the conditions to closing of the Merger will be satisfied or waived or that the Merger will be completed.

Failure to complete the Merger would adversely affect the stock price and future business and financial results of Acer.

There can be no assurance that the conditions to the Closing will be satisfied or waived or that the Merger will be completed. If the Merger is not completed, the ongoing business of Acer would be adversely affected and Acer will be subject to a variety of risks and possible consequences associated with the failure to complete the Merger, including the following:

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If the Merger is not completed, these risks could materially affect the business and financial results of Acer and its stock price, including to the extent that the current market price of Acer Common Stock is positively affected by a market assumption that the Merger will be completed.

Acer may need additional capital to meet its current obligations and continue to operate its business if the Merger is not completed in a timely fashion.

As noted in its most recent Form 10-Q for the quarter ended June 30, 2023, Acer required additional financing to commercialize OLPRUVA^™, as well as to complete development and seek to obtain marketing approval of its other product candidates and, if approved, to commercialize its other product candidates. In connection with the signing of the Merger Agreement, on August 30, 2023 Zevra extended a bridge loan (the “Bridge Loan”) to Acer pursuant to that certain Bridge Loan Agreement, (the “Bridge Loan Agreement”), and accompanying Security Agreement and Subordination Agreement (collectively, the “Bridge Loan Facility”), pursuant to which Zevra agreed to lend, in tranches, up to $6.5 million to Acer for payment of certain working capital requirements of Acer, subject to Zevra’s approval, as well as up to $10.0 million, immediately, for the purpose of paying the consideration required by the Termination Agreement (the “Termination Agreement”) terminating that certain Collaboration and License Agreement, dated March 19, 2021, by and between Acer and Relief Therapeutics Holding AG (“Relief”). The loans made pursuant to the Bridge Loan Agreement are secured by Acer’s collateral as set forth in the Security Agreement. However, if the Merger is not completed in a timely fashion, Acer would require further financing for working capital to continue its operations. In that instance Zevra is not required to extend such further capital, and may not elect to do so or be in a position to do so. In the event that the financing contemplated by the Bridge Loan Agreement is insufficient to fund Acer’s operations prior to the Closing, Zevra may not provide additional financing and other financing may not be available on acceptable terms, in a timely manner or at all. If such additional financing becomes necessary and Acer is unable to secure such additional financing, it may have to modify its current business plans and discontinue or delay certain activities that would otherwise be in its best interest to pursue. If Acer was required to modify or curtail its business operations, it may have a materially adverse effect on the stand-alone business of Acer prior to and following the Merger (if the Merger is not consummated), as well as to the value of the combined company, even if the Merger is completed.

In addition, if the Merger is terminated or if there is a default thereunder, Acer is required to pay back the principal amount of the Bridge Loan (including payment-in-kind interest and all accrued and unpaid interest thereon). Additionally, pursuant to agreements negotiated between Zevra and Nantahala Capital Management, LLC, Zevra has become the successor party to the lenders under that certain Credit Agreement dated March 4, 2022, by and among Acer, as borrower, Zevra (as successor) as the agent, and the lenders party thereto, and that certain Secured Convertible Note Purchase and Security Agreement dated March 4, 2022, by and among Acer, as the issuer, Zevra (as successor) as the agent, and the purchasers party thereto (collectively the “Existing Secured Debt”). In connection therewith, Acer’s obligations in respect of the Existing Secured Debt have been subordinated to Acer’s obligations under the Bridge Loan Agreement. As a result, Acer will have substantial indebtedness in favor of Zevra, and may be under default under one or more of such facilities.

While the Merger is pending, Zevra and Acer will be subject to business uncertainties and certain contractual restrictions that could adversely affect the business and operations of Zevra and Acer.

In connection with the pending Merger, some tenants, operators, borrowers, managers, vendors or other third parties of each of Zevra and Acer may react unfavorably, delay or defer decisions concerning their business relationships or transactions with Zevra or Acer, which could adversely affect the revenues, earnings, funds from operations, cash flows and expenses of Zevra and Acer, regardless of whether the Merger is completed. In addition, due to certain restrictions in the Merger Agreement on the conduct of business prior to completing the Merger, Acer may be unable (without Zevra’s prior written consent), during the pendency of the Merger, to pursue strategic transactions, undertake significant capital projects, undertake certain significant financing transactions and otherwise pursue other actions, even if such actions would prove beneficial and may cause Acer

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to forego certain opportunities each might otherwise pursue. In addition, the pendency of the Merger may make it more difficult for Acer to effectively retain and incentivize key personnel and may cause distractions from Acer’s strategy and day-to-day operations for its current employees and management. Finally, the Bridge Loan requires certain review and approvals from Zevra prior to certain drawdowns on the Bridge Loan.

Zevra and Acer will incur substantial transaction fees and Merger-related costs in connection with the Merger.

Zevra and Acer expect to incur non-recurring transaction fees, which include legal and advisory fees and substantial Merger-related costs associated with completing the Merger, combining the operations of the two companies and achieving desired synergies. Additional unanticipated costs may be incurred in the course of the integration of the businesses of Zevra and Acer. The companies cannot be certain that the realization of other benefits related to the integration of the two businesses will offset the transaction and Merger-related costs in the near term, or at all.

The Termination Fee and restrictions on solicitation contained in the Merger Agreement may discourage other companies from trying to acquire Acer.

The Merger Agreement provides that Acer shall not, and shall refrain from authorizing, directing or permitting its representatives to, solicit, participate in negotiations with respect to or approve or recommend any third-party Acquisition Proposal (as such term is defined in the Merger Agreement—see “The Merger Agreement—Unsolicited Proposals” beginning on page 124) for an alternative transaction, subject to certain exceptions set forth in the Merger Agreement relating to the receipt of certain unsolicited offers. The Merger Agreement requires Acer to pay Zevra the Termination Fee, under specified circumstances, including termination of the Merger Agreement by Zevra as a result of an adverse change in the recommendation of the Acer Board in order to enter into a Superior Proposal (as such term is defined in the Merger Agreement—see “The Merger Agreement—Unsolicited Proposals” beginning on page 124) with a third party. The Termination Fee and restrictions could discourage other companies from trying to acquire Acer even though those other companies might be willing to offer greater value to Acer Stockholders than Zevra has offered in the Merger.

Acer Stockholders will have a substantially smaller ownership and voting interest in Zevra upon completion of the Merger, compared to their ownership and voting interest in Acer prior to the Merger.

Upon completion of the Merger, each Acer Stockholder at the Effective Time will become a Zevra stockholder with a percentage ownership of Zevra that is substantially smaller than the Acer Stockholder’s current percentage ownership of Acer. Upon completion of the Merger, based on the number of shares of Zevra Common Stock and Acer Common Stock outstanding on September 25, 2023, the latest practicable date prior to the filing of this proxy statement/prospectus, it is estimated that continuing Zevra stockholders will own approximately 92.4% of the issued and outstanding common stock of Zevra, and former Acer Stockholders will own approximately 7.6% of the issued and outstanding common stock of Zevra. Accordingly, the former Acer Stockholders will exercise significantly less influence over Zevra after the Merger relative to their influence over Acer prior to the Merger, and thus will have a less significant impact on the approval or rejection of future Zevra proposals submitted to a Zevra stockholder vote.

Litigation against Acer, Zevra or the members of their respective boards, could prevent or delay the completion of the Merger or result in the payment of damages following completion of the Merger.

It is a condition to the Merger that no temporary restraining order, preliminary or permanent injunction or other order preventing the consummation of the Merger Agreement or the transactions contemplated thereby shall have been issued by any court of competent jurisdiction or other governmental authority of competent jurisdiction and remain in effect. It is possible that Zevra or Acer stockholders may file lawsuits challenging the Merger or the other transactions contemplated by the Merger Agreement, which may name Zevra, members of

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the Zevra Board, Acer and/or members of the Acer Board as defendants. The outcome of such lawsuits cannot be assured, including the amount of costs associated with defending these claims or any other liabilities that may be incurred in connection with the litigation of these claims. If plaintiffs are successful in obtaining an injunction prohibiting the parties from completing the Merger on the agreed-upon terms, such an injunction may delay the consummation of the Merger in the expected timeframe, or may prevent the Merger from being consummated at all. Whether or not any plaintiff’s claim is successful, this type of litigation can result in significant costs and divert management’s attention and resources from the Closing and ongoing business activities, which could adversely affect the operation of Zevra’s and Acer’s businesses.

Directors and executive officers of Acer may have interests in the Merger that are different from, or in addition to, the interests of other Acer Stockholders.

Directors and executive officers of Acer have interests in the Merger that may be different from, or in addition to, the interests of other Acer Stockholders, generally. These interests may include, among others: severance payments under their employment agreements if their employment is terminated without cause or in a “constructive termination” following the Closing; the payment of certain accrued bonuses awarded in March 2022 to certain Acer executive officers and other non-executive employees; the anticipated repayment of a $1.0 million unsecured promissory note to Chris Schelling, Acer’s founder, President and Chief Executive Officer; and rights to ongoing indemnification and insurance coverage by Zevra as the surviving company for acts or omissions occurring prior to the Merger. The Acer Board was aware of and considered those interests, among other matters, in reaching its decision to approve and adopt the Merger Agreement, approve the Merger and recommend the approval of the Merger Agreement to Acer Stockholders. These interests, among other factors, may have influenced the directors and executive officers of Acer to support or approve the Merger. See “The Merger—Interests of Acer Directors and Officers in the Merger” beginning on page 107.

Acer Stockholders may not receive any payments under the CVRs, which makes it difficult to value the CVRs.

Under the Merger Agreement, holders of Acer Common Stock have the right to receive one CVR for each share of Acer Common Stock held by such person. Each CVR will entitle its holder to receive one or more contingent cash payments upon the achievement of certain milestones, if achieved. See “Agreements Related to the Merger—The Contingent Value Rights Agreement” beginning on page 135. Therefore, Acer Stockholders’ right to receive any future payment with respect to the CVRs will be contingent upon whether the milestones are achieved. While Zevra is obligated to use diligent efforts to satisfy the milestone events, if the milestones are not achieved within the deadline period (the twelfth anniversary of the date of the CVR Agreement), no payment will be made under the CVRs and the CVRs will expire valueless. Accordingly, the value, if any, of the CVRs is speculative, and the CVRs may ultimately have no value at all.

In addition, the CVR Agreement provides that a portion of any milestone payment, if payable, may be allocated to SWK in respect of the SWK Warrants held prior to the Effective Time. If the parties agree that a portion of any milestone payment is to be allocated to SWK in connection with terminating and canceling any SWK Warrants, such amounts would reduce the amount of such milestone payment(s) that would otherwise be received by the holders of Acer Common Stock receiving the right to CVR payments in the Merger. The parties do not presently know the amounts of any such derivative payments that may be agreed to in connection with terminating and canceling any of the SWK Warrants. Although the amount of any such payments to SWK, if applicable, are expected to be immaterial to the other Acer Stockholders due to the relatively low intrinsic values of the SWK Warrants due to their high exercise prices as compared with the current closing price per share of Acer Common Stock on the Nasdaq Capital Market ($0.80 on September 25, 2023), and if fully exercised the SWK Warrants would represent less than 4% of the total number of shares represented by the outstanding shares of Acer Common Stock held by the Acer Stockholders as of the date of the Merger Agreement plus the shares underlying the SWK Warrants, negotiations with SWK may be unsuccessful and Acer may be required to agree to a higher payout amount to SWK in respect of the SWK Warrants than is currently anticipated.

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The CVRs are nontransferable.

The CVRs are nontransferable, meaning that they may not be sold, assigned, transferred, pledged, encumbered or in any other manner transferred or disposed of either in whole or in part, other than in certain limited circumstances. The CVRs will not be registered as securities and they will not be listed or traded on any stock exchange in the United States or elsewhere. Therefore, the CVRs are not liquid and Acer Stockholders will not be permitted to sell or transfer them, except in certain limited circumstances.

Zevra is required to use “diligent efforts” to achieve the milestones, which allows for consideration of a variety of factors to determine the efforts Zevra is required to take; accordingly, under certain circumstances, Zevra may not be required to take certain actions to achieve the milestones, which would have an adverse effect on the value, if any, of the CVRs.

Zevra has agreed to use “diligent efforts,” as defined in the CVR Agreement, to achieve the milestones. Under the CVR Agreement, the definition of “diligent efforts” requires Zevra to use such efforts and resources normally used by a company in the pharmaceutical business similar in size and resources to Zevra, in the exercise of their reasonable business discretion, relating to development of, seeking regulatory approval of or commercializing, as applicable, a similar product, that is of similar market potential and at a similar development stage, regulatory stage or commercialization stage. The CVR Agreement allows for the consideration of a variety of factors in determining such effort, including without limitation:

As a result, factors and events may come to pass that result in Zevra permissibly devoting less effort to the achievement of the milestone than Acer would have devoted had Acer remained a stand-alone company.

The Merger is expected to be a taxable transaction for U.S. federal income tax purposes.

The exchange of Acer Common Stock for the Merger Consideration in the Merger is expected to be a taxable transaction for U.S. federal income tax purposes. For further discussion of the tax consequences to holders of Acer Common Stock in the Merger, see “Material U.S. Federal Income Tax Consequences” beginning on page 227. Holders of Acer Common Stock should be aware that the Merger Consideration they will be entitled to receive does not include a cash component payable at Closing that could be used to pay taxes that may be due as a result of the Merger.

The U.S. federal income tax treatment of the CVRs is uncertain.

There is no legal authority directly addressing the U.S. federal income tax treatment of the CVRs or the treatment of payments that may be received pursuant to the CVRs. Accordingly, the amount, timing and character of any gain, income or loss with respect to the CVRs are uncertain. For a more detailed summary of the material U.S. federal income tax consequences of the Merger, see “Material U.S. Federal Income Tax Consequences” beginning on page 227.

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The fairness opinion obtained from William Blair, the financial advisor to the Acer Board, will not reflect subsequent developments between the signing of the Merger Agreement and the Closing.

In connection with the proposed Merger, the Acer Board received an opinion on August 28, 2023, from William Blair as to the fairness, from a financial point of view, and as of such date, of the Merger Consideration to be paid to the holders (other than holders of cancelled or dissenting shares) of Acer Common Stock, which opinion was based on and subject to various assumptions, procedures, considerations, limitations and qualifications, more fully described in the section titled “The Merger—Opinion of Acer’s Financial Advisor” beginning on page 94. The opinion does not reflect developments that may occur or may have occurred after the date of the opinion, including changes in the market prices of Zevra Common Stock and Acer Common Stock, changes to the operations and prospects of Zevra or Acer, changes in general market and economic conditions or regulatory or other factors. Any such changes, or other factors on which the opinions are based, may materially alter or affect the relative values of Zevra or Acer.

If the Merger is not consummated by February 29, 2024 (or, under certain circumstances, May 29, 2024), either Acer or Zevra may terminate the Merger Agreement.

Either Acer or Zevra may terminate the Merger Agreement if the Merger has not been consummated by February 29, 2024, subject to automatic extension to May 29, 2024, if, as of February 29, 2024, all of the closing conditions have been satisfied other than the expiration or earlier termination of any applicable waiting period under the HSR Act. However, this termination right will not be available to a party if that party failed to fulfill its obligations under the Merger Agreement and that failure was the principal cause of, or directly resulted in, the failure to consummate the Merger on time. See “The Merger Agreement—Termination of the Merger Agreement” beginning on page 131. In the event the Merger Agreement is terminated by either party due to the failure of the Merger to close by February 29, 2024 (or, under certain circumstances, May 29, 2024), Acer will have incurred significant costs and will have diverted significant management focus and resources from other strategic opportunities and ongoing business activities without realizing the anticipated benefits of the Merger.

Risks Related to the Combined Company Following the Merger

The unaudited pro forma combined financial information and prospective financial information included in this proxy statement/prospectus are presented for illustrative purposes only and do not represent the actual financial position or results of operations of the combined company following completion of the Merger.

The unaudited pro forma combined financial information and prospective financial information contained in this proxy statement/prospectus is presented for illustrative purposes only, contains a variety of adjustments, assumptions and preliminary estimates and does not represent the actual financial position or results of operations of Zevra and Acer prior to the Merger or that of the combined company following the Merger for several reasons. Among other things, the unaudited pro forma combined financial information does not reflect the projected realization of cost savings following completion of the Merger. See the section entitled “Management Forecasts” and “Unaudited Pro Forma Condensed Combined Financial Statements” beginning on pages 104 and 207, respectively, of this proxy statement/prospectus.

The actual financial positions and results of operations of Zevra and Acer prior to the Merger and that of the combined company following the Merger may not be consistent with, or evident from, and may differ materially and adversely from, the unaudited pro forma combined financial information or prospective financial information included in this proxy statement/prospectus. In addition, the assumptions used in preparing the unaudited pro forma combined financial information and/or the prospective financial information included in this proxy statement/prospectus may not be realized, may not prove to be accurate and may be affected by other factors, which could lead to material changes to the combined company’s business that are not reflected in the unaudited pro forma combined financial information.

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The financial analyses and forecasts considered by Acer and its financial advisor may not be realized, which may adversely affect the market price of Zevra Common Stock following the completion of the Merger.

In performing its financial analyses and rendering its opinions related to the Merger, William Blair relied on, among other things, internal stand-alone financial analyses and forecasts as separately provided by Acer and described in “The Merger—Opinion of Acer’s Financial Advisor” beginning on page 94. These analyses and forecasts were prepared by, or as directed by, the management of Acer and provided to William Blair on August 24, 2023 and approved by Acer for William Blair’s use. None of these analyses or forecasts were prepared with a view towards public disclosure or compliance with the published guidelines of the SEC, the U.S. generally accepted accounting principles (“GAAP”), or the guidelines established by the American Institute of Certified Public Accountants for preparation and presentation of financial forecasts. These projections are inherently based on various estimates and assumptions that are subject to the judgment of those preparing them. These projections are also subject to significant economic, competitive, industry and other uncertainties and contingencies, all of which are difficult or impossible to predict and many of which are beyond the control of Zevra and Acer. There can be no assurance that Acer’s or the combined company’s financial condition or results of operations will be consistent with those set forth in such analyses and forecasts, which could have an adverse impact on the market price of Zevra Common Stock or the financial position of the combined company following the Merger. William Blair expressed no opinion in the opinion as to the price at which the Acer Common Stock or Zevra Common Stock will trade at any future time or as to the effect of the Merger on the trading prices of the Acer Common Stock or Zevra Common Stock.

Following the Merger, Zevra may be unable to integrate the Acer business successfully or realize the anticipated synergies and related benefits of the Merger.

Zevra and Acer entered into the Merger Agreement with the expectation that the Merger will result in various benefits and synergies. However, the Merger involves the combination of two companies that currently operate as independent public companies. In particular, as discussed above in “—Acer may need additional capital to meet its current obligations and continue to operate its business if the Merger is not completed in a timely fashion” and “The Merger—Acer Reasons for the Merger,” prior to the signing of the Merger Agreement and the extension of the Bridge Loan, Acer’s assets consisted primarily of approximately $0.6 million in cash or cash equivalents and certain product rights. Moreover, prior to the Merger Agreement, Acer had historically been unable to fund its operations on a standalone basis without substantial additional investment. Even after the Closing, Zevra may be unable to successfully operate Acer’s business or integrate it into its own operations as a combined company.

After the Closing, Zevra will be required to devote significant management attention and resources to integrating the portfolio and operations of Acer. Potential difficulties that Zevra may encounter in the integration process include the following:

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It is possible that the integration process could result in the distraction of Zevra’s management, the loss of key employees, the disruption of Zevra’s ongoing business or inconsistencies in Zevra’s operations, services, standards, controls, procedures and policies, any of which could adversely affect the ability of Zevra to maintain relationships with third parties and employees or to achieve the anticipated benefits of the Merger, or could otherwise adversely affect the business and financial results of Zevra.

Zevra’s future results will suffer if it does not effectively manage its expanded operations following the Merger.

Following the Merger, the size and scope of operations of the business of the combined company will increase beyond the current size and scope of operations of either Zevra’s or Acer’s current businesses. In addition, Zevra may continue to expand its size and operations through additional acquisitions or other strategic transactions. Zevra’s future success depends, in part, upon its ability to manage its expanded business, which may pose substantial challenges for its management, including challenges related to the management and monitoring of new operations and locations and associated increased costs and complexity. There can be no assurances that Zevra will be successful in managing such expanded business or that it will realize the expected economies of scale, synergies and other benefits currently anticipated from the Merger or anticipated from any additional acquisitions or strategic transactions.

The market price of Zevra Common Stock may decline as a result of the completion of the Merger.

The market price of Zevra Common Stock may decline as a result of the completion of the Merger for a number of reasons, including if Zevra does not achieve the perceived benefits of the Merger as rapidly or to the degree anticipated by financial and industry analysts, or if the effect of the Merger on Zevra’s financial results is not consistent with the expectations of financial and industry analysts. In addition, if the Merger is consummated, Zevra stockholders, including the former Acer Stockholders, will own interests in a company operating an expanded business with a different mix of assets, risks and liabilities. Current stockholders of Zevra and former Acer Stockholders may not wish to continue to invest in Zevra, or for other reasons may wish to dispose of some or all of their shares of Zevra Common Stock. If, following the consummation of the Merger, there is selling pressure on Zevra Common Stock that exceeds demand at the market price, the price of Zevra Common Stock could decline.

Shares of Zevra Common Stock to be received by Acer Stockholders in the Merger will have rights different from the shares of Acer Common Stock.

After the Effective Time, Acer Stockholders who receive shares of Zevra Common Stock in connection with the Merger will no longer be stockholders of Acer but instead will hold shares of Zevra. Although both companies are Delaware corporations, as stockholders of Zevra, former Acer Stockholders will have different rights than they currently have under the terms of Zevra’s certificate of incorporation and bylaws, and those rights may be, or may be perceived to be, less favorable than their current rights as Acer Stockholders. See “Comparison of Rights of Holders of Zevra Common Stock and Acer Common Stock” beginning on page 219.

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The combined company may not be able to retain suppliers or distributors, or suppliers or distributors may seek to modify contractual relationships with the combined company, which could have an adverse effect on the combined company’s business and operations. Third parties may terminate or alter existing contracts or relationships with Zevra or Acer.

As a result of the Merger, the combined company may experience impacts on relationships with customers, suppliers and distributors that may harm the combined company’s business and results of operations. Certain suppliers or distributors may seek to terminate or modify contractual obligations following the Merger whether or not contractual rights are triggered as a result of the Merger. There can be no guarantee that customers, suppliers and distributors will remain with or continue to have a relationship with the combined company or do so on contractual terms amenable to Zevra following the Merger. If any suppliers or distributors seek to terminate or modify contractual obligations or discontinue their relationship with the combined company, then the combined company’s business and results of operations may be harmed.

Acer (or certain of its subsidiaries) also has contracts with vendors, landlords and other business partners which may require Acer (or certain of its subsidiaries) to obtain consent from or provide notice to these other parties in connection with the Merger, or which may otherwise contain limitations applicable to such contracts following the Merger. If these consents cannot be obtained, the combined company may suffer a loss of potential future revenue, incur costs and lose rights that may be material to the combined company’s business. In addition, third parties with whom Zevra and Acer currently have relationships may terminate or otherwise reduce the scope of their relationship with either party in anticipation of the Merger. Any such disruptions could limit the combined company’s ability to achieve the anticipated benefits of the Merger. The adverse effect of any such disruptions could also be exacerbated by a delay in the completion of the Merger or by a termination of the Merger Agreement.

Risks Relating to Zevra’s Business

Zevra’s business will continue to be subject to the risks described in the section entitled “Risk Factors” in Zevra’s Annual Report on Form 10-K for the year ended December 31, 2022, and Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2023, and in other documents incorporated by reference into this proxy statement/prospectus. See the section entitled “Where You Can Find More Information” beginning on page 233 for the location of information incorporated by reference into this proxy statement/prospectus.

Risks Relating to Acer’s Business

Risks Related to Acer’s Business and Financial Condition

If the Merger is not consummated, Acer will require substantial additional financing immediately to pay indebtedness as well as to continue its efforts to commercialize OLPRUVA^™ for oral suspension in the U.S. for the treatment of certain patients with UCDs involving deficiencies of CPS, OTC, or AS, and to complete development and seek to obtain marketing approval of Acer’s product candidates and, if approved, to commercialize Acer’s product candidates. A failure to obtain this necessary capital when needed on acceptable terms, or at all, could force Acer to delay, limit, reduce or terminate Acer’s product development, other operations or commercialization efforts, or to suspend or restructure Acer’s business.

Since Acer’s inception, substantially all of Acer’s resources have been dedicated to the clinical development of Acer’s product candidates. As of June 30, 2023, Acer had an accumulated deficit of $165.1 million, cash and cash equivalents of $1.6 million and current liabilities of $43.4 million, which include $0.2 million associated with deferred collaboration funding.

If the Merger is not consummated, then at least $54.5 million in Acer’s debt (projected as of October 31, 2023) is expected to become due, consisting of $37.0 million under the SWK Loans and the Marathon Convertible Notes (projected as of October 31, 2023), now all held by Zevra, $1.0 million under a promissory

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note from Acer’s Chief Executive Officer (the “Schelling Note”), and $16.5 million under the Bridge Loan Facility (assuming a full draw-down of all amounts available thereunder, of which $13.4 million has been drawn as of the date of this proxy statement/prospectus), plus obligations for accrued and ongoing trade debt (which was approximately $8.0 million as of the date of the meeting of the Acer Board on August 28, 2023, at which the Merger Agreement was approved) together with ordinary course payables, representing a substantial risk to the ability of Acer to carry on its business and operations. In such event, Acer would need to raise additional capital immediately in order to pay indebtedness as well as to continue financing Acer’s operations, including with respect to the commercialization of OLPRUVA^™ for oral suspension in the U.S. for the treatment of certain patients with UCDs involving deficiencies of CPS, OTC, or AS, and to pursue further clinical development and regulatory preparedness of Acer’s product candidates, preparations for a commercial launch of Acer’s product candidates, if approved, and development of any other current or future product candidates. These expenditures will include costs associated with research and development, conducting preclinical studies and clinical trials, obtaining marketing approvals, and manufacturing and supply as well as marketing and selling any products approved for sale. In addition, other unanticipated costs may arise. Because the outcome of any drug development process is highly uncertain and Acer’s activities with respect to the commercialization of OLPRUVA^™ for oral suspension in the U.S. for the treatment of certain patients with UCDs involving deficiencies of CPS, OTC, or AS are at a very early stage, Acer cannot reasonably estimate the actual amounts of additional financing that will be necessary to commercialize OLPRUVA^™ or to complete the development and, if approved, commercialization of any of Acer’s current product candidates or future product candidates, if any.

If the Merger is not consummated, Acer’s operating plan may change as a result of factors currently unknown to Acer, and Acer would need to seek substantial additional funds, through public or private equity or debt financings or other sources, such as non-dilutive funding or strategic collaborations. Such financing may not be available on acceptable terms, if at all, and even if obtained could result in substantial dilution to stockholders, imposition of onerous debt covenants and repayment obligations, or other restrictions that may adversely affect Acer’s business.

Acer’s results of operations could be adversely affected by general conditions in the global economy and in the global financial markets, which recently have been extremely challenging. For example, the volatility associated with the ongoing COVID-19 pandemic, the global supply chain issues and Russia’s invasion of Ukraine has caused significant instability and disruptions in the capital and credit markets, which may continue to be adversely affected, including by the possibility of a wider European or global conflict and global sanctions imposed in response to Russia’s invasion. The continued increases and fluctuations in interest rates and inflation have exacerbated negative economic and financial conditions. A severe or prolonged economic downturn, such as a global financial crisis, could result in a variety of risks to Acer’s business, including Acer’s ability to raise additional capital when needed on acceptable terms, if at all. The recent turmoil in the banking sector initiated by the failure of Silicon Valley Bank (“SVB”) has added to the volatility in that sector. While Acer has no direct relationship or business with SVB or other banks that have failed thus far in 2023, this situation has added to the difficulties in raising capital on a timely basis and on favorable terms. Acer cannot anticipate all of the ways in which the foregoing, and the current economic climate and financial market conditions generally, could adversely impact Acer’s business.

Acer’s future capital requirements depend on many factors, including:

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If the Merger is not consummated, additional funds may not be available when Acer needs them, on terms that are acceptable to Acer, or at all. If adequate funds are not available to Acer on a timely basis, Acer may be required to:

Substantial doubt exists as to Acer’s ability to continue as a going concern.

As noted above, (i) since Acer’s inception, substantially all of Acer’s resources have been dedicated to the clinical development of Acer’s product candidates, (ii) as of June 30, 2023, Acer had an accumulated deficit of

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$165.1 million, cash and cash equivalents of $1.6 million, and current liabilities of $43.4 million, which include $0.2 million associated with deferred collaboration funding, (iii) if the Merger is not consummated, then at least $54.5 million in Acer’s debt (projected as of October 31, 2023) is expected to become due, consisting of $37.0 million under the SWK Loans and the Marathon Convertible Notes (projected as of October 31, 2023), now all held by Zevra, $1.0 million under the Schelling Note, and $16.5 million under the Bridge Loan Facility (assuming a full draw-down thereof), plus obligations for accrued and ongoing trade debt (which was approximately $8.0 million as of the date of the meeting of the Acer Board on August 28, 2023, at which the Merger Agreement was approved) together with ordinary course payables, representing a substantial risk to the ability of Acer to carry on its business and operations.in the absence of the Merger, NS (iv) if the Merger is not consummated, Acer will need to raise additional capital immediately in order to pay indebtedness as well as to continue financing Acer’s operations, including with respect to the commercialization of OLPRUVA^™ for oral suspension in the U.S. for the treatment of certain patients with UCDs involving deficiencies of CPS, OTC, or AS, and to pursue further clinical development and regulatory preparedness of Acer’s product candidates, preparations for a commercial launch of Acer’s product candidates, if approved, and development of any other current or future product candidates.

Although OLPRUVA^™ for oral suspension in the U.S. has been approved by the FDA for the treatment of certain patients with UCDs involving deficiencies of CPS, OTC, or AS, Acer has yet to achieve significant commercial product revenues and Acer expects to continue to incur losses for the foreseeable future as Acer continues Acer’s commercialization efforts for OLPRUVA^™ as well as development of, and seeking marketing approvals for, Acer’s product candidates. These factors individually and collectively raise substantial doubt about Acer’s ability to continue as a going concern if the Merger is not timely consummated and therefore it may be more difficult for Acer to attract investors. If the Merger is not consummated, unless Acer is able to raise additional capital immediately to continue to finance Acer’s operations, Acer’s long-term business plan may not be accomplished, and Acer may be forced to cease, restructure, reduce, terminate or delay operations, including reduction of employees who support Acer’s efforts toward the commercialization of OLPRUVA^™ for oral suspension in the U.S. for the treatment of certain patients with UCDs involving deficiencies of CPS, OTC, or AS.

In the absence of the Merger, Acer’s efforts to raise additional funds could be affected by negative conditions in the capital markets generally, which in recent months have been especially challenging, and there are numerous companies in the pharmaceutical and biotech sectors seeking additional capital from many of the same sources, which may also limit the amount of capital, if any, available to Acer. The recent turmoil in the banking sector initiated by the failure of SVB has added to the volatility in that sector. While Acer has no direct relationship or business with SVB, this situation has added to the difficulties in raising capital on a timely basis and on favorable terms.

Acer recently terminated its Collaboration Agreement with Relief and entered into a new Exclusive License Agreement for Geographical Europe, which may impact Acer’s ability to generate revenues and achieve or sustain profitability. In addition, Acer is required to provide assistance to Relief in the performance of their contractual obligations, which may distract Acer from achieving its objectives.

Acer recently terminated its Collaboration Agreement with Relief (the “Collaboration Agreement”) providing for the development and commercialization of OLPRUVA^™ for the treatment of various inborn errors of metabolism, including for the treatment of UCDs and MSUD, and entered into the Exclusive License Agreement for Geographical Europe, which may impact Acer’s ability to generate revenues and achieve or sustain profitability. In addition, Acer is required to provide assistance to Relief in the performance of Relief’s contractual obligations, which may distract Acer from achieving its objectives.

Aside from OLPRUVA^™ for oral suspension in the U.S. which has been approved by the FDA for the treatment of certain patients with UCDs involving deficiencies of CPS, OTC, or AS, there is no guarantee that OLPRUVA^™ will receive regulatory authority approval in any territory or become commercially available for the indications under investigation.

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The rights Acer has transferred to Relief for Acer’s product candidate OLPRUVA^™ in the applicable territories (i.e., Geographical Europe), including development and commercialization rights, may impact Acer’s ability to generate revenues and achieve or sustain profitability. Acer is reliant on Relief’s resources and efforts with respect to OLPRUVA^™ in UCDs and MSUD in their applicable territories, including the pace at which Relief moves forward with development and commercialization. Relief may fail to develop or successfully commercialize OLPRUVA^™ for a variety of reasons, including that Relief:

In addition, Acer is required by Acer’s agreements with Relief to provide certain assistance in the performance of their obligations. Doing so may cause Acer to delay or defer achievement of its own objectives regarding OLPRUVA^™ or Acer’s other programs.

If Relief does not pursue development and successfully commercialize OLPRUVA^™ in the applicable territories, Acer’s ability to generate revenues and achieve or sustain profitability could be significantly hindered and may have a material adverse impact on Acer’s financial condition and results of operations.

If Acer is unable to maintain effective disclosure controls and internal control over financial reporting, investors could lose confidence in the accuracy and completeness of Acer’s financial reports and the market price of Acer’s common stock may be materially and adversely affected.

Acer’s management is responsible for establishing and maintaining adequate internal control over financial reporting designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of Acer’s financial statements for external purposes in accordance with GAAP. Acer’s management is likewise required, on a quarterly basis, to evaluate the effectiveness of Acer’s internal controls and to disclose any changes and material weaknesses identified through such evaluation in those internal controls. A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of Acer’s annual or interim financial statements will not be prevented or detected on a timely basis.

As previously described in Item 9A of Acer’s Annual Report on Form 10-K for the fiscal year ended December 31, 2022, Acer identified a material weakness in its internal controls over financial reporting, in that it did not design or maintain procedures or controls to accurately apply ASC 260, Earnings Per Share. As a result of this material weaknesses, Acer’s management concluded that Acer’s internal control over financial reporting was not effective as of June 30, 2022, September 30, 2022, and December 31, 2022. Acer has, from time to time, identified other material weaknesses in its internal control over financial reporting.

While Acer believes it has fully remediated the material weakness related to Earnings Per Share as of March 31, 2023, any failure to maintain effective internal control over financial reporting in the future, or failure to remediate any future material weakness, could adversely impact Acer’s ability to report Acer’s financial position and results of operations on a timely and accurate basis. If Acer’s financial statements are not accurate, investors may not have a complete understanding of Acer’s operations and may lose confidence in Acer’s financial reporting and Acer’s business, reputation, results of operations, liquidity, financial condition, stock price and ability to access the capital markets could be adversely affected. In addition, Acer may be unable to

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maintain or regain compliance with applicable securities laws, stock market listing requirements and covenants regarding the timely filing of periodic reports, Acer may be subject to regulatory investigations and penalties, and Acer may face claims invoking the federal and state securities laws. Any such litigation or dispute, whether successful or not, could have a material adverse effect on Acer’s business, results of operations and financial condition.

Acer can provide no assurance that additional material weaknesses or restatements of financial results will not arise in the future due to a failure to implement and maintain adequate internal control over financial reporting or circumvention of these controls. In addition, even if Acer is successful in strengthening Acer’s controls and procedures, in the future these controls and procedures may not be adequate to prevent or identify irregularities or errors or to facilitate the fair presentation of Acer’s financial statements.

Funding from Acer’s ATM facility with JonesTrading and Roth Capital may be limited or may be insufficient to fund Acer’s operations or to implement Acer’s strategy.

If the Merger is not consummated, Acer will need to keep current Acer’s shelf registration statement and an offering prospectus relating to Acer’s ATM facility with JonesTrading and Roth Capital in order to use the program to sell shares of Acer’s common stock, as well as provide certain periodic deliverables required by the amended and restated sales agreement with JonesTrading and Roth Capital for the ATM facility. Due to the SEC’s “baby shelf rules,” which prohibit companies with a public float of less than $75.0 million from issuing securities under a shelf registration statement in excess of one-third of such company’s public float in a 12-month period, Acer is currently only able to issue a limited number of shares which aggregate to no more than one-third of Acer’s public float using Acer’s shelf registration statement. These sales of common stock are counted toward the maximum of one-third of Acer’s public float that can be sold in a 12-month period and reduce the remaining shares available to sell under Acer’s ATM facility during that 12-month period. The number of shares and price at which Acer may be able to sell shares under the ATM facility may be limited due to market conditions and other factors beyond Acer’s control.

Acer has a limited operating history and have incurred significant losses since Acer’s inception and anticipate that Acer will continue to incur losses for the foreseeable future and may never achieve or maintain profitability. The absence of any commercial sales and Acer’s limited operating history make it difficult to assess Acer’s future viability.

Acer is a development-stage pharmaceutical company with a limited operating history and a history of losses. Pharmaceutical product development is a highly speculative undertaking and involves a substantial degree of risk. Acer is focused principally on repurposing and/or reformulating existing drugs for serious rare and life-threatening diseases with significant unmet medical needs. Acer is not profitable and have incurred losses in each year since inception. Acer has only a limited operating history upon which you can evaluate Acer’s business and prospects. In addition, Acer has limited experience and have not yet demonstrated an ability to successfully overcome many of the risks and uncertainties frequently encountered by companies in new and rapidly evolving fields, particularly in the pharmaceutical industry. Acer has not generated any significant product sales revenue to date. Acer continues to incur significant research and development and other expenses related to Acer’s ongoing operations. Acer’s net loss for the three months ended June 30, 2023 was $8.1 million. As of June 30, 2023, Acer had an accumulated deficit of $165.1 million. Acer expects to continue to incur losses for the foreseeable future as Acer continues OLPRUVA^™ commercialization and Acer’s development of, and seek marketing approvals for, Acer’s product candidates.

Acer has devoted substantially all of Acer’s financial resources to identify, acquire, and develop Acer’s product candidates, including providing general and administrative support for Acer’s operations. To date, Acer has financed Acer’s operations primarily through the sale of equity securities. The amount of Acer’s future net losses will depend, in part, on the rate of Acer’s product sales revenue, future expenditures and Acer’s ability to obtain funding through public or private equity or debt financings, strategic collaborations, or non-dilutive

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funding. Acer expects losses to increase as Acer conducts clinical trials and continue to develop Acer’s product candidates. Acer expects to invest significant funds into the research and development of Acer’s current product candidates to determine the potential to advance these product candidates to regulatory approval. Acer may also invest in acquiring or in-licensing additional product candidates to expand Acer’s pipeline, all dependent on the availability of capital.

The market for OLPRUVA^™ for oral suspension in the U.S. for the treatment of certain patients with UCDs involving deficiencies of CPS, OTC, or AS is limited, as Acer believes the prevalence is no more than approximately 2,100 individuals in the U.S. with a diagnosed patient population in the U.S. of only approximately 1,100. Thus, Acer’s potential future revenue from this market is limited. If Acer obtains regulatory approval to market other product candidates, Acer’s potential future revenue from any such product will depend upon the size of any market in which such product candidate may receive approval and, as with OLPRUVA^™ for oral suspension in the U.S. for the treatment of certain patients with UCDs involving deficiencies of CPS, OTC, or AS, Acer’s ability to achieve sufficient market acceptance, pricing, reimbursement from third-party payors, and adequate market share cannot be assured. Even if Acer obtains adequate market share, because the market for OLPRUVA^™ for oral suspension in the U.S. for the treatment of certain patients with UCDs involving deficiencies of CPS, OTC, or AS is limited and the potential markets in which Acer’s other product candidates may ultimately receive regulatory approval could be very small, Acer may never become profitable despite obtaining such market share and acceptance of Acer’s products.

Acer expects to continue to incur significant expenses and increasing operating losses for the foreseeable future, and Acer’s expenses will increase substantially if and as we:

Further, the net losses Acer incurs will fluctuate significantly from quarter to quarter and year to year, such that a period-to-period comparison of Acer’s results of operations may not be a good indication of Acer’s future performance.

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Acer currently has yet to realize significant commercial product sales revenue and may never be profitable.

While Acer has generated revenue related to the Collaboration Agreement with Relief (now superseded by the Exclusive License Agreement), Acer has not generated significant revenues from commercial sales of OLPRUVA^™ for oral suspension in the U.S. for the treatment of certain patients with UCDs involving deficiencies of CPS, OTC, or AS, or from any of Acer’s current product candidates. Acer’s ability to generate product revenue depends upon Acer’s ability to successfully commercialize OLPRUVA^™ for oral suspension in the U.S. for the treatment of certain patients with UCDs involving deficiencies of CPS, OTC, or AS, and to identify, develop and commercialize Acer’s product candidates or other product candidates that Acer may develop, in-license or acquire in the future. Acer’s ability to generate significant product revenue from OLPRUVA^™ for oral suspension in the U.S. for the treatment of certain patients with UCDs involving deficiencies of CPS, OTC, or AS, as well as future product revenue from Acer’s current or future product candidates also depends on a number of additional factors, including Acer’s ability to:

In addition, because of the numerous risks and uncertainties associated with clinical product development, including that Acer’s product candidates may not successfully advance through development or achieve regulatory approval, Acer is unable to predict the timing or amount of any potential future product sales revenues. Acer’s expenses also could increase beyond expectations if Acer decides to or is required by the FDA, or comparable foreign regulatory authorities, to perform studies or trials to satisfy additional unexpected activities in addition to those that Acer currently anticipates.

Even if Acer completes the development and regulatory processes described above, Acer anticipates incurring significant costs associated with launching and commercializing these products.

Acer has incurred, and if the Merger is not consummated, Acer expects to continue to incur, increased costs and risks as a result of being a public company.

As a public company, Acer is required to comply with the Sarbanes-Oxley Act of 2002 (“SOX”), as well as rules and regulations implemented by the SEC and the Nasdaq Capital Market. Changes in the laws and

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regulations affecting public companies, including the provisions of SOX and rules adopted by the SEC and by Nasdaq Capital Market, have resulted in, and will continue to result in, increased costs as Acer responds to their requirements. Given the risks inherent in the design and operation of internal controls over financial reporting, the effectiveness of Acer’s internal controls over financial reporting is uncertain. If Acer’s internal controls are not designed or operating effectively, Acer may not be able to conclude an evaluation of Acer’s internal control over financial reporting as required or Acer or Acer’s independent registered public accounting firm may determine that Acer’s internal control over financial reporting was not effective. Acer currently has a very limited workforce, and it may be difficult to adhere to appropriate internal controls over financial reporting or disclosure controls with such limited staffing. Acer is not yet subject to the provisions of section 404(b) of SOX, which would require Acer’s independent registered public accounting firm’s attestation on management’s assessment of internal controls over financial reporting. Investors may lose confidence in the reliability of Acer’s financial statements, which could cause the market price of Acer’s common stock to decline and which could affect Acer’s ability to run Acer’s business effectively. As a public company, it could also be more difficult or more costly for Acer to obtain certain types of insurance, including directors’ and officers’ liability insurance. The impact of these events could also make it more difficult for Acer to attract and retain qualified persons to serve on Acer’s Board of Directors, Acer’s Board committees, and as executive officers.

If Acer fails to maintain proper and effective internal controls, Acer’s ability to produce accurate financial statements on a timely basis could be impaired.

Acer is currently subject to the reporting requirements of the Exchange Act, SOX and Nasdaq Capital Market rules and regulations. SOX requires, among other things, that Acer maintains effective disclosure controls and procedures and internal controls over financial reporting. Acer must perform system and process evaluation and testing of Acer’s internal control over financial reporting to allow management to report on the effectiveness of Acer’s internal controls over financial reporting in Acer’s Annual Report on Form 10-K filing for that year, as required by Section 404 of SOX.

As previously reported, Acer has identified material weaknesses in Acer’s internal control over financial reporting as recently as December 31, 2022. Although Acer is committed to continuing to improve Acer’s internal control processes, and although Acer will continue to diligently and vigorously review Acer’s internal controls over financial reporting, Acer cannot be certain that, in the future, a material weakness will not exist or otherwise be discovered. Acer may discover other weaknesses in Acer’s system of internal financial and accounting controls and procedures that could result in a material misstatement of Acer’s financial statements. Acer’s internal control over financial reporting will not prevent or detect all errors and all fraud. A control system, no matter how well designed and operated, can provide only reasonable, not absolute, assurance that the control system’s objectives will be met. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that misstatements due to error or fraud will not occur or that all control issues and instances of fraud will be detected.

If Acer is not able to comply with the requirements of Section 404 of SOX, or if Acer is unable to maintain proper and effective internal controls, Acer may not be able to produce timely and accurate financial statements. If that were to happen, the market price of Acer’s common stock could decline and Acer could be subject to penalties or investigations by Nasdaq Capital Market or the SEC.

Acer faces risks related to health epidemics including but not limited to the COVID-19 pandemic which could adversely affect Acer’s business.

Acer’s business could be materially adversely affected by the effects of a widespread outbreak of contagious disease, including the recent pandemic of COVID-19, a respiratory illness caused by a novel coronavirus. While Acer’s employees work remotely a large part of the time, these effects could include disruptions or restrictions on Acer’s employees’ ability to travel, as well as disruptions at or closures of Acer’s facilities or the facilities of Acer’s manufacturers and suppliers, which could adversely impact Acer’s development activities and other

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operations. Health professionals may reduce staffing and reduce or postpone meetings with clients, colleagues, and others in response to the spread of an infectious disease. Such events may result in a period of business disruption, and in reduced operations, any of which could materially affect Acer’s business, financial condition, and results of operations. In addition, a significant outbreak of contagious diseases in the human population could result in a widespread health crisis that could adversely affect the economies and financial markets of many countries, resulting in an economic downturn or volatility that could adversely affect Acer’s manufacturers and suppliers and otherwise adversely impact Acer’s development activities and other operations. Current estimates of the possible impact of global issues on the drug supply chain and its application to Acer’s potential products may also be affected by the manufacturing steps required to be undertaken to produce finished product, including manufacture of active pharmaceutical ingredient, excipients, packaging, and labeling.

The extent to which the COVID-19 pandemic will continue to affect Acer’s business, results of operations, and financial condition is difficult to predict. The outbreak has affected, and could potentially continue to affect, the business of the FDA, EMA or other health authorities, which has resulted and could continue to result in delays in meetings and other activities related to Acer’s product candidates and Acer’s planned clinical trials and ultimately in the review and approval of Acer’s product candidates. The spread of COVID-19 has slowed and may continue to slow enrollment of clinical trials and reduce the number of eligible patients for Acer’s clinical trials, thereby making recruitment more difficult and competitive. Prolonged disruptions to businesses, manufacturing and supply chain, including shelter-in-place or similar orders imposed by federal, state or local government authorities, and economic downturns can lead to material adverse effects on Acer’s business operations, including layoffs and/or suspension of Acer’s business operations. The COVID-19 outbreak and mitigation measures also have had and may continue to have an adverse impact on global economic conditions which could have an adverse effect on Acer’s business and financial condition, including impairing Acer’s ability to raise capital when and in the amount needed. The extent to which COVID-19 impacts Acer’s business will depend on future developments, which are highly uncertain and cannot be predicted, including new information which may emerge concerning the severity of COVID-19 and the actions to contain COVID-19 or treat its impact, among others. In addition, any COVID-19 infection of any of Acer’s employees could have a significant impact on Acer’s ability to conduct business.

Risks Related to the Marathon Convertible Notes and SWK Loans

The requirement that Acer repay in cash the outstanding principal balance and accrued interest on the SWK Loans plus interest and fees (including a repayment premium) and the Marathon Convertible Notes, now held by Zevra, which Acer is obligated to repurchase at a premium (which is subject to escalation), and certain operating and financial covenants and restrictions on Acer’s operating and financial flexibility under the SWK Loans and the Marathon Convertible Notes, could materially adversely affect Acer’s business plans, liquidity, financial condition, results of operations and viability, including but not limited to a loss of control over Acer’s cash and other assets, in which the lenders have a security interest, and prevent Acer from taking actions that Acer would otherwise consider to be in Acer’s best interests. In addition, since both of these notes are now held by Zevra, there can be no assurance what course of action Zevra would take if the Merger were not consummated.

If the Merger is not consummated, then at least $54.5 million in Acer’s debt (projected as of October 31, 2023) is expected to become due, consisting of $37.0 million under the SWK Loans and the Marathon Convertible Notes (projected as of October 31, 2023), now all held by Zevra, $1.0 million under the Schelling Note, and $16.5 million under the Bridge Loan Facility (assuming a full draw-down of all amounts available thereunder), plus obligations for accrued and ongoing trade debt (which was approximately $8.0 million as of the date of the meeting of the Acer Board on August 28, 2023, at which the Merger Agreement was approved) together with ordinary course payables, representing a substantial risk to the ability of Acer to carry on its business and operations.

The Marathon Convertible Notes originally issued to the Marathon Holders, in an aggregate principal amount of $6.0 million, bear interest at an annual rate of 6.5%, with such interest payable quarterly; provided,

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however, that accrued and unpaid interest through March 31, 2023 was deferred and became due and payable in cash, together with any accrued and unpaid interest on each Marathon Convertible Note after March 31, 2023, on April 15, 2023. Additionally, subject to the restrictions set forth in a subordination agreement among SWK, as agent and lender, and each of the Marathon Holders (the “Subordination Agreement”), Acer is required to repurchase the Marathon Convertible Notes, on or before the fifth business day following the earlier of June 15, 2023 and Acer’s receipt of gross proceeds of at least $40.0 million from the issuance or sale of debt, equity or hybrid securities, loans or other financing on a cumulative basis since January 1, 2023 (excluding the Second SWK Loan, defined below) at a price equal to 200% (the “Buy-Out Percentage”) of the outstanding principal amount of the Marathon Convertible Notes, plus any accrued but unpaid interest thereon to the date of such repurchase plus 2500 basis points for each 90-day period after April 15, 2023, pro-rated for the actual number of days elapsed in the 90-day period before the repurchase actually occurs (i.e., the Buy-Out Percentage would have been 212.5% had the repurchase occurred 45 days after April 15, 2023, or on May 30, 2023); provided, that if Acer is prohibited from effectuating such repurchases pursuant to the Subordination Agreement, the repurchase is to occur on or before the fifth business day after such prohibition is no longer applicable. However, since Zevra now holds all indebtedness of Acer covered by the Subordination Agreement, in the absence of the Merger Agreement (i.e., in the event the Merger Agreement is terminated without a Merger occurring) Zevra could require an immediate repurchase of the Marathon Convertible Notes and a failure to effect such repurchase would trigger a cross-default of the SWK Loans, obligating Acer to pay immediately the full repayment obligation of the SWK Loans.

The SWK Loans, in a principal amount of $13.9 million, bears interest at an annual rate equal to the three-month term rate based on the Secured Overnight Financing Rate (“Term SOFR”) (or such other rate as may be agreed between SWK and Acer following the date on which three-month Term SOFR is no longer available), subject to a 1.0% Term SOFR floor, plus a margin of 11.0%, and is therefore sensitive to changes in interest rates. If three-month Term SOFR can no longer be determined or if the applicable governmental authority ceases to supervise or sanction such rates, then Acer will endeavor to agree with SWK on an alternate rate of interest that gives due consideration to the then prevailing market convention for determining interest for comparable loans in the U.S. Acer cannot predict what the impact of any such alternative rate would be to Acer’s interest expense. However, the discontinuation, reform, or replacement of Term SOFR or any other benchmark rates may result in fluctuating interest rates that may have a negative impact on Acer’s interest expense and cash flows. Furthermore, Acer cannot predict or quantify the time, effort and cost required to transition to the use of new benchmark rates, including with respect to negotiating and implementing any necessary changes to the SWK Loans, and implementing changes to Acer’s systems and processes.

Due to topline results announced in March 2023 from Acer’s Phase 2a proof of concept clinical trial to evaluate ACER-801 as a potential treatment for moderate to severe VMS associated with menopause, which showed that ACER-801 was safe and well-tolerated but did not achieve statistical significance when evaluating ACER-801’s ability to decrease the frequency or severity of hot flashes in postmenopausal women, the principal amount of the SWK Loans amortizes at a monthly rate of $0.6 million (as opposed to $1.3 million quarterly prior to the announcement of such topline results), although the a Third Amendment to the SWK Credit Agreement (the “Third Amendment”) allowed Acer to forgo the amortization payment otherwise due on May 15, 2023, and at the discretion of SWK (which was exercised) a second amortization payment otherwise due on June 15, 2023. The final maturity date of the SWK Loans is March 4, 2024. Upon the repayment of the SWK Loans, Acer must pay an exit fee so that SWK receives an aggregate amount (inclusive of all principal, interest and origination and other fees paid to SWK on or prior to the prepayment date) equal to 1.5 times the outstanding principal amount of the SWK Loans, plus any and all payment-in-kind interest amounts. Due to topline results announced in March 2023 from Acer’s Phase 2a proof of concept clinical trial to evaluate ACER-801 as a potential treatment for moderate to severe VMS associated with menopause, Acer is required to maintain for purposes of the SWK Loans unencumbered liquid assets of not less than the lesser of (x) the outstanding principal amount of the SWK Loans or (y) $3.0 million (as opposed to $1.5 million for clause (y) prior to the announcement of such topline results), although the Third Amendment provides for a temporary reduction in the minimum amount of unencumbered liquid assets required to be maintained by Acer under clause (y) (from $3.0 million to

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$1.75 million through May 30, 2023, and at the discretion of SWK (which was exercised) a further temporary reduction to $1.25 million from May 31, 2023 through June 30, 2023 – although, in connection with the purchase from SWK of the SWK Loans (see below), the purchaser, Nantahala (defined below), has since provided a further reduction/waiver for the minimum unencumbered liquid assets requirement such that the current requirement is $0.5 million).

The Marathon Convertible Notes and the SWK Loans are secured by a first and second priority lien on all of Acer’s assets (including Acer’s intellectual property). Acer’s failure to repurchase the Marathon Convertible Notes when required, or to pay any cash for principal reduction or accrued interest on the Marathon Convertible Notes or the SWK Loans, would constitute a default under the relevant indebtedness. In such event, or if a default otherwise occurs, including as a result of Acer’s failure to comply with the restrictive covenants contained therein, the interest rate on the outstanding principal balance of the SWK Loans will increase by 3% from the occurrence and during the continuance of an event of default. If not timely cured, the lenders could take such actions as may be available to senior secured creditors generally, and specifically under the loan agreements governing the SWK Loans and the Marathon Convertible Notes, including assertion of control over some or all of Acer’s assets.

The Marathon Convertible Notes and the SWK Loans restrict Acer’s ability to incur new indebtedness, sell assets, and pursue certain mergers, acquisitions, or consolidations that Acer may believe to be in Acer’s best interest. In addition, the SWK Loans contain financial covenants that require Acer to maintain a minimum amount of unencumbered liquid assets (as noted above) as well as other covenants and restrictions that could materially adversely affect Acer’s business plans, liquidity, financial condition, results of operations and viability and prevent Acer from taking actions that Acer would otherwise consider to be in Acer’s best interests. If Acer defaults under the SWK Loans, the lenders will be able to declare all obligations immediately due and payable, including certain fees and other obligations. The lenders could declare an event of default upon the occurrence of any event that they interpret as a material adverse change or material adverse effect. Any declaration by the lenders of an event of default could significantly harm Acer’s business and prospects and could cause the price of Acer’s common stock to decline.

The obligations, security interests and covenants of the Marathon Convertible Notes and the SWK Loans could have important consequences on Acer’s business. In particular, they could:

The debt service requirements of the Marathon Convertible Notes and the SWK Loans could intensify these risks. Acer’s ability to make scheduled payments of interest or principal or to repurchase or refinance Acer’s indebtedness depends on Acer’s future performance, which is subject to economic, financial, competitive and other factors beyond Acer’s control. Acer’s business may not generate cash flow from operations in the future sufficient to service Acer’s debt and make necessary capital expenditures. If Acer is unable to generate such cash flow, Acer may be required to adopt one or more alternatives, such as selling assets, restructuring debt or

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obtaining additional equity capital on terms that may be onerous or highly dilutive. No assurances can be given that Acer will be successful in making the required payments under Acer’s indebtedness, or in refinancing Acer’s obligations on favorable terms, or at all. Should Acer determine to refinance, it could be further dilutive to Acer’s stockholders. Acer’s ability to refinance Acer’s indebtedness will depend on the capital markets and Acer’s financial condition at such time. Acer may not be able to engage in any of these activities or engage in these activities on desirable terms, which could result in a default on Acer’s debt obligations.

Furthermore, Zevra has recently acquired from Nantahala all rights as lender under the SWK Loans and the Marathon Convertible Notes. There can be no assurance what course of action Zevra would take if the Merger is not consummated.

The number of shares registered for resale on behalf of the holders of the Marathon Convertible Notes is significant in relation to Acer’s trading volume.

All of the shares of common stock underlying the Marathon Convertible Notes that Acer registered for resale on behalf of holders are “restricted securities” as that term is defined in Rule 144 under the Securities Act. Acer registered the offer and resale by the holders of the shares underlying the Marathon Convertible Notes to satisfy certain registration rights Acer granted to the holders, and so that the shares may be offered for resale into the public market by the holders. If all such shares were sold into the market all at once or at about the same time, it could depress the market price of Acer’s stock during the period the registration statement covering the resale of the shares remains effective and also could affect Acer’s ability to raise equity capital.

A substantial number of shares of Acer’s common stock may be issued pursuant to the terms of the Marathon Convertible Notes, which could cause the price of Acer’s common stock to decline.

The Marathon Convertible Notes are convertible into shares of Acer’s common stock immediately after issuance at a conversion price of $2.50, for an aggregate of 2.4 million shares upon conversion of the original principal amount (without taking into account the limitations on the conversion of the Marathon Convertible Notes). Furthermore, the number of shares of common stock to be issued upon conversion of the Marathon Convertible Notes may be substantially greater if accrued but unpaid interest on the Marathon Convertible Notes is converted into shares of common stock at the same time as the principal is converted. Acer is unable to predict if and when the holders will convert their Marathon Convertible Notes, and whether or not any accrued but unpaid interest will also be converted. While accrued interest on the Marathon Convertible Notes is payable in cash according to their terms, any accrued but unpaid interest is also convertible into shares of common stock at the same time as the holder otherwise converts principal on the Marathon Convertible Notes.

Acer registered 2,478,000 shares of Acer’s common stock for resale by the holders in the event that up to six months of accrued but unpaid interest is included in the conversion. The actual number of shares issued upon conversion of the Marathon Convertible Notes may be more or less than this amount depending upon the outstanding principal balance and the amount of any accrued but unpaid interest at the time. Acer may need to register more shares if the accrued but unpaid interest at the time of conversion represents more than 78,000 shares of Acer’s common stock. The foregoing amount of shares registered does not take into account the limitations on conversion of the Marathon Convertible Notes.

Risks Related to the Clinical Development and Marketing Approval of Acer’s Product Candidates

The marketing approval processes of the FDA and comparable foreign authorities are lengthy, time-consuming and inherently unpredictable, and if Acer is ultimately unable to obtain marketing approval for Acer’s product candidates, Acer’s business will be substantially harmed.

Other than OLPRUVA^™ for oral suspension in the U.S. which has been approved by the FDA for the treatment of certain patients with UCDs involving deficiencies of CPS, OTC, or AS, none of Acer’s current

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product candidates has gained marketing approval for sale in the U.S. or any other country, and Acer cannot guarantee that Acer will ever have any other marketable products. Acer’s business is substantially dependent on Acer’s ability to complete the development of, obtain marketing approval for, and successfully commercialize Acer’s product candidates in a timely manner. Acer cannot commercialize Acer’s product candidates in the U.S. without first obtaining approval from the FDA to market each product candidate. Similarly, Acer cannot commercialize Acer’s product candidates outside of the U.S. without obtaining regulatory approval from comparable foreign regulatory authorities. Acer’s product candidates could fail to receive marketing approval for many reasons, including the following:

Before obtaining marketing approval for the commercial sale of any drug product for a target indication, Acer must demonstrate in preclinical studies and well-controlled clinical trials and, to the satisfaction of the applicable regulatory authorities, that the product is safe and effective for its intended use and that the

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manufacturing facilities, processes, and controls are adequate to preserve the drug’s identity, strength, quality and purity. In the U.S., it is necessary to submit and obtain approval of an NDA from the FDA. An NDA must include extensive preclinical and clinical data and supporting information to establish the product safety and efficacy for each desired indication. The NDA must also include significant information regarding the chemistry, manufacturing, and controls for the product. After the submission but before approval of the NDA, the manufacturing facilities used to manufacture a product candidate must be inspected by the FDA to ensure compliance with the applicable Current Good Manufacturing Practice (“cGMP”) requirements. The FDA and the Competent Authorities of the Member States of the European Economic Area (“EEA”) and comparable foreign regulatory authorities, may also inspect Acer’s clinical trial sites and audit clinical study data to ensure that Acer’s studies are properly conducted in accordance with the IND regulations, human subject protection regulations, and current good clinical practice (“cGCP”).

Obtaining approval of an NDA is a lengthy, expensive and uncertain process, and approval may not be obtained. Upon submission of an NDA, the FDA must make an initial determination that the application is sufficiently complete to accept the submission for filing. Acer cannot be certain that any submissions, even those that are or have been accepted for filing and reviewed by the FDA, will ultimately be approved. If the application is not accepted for review, or if the FDA finds after review that the NDA is not approvable as submitted, the FDA may require that Acer conducts additional clinical studies or preclinical testing or take other actions before it will reconsider Acer’s application. If the FDA requires additional studies or data, Acer would incur increased costs and delays in the marketing approval process, which may require Acer to reduce headcount or other expenses and/or expend more resources than Acer has available. In addition, the FDA may not consider any additional information to be complete or sufficient to support the filing or approval of the NDA.

Regulatory authorities outside of the U.S., such as in Europe and Japan and in emerging markets, also have requirements for approval of drugs for commercial sale with which Acer must comply prior to marketing in those areas. Regulatory requirements can vary widely from country to country and could delay or prevent the introduction of Acer’s product candidates. Clinical trials conducted in one country may not be accepted or the results may not be found adequate by regulatory authorities in other countries, and obtaining regulatory approval in one country does not mean that regulatory approval will be obtained in any other country. However, the failure to obtain regulatory approval in one jurisdiction could have a negative impact on Acer’s ability to obtain approval in a different jurisdiction. Approval processes vary among countries and can involve additional product candidate testing and validation and additional administrative review periods. Seeking foreign regulatory approval could require additional non-clinical studies or clinical trials, which could be costly and time-consuming. Foreign regulatory approval may include all of the risks associated with obtaining FDA approval. For all of these reasons, Acer may not obtain foreign regulatory approvals on a timely basis, if at all.

The process to develop, obtain marketing approval for, and commercialize product candidates is long, complex and costly, both inside and outside of the U.S., and approval is never guaranteed. The time required to obtain approval by the FDA and comparable foreign authorities is unpredictable but typically takes many years following the commencement of clinical trials and depends upon numerous factors, including the substantial discretion of the regulatory authorities. In addition, approval policies, regulations, or the type and amount of clinical data necessary to gain approval may change during the course of a product candidate’s clinical development and may vary among jurisdictions. Even if Acer’s product candidates were to successfully obtain approval from regulatory authorities, any such approval might significantly limit the approved indications for use, including more limited patient populations, require that precautions, warnings or contraindications be included on the product labeling, including black box warnings, require expensive and time-consuming post-approval clinical studies, risk evaluation and mitigation strategies or surveillance as conditions of approval, or, through the product label, the approval may limit the claims that Acer may make, which may impede the successful commercialization of Acer’s product candidates. Following any approval for commercial sale of Acer’s product candidates, certain changes to the product, such as changes in manufacturing processes and additional labeling claims, as well as new safety information, may require new studies and will be subject to additional FDA notification, or review and approval. Also, marketing approval for any of Acer’s product

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candidates may be withdrawn. If Acer is unable to obtain marketing approval for Acer’s product candidates in one or more jurisdictions, or any approval contains significant limitations, Acer’s ability to market to Acer’s full target market will be reduced and Acer’s ability to realize the full market potential of Acer’s product candidates will be impaired. Furthermore, Acer may not be able to obtain sufficient funding or generate sufficient revenue and cash flows to continue or complete the development of any of Acer’s current or future product candidates.

If Acer is unable to obtain approval under Section 505(b)(2) of the FFDCA or if Acer is required to generate additional data related to safety or efficacy in order to seek approval under Section 505(b)(2), Acer may be unable to meet Acer’s anticipated development and commercialization timelines, and could decide not to pursue further development, depending on the expected time, cost, and risks associated with generating any such additional data, which could have a negative impact on the success of Acer’s product development efforts.

Traditional drug development typically relies upon Section 505(b)(1) of the FFDCA for seeking marketing authorization in the U.S., where the sponsor of the product candidate (i.e., the applicant for marketing authorization) is required to conduct all of the studies needed to demonstrate the safety and efficacy of such candidate, a pathway that Acer plans to use for EDSIVO^™ and ACER-801. Acer’s strategy for seeking marketing authorization in the U.S. for OLPRUVA^™ for oral suspension in the U.S. for the treatment of certain patients with UCDs involving deficiencies of CPS, OTC, or AS, OLPRUVA^™ relied on Section 505(b)(2) of the FFDCA, and Acer’s intended strategy for other product candidates may rely on Section 505(b)(2) of the FFDCA, which permits use of a marketing application, referred to as a 505(b)(2) application, where at least some of the information needed to demonstrate the safety and efficacy of the product candidate at issue for approval comes from studies not conducted by or for the applicant and for which the applicant has not obtained a right of reference or use. The FDA interprets this to mean that an applicant may rely for approval on such data as that found in published literature or the FDA’s finding of safety or effectiveness, or both, of a previously approved drug product owned by a third party. There is no assurance that the FDA would find third-party data relied upon by Acer in a 505(b)(2) application sufficient or adequate to support approval, and the FDA may require Acer to generate additional data to support the safety and efficacy of Acer’s product candidates. Depending on the time, nature, risk, and cost of obtaining that data or undertaking the required activities, Acer may decide that Acer is not able or willing to proceed with development, and may or may not reduce headcount and spending accordingly.

If the data to be relied upon in a 505(b)(2) application are related to drug products previously approved by the FDA and covered by patents that are listed in the FDA’s Orange Book, Acer would be required to submit with Acer’s 505(b)(2) application a Paragraph IV Certification in which Acer must certify that Acer does not infringe the listed patents or that such patents are invalid or unenforceable, and provide notice to the patent owner or the holder of the approved NDA. The patent owner or NDA holder would have 45 days from receipt of the notification of Acer’s Paragraph IV Certification to initiate a patent infringement action against Acer. If an infringement action is initiated, the approval of Acer’s NDA would be subject to a stay of up to 30 months or more while Acer defends against such a suit. Approval of Acer’s product candidates under Section 505(b)(2) may, therefore, be delayed until patent exclusivity expires or until Acer successfully challenges the applicability of those patents to Acer’s product candidates. Alternatively, Acer might elect a Section 505(b)(1) pathway to generate sufficient clinical data so that Acer would no longer need to rely on third-party data. However, a Section 505(b)(1) pathway would likely be costly and time-consuming and there would be no assurance that such data generated from such additional activities would be sufficient to seek or obtain approval.

Acer may not be able to obtain shortened review of Acer’s applications, and the FDA may not agree that Acer’s product candidates qualify for marketing approval. If Acer is required to generate additional data to support approval, Acer may be unable to meet anticipated or reasonable development and commercialization timelines, may be unable to generate the additional data at a reasonable cost, or at all, and may be unable to obtain marketing approval of Acer’s product candidates. If the FDA changes its interpretation of Section 505(b)(2) allowing reliance on data in a previously approved drug application owned by a third party, or

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if there is a change in the law affecting Section 505(b)(2), this could delay or even prevent the FDA from approving any Section 505(b)(2) application that Acer submits.

Marketing approval may be substantially delayed or may not be obtained for one or all of Acer’s product candidates if regulatory authorities require additional or more studies to assess the safety and efficacy of Acer’s product candidates. Acer could decide not to pursue further development of one or all of Acer’s product candidates, depending on, among other things, the expected time, cost, and risks associated with generating any such additional data.

Acer may be unable to initiate or complete development of Acer’s product candidates on schedule, if at all. The completion of the studies for certain of Acer’s product candidates will require Acer to obtain substantial additional funding beyond Acer’s current resources. In addition, regulatory authorities may require additional or more time-consuming studies to assess the safety or efficacy of Acer’s product candidates than Acer is currently planning. For example, in June 2019, Acer received a Complete Response Letter from the FDA regarding Acer’s NDA for EDSIVO^™ for the treatment of vEDS. The Complete Response Letter stated that it will be necessary to conduct an adequate and well-controlled trial to determine whether celiprolol reduces the risk of clinical events in patients with vEDS. In light of the FDA’s Complete Response Letter regarding Acer’s NDA for EDSIVO^™, Acer halted precommercial activities. In December 2019, Acer submitted a Formal Dispute Resolution Request to the Office of New Drugs appealing the FDA’s decision as outlined in the Complete Response Letter. In March 2020, Acer received a response to Acer’s Formal Dispute Resolution Request from the Office of New Drugs of the FDA stating that it had denied Acer’s appeal of the Complete Response Letter in relation to the NDA for EDSIVO^™. In its Appeal Denied letter, the Office of New Drugs (i) described possible paths forward for Acer to explore that could provide the substantial evidence of effectiveness needed to support a potential resubmission of the EDSIVO^™ NDA for the treatment of patients with vEDS with a confirmed COL3A1 mutation and (ii) referred to the FDA Guidance document issued in December 2019, where substantial evidence of effectiveness can be provided by two or more adequate and well-controlled studies demonstrating efficacy, or a single positive adequate and well-controlled study plus confirmatory evidence.

Following a Type B meeting with the FDA in the second quarter of 2021, Acer is now conducting a U.S.-based prospective, randomized, double-blind, placebo-controlled, decentralized pivotal clinical trial in patients with COL3A1-positive vEDS, which Acer refers to as the DiSCOVER trial. The proposed design features of the trial under SPA agreement with the FDA include: the acceptability of a decentralized (virtual) clinical trial design and use of an independent centralized adjudication committee; acceptability of a primary endpoint based on clinical events associated with disease outcome; agreement with modest safety data collection (based on the known safety profile of the drug); and a statistical plan that considers the rare disease classification of vEDS. In the fourth quarter of 2021, Acer submitted a protocol for the prospective pivotal trial, along with an IND. In April 2022, Acer received breakthrough therapy designation and reached agreement on a SPA in May 2022. The trial plan is to enroll approximately 150 COL3A1-positive vEDS patients in the U.S., and the duration of the trial is estimated to be approximately 3.5 years to complete once fully enrolled (based on statistical power calculations and based on 46 primary events). Additional capital will be needed to fund the trial through and beyond the third quarter of 2023. One interim analysis (based on 28 primary events) is planned at approximately 18 months after full enrollment. There can be no assurance that the resulting data from the trial would be adequate to support approval of Acer’s NDA. Acer may also conclude at any point that the cost, risk and uncertainty of obtaining that additional data does not justify continuing with the development of EDSIVO^™.

Acer currently does not have, and may not be able to obtain, adequate funding to complete the necessary steps for approval for any or all of Acer’s product candidates. Additional delays may result if the FDA, an FDA Advisory Committee (if one is convened to review any NDA Acer file) or another regulatory authority indicates that a product candidate should not be approved or there should be restrictions on approval, such as the requirement for a Risk Evaluation and Mitigation Strategy (“REMS”), to ensure the safe use of the drug. Delays

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in marketing approval or rejections of applications for marketing approval in the U.S. or other markets may result from many factors, including:

The lengthy and unpredictable approval process, as well as the unpredictability of future clinical trial results, may result in Acer’s failure to obtain marketing approval to market Acer’s product candidates, which would significantly harm Acer’s business, results of operations and prospects and could lead to reduction in headcount.

Clinical drug development involves a lengthy and expensive process with an uncertain outcome. Clinical development of product candidates for rare diseases carries additional risks, such as recruiting patients in a very small patient population.

Clinical testing is expensive and can take many years to complete, and its outcome is inherently uncertain. The FDA and comparable foreign regulatory authorities have substantial discretion in the approval process and determining when or whether marketing approval will be obtained for Acer’s current product candidates. Even if Acer believes the data collected from clinical trials of Acer’s current product candidates are promising, such data may not be sufficient to support approval by the FDA or comparable foreign authorities. Acer’s future clinical trial results may not be successful.

It is impossible to predict the extent to which the clinical trial process may be affected by legislative and regulatory developments. Due to these and other factors, Acer’s current product candidates or future product candidates could take a significantly longer time to gain marketing approval than expected or may never gain marketing approval. This could delay or eliminate any potential product revenue by delaying or terminating the potential commercialization of Acer’s current product candidates.

Preclinical trials must also be conducted in accordance with the FDA and comparable foreign authorities’ legal requirements, regulations or guidelines, including current Good Laboratory Practice (“cGLP”), an international standard meant to harmonize the conduct and quality of nonclinical studies and the archiving and

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reporting of findings. Preclinical studies including long-term toxicity studies and carcinogenicity studies in animals may result in findings that may require further evaluation, which could affect the risk-benefit evaluation of clinical development, or which may lead the regulatory agencies to delay, prohibit the initiation of or halt clinical trials or delay or deny marketing authorization applications. Failure to adhere to the applicable cGLP standards or misconduct during the course of preclinical trials may invalidate the data and require one or more studies to be repeated or additional testing to be conducted.

Clinical trials must also be conducted in accordance with the FDA and comparable foreign authorities’ legal requirements, regulations or guidelines, including human subject protection requirements and cGCP. Clinical trials are subject to further oversight by these governmental agencies and Institutional Review Boards (“IRBs”), at the medical institutions where the clinical trials are conducted. In addition, clinical trials must be conducted with supplies of Acer’s current product candidates produced under cGMP and other requirements. Clinical trials are usually conducted at multiple sites, potentially including some sites in countries outside the U.S. and the European Union, which may subject Acer to further delays and expenses as a result of increased shipment costs, additional regulatory requirements and the engagement of foreign and non-EU clinical research organizations, as well as expose Acer to risks associated with clinical investigators who are unknown to the FDA or the European regulatory authorities, and with different standards of diagnosis, screening and medical care.

The commencement and completion of clinical trials for Acer’s current product candidates may be delayed, suspended or terminated as a result of many factors, including but not limited to:

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Patient enrollment is a significant factor in the timing of clinical trials and is affected by many factors, including the size and nature of the patient population, the proximity of patients to clinical sites, the eligibility criteria for the trial, the design of the clinical trial, competing clinical trials and clinicians’ and patients’ perceptions as to the potential advantages of the drug being studied in relation to other available therapies, including any new drugs or treatments that may be approved for the indications Acer is investigating. In addition, the ongoing COVID-19 pandemic may materially adversely affect Acer’s ability to recruit qualified subjects for Acer’s clinical trials for Acer’s product candidates. It is impossible to predict that impact on Acer’s clinical trials and Acer’s business.

There are significant requirements imposed on Acer and on clinical investigators who conduct clinical trials that Acer sponsors. Although Acer is responsible for selecting qualified clinical investigators, providing them with the information they need to conduct the clinical trial properly, ensuring proper monitoring of the clinical trial, and ensuring that the clinical trial is conducted in accordance with the general investigational plan and protocols contained in the IND, Acer cannot ensure the clinical investigators will maintain compliance with all regulatory requirements at all times. The pharmaceutical industry has experienced cases where clinical investigators have been found to incorrectly record data, omit data, or even falsify data. Acer cannot ensure that the clinical investigators in Acer’s trials will not make mistakes or otherwise compromise the integrity or validity of data, any of which would have a significant negative effect on Acer’s ability to obtain marketing approval, Acer’s business, and Acer’s financial condition.

Acer could encounter delays if a clinical trial is suspended or terminated by Acer, by the IRBs of the institutions in which such trial is being conducted, by the data safety monitoring board (“DSMB”) for such trial, or by the FDA or comparable foreign regulatory authorities. Acer or such authorities may impose a suspension or termination due to a number of factors, including failure to conduct the clinical trial in accordance with regulatory requirements or Acer’s clinical protocols, inspection of the clinical trial operations or trial site by the FDA or comparable foreign regulatory authorities resulting in the imposition of a clinical hold, safety issues or adverse side effects, failure to demonstrate a benefit from using the drug, changes in governmental regulations or administrative actions or lack of adequate funding to continue the clinical trial. If Acer experiences delays in the completion or termination of any clinical trial of Acer’s current product candidates, the commercial prospects of Acer’s current product candidates will be harmed, and Acer’s ability to generate product revenues from Acer’s product candidates will be delayed. In addition, any delays in completing Acer’s clinical trials will increase Acer’s costs, slow Acer’s development and approval process and jeopardize Acer’s ability to commence product sales and generate revenues. Many of the factors that cause, or lead to, a delay in the commencement or completion of clinical trials may also ultimately lead to the denial of marketing approval of Acer’s product candidates.

Any of these occurrences could materially adversely affect Acer’s business, financial condition, results of operations, and prospects. In addition, many of the factors that cause, or lead to, a delay in the commencement or completion of clinical trials may also ultimately lead to the denial of marketing approval of Acer’s current product candidates. Significant clinical trial delays could also allow Acer’s competitors to bring products to market before Acer is able to do so, shorten any periods during which Acer has the exclusive right to commercialize Acer’s current product candidates and impair Acer’s ability to commercialize Acer’s current product candidates, which may harm Acer’s business, financial condition, results of operations, and prospects.

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Clinical failure can occur at any stage of clinical development. Because the results of earlier clinical trials are not necessarily predictive of future results, any product candidate Acer advances through clinical trials may not have favorable results in later clinical trials or receive marketing approval.

Clinical failure can occur at any stage of Acer’s clinical development. For example, topline results announced in March 2023 from Acer’s Phase 2a proof of concept clinical trial to evaluate ACER-801 as a potential treatment for moderate to severe VMS associated with menopause showed that ACER-801 was safe and well-tolerated but did not achieve statistical significance when evaluating ACER-801’s ability to decrease the frequency or severity of hot flashes in postmenopausal women.

The results of preclinical studies and early clinical trials of Acer’s product candidates may not be predictive of the results of later-stage clinical trials. Product candidates in later stages of clinical trials may fail to show the desired safety and efficacy traits despite having progressed through preclinical studies and initial clinical trials. A number of companies in the pharmaceutical industry have suffered significant setbacks in advanced clinical trials due to lack of efficacy or adverse safety profiles, notwithstanding promising results in earlier trials. Clinical trials may produce negative or inconclusive results, and Acer may decide, or regulators may require Acer, to conduct additional clinical or preclinical testing. Data obtained from tests are susceptible to varying interpretations, and regulators may not interpret Acer’s data as favorably as Acer does, which may delay, limit or prevent marketing approval.

In addition, the design of a clinical trial can determine whether Acer’s results will support approval of a product or approval of a product for desired indications, and flaws or shortcomings in the design of a clinical trial may not become apparent until the clinical trial is well advanced. Further, clinical trials of potential products often reveal that it is not practical or feasible to continue development efforts. If one of Acer’s product candidates is found to be unsafe or lack efficacy, Acer will not be able to obtain marketing approval for it and Acer’s business would be harmed. For example, if the results of Acer’s clinical trials of Acer’s product candidates do not achieve pre-specified endpoints or Acer is unable to provide primary or secondary endpoint measurements deemed acceptable by the FDA or comparable foreign regulators or if Acer is unable to demonstrate an acceptable level of safety relative to the efficacy associated with Acer’s proposed indications, the prospects for approval of Acer’s product candidates would be materially and adversely affected. A number of companies in the pharmaceutical industry, including those with greater resources and experience than Acer, have suffered significant setbacks in Phase 2 and Phase 3 clinical trials, even after seeing promising results in earlier clinical trials.

In some instances, there can be significant variability in safety and/or efficacy results between different trials of the same product candidate due to numerous factors, including differences in trial protocols and design, the size and type of the patient population, adherence to the dosing regimen and the rate of dropout among clinical trial participants. Acer does not know whether any clinical trials Acer may conduct will demonstrate consistent and/or adequate efficacy and safety to obtain marketing approval for Acer’s product candidates.

As an organization, Acer has limited experience in designing and completing clinical trials and may be unable to do so efficiently or at all for Acer’s current product candidates or any product candidate Acer develops.

Acer will need to conduct clinical trials of Acer’s product candidates. The conduct of clinical trials and the submission of a successful NDA is a complicated process. As an organization, Acer has limited experience in designing and completing clinical trials, and Acer has limited experience in preparing and submitting regulatory filings. Consequently, Acer may be unable to successfully and efficiently execute and complete necessary clinical trials in a way that leads to NDA submission and approval of Acer’s product candidates. Acer may require more time and incur greater costs than anticipated and may not succeed in obtaining marketing approval of the product candidates Acer develops. Failure to commence or complete, or delays in, Acer’s planned clinical trials would prevent Acer from or delay Acer in commercializing Acer’s current product candidates or any other product candidate Acer develops.

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Acer’s product candidates may cause undesirable adverse effects or have other properties that could delay or prevent their marketing approval, limit the commercial profile of an approved label, or result in significant negative consequences following marketing approval, if obtained.

Undesirable side effects caused by Acer’s product candidates could cause Acer or regulatory authorities to interrupt, delay or halt clinical trials and could result in a more restrictive label or the delay or denial of marketing approval by the FDA or other comparable foreign authorities. If any of Acer’s current product candidates or any other product candidate Acer develops is associated with serious adverse, undesirable or unacceptable side effects, Acer may need to abandon such candidate’s development or limit development to certain uses or subpopulations in which such side effects are less prevalent, less severe or more acceptable from a risk-benefit perspective. Many compounds that initially showed promise in early-stage or clinical testing have later been found to cause side effects that prevented further development of the compound. Results of Acer’s trials could reveal a high and unacceptable prevalence of these or other side effects. In such an event, Acer’s trials could be suspended or terminated, and the FDA or comparable foreign regulatory authorities could order Acer to cease further development of or deny approval of Acer’s product candidates for any or all targeted indications. The drug-related side effects could affect patient recruitment or the ability of enrolled patients to complete the trial or result in potential product liability claims.

For OLPRUVA^™ for oral suspension in the U.S. for the treatment of certain patients with UCDs involving deficiencies of CPS, OTC, or AS, and for other product candidates that receive marketing approval, if any, and Acer or others may identify undesirable side effects caused by such products and a number of potentially significant negative consequences could result, including:

Any of these events could prevent Acer from achieving or maintaining market acceptance of Acer’s product candidates, if approved, and could materially adversely affect Acer’s business, financial condition, results of operations and prospects.

Even if Acer receives marketing approval for Acer’s product candidates, such approved products will be subject to ongoing obligations and continued regulatory review, which may result in significant additional expense. Additionally, Acer’s product candidates, if approved, could be subject to labeling and other restrictions, and Acer may be subject to penalties and legal sanctions if Acer fails to comply with regulatory requirements or experience unanticipated problems with Acer’s approved products.

For OLPRUVA^™ for oral suspension in the U.S. for the treatment of certain patients with UCDs involving deficiencies of CPS, OTC, or AS, and for other product candidates that receive marketing approval, the manufacturing processes, labeling, packaging, distribution, adverse event reporting, storage, advertising, promotion and recordkeeping for the product will be subject to extensive and ongoing regulatory requirements.

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These requirements include submissions of safety and other post-marketing information and reports, registration, as well as continued compliance with cGMP regulations and GCP for any clinical trials that Acer conducts post-approval. Any marketing approvals that Acer receives for Acer’s product candidates may also be subject to limitations on the approved indicated uses for which the product may be marketed or to conditions of approval, or contain requirements for potentially costly post-marketing testing, including Phase 4 clinical trials, and surveillance to monitor safety and efficacy.

Later discovery of previously unknown problems with an approved product, including adverse events of unanticipated severity or frequency, or with manufacturing operations or processes, or failure to comply with regulatory requirements, or evidence of acts that raise questions about the integrity of data supporting the product approval, may result in, among other things:

The FDA’s policies may change and additional government regulations may be enacted that could prevent, limit or delay marketing approval, manufacturing or commercialization of Acer’s product candidates. Acer cannot predict the likelihood, nature or extent of government regulation that may arise from future legislation or administrative action, either in the U.S. or abroad. If Acer is slow or unable to adapt to changes in existing requirements or the adoption of new requirements or policies, or Acer is not able to maintain regulatory compliance, Acer may lose any marketing approval that may have been obtained and Acer may not achieve or sustain profitability, which would adversely affect Acer’s business.

Agencies such as the FDA and national competition regulators in European countries regulate the promotion and uses of drugs not consistent with approved product labeling requirements. If Acer is found to have improperly promoted Acer’s current product candidates for uses beyond those that are approved, Acer may become subject to significant liability.

Regulatory authorities such as the FDA and national competition agencies in Europe strictly regulate the promotional claims that may be made about prescription products, such as OLPRUVA^™ for oral suspension in the U.S. for the treatment of certain patients with UCDs involving deficiencies of CPS, OTC, or AS, as well as Acer’s product candidates, EDSIVO^™, ACER-801, or ACER-2820, if approved. In particular, a product may not be promoted for uses that are not approved by the FDA or comparable foreign regulatory authorities as reflected in the product’s approved labeling, known as “off-label” use, nor may it be promoted prior to obtaining marketing approval. If Acer receives marketing approval for Acer’s product candidates for Acer’s proposed indications, physicians may nevertheless use Acer’s products for their patients in a manner that is inconsistent with the approved label if the physicians personally believe in their professional medical judgment it could be used in such manner. Although physicians may prescribe legally available drugs for off-label uses, manufacturers may not market or promote such off-label uses.

In addition, the FDA requires that promotional claims not be “false or misleading” as such terms are defined in the FDA’s regulations. For example, the FDA requires substantial evidence, which generally consists of two adequate and well-controlled clinical trials, for a company to make a claim that its product is superior to another product in terms of safety or effectiveness. Generally, unless Acer performs clinical trials meeting that standard comparing Acer’s product candidates to competitive products and these claims are approved in Acer’s product

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labeling, Acer will not be able promote Acer’s current product candidates as superior to other products. If Acer is found to have made such claims, Acer may become subject to significant liability. In the U.S., the federal government has levied large civil and criminal fines against companies for alleged improper promotion and has enjoined several companies from engaging in improper promotion. The FDA has also requested that companies enter into consent decrees or corporate integrity agreements. The FDA could also seek permanent injunctions under which specified promotional conduct is monitored, changed or curtailed.

Acer’s current and future relationships with healthcare professionals, investigators, consultants, collaborators, actual customers, potential customers and third-party payors in the U.S. and elsewhere may be subject, directly or indirectly, to applicable anti-kickback, fraud and abuse, false claims, physician payment transparency, health information privacy and security and other healthcare laws and regulations, which could expose Acer to sanctions.

Healthcare providers, physicians and third-party payors in the U.S. and elsewhere will play a primary role in the recommendation and prescription of OLPRUVA^™ for oral suspension in the U.S. for the treatment of certain patients with UCDs involving deficiencies of CPS, OTC, or AS, and for any other drug products for which Acer may obtain marketing approval. Acer’s current and future arrangements with healthcare professionals, investigators, consultants, collaborators, actual customers, potential customers and third-party payors may expose Acer to broadly applicable fraud and abuse and other healthcare laws, including, without limitation, the federal Anti-Kickback Statute and the federal False Claims Act, that may constrain the business or financial arrangements and relationships through which Acer sells, markets and distributes any drug candidates for which Acer obtains marketing approval. In addition, Acer may be subject to physician payment transparency laws and patient privacy and security regulation by the U.S. federal government and states and by the foreign jurisdictions in which Acer conducts Acer’s business. The applicable federal, state and foreign healthcare laws that may affect Acer’s ability to operate include the following:

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Further, the Affordable Care Act, among other things, amended the intent requirement of the federal Anti-Kickback Statute and certain criminal statutes governing healthcare fraud. A person or entity no longer needs to have actual knowledge of the statute or specific intent to violate it. In addition, the Affordable Care Act provided that the government may assert that a claim including items or services resulting from a violation of the federal Anti-Kickback Statute constitutes a false or fraudulent claim for purposes of the False Claims Act.

Efforts to ensure that Acer’s future business arrangements with third parties will comply with applicable healthcare laws and regulations may involve substantial costs. It is possible that governmental authorities will conclude that Acer’s business practices may not comply with current or future statutes, regulations or case law involving applicable fraud and abuse or other healthcare laws. If Acer’s operations are found to be in violation of any of these laws or any other governmental regulations that may apply to Acer, Acer may be subject to significant civil, criminal and administrative penalties, including, without limitation, damages, fines, imprisonment, exclusion from participation in government healthcare programs, such as Medicare and Medicaid, and the curtailment or restructuring of Acer’s operations, which could significantly harm Acer’s business. If any of the physicians or other healthcare providers or entities with whom Acer expects to do business, including Acer’s current and future collaborators, if any, are found not to be in compliance with applicable laws, those persons or entities may be subject to criminal, civil or administrative sanctions, including exclusion from participation in government healthcare programs, which could also affect Acer’s business.

The impact of recent healthcare reform legislation and other changes in the healthcare industry and healthcare spending on Acer is currently unknown and may adversely affect Acer’s business model.

In the U.S. and some foreign jurisdictions, legislative and regulatory changes and proposed changes regarding the healthcare system could prevent or delay marketing approval of Acer’s drug candidates, restrict or regulate post-approval activities and affect Acer’s ability to profitably sell any drug candidates for which Acer obtains marketing approval.

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Acer’s revenue prospects could be affected by changes in healthcare spending and policy in the U.S. and abroad. Acer operates in a highly regulated industry and new laws and judicial decisions, or new interpretations of existing laws or decisions, related to healthcare availability, the method of delivery or payment for healthcare products and services could negatively impact Acer’s business, financial condition, results of operations and prospects. There is significant interest in promoting healthcare reform, as evidenced by the enactment in the U.S. of the Affordable Care Act. Among other things, the Affordable Care Act contains provisions that may reduce the profitability of drug products, including, for example, revising the methodology by which rebates owed by manufacturers for covered outpatient drugs under the Medicaid Drug Rebate Program are calculated, extending the Medicaid Drug Rebate Program to utilization of prescriptions of individuals enrolled in Medicaid managed care plans, imposing mandatory discounts for certain Medicare Part D beneficiaries, and subjecting drug manufacturers to payment of an annual fee.

Acer expects that the Affordable Care Act, as well as other healthcare reform measures that may be adopted in the future, may result in more rigorous coverage criteria and in additional downward pressure on the price that Acer receives for any approved product. Any reduction in reimbursement from Medicare or other government programs may result in a similar reduction in payments from private payors. The implementation of cost containment measures or other healthcare reforms may prevent Acer from being able to generate revenue or commercialize Acer’s drugs.

It is likely that federal and state legislatures within the U.S. and foreign governments will continue to consider changes to existing healthcare legislation including the Affordable Care Act. It is also possible that the executive branch may take certain steps by executive action which could modify or solidify aspects of the Affordable Care Act. Certain stakeholders are also pursuing litigation challenging certain provisions which, if successful, would have the effect of modifying some or all of the provisions of the Affordable Care Act. Acer cannot predict the reform initiatives that may be adopted or litigation outcomes in the future or whether initiatives that have been adopted will be repealed or modified. The continuing efforts of the government, insurance companies, managed care organizations and other payors of healthcare services to contain or reduce costs of healthcare may adversely affect:

If Acer fails to comply with environmental, health and safety laws and regulations, Acer could become subject to fines or penalties or incur costs that could have a material adverse effect on Acer’s business, financial condition or results of operations.

Acer’s research, development and commercialization activities and Acer’s third-party manufacturers’ and suppliers’ activities involve the controlled storage, use, and disposal of hazardous materials, including the components of Acer’s product candidates and other hazardous compounds. Acer and Acer’s manufacturers and suppliers are subject to laws and regulations governing the use, manufacture, storage, handling, and disposal of these hazardous materials. In some cases, these hazardous materials and various wastes resulting from their use are stored at Acer’s and Acer’s manufacturers’ facilities pending their use and disposal. Acer cannot eliminate the risk of contamination, which could cause an interruption of Acer’s commercialization efforts, research and development efforts and business operations, environmental damage resulting in costly clean-up and liabilities under applicable laws and regulations governing the use, storage, handling, and disposal of these materials and

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specified waste products. Although Acer believes that the safety procedures utilized by Acer and Acer’s third-party manufacturers for handling and disposing of these materials generally comply with the standards prescribed by these laws and regulations, Acer cannot guarantee that this is the case or eliminate the risk of accidental contamination or injury from these materials. In such an event, Acer may be held liable for any resulting damages and such liability could exceed Acer’s resources and state or federal or other applicable authorities may curtail Acer’s use of specified materials and/or interrupt Acer’s business operations. Furthermore, environmental laws and regulations are complex, change frequently, and have tended to become more stringent. Acer cannot predict the impact of such changes and cannot be certain of Acer’s future compliance. Acer does not currently carry biological or hazardous waste insurance coverage.

Other Risks Related to Acer’s Business

If Acer fails to attract and retain key management and scientific personnel, Acer may be unable to successfully develop or commercialize Acer’s product candidates.

Acer’s success as a pharmaceutical company depends on Acer’s continued ability to attract, retain and motivate highly qualified management and scientific and clinical personnel. The loss of the services of any of Acer’s senior management could delay or prevent obtaining marketing approval or commercialization of Acer’s product candidates.

As of September 25, 2023, Acer had a workforce of 27 full-time employees, in addition to several consultants or independent contractors, to conduct Acer’s planned business operations. If Acer’s projections prove to be inaccurate or if Acer is forced to implement any workforce reductions, Acer may not have sufficient staffing to pursue Acer’s research and development goals.

Acer may not be able to attract or retain qualified management and scientific personnel in the future due to the intense competition for a limited number of qualified personnel among pharmaceutical businesses, and other pharmaceutical, biotechnology and other businesses. Acer’s failure to attract, hire, integrate and retain qualified personnel could impair Acer’s ability to achieve Acer’s business objectives.

Acer may not be able to win government, academic institution or non-profit contracts or grants, which could affect the timing or continued development of one or more of Acer’s product candidates, and ACER-2820 in particular.

From time to time, Acer may apply for contracts or grants from government agencies, non-profit entities and academic institutions. For example, Acer is pursuing several financing options, including federally-funded research contracts and grants and other potentially non-dilutive funding sources, to fund Acer’s planned ACER-2820 development program for the potential treatment of patients with COVID-19. Such contracts or grants can be highly attractive because they provide capital to fund the ongoing development of Acer’s product candidates without diluting Acer’s stockholders. However, there is often significant competition for these contracts or grants. Entities offering contracts or grants may have requirements to apply for or to otherwise be eligible for certain contracts or grants that Acer’s competitors may be able to satisfy that Acer cannot. In addition, such entities may make unfavorable decisions as to whether to offer contracts or make grants, to whom the contracts or grants may or will be awarded and the size of the contracts or grants to each awardee. Even if Acer is able to satisfy the award requirements, there is no guarantee that Acer will be a successful awardee. Therefore, Acer may not be able to win any contracts or grants in a timely manner, if at all.

If a successful product liability claim or series of claims is brought against Acer for uninsured liabilities or in excess of insured liabilities, Acer could be forced to pay substantial damage awards.

The use of any of Acer’s product candidates in clinical trials, and the sale of any approved products such as OLPRUVA^™ for oral suspension in the U.S. for the treatment of certain patients with UCDs involving

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deficiencies of CPS, OTC, or AS, may expose Acer to product liability claims. Acer currently maintains product liability insurance coverage in amounts Acer considers to be reasonable for Acer’s stage of development. Acer intends to monitor the amount of coverage Acer maintains as Acer’s commercialization efforts progress for OLPRUVA^™ for oral suspension in the U.S. for the treatment of certain patients with UCDs involving deficiencies of CPS, OTC, or AS, and as the size and design of Acer’s clinical trials evolve, and if Acer is successful in such commercialization efforts or obtaining approval to commercialize any of Acer’s other product candidates, adjust the amount of coverage Acer maintains accordingly. However, there is no assurance that such insurance coverage will fully protect Acer against some or all of the claims to which Acer might become subject. Acer might not be able to maintain adequate insurance coverage at a reasonable cost or in sufficient amounts or scope to protect Acer against potential losses. In the event a claim is brought against Acer, Acer might be required to pay legal and other expenses to defend the claim, as well as uncovered damages awards resulting from a claim brought successfully against Acer.

Furthermore, whether or not Acer is ultimately successful in defending any such claims, Acer might be required to direct financial and managerial resources to such defense and adverse publicity could result, all of which could harm Acer’s business.

Acer’s employees, independent contractors, investigators, contract research organizations, consultants, collaborators and vendors may engage in misconduct or other improper activities, including noncompliance with regulatory standards and requirements and insider trading.

Acer is exposed to the risk that Acer’s employees and other third parties may engage in fraudulent conduct or other illegal activity. Misconduct by employees and other third parties could include intentional, reckless and/or negligent conduct or disclosure of unauthorized activities to Acer that violate FDA regulations, including those laws requiring the reporting of true, complete and accurate information to the FDA, manufacturing standards, federal and state healthcare fraud and abuse laws and regulations, or laws that require the reporting of financial information or data accurately. In particular, sales, marketing and business arrangements in the healthcare industry are subject to extensive laws intended to prevent fraud, kickbacks, self-dealing and other abusive practices. These laws and regulations may restrict or prohibit a wide range of pricing, discounting, marketing and promotion, sales commission, customer incentive programs and other business arrangements. Activities subject to these laws also involve the improper use of information obtained in the course of clinical trials, which could result in regulatory sanctions and serious harm to Acer’s reputation. It is not always possible to identify and deter employee and other third-party misconduct, and the precautions Acer takes to detect and prevent this activity may not be effective in controlling unknown or unmanaged risks or losses or in protecting Acer from governmental investigations or other actions or lawsuits stemming from a failure to be in compliance with such laws. If any such actions are instituted against Acer, and Acer is not successful in defending ourselves or asserting Acer’s rights, those actions could have a significant impact on Acer’s business, including the imposition of significant civil, criminal and administrative penalties, damages, monetary fines, disgorgement, possible exclusion from participation in Medicare, Medicaid and other federal healthcare programs, contractual damages, reputational harm, diminished profits and future earnings and curtailment or restructuring of Acer’s operations, any of which could adversely affect Acer’s ability to operate.

Acer’s internal computer systems, or those of Acer’s development collaborators, third-party clinical research organizations or other contractors or consultants, may fail or suffer cybersecurity or other security breaches, which could result in a material disruption of Acer’s product development programs.

Despite the implementation of security measures, Acer’s internal computer systems and those of Acer’s current and any future CROs and other contractors, consultants and collaborators are vulnerable to cybersecurity breaches and damage from computer viruses, unauthorized access, natural disasters, terrorism, war and telecommunication and electrical failures. In addition, there has recently been a significant increase in ransomware and cybersecurity attacks related to the ongoing conflict between Russia and Ukraine, which could lead to interruptions, delays, or loss of critical data if Acer or one of Acer’s partners is the subject of such an

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attack. While Acer has not experienced any such material system failure, accident or security breach to date, if such an event were to occur and cause interruptions in Acer’s operations, it could result in a material disruption of Acer’s commercialization efforts, Acer’s development programs and Acer’s business operations. For example, the loss of clinical trial data from completed or future clinical trials could result in delays in Acer’s marketing approval efforts and significantly increase Acer’s costs to recover or reproduce the data. Likewise, Acer intends to rely on third parties to manufacture Acer’s products and product candidates and to conduct clinical trials, and similar events relating to their computer systems could also have a material adverse effect on Acer’s business. To the extent that any disruption or cybersecurity or other security breach were to result in a loss of, or damage to, Acer’s data or applications, or inappropriate disclosure of confidential or proprietary information, Acer could incur liability, Acer’s further development and commercialization efforts could be delayed, and Acer’s reputation could be harmed.

Risks Related to Commercialization of Acer’s Product Candidates

Even if Acer obtains the required regulatory approvals in the U.S. and other territories, the commercial success of Acer’s product candidates will depend on, among other factors, market awareness and acceptance of Acer’s product candidates.

Despite the FDA’s approval of OLPRUVA^™ for oral suspension in the U.S. for the treatment of certain patients with UCDs involving deficiencies of CPS, OTC, or AS, and even if Acer obtains marketing approval for other product candidates, the products may not gain market acceptance among physicians, key opinion leaders, healthcare payors, patients and the medical community. Market acceptance of any approved products depends on a number of factors, including:

Market acceptance is critical to Acer’s ability to generate revenue. Any product candidate, if approved and commercialized, may be accepted in only limited capacities or not at all. If any approved products are not accepted by the market to the extent that Acer expects, Acer may not be able to generate revenue and Acer’s business would suffer.

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If the market opportunities for OLPRUVA^™ for oral suspension in the U.S. for the treatment of certain patients with UCDs involving deficiencies of CPS, OTC, or AS, or for other product candidates to treat rare diseases are smaller than Acer believes they are, then Acer’s revenues may be adversely affected and Acer’s business may suffer.

The market for OLPRUVA^™ for oral suspension in the U.S. for the treatment of certain patients with UCDs involving deficiencies of CPS, OTC, or AS is limited, and the diseases that some of Acer’s current and future product candidates are being developed to address are rare. Acer’s projections of both the number of people who have these diseases, as well as the subset of people with these diseases who have the potential to benefit from treatment with Acer’s product candidates, and Acer’s assumptions relating to pricing are based on estimates. Given the small number of patients who have some of the diseases that Acer is targeting, Acer’s eligible patient population and pricing estimates may differ significantly from the actual market addressable by Acer’s product candidates.

For OLPRUVA^™ for oral suspension in the U.S. for the treatment of certain patients with UCDs involving deficiencies of CPS, OTC, or AS, Acer believes the prevalence is no more than approximately 2,100 individuals in the U.S. with a diagnosed patient population in the U.S. of only approximately 1,100. For Acer’s product candidate EDSIVO^™ (celiprolol) for the treatment of vEDS patients with a confirmed type III collagen (COL3A1) mutation, it is estimated that there are up to 7,500 COL3A1-positive vEDS patients in the U.S. As new studies are performed the estimated prevalence of these diseases may change. The number of patients may turn out to be lower than expected. There can be no assurance that the prevalence of UCDs or vEDS in the study populations accurately reflect the prevalence of these diseases in the broader world population. If Acer’s estimates of the prevalence of UCDs or vEDS or of the number of patients who may benefit from treatment with OLPRUVA^™ or EDSIVO^™ prove to be incorrect, the market opportunities for OLPRUVA^™ and for Acer’s other product candidates may be smaller than Acer believes they are, Acer’s prospects for generating revenue may be adversely affected and Acer’s business may suffer. Likewise, the potentially addressable patient population for OLPRUVA^™ and for each of these other product candidates may be limited or may not be amenable to treatment with OLPRUVA^™ or Acer’s other product candidates, and new patients may become increasingly difficult to identify or gain access to, which would adversely affect Acer’s business, financial condition, results of operations and prospects.

If Acer decides not to pursue further development of ACER-801 (osanetant) for the treatment of vasomotor symptoms following Acer’s pause of that program to conduct a thorough review of the full data set from Acer’s Phase 2a proof of concept clinical trial, Acer will have significantly reduced Acer’s portfolio of development programs as well as a possible revenue source.

In March 2023 Acer announced that topline results from Acer’s Phase 2a proof of concept clinical trial to evaluate ACER-801 (osanetant) as a potential treatment for moderate to severe Vasomotor Symptoms (VMS) associated with menopause showed that ACER-801 was safe and well-tolerated but did not achieve statistical significance when evaluating ACER-801’s ability to decrease the frequency or severity of hot flashes in postmenopausal women. As a result, acer paused the ACER-801 program to conduct a thorough review of the full data set. If acer decides not to pursue further development of osanetant, Acer will have significantly reduced Acer’s portfolio of development programs as well as a possible revenue source.

Acer currently has limited marketing and sales experience. If Acer is unable to establish sales and marketing capabilities or enter into agreements with third parties to market and sell Acer’s product candidates, Acer may be unable to generate any product sales revenue.

Acer has never commercialized a product candidate and, although commercial activities have recently begun for OLPRUVA^™ for oral suspension in the U.S. for the treatment of certain patients with UCDs involving deficiencies of CPS, OTC, or AS, as well as precommercial activities for EDSIVO^™ prior to Acer’s receipt of the FDA’s Complete Response Letters with respect to such development program, Acer currently does not have

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fully developed marketing, sales or distribution capabilities for any marketed products. In order to commercialize OLPRUVA^™ for oral suspension in the U.S. for the treatment of certain patients with UCDs involving deficiencies of CPS, OTC, or AS, Acer is building marketing, sales, medical affairs, distribution, managerial and other non-technical capabilities or making arrangements with third parties to perform these services, any for any of Acer’s other product candidates that receive marketing approval Acer would have to build marketing, sales, medical affairs, distribution, managerial and other non-technical capabilities or make arrangements with third parties to perform these services, and Acer may not be successful in doing any of the foregoing. Building a targeted specialty sales force is expensive and time consuming. Any failure or delay in the development of Acer’s internal sales, marketing and distribution capabilities would adversely impact Acer’s commercialization efforts. Acer may choose to collaborate with third parties that have their own sales forces and established distribution systems, in lieu of or to augment any sales force and distribution systems Acer may create. If Acer is unable to enter into collaborations with third parties for the commercialization of approved product candidates, if any, on acceptable terms or at all, or if any such collaborator does not devote sufficient resources to the commercialization of Acer’s product or otherwise fails in commercialization efforts, Acer may not be able to successfully commercialize Acer’s product candidates that receive marketing approval. If Acer is not successful in commercializing Acer’s product candidates that receive marketing approval, either on Acer’s own or through collaborations with one or more third parties, Acer’s potential future revenue will be materially and adversely impacted, as well as the realizability of inventory costs which have been recorded to Acer’s balance sheet.

If Acer fails to enter into strategic relationships or collaborations, Acer’s business, financial condition, commercialization prospects and results of operations may be materially adversely affected.

Acer’s product development programs and the commercialization of Acer’s product candidates that receive marketing approval, including OLPRUVA^™ for oral suspension in the U.S. for the treatment of certain patients with UCDs involving deficiencies of CPS, OTC, or AS, will require substantial additional cash to fund expenses. Therefore, in addition to financing the development of Acer’s product candidates through additional equity financings or through debt financings, Acer may decide to enter into collaborations with pharmaceutical or biopharmaceutical companies for the development and potential commercialization of Acer’s product candidates and, with respect to OLPRUVA^™ and in addition to the Exclusive License Agreement with Relief, for the commercialization of OLPRUVA^™.

Acer faces significant competition in seeking appropriate collaborators. Collaborations are complex and time-consuming to negotiate and document. Acer may also be restricted under existing and future collaboration agreements from entering into agreements on certain terms with other potential collaborators. Acer may not be able to negotiate collaborations on acceptable terms, or at all. If that were to occur, Acer may have to curtail the development of a particular product, reduce or delay one or more of Acer’s development programs, delay Acer’s potential commercialization or reduce the scope of Acer’s sales or marketing activities, or increase Acer’s expenditures and undertake development or commercialization activities at Acer’s own expense. If Acer elects to increase Acer’s expenditures to fund development or commercialization activities on Acer’s own, Acer may need to obtain additional capital, which may not be available to Acer on acceptable terms or at all. If Acer does not have sufficient funds, Acer will not be able to bring Acer’s product candidates to market and generate product revenue. Acer’s existing Exclusive License Agreement with Relief, and any other collaboration agreements, could be subject to the following risks, each of which may materially harm Acer’s business, commercialization prospects and financial condition:

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Coverage and reimbursement may be limited or unavailable in certain market segments for Acer’s product candidates, which could make it difficult for Acer to sell Acer’s products profitably.

There is significant uncertainty related to third-party coverage and reimbursement of newly approved pharmaceuticals. Market acceptance and sales of any approved product candidates will depend significantly on the availability of coverage and adequate reimbursement from third-party payors and may be affected by existing and future healthcare reform measures. Patients who are prescribed treatments for their conditions and providers performing the prescribed services generally rely on third-party payors to reimburse all or part of the associated healthcare costs. Government authorities and third-party payors, such as private health insurers, health maintenance organizations, and government payors like Medicare and Medicaid, decide which drugs they will pay for and establish reimbursement levels. Increasingly, third-party payors are requiring that drug companies provide them with predetermined discounts from list prices and are challenging the prices charged for drugs and products. Coverage and reimbursement may not be available for any product that Acer commercializes and, even if coverage is provided, the level of reimbursement may not be satisfactory. Inadequate reimbursement levels may adversely affect the demand for, or the price of, any drug candidate for which Acer obtains marketing approval.

Reimbursement by a third-party payor may depend upon a number of factors, including the third-party payor’s determination that use of a product is, among other things:

Obtaining coverage and adequate reimbursement approval for a product from a government or other third-party payor is a time consuming and costly process that could require Acer to conduct expensive pharmacoeconomic studies and provide supporting scientific, clinical and cost-effectiveness data for the use of Acer’s products to the payor. Acer may not be able to provide data sufficient to gain acceptance with respect to coverage and adequate reimbursement. In addition to examining the medical necessity and cost-effectiveness of new products, coverage may be limited to specific drug products on an approved list, or formulary, which might not include all of the FDA-approved drug products for a particular indication. There may also be formulary placements that result in lower reimbursement levels and higher cost-sharing borne by patients, any of which could have an adverse effect on Acer’s revenues and profits. Moreover, a third-party payor’s decision to provide coverage for a drug product does not imply that an adequate reimbursement rate will be approved. Adequate third-party reimbursement may not be available to enable Acer to maintain price levels sufficient to realize an appropriate return on Acer’s investment in product development. Additionally, coverage and reimbursement for drug products can differ significantly from payor to payor. One third-party payor’s decision to cover a particular drug product does not ensure that other payors will also provide coverage for the drug product, or even if coverage is available, establish an adequate reimbursement rate. In addition, pricing of orphan and rare disease drug treatments is under increased pressure given the overall healthcare cost climate generally, and pricing of pharmaceutical products specifically.

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Acer cannot be sure that coverage or adequate reimbursement will be available for any of Acer’s product candidates. Also, Acer cannot be sure that reimbursement amounts will not reduce the demand for, or the price of, Acer’s products. If reimbursement is not available or is available only to limited levels, Acer may not be able to commercialize certain of Acer’s products. In the U.S., third-party payors are increasingly attempting to contain healthcare costs by limiting both coverage and the level of reimbursement of new drugs. Third-party payors are increasingly challenging the prices charged for medical products and services, examining the medical necessity and reviewing the cost-effectiveness of drug products and medical services and questioning safety and efficacy. As a result, significant uncertainty exists as to whether and how much third-party payors will reimburse patients for their use of newly approved drugs, which in turn will put pressure on the pricing of drugs. Additionally, emphasis on managed care in the U.S. has increased and Acer expects will continue to increase the pressure on drug pricing. If third-party payors do not consider Acer’s products to be cost-effective compared to other available therapies, they may not cover the products for which Acer receives FDA approval or, if they do, the level of payment may not be sufficient to allow Acer to sell Acer’s products at a profit.

Coverage policies, third-party reimbursement rates and drug pricing regulation (including indirect techniques of pricing pressure, such as allowing reimportation from markets outside the U.S.) may change at any time, and there is the potential for significant movement in these areas in the foreseeable future. Even if favorable coverage and reimbursement status is attained for one or more products for which Acer receives marketing approval, less favorable coverage policies and reimbursement rates may be implemented in the future.

Acer faces substantial competition, which may result in others discovering, developing or commercializing products for Acer’s targeted indications before, or more successfully, than Acer does.

The life sciences industry is highly competitive, and Acer faces significant competition from many pharmaceutical, biopharmaceutical and biotechnology companies that are generally developing and marketing therapeutic products. Such competition may include large pharmaceutical and biotechnology companies, specialty pharmaceutical and generic companies and medical technology companies. Acer’s future success depends on Acer’s ability to demonstrate and maintain a competitive advantage with respect to the design, development and commercialization of Acer’s product candidates for the treatment of orphan and ultra-orphan diseases for which there is a small patient population in the U.S. A drug designated an Orphan Drug may receive up to seven years of exclusive marketing in the U.S. for that indication. Acer’s objective is to design, develop and commercialize product candidates by repurposing or reformulating existing drugs, generally for orphan diseases, with significant unmet medical needs.

Many of Acer’s potential competitors have significantly greater financial, manufacturing, marketing, development, technical and human resources than Acer does. Large pharmaceutical and biotechnology companies, in particular, have extensive experience in clinical testing, obtaining regulatory approvals, recruiting patients and in manufacturing clinical products. These companies also have significantly greater research and marketing capabilities than Acer does and may also have products that have been approved or are in late stages of development, and have collaborative arrangements in Acer’s target markets with leading companies and research institutions. Established companies may also invest heavily to accelerate discovery and development of compounds that could make the product candidates that Acer develops obsolete. As a result of all of these factors, the obtaining of Orphan Drug designation for Acer’s product candidates to treat rare diseases is highly desirable to Acer’s viability since Acer’s competitors may, among other things:

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Should any of these events occur, Acer’s business, financial condition, results of operations, and prospects could be materially adversely affected. If Acer is not able to compete effectively against potential competitors, Acer’s business will not grow and Acer’s financial condition and operations will suffer.

Acer believes that Acer’s ability to successfully compete in the rare disease category will depend in part on Acer’s ability to obtain Orphan Drug designation for Acer’s product candidates to treat rare diseases as well as:

If Acer’s competitors are able to obtain Orphan Drug exclusivity for their products that are the same drug as Acer’s product candidates, Acer may not be able to have competing products approved by the applicable regulatory authority for a significant period of time or benefit from that exclusivity.

Acer has Orphan Drug exclusivity designation in the U.S. and the European Union for OLPRUVA^™ for MSUD and in the U.S. for EDSIVO^™ for vEDS. If Acer is unable to maintain Acer’s current Orphan Drug exclusivities, it may have a material negative effect on Acer’s business.

Generally, if a product with an Orphan Drug designation subsequently receives the first marketing approval for the indication for which it has such designation, that product is entitled to a period of marketing exclusivity, which precludes the applicable regulatory authority from approving another marketing application for the same drug for the same indication for that time period. The applicable period is seven years in the U.S. and ten years in the European Union. The exclusivity period in the European Union can be reduced to six years if the product no longer meets the criteria for Orphan Drug designation or if its commercialization is sufficiently profitable so that market exclusivity is no longer justified. Orphan Drug exclusivity may be lost if the FDA or the EMA determines that the request for designation was materially defective or if the manufacturer is unable to ensure sufficient quantity of the product to meet the needs of patients with the rare disease or condition. Maintaining Orphan Drug

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exclusivity for OLPRUVA^™ and EDSIVO^™ may be important to the product candidate’s success, which Acer may not be able to do. For example, if a competitive product that treats the same disease as Acer’s product candidate is shown to be clinically superior to Acer’s product candidate, any Orphan Drug exclusivity Acer has obtained will not block the approval of such competitive product and Acer may effectively lose what had previously been Orphan Drug exclusivity. Orphan Drug exclusivity for OLPRUVA^™ or EDSIVO^™ also will not bar the FDA from approving another celiprolol drug product or a sodium phenylbutyrate (“NaPB”) product, for another indication. In the U.S., reforms to the Orphan Drug Act, if enacted, could also materially affect Acer’s ability to maintain Orphan Drug exclusivity for OLPRUVA^™ for MSUD and EDSIVO^™ for vEDS.

Price controls, importation of drug products from outside the U.S., or other rules may be imposed in domestic or foreign markets, which may adversely affect Acer’s future profitability.

The U.S. government, state legislatures, and foreign governments have shown significant interest in implementing cost-containment programs to limit the growth of government-paid healthcare costs and drug prices in general, including for therapies for rare diseases. These measures include price controls, transparency requirements triggered by the introduction of new high-cost drugs into the market, drug re-importation, restrictions on reimbursement and requirements for substitution of generic products for branded prescription drugs. Some laws and regulations have already been enacted in these areas, and additional measures have been introduced or are under consideration at both the federal and state levels. Additionally, legislation that affects reimbursement for drugs with small patient populations could be adopted, limiting payments for pharmaceuticals such as Acer’s product candidates, which could adversely affect Acer’s potential future net revenue and results. Adoption of such controls and measures and tightening of restrictive policies in jurisdictions with existing controls and measures could limit payments for pharmaceuticals such as Acer’s drug product candidates and could adversely affect Acer’s net revenue and results.

In some countries, particularly member states of the European Union, the pricing of prescription drugs is subject to governmental control. In these countries, pricing negotiations with governmental authorities can take considerable time after receipt of marketing approval for a product. In addition, there can be considerable pressure by governments and other stakeholders on prices and reimbursement levels, including as part of cost containment measures. Political, economic and regulatory developments may further complicate pricing negotiations, and pricing negotiations may continue after reimbursement has been obtained. Reference pricing used by various European Union member states and parallel distribution, or arbitrage between low-priced and high-priced member states, can further reduce prices. There is also the potential for a reference pricing system using drug prices from other countries, sometimes referred to as “most favored nation” treatment. In some countries, Acer may be required to conduct a clinical trial or other studies that compare the cost-effectiveness of Acer’s product candidates to other available therapies in order to obtain or maintain reimbursement or pricing approval. Publication of discounts by third-party payors or authorities may lead to further pressure on the prices or reimbursement levels within the country of publication and other countries. If reimbursement of Acer’s products is unavailable or limited in scope or amount, or if pricing is set at unsatisfactory levels, Acer’s business could be adversely affected.

Rapid technological change could make Acer’s product candidates obsolete.

Pharmaceutical technologies have undergone rapid and significant change, and Acer expects that they will continue to do so. As a result, there is significant risk that Acer’s product candidates may be rendered obsolete or uneconomical by new discoveries before Acer recovers all or any expenses incurred in connection with their development. If any of Acer’s product candidates are rendered obsolete by advancements in pharmaceutical technologies, Acer’s business will suffer.

Government controls and healthcare reform measures could adversely affect Acer’s business.

The business and financial condition of pharmaceutical and biotechnology companies are affected by the efforts of governmental and third-party payors to contain or reduce the costs of healthcare. In the U.S. and in

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foreign jurisdictions, there have been, and Acer expects that there will continue to be, a number of legislative and regulatory proposals aimed at changing the healthcare system. For example, in some foreign countries, particularly in Europe, the pricing of prescription pharmaceuticals is subject to governmental control. In these countries, pricing negotiations with governmental authorities can take considerable time after the receipt of marketing approval for a product candidate. To obtain reimbursement or pricing approval in some countries, Acer may be required to conduct additional clinical trials that compare the cost-effectiveness of any product candidate to other available therapies. If reimbursement of any product candidate is unavailable or limited in scope or amount in a particular country, or if pricing is set at unsatisfactory levels, Acer may be unable to achieve or sustain profitability in such country. In the U.S., the Medicare Prescription Drug, Improvement, and Modernization Act of 2003 (“MMA”) changed the way Medicare covers and pays for pharmaceutical products. The legislation established Medicare Part D, which expanded Medicare coverage for outpatient prescription drug purchases by the elderly but provided authority for limiting the number of drugs that will be covered in any therapeutic class. The MMA also introduced a new reimbursement methodology based on average sales prices for physician-administered drugs. Any negotiated prices for any product candidate covered by a Part D prescription drug plan will likely be lower than the prices that might otherwise be obtained outside of the Medicare Part D prescription drug plan. Moreover, while Medicare Part D applies only to drug benefits for Medicare beneficiaries, private payors often follow Medicare coverage policy and payment limitations in setting their own payment rates. Any reduction in payment under Medicare Part D may result in a similar reduction in payments from non-governmental payors.

The U.S. and several other jurisdictions are considering, or have already enacted, a number of legislative and regulatory proposals to change the healthcare system in ways that could affect Acer’s ability to sell any product candidate. Among policy-makers and payors in the U.S. and elsewhere, there is significant interest in promoting changes in healthcare systems with the stated goals of containing healthcare costs, improving quality and/or expanding access to healthcare. In the U.S., the pharmaceutical industry has been a particular focus of these efforts and has been significantly affected by major legislative initiatives and executive actions. There have been, and likely will continue to be, legislative and executive regulatory proposals at the federal and state levels directed at broadening the availability of healthcare and containing or lowering the cost of healthcare. Acer cannot predict the initiatives that may be adopted in the future. The continuing efforts of the government, insurance companies, managed care organizations and other payors of healthcare services to contain or reduce costs of healthcare may adversely affect: the demand for any product candidate; the ability to set a price that Acer believes is fair for any product candidate; Acer’s ability to generate revenues and achieve or maintain profitability; the level of taxes that Acer is required to pay; and the availability of capital.

Risks Related to Third Parties

Acer relies on third-party suppliers and other third parties for manufacture of OLPRUVA^™ for oral suspension in the U.S. for the treatment of certain patients with UCDs involving deficiencies of CPS, OTC, or AS, as well as any of Acer’s other product candidates, and Acer’s dependence on these third parties may impair or delay the commercialization of OLPRUVA^™ as well as the advancement of Acer’s research and development programs and the development of Acer’s other product candidates.

Acer does not currently own or operate manufacturing facilities for clinical or commercial production of Acer’s product candidates. Acer lacks the resources and the capability to manufacture OLPRUVA^™ for oral suspension in the U.S. for the treatment of certain patients with UCDs involving deficiencies of CPS, OTC, or AS, as well as any of Acer’s other product candidates on a clinical or commercial scale. Instead, Acer relies on, and expect to continue to rely on, third parties for the supply of raw materials and manufacture of drug supplies necessary to conduct Acer’s preclinical studies and clinical trials and for Acer’s commercialization efforts. Acer’s reliance on third parties may expose Acer to more risk than if Acer was itself to manufacture OLPRUVA^™ or Acer’s other product candidates. Delays in production by third parties could delay Acer’s clinical trials or have an adverse impact on Acer’s commercial activities. In addition, the fact that Acer is dependent on third parties for the manufacture of and formulation of OLPRUVA^™ and Acer’s other product

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candidates means that Acer is subject to the risk that OLPRUVA^™ or Acer’s other product candidates may have manufacturing defects that Acer has limited ability to prevent or control. Although Acer oversees these activities to ensure compliance with Acer’s quality standards, budgets and timelines, Acer has had and will continue to have less control over the manufacturing of OLPRUVA^™ and Acer’s other product candidates than potentially would be the case if Acer was itself to manufacture OLPRUVA^™ or Acer’s other product candidates. Further, due to the ongoing impact of the COVID-19 pandemic, new pandemic lockdowns in China, global supply chain issues, Russia’s invasion of Ukraine, or other reasons, the third parties Acer deals with could experience increased costs in transportation, logistics, raw materials and other costs, may have difficulty sourcing raw materials, may have staffing difficulties, might undergo changes in priorities or may become financially distressed, which would adversely affect the manufacturing and production of Acer’s product candidates. In addition, a third party could be acquired by, or enter into an exclusive arrangement with, one of Acer’s competitors, which would adversely affect Acer’s ability to access the formulations Acer requires.

The facilities used by Acer’s current contract manufacturers and any future manufacturers to manufacture Acer’s product candidates must be inspected by the FDA after Acer submits Acer’s NDA for a product candidate. For example, the Complete Response Letter Acer received in June 2022 for OLPRUVA^™ (before it was approved by the FDA in December 2022 for oral suspension in the U.S. for the treatment of certain patients with UCDs involving deficiencies of CPS, OTC, or AS) identified satisfactory inspection of Acer’s packaging and labeling contract vendor as a necessary prerequisite to any approval for marketing. Acer does not control the manufacturing process of, and are completely dependent on, Acer’s contract manufacturers for compliance with the regulatory requirements, known as cGMPs, for manufacture of both active drug substances and finished drug products. If Acer’s contract manufacturers cannot successfully manufacture material that conforms to Acer’s specifications and the strict regulatory requirements of the FDA or others, the FDA may refuse to approve any of Acer’s NDAs. If the FDA or a comparable foreign regulatory authority does not approve Acer’s NDA because of concerns about the manufacture of Acer’s product candidates or if significant manufacturing issues arise in the future, Acer may need to find alternative manufacturing facilities, which would significantly impact Acer’s ability to develop Acer’s product candidates, to obtain marketing approval of Acer’s NDA or to continue to market Acer’s product candidates, if approved. Although Acer is ultimately responsible for ensuring compliance with these regulatory requirements, Acer does not have day-to-day control over a contract manufacturing organization (“CMO”) or other third-party manufacturer’s compliance with applicable laws and regulations, including cGMPs and other laws and regulations, such as those related to environmental health and safety matters. Any failure to achieve and maintain compliance with these laws, regulations and standards could subject Acer to the risk that Acer may have to suspend the manufacturing of OLPRUVA^™ or Acer’s other product candidates or that obtained approvals could be revoked, which would adversely affect Acer’s business and reputation. In addition, third-party contractors, such as Acer’s CMOs, may elect not to continue to work with Acer due to factors beyond Acer’s control. Although Acer has contracts in place, they may also refuse to work with Acer because of their own financial difficulties, business priorities or other reasons, at a time that is costly or otherwise inconvenient for Acer. If Acer was unable to find adequate replacement or another acceptable solution in time, Acer’s clinical trials could be delayed or Acer’s commercial activities could be harmed.

Problems with the quality of the work of third parties may lead Acer to seek to terminate Acer’s working relationships and use alternative service providers. However, making this change may be costly and may delay clinical trials. In addition, it may be very challenging, and in some cases impossible, to find replacement service providers that can develop and manufacture Acer’s drug candidates in an acceptable manner and at an acceptable cost and on a timely basis. The sale of products containing any defects or any delays in the supply of necessary services could adversely affect Acer’s business, financial condition, results of operations, and prospects.

Growth in the costs and expenses of components or raw materials may also adversely affect Acer’s business, financial condition, results of operations, and prospects. Supply sources could be interrupted from time to time and, if interrupted, supplies may not be resumed (whether in part or in whole) within a reasonable timeframe and at an acceptable cost or at all.

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Acer plans to rely on third parties to conduct clinical trials for Acer’s product candidates. If these third parties do not successfully carry out their contractual duties or meet expected deadlines, it may cause delays in commencing and completing clinical trials of Acer’s product candidates or Acer may be unable to obtain marketing approval for or commercialize Acer’s product candidates.

Clinical trials must meet applicable FDA and foreign regulatory requirements. Acer does not have the ability to independently conduct clinical trials for any of Acer’s product candidates. Acer has and will continue to rely on third parties, such as CROs, medical institutions, clinical investigators and contract laboratories, to conduct all of Acer’s clinical trials of Acer’s product candidates; however, Acer remains responsible for ensuring that each of Acer’s clinical trials is conducted in accordance with Acer’s investigational plan and protocol. Moreover, the FDA and other foreign regulatory authorities require Acer to comply with IND and human subject protection regulations and current good clinical practice standards, commonly referred to as GCPs, for conducting, monitoring, recording, and reporting the results of clinical trials to ensure that the data and results are scientifically credible and accurate and that the trial subjects are adequately informed of the potential risks of participating in clinical trials. Acer’s reliance on third parties does not relieve Acer of these responsibilities and requirements. Regulatory authorities enforce these GCPs through periodic inspections of trial sponsors, principal investigators and trial sites. If Acer or any of Acer’s third-party contractors fail to comply with applicable GCPs, the clinical data generated in Acer’s clinical trials may be deemed unreliable and the FDA or comparable foreign regulatory authorities may require Acer to perform additional clinical trials before approving Acer’s marketing applications. There is no assurance that upon inspection by a given regulatory authority, such regulatory authority will determine that any of Acer’s clinical trials comply with GCPs. Acer’s failure to comply with these regulations may require Acer to repeat clinical trials, which would delay the marketing approval process.

There are significant requirements imposed on Acer and on clinical investigators who conduct clinical trials that Acer sponsors. Although Acer is responsible for selecting qualified CROs or clinical investigators, providing them with the information they need to conduct the clinical trials properly, ensuring proper monitoring of the clinical trials, and ensuring that the clinical trials are conducted in accordance with the general investigational plan and protocols contained in the IND, Acer cannot ensure that the CROs or clinical investigators will maintain compliance with all regulatory requirements at all times. The pharmaceutical industry has experienced cases where clinical investigators have been found to incorrectly record data, omit data, or even falsify data. Acer cannot ensure that the CROs or clinical investigators in Acer’s trials will not make mistakes or otherwise compromise the integrity or validity of data, any of which would have a significant negative effect on Acer’s ability to obtain marketing approval, Acer’s business, and Acer’s financial condition.

Acer or the third parties Acer relies on may encounter problems in clinical trials that may cause Acer or the FDA or foreign regulatory agencies to delay, suspend or terminate Acer’s clinical trials at any phase. These problems could include the possibility that Acer may not be able to manufacture sufficient quantities of materials for use in Acer’s clinical trials, conduct clinical trials at Acer’s preferred sites, enroll a sufficient number of patients for Acer’s clinical trials at one or more sites, or begin or successfully complete clinical trials in a timely fashion, if at all. Furthermore, we, the FDA or foreign regulatory agencies may suspend clinical trials of Acer’s product candidates at any time if Acer or they believe the subjects participating in the trials are being exposed to unacceptable health risks, whether as a result of adverse events occurring in Acer’s trials or otherwise, or if Acer or they find deficiencies in the clinical trial process or conduct of the investigation.

The FDA and foreign regulatory agencies could also require additional clinical trials before or after granting of marketing approval for any products, which would result in increased costs and significant delays in the development and commercialization of such products and could result in the withdrawal of such products from the market after obtaining marketing approval. Acer’s failure to adequately demonstrate the safety and efficacy of a product candidate in clinical development could delay or prevent obtaining marketing approval of the product candidate and, after obtaining marketing approval, data from post-approval studies could result in the product being withdrawn from the market, either of which would likely have a material adverse effect on Acer’s business.

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In addition, the above risks are compounded by uncertainties related to the ongoing COVID-19 pandemic, which could affect Acer’s CROs’ businesses internally (for example, maintaining staffing levels and ongoing financial viability), as well as their ability to perform their obligations to Acer under Acer’s agreements (such as recruitment of subjects for clinical trials in an increasingly uncertain and competitive business environment).

Risks Related to Acer’s Intellectual Property

Acer’s proprietary rights may not adequately protect Acer’s technologies and product candidates.

Acer’s commercial success will depend in part on Acer’s ability to obtain patents and protect Acer’s existing patent position as well as Acer’s ability to maintain adequate protection of other intellectual property for Acer’s technologies, product candidates, and any future products in the U.S. and other countries. If Acer does not adequately protect Acer’s intellectual property, competitors may be able to use Acer’s technologies and erode or negate any competitive advantage Acer may have, which could harm Acer’s business and ability to achieve profitability. The laws of some foreign countries do not protect Acer’s proprietary rights to the same extent or in the same manner as U.S. laws, and Acer may encounter significant problems in protecting and defending Acer’s proprietary rights in these countries. Acer will be able to protect Acer’s proprietary rights from unauthorized use by third parties only to the extent that Acer’s proprietary technologies, product candidates and any future products are covered by valid and enforceable patents or are effectively maintained as trade secrets.

Acer applies for patents covering both Acer’s technologies and product candidates, as Acer deems appropriate. However, Acer may fail to apply for patents on important technologies or product candidates in a timely fashion, or at all. Acer’s existing patents and any future patents Acer obtains may not be sufficiently broad to prevent others from practicing Acer’s technologies or from developing competing products and technologies. Acer cannot be certain that Acer’s patent applications will be approved or that any patents issued will adequately protect Acer’s intellectual property.

While Acer is responsible for and typically have control over the filing and prosecuting of patent applications and maintaining patents which cover making, using or selling OLPRUVA^™, EDSIVO^™, or ACER-801, Acer may lose any such rights if Acer decides to allow any licensed patent to lapse. If Acer fails to appropriately prosecute and maintain patent protection for any of Acer’s product candidates, Acer’s ability to develop and commercialize those product candidates may be adversely affected and Acer may not be able to prevent competitors from making, using and selling competing products.

Moreover, the patent positions of pharmaceutical companies are highly uncertain and involve complex legal and factual questions for which important legal principles are evolving and remain unresolved. As a result, the validity and enforceability of patents cannot be predicted with certainty. In addition, Acer does not know whether:

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The actual protection afforded by a patent varies based on products or processes, from country to country, and depends upon many factors, including the type of patent, the scope of its coverage, the availability of regulatory related extensions, the availability of legal remedies in a particular country, the validity and enforceability of the patents and Acer’s financial ability to enforce Acer’s patents and other intellectual property. Acer’s ability to maintain and solidify Acer’s proprietary position for Acer’s products will depend on Acer’s success in obtaining effective claims and enforcing those claims once granted. Acer’s issued patents and those that may issue in the future, or those licensed to Acer, may be challenged, narrowed, invalidated or circumvented, and the rights granted under any issued patents may not provide Acer with proprietary protection or competitive advantages against competitors with similar products. Due to the extensive amount of time required for the development, testing and regulatory review of a potential product, it is possible that, before any of Acer’s product candidates can be commercialized, any related patent may expire or remain in force for only a short period following commercialization, thereby reducing any advantage of the patent.

Acer may also rely on trade secrets to protect some of Acer’s technology, especially where Acer does not believe patent protection is appropriate or obtainable. However, trade secrets are difficult to maintain. While Acer uses reasonable efforts to protect Acer’s trade secrets, Acer or any of Acer’s collaborators’ employees, consultants, contractors or scientific and other advisors may unintentionally or willfully disclose Acer’s proprietary information to competitors and Acer may not have adequate remedies in respect of that disclosure. Enforcement of claims that a third party has illegally obtained and is using trade secrets is expensive, time consuming and uncertain. In addition, foreign courts are sometimes less willing than U.S. courts to protect trade secrets. If Acer’s competitors independently develop equivalent knowledge, methods and know-how, Acer would not be able to assert Acer’s trade secrets against them and Acer’s business could be harmed.

Acer is a party to license or similar agreements under which Acer licenses intellectual property, data, and/or receive commercialization rights relating to OLPRUVA^™, EDSIVO^™ and ACER-801. If Acer fails to comply with obligations in such agreements or otherwise experience disruptions to Acer’s business relationships with Acer’s licensors, Acer could lose license rights that are important to Acer’s business; any termination of such agreements would adversely affect Acer’s business.

In April 2014, Acer entered into an agreement with Baylor College of Medicine pursuant to which Acer obtained an exclusive worldwide license to develop and commercialize NaPB (OLPRUVA^™) for treatment of MSUD. In August 2016, Acer entered into an agreement with Assistance Publique—Hôpitaux de Paris, Hôpital Européen Georges Pompidou (“AP-HP”), pursuant to which Acer obtained an exclusive worldwide right to access and use data from the Ong trial, which Acer used to support an NDA filing for EDSIVO^™ for the treatment of vEDS. In September 2018, Acer entered into an additional agreement with AP-HP pursuant to which Acer obtained the exclusive worldwide intellectual property rights to three European patent applications relating to certain uses of celiprolol including (i) the optimal dose of celiprolol in treating vEDS patients, (ii) the use of celiprolol during pregnancy and (iii) the use of celiprolol to treat kyphoscoliotic Ehlers-Danlos syndrome (type VI). In December 2018, Acer entered into an exclusive license agreement with Sanofi granting Acer worldwide rights to ACER-801, a clinical-stage, selective, non-peptide tachykinin NK3 receptor antagonist. Under each license agreement, Acer is subject to commercialization and development diligence obligations, royalty payments and other obligations. If Acer fails to comply with any of these obligations or otherwise breach any of these license agreements, the licensor may have the right to terminate the license in whole or in part or to terminate the exclusive nature of the license. The loss of the licenses granted to Acer under Acer’s agreements with these licensors or the rights provided therein would prevent Acer from developing, manufacturing or marketing products covered by the license or subject to supply commitments, and could materially harm Acer’s business, financial condition, results of operations and prospects.

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Acer may not be able to protect Acer’s intellectual property rights throughout the world.

Filing, prosecuting and defending patents on product candidates in all countries throughout the world would be prohibitively expensive, and Acer’s intellectual property rights in some countries outside the U.S. can be less extensive than those in the U.S. In addition, the laws of some foreign countries do not protect intellectual property rights to the same extent as federal and state laws in the U.S. For example, many foreign countries have compulsory licensing laws under which a patent owner must grant licenses to third parties. Consequently, Acer may not be able to prevent third parties from practicing Acer’s inventions in all countries outside the U.S., or from selling or importing products made using Acer’s inventions in and into the U.S. or other jurisdictions. Competitors may use Acer’s technologies in jurisdictions where Acer has not obtained patent protection to develop their own products and further, may export otherwise infringing products to territories where Acer has patent protection, but enforcement rights are not as strong as those in the U.S. These products may compete with Acer’s product candidates in jurisdictions where Acer does not have any issued patents and Acer’s patent claims or other intellectual rights may not be effective or sufficient to prevent them from so competing.

Many companies have encountered significant problems in protecting and defending intellectual property rights in foreign jurisdictions. The legal systems of certain countries do not favor the enforcement of patents and other intellectual property protection, which could make it difficult for Acer to stop the infringement of Acer’s patents generally. Proceedings to enforce Acer’s patent rights in foreign jurisdictions could result in substantial costs and divert Acer’s efforts and attention from other aspects of Acer’s business, could put Acer’s patents at risk of being invalidated or interpreted narrowly and Acer’s patent applications at risk of not issuing and could provoke third parties to assert claims against Acer. Acer may not prevail in any lawsuits that Acer initiates and the damages or other remedies awarded, if any, may not be commercially meaningful. Accordingly, Acer’s efforts to enforce Acer’s intellectual property rights around the world may be inadequate to obtain a significant commercial advantage from the intellectual property that Acer develops or license.

The patent protection for Acer’s product candidates may expire before Acer is able to maximize their commercial value, which may subject Acer to increased competition and reduce or eliminate Acer’s opportunity to generate product revenue.

The patents for Acer’s product candidates have varying expiration dates and, if these patents expire, Acer may be subject to increased competition and Acer may not be able to recover Acer’s development costs or market any of Acer’s approved products profitably. In some of the larger potential market territories, such as the U.S. and Europe, patent term extension or restoration may be available to compensate for time taken during aspects of the product’s development and regulatory review. For example, depending on the timing, duration and specifics of FDA marketing approval of Acer’s product candidates, if any, one of the U.S. patents covering each of such approved product(s) or the use thereof may be eligible for up to five years of patent term restoration under the Hatch-Waxman Act. The Hatch-Waxman Act allows a maximum of one patent to be extended per FDA-approved product. Patent term extension also may be available in certain foreign countries upon regulatory approval of Acer’s product candidates.

Nevertheless, Acer may not be granted patent term extension either in the U.S. or in any foreign country because of, for example, failing to apply within applicable deadlines, failing to apply prior to expiration of relevant patents or otherwise failing to satisfy applicable requirements. Moreover, the term of extension, as well as the scope of patent protection during any such extension, afforded by the governmental authority could be less than Acer requests. In addition, even though some regulatory authorities may provide some other exclusivity for a product under their own laws and regulations, Acer may not be able to qualify the product or obtain the exclusive time period. If Acer is unable to obtain patent term extension/restoration or some other exclusivity, Acer could be subject to increased competition and Acer’s opportunity to establish or maintain product revenue could be substantially reduced or eliminated. Furthermore, Acer may not have sufficient time to recover Acer’s development costs prior to the expiration of Acer’s U.S. and foreign patents.

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Obtaining and maintaining Acer’s patent protection depends on compliance with various procedural, documentary, fee payment and other requirements imposed by governmental patent agencies, and Acer’s patent protection could be reduced or eliminated for non-compliance with these requirements.

The U.S. Patent and Trademark Office (“USPTO”) and various foreign governmental patent agencies require compliance with a number of procedural, documentary, fee payment and other similar provisions during the patent prosecution process. Periodic maintenance fees, renewal fees, annuity fees and various other governmental fees on any issued patent and/or pending patent applications are due to be paid to the USPTO and foreign patent agencies in several stages over the lifetime of a patent or patent application. Acer employs an outside firm and rely on Acer’s outside counsel to pay these fees. While an inadvertent lapse may sometimes be cured by payment of a late fee or by other means in accordance with the applicable rules, there are many situations in which noncompliance can result in abandonment or lapse of the patent or patent application, resulting in partial or complete loss of patent rights in the relevant jurisdiction. If Acer fails to maintain the patents and patent applications directed to Acer’s product candidates, Acer’s competitors might be able to enter the market earlier than should otherwise have been the case, which would have a material adverse effect on Acer’s business.

Acer may become involved in lawsuits to protect Acer’s patents or other intellectual property rights, which could be expensive, time-consuming and ultimately unsuccessful.

Competitors may infringe Acer’s patents or other intellectual property rights. To counter infringement or unauthorized use, Acer may be required to file infringement claims, directly or through Acer’s licensors, which can be expensive and time consuming. In addition, in an infringement proceeding, a court may decide that a patent of Acer’s licensor is not valid or is unenforceable or may refuse to stop the other party from using the technology at issue on the grounds that Acer’s patents do not cover the technology in question. An adverse result in any litigation or defense proceedings could put one or more of the patents Acer licenses at risk of being invalidated or interpreted narrowly and could put Acer’s licensors’ patent applications at risk of not issuing.

Interference proceedings brought by the USPTO may be necessary to determine the priority of inventions with respect to Acer’s patents or the patents of Acer’s licensors. An unfavorable outcome could require Acer to cease using the technology or to attempt to license rights to it from the prevailing party. Acer’s business could be harmed if a prevailing party does not offer Acer a license on terms that are acceptable to Acer. Litigation or interference proceedings may fail and, even if successful, may result in substantial costs and distraction of Acer’s management and other employees. Acer may not be able to prevent, alone or with Acer’s licensors, misappropriation of Acer’s proprietary rights, particularly in countries where the laws may not protect those rights as fully as in the U.S. In addition, potential infringers of Acer’s intellectual property rights may have substantially more resources than Acer does to defend their position, which could adversely affect the outcome of any such dispute.

Furthermore, because of the substantial amount of discovery required in connection with intellectual property litigation, there is a risk that some of Acer’s confidential and proprietary information could be compromised by disclosure during this type of litigation. In addition, there could be public announcements of the results of hearings, motions or other interim proceedings or developments. If securities analysts or investors perceive these results to be negative, it could have a substantial adverse effect on the price of Acer’s common stock.

Third-party claims of intellectual property infringement or misappropriation may adversely affect Acer’s business and could prevent Acer from developing or commercializing Acer’s product candidates.

Acer’s commercial success depends in part on Acer not infringing the patents and proprietary rights of third parties. There is a substantial amount of litigation, both within and outside the U.S., involving patent and other intellectual property rights in the biotechnology and pharmaceutical industries, including patent infringement

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lawsuits, interferences, oppositions, ex-parte review and inter partes reexamination and post-grant review proceedings before the USPTO and corresponding foreign patent offices. Numerous U.S. and foreign issued patents and pending patent applications owned by third parties exist in the fields in which Acer is developing and may develop Acer’s product candidates. As the biotechnology and pharmaceutical industries expand and more patents are issued, the risk increases that Acer’s product candidates may be subject to claims of infringement of the patent rights of third parties. If a third party claims that Acer infringes on their products or technology, Acer could face a number of issues, including:

Third parties may assert that Acer is employing their proprietary technology without authorization. There may be third-party patents or patent applications with claims to materials, formulations, methods of manufacture or methods for treatment related to the use or manufacture of OLPRUVA^™ or Acer’s other product candidates that Acer failed to identify. For example, certain applications that will not be filed outside the U.S. remain confidential until issued as patents. Patent applications in the U.S. and elsewhere are otherwise generally published only after a waiting period of approximately 18 months after the earliest filing. Therefore, patent applications covering OLPRUVA^™ or Acer’s other product candidates could have been filed by others without the knowledge of Acer or Acer’s licensors. Additionally, pending patent applications which have been published can, subject to certain limitations, be later amended in a manner that could cover OLPRUVA^™ or Acer’s other product candidates or the use or manufacture of OLPRUVA^™ or Acer’s other product candidates. Acer may also face a claim of misappropriation if a third party believes that Acer inappropriately obtained and used trade secrets of such third party. If Acer is found to have misappropriated a third party’s trade secrets, Acer may be prevented from further using such trade secrets, limiting Acer’s ability to develop Acer’s product candidates, and Acer may be required to pay damages.

If any third-party patents were held by a court of competent jurisdiction to cover aspects of Acer’s materials, formulations, methods of manufacture or methods for treatment, the holders of any such patents would be able to block Acer’s ability to develop and commercialize the applicable product candidate until such patent expired or unless Acer obtains a license. These licenses may not be available on acceptable terms, if at all. Even if Acer was able to obtain a license, the rights may be nonexclusive, which could result in Acer’s competitors gaining access to the same intellectual property.

Ultimately, Acer could be prevented from commercializing a product, or be forced to cease some aspect of Acer’s business operations, if, as a result of actual or threatened patent infringement claims, Acer is unable to enter into licenses on acceptable terms.

Parties making claims against Acer may obtain injunctive or other equitable relief, which could effectively block Acer’s ability to further develop and commercialize one or more of OLPRUVA^™ or Acer’s other product candidates. Defending against claims of patent infringement or misappropriation of trade secrets could be costly and time-consuming, regardless of the outcome. Thus, even if Acer was to ultimately prevail, or to settle at an early stage, such litigation could burden Acer with substantial unanticipated costs. In addition, litigation or

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threatened litigation could result in significant demands on the time and attention of Acer’s management team, distracting them from the pursuit of other company business. In the event of a successful claim of infringement against Acer, Acer may have to pay substantial damages, including treble damages and attorneys’ fees for willful infringement, pay royalties, redesign Acer’s infringing products or obtain one or more licenses from third parties, which may be impossible or require substantial time and monetary expenditure. In addition, the uncertainties associated with litigation could have a material adverse effect on Acer’s ability to raise the funds necessary to continue Acer’s commercialization efforts, continue Acer’s clinical trials, continue Acer’s research programs, license necessary technology from third parties, or enter into development collaborations that would help Acer bring OLPRUVA^™ or Acer’s other product candidates to market.

Changes in U.S. patent law could diminish the value of patents in general, thereby impairing Acer’s ability to protect Acer’s product candidates.

As is the case with other pharmaceutical companies, Acer’s success is heavily dependent on intellectual property, particularly on obtaining and enforcing patents and patent rights. Obtaining and enforcing patents and patent rights in the specialty pharmaceutical industry involves both technological and legal complexity, and therefore, is costly, time-consuming and inherently uncertain. In addition, the U.S. has recently enacted and is currently implementing wide-ranging patent reform legislation. Further, several recent U.S. Supreme Court rulings have either narrowed the scope of patent protection available in certain circumstances or weakened the rights of patent owners in certain situations. In addition to increasing uncertainty with regard to Acer’s ability to obtain patents in the future, this combination of events has created uncertainty with respect to the value of patents and patent rights, once obtained.

For Acer’s U.S. patent applications containing a claim not entitled to priority before March 16, 2013, there is a greater level of uncertainty in the patent law. In September 2011, the Leahy-Smith America Invents Act (the “America Invents Act” or “AIA”) was signed into law. The AIA includes a number of significant changes to U.S. patent law, including provisions that affect the way patent applications will be prosecuted, reviewed after issuance, and may also affect patent litigation. The USPTO is currently developing regulations and procedures to govern administration of the AIA, and many of the substantive changes to patent law associated with the AIA. It is not clear what other, if any, impact the AIA will have on the operation of Acer’s business. Moreover, the AIA and its implementation could increase the uncertainties and costs surrounding the prosecution of patent applications and the enforcement or defense of patent rights, all of which could have a material adverse effect on Acer’s business and financial condition.

An important change introduced by the AIA is that, as of March 16, 2013, the U.S. transitioned to a “first-inventor-to-file” system for deciding which party should be granted a patent when two or more patent applications are filed by different parties claiming the same invention. A third party that files a patent application in the USPTO after that date but before the filing of a patent application by a licensor or Acer could therefore be awarded a patent covering an invention of ours even if said licensor or Acer had made the invention before it was made by the third party. This will require Acer to be cognizant going forward of the time from invention to filing of a patent application. Furthermore, Acer’s ability to obtain and maintain valid and enforceable patent rights depends on whether the differences between the licensor’s or Acer’s technology and the prior art allow Acer’s technology to be patentable over the prior art. Since patent applications in the U.S. and most other countries are confidential for a period of time after filing, Acer cannot be certain that a licensor or Acer was the first to either (a) file any patent application related to Acer’s product candidates or (b) invent any of the inventions claimed in Acer’s patents or patent applications.

Among some of the other changes introduced by the AIA are changes that limit where a patentee may file a patent infringement suit and providing opportunities for third parties to challenge any issued patent in the USPTO. This applies to all U.S. patents, even those issued before March 16, 2013. Because of a lower evidentiary standard in USPTO proceedings compared to the evidentiary standard in U.S. federal court necessary to invalidate a patent claim, a third party could potentially provide evidence in a USPTO proceeding sufficient

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for the USPTO to hold a claim invalid as unpatentable even though the same evidence may be insufficient to invalidate the claim if first presented in a district court action. Accordingly, a third party may attempt to use the USPTO procedures to invalidate patent rights that would not have been invalidated if first challenged by the third party as a defendant in a district court action.

Depending on decisions by the U.S. Congress, the federal courts, and the USPTO, the laws and regulations governing patents could change in unpredictable ways that would weaken Acer’s ability to obtain new patents or to enforce Acer’s existing patents and patents that Acer might obtain in the future.

Intellectual property rights do not address all potential threats to Acer’s competitive advantage.

The degree of future protection afforded by Acer’s intellectual property rights is uncertain because intellectual property rights have limitations, and may not adequately protect Acer’s business, or permit Acer to maintain Acer’s competitive advantage. The following examples are illustrative:

Confidentiality agreements with employees, consultants and others may not adequately prevent disclosure of trade secrets and protect other proprietary information.

Acer considers proprietary trade secrets and/or confidential know-how and unpatented know-how to be important to Acer’s business. Acer may rely on trade secrets and/or confidential know-how to protect Acer’s technology, especially where patent protection is believed by Acer to be of limited value. However, trade secrets and/or confidential know-how can be difficult to maintain as confidential.

To protect this type of information against disclosure or appropriation by competitors, Acer’s policy is to require Acer’s employees, consultants, contractors and advisors to enter into confidentiality agreements with Acer. However, current or former employees, consultants, contractors and advisers may unintentionally or willfully disclose Acer’s confidential information to competitors, and confidentiality agreements may not provide an adequate remedy in the event of unauthorized disclosure of confidential information. Enforcing a claim that a third party obtained illegally and is using trade secrets and/or confidential know-how is expensive, time consuming and unpredictable. The enforceability of confidentiality agreements may vary from jurisdiction to jurisdiction.

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Failure to obtain or maintain trade secrets and/or confidential know-how trade protection could adversely affect Acer’s competitive position. Moreover, Acer’s competitors may independently develop substantially equivalent proprietary information and may even apply for patent protection in respect of the same. If successful in obtaining such patent protection, Acer’s competitors could limit Acer’s use of Acer’s trade secrets and/or confidential know-how.

Acer may need to license certain intellectual property from third parties, and such licenses may not be available or may not be available on commercially reasonable terms.

A third party may hold intellectual property, including patent rights that are important or necessary to the development or commercialization of OLPRUVA^™ or Acer’s other product candidates. It may be necessary for Acer to use the patented or proprietary technology of third parties to commercialize OLPRUVA^™ or Acer’s other product candidates, in which case Acer would be required to obtain a license from these third parties. Such a license may not be available on commercially reasonable terms or at all, which could materially harm Acer’s business.

Acer may be subject to claims that Acer’s employees, consultants or independent contractors have wrongfully used or disclosed confidential information of third parties.

Acer has received confidential and proprietary information from third parties. In addition, Acer employs individuals who were previously employed at other biotechnology or pharmaceutical companies. Acer may be subject to claims that Acer or Acer’s employees, consultants or independent contractors have inadvertently or otherwise improperly used or disclosed confidential information of these third parties or Acer’s employees’ former employers.

Further, Acer may be subject to ownership disputes in the future arising, for example, from conflicting obligations of consultants or others who are involved in developing Acer’s product candidates. Acer may also be subject to claims that former employees, consultants, independent contractors, collaborators or other third parties have an ownership interest in Acer’s patents or other intellectual property. Litigation may be necessary to defend against these and other claims challenging Acer’s right to and use of confidential and proprietary information. If Acer fails in defending any such claims, in addition to paying monetary damages, Acer may lose Acer’s rights therein. Such an outcome could have a material adverse effect on Acer’s business.

Even if Acer is successful in defending against these claims, litigation could result in substantial cost and be a distraction to Acer’s management and employees.

Acer may be subject to claims challenging the inventorship or ownership of Acer’s patents and other intellectual property.

Acer may also be subject to claims that former employees, collaborators or other third parties have an ownership interest in Acer’s patents and other intellectual property. Acer may be subject to ownership disputes in the future arising, for example, from conflicting obligations of consultants or others who are involved in developing Acer’s product candidates. Litigation may be necessary to defend against these and other claims challenging inventorship or ownership. If Acer fails in defending any such claims, in addition to paying monetary damages, Acer may lose valuable intellectual property rights, such as exclusive ownership of, or right to use, valuable intellectual property. Such an outcome could have a material adverse effect on Acer’s business. Even if Acer is successful in defending against such claims, litigation could result in substantial costs and be a distraction to management and other employees.

Acer’s reliance on third parties requires Acer to share Acer’s trade secrets, which increases the possibility that a competitor will discover them or that Acer’s trade secrets will be misappropriated or disclosed.

Because Acer relies on third parties to assist with research and development and to manufacture Acer’s product candidates, Acer must, at times, share trade secrets with them. Acer seeks to protect Acer’s proprietary

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technology in part by entering into confidentiality agreements and, if applicable, material transfer agreements, consulting agreements or other similar agreements with Acer’s advisors, employees, third-party contractors and consultants prior to beginning research or disclosing proprietary information. These agreements typically limit the rights of the third parties to use or disclose Acer’s confidential information, including Acer’s trade secrets. Despite the contractual provisions employed when working with third parties, the need to share trade secrets and other confidential information increases the risk that such trade secrets become known by Acer’s competitors, are inadvertently incorporated into the technology of others, or are disclosed or used in violation of these agreements. Given that Acer’s proprietary position is based, in part, on Acer’s know-how and trade secrets, a competitor’s discovery of Acer’s trade secrets or other unauthorized use or disclosure would impair Acer’s competitive position and may have a material adverse effect on Acer’s business.

In addition, these agreements typically restrict the ability of Acer’s advisors, employees, third-party contractors and consultants to publish data potentially relating to Acer’s trade secrets, although Acer’s agreements may contain certain limited publication rights. For example, any academic institution that Acer may collaborate with in the future will usually expect to be granted rights to publish data arising out of such collaboration, provided that Acer is notified in advance and given the opportunity to delay publication for a limited time period in order for Acer to secure patent protection of intellectual property rights arising from the collaboration, in addition to the opportunity to remove confidential or trade secret information from any such publication. In the future Acer may also conduct joint research and development programs that may require Acer to share trade secrets under the terms of Acer’s research and development or similar agreements. Despite Acer’s efforts to protect Acer’s trade secrets, Acer’s competitors may discover Acer’s trade secrets, either through breach of Acer’s agreements with third parties, independent development or publication of information by any of Acer’s third-party collaborators. A competitor’s discovery of Acer’s trade secrets would impair Acer’s competitive position and have an adverse impact on Acer’s business.

Risks Related to Acer’s Securities

Acer’s share price is very volatile, may not reflect the underlying value of Acer’s net assets or business prospects, and you may not be able to resell your shares at a profit or at all.

The market price of Acer’s common stock could be subject to significant fluctuations. The market prices for securities of pharmaceutical and biotechnology companies, and early-stage drug discovery and development companies like ours in particular, have historically been highly volatile and may continue to be highly volatile in the future. The following factors, in addition to other risk factors described in this section, may have a significant impact on the market price of Acer’s common stock:

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Broad market and industry factors, as well as economic and political factors, also may materially adversely affect the market price of Acer’s common stock. As noted, the short-, medium-, and long-term impacts of the COVID-19 pandemic on the U.S. and global economies generally, and on Acer’s business specifically, are difficult to predict.

Acer does not currently, and in the future Acer may not be able to comply with the Nasdaq Capital Market’s continued listing standards for Acer’s common stock, which could result in Acer’s common stock being delisted from the Nasdaq Capital Market as well as a number of negative implications, including reduced market price and liquidity of Acer’s common stock, the potential loss of confidence by suppliers, partners, employees and institutional investor interest, fewer business development opportunities, greater difficulty in obtaining financing and breaches of or events of default under certain contractual obligations (including an event of default under the loan agreement for the Marathon Convertible Notes).

The Nasdaq Capital Market’s continued listing standards for Acer’s common stock require, among other things, that Acer maintains either (i) stockholders’ equity of $2.5 million, (ii) Market Value of Listed Securities (“MVLS”) of $35.0 million or (iii) net income from continuing operations of $500,000 in the most recently completed fiscal year or in two of the last three most recently completed fiscal years. On May 3, 2023, Acer received a letter from the listing qualifications department staff of Nasdaq indicating that for the last 30 consecutive business days, Acer’s minimum MVLS was below the minimum of $35.0 million required for continued listing on the Nasdaq Capital Market pursuant to Nasdaq listing rule 5550(b)(2). In accordance with Nasdaq listing rules, Acer has 180 calendar days, or until October 30, 2023, to regain compliance with respect to Acer’s minimum MVLS.

In addition, pursuant to Nasdaq Listing Rules, Acer is required to maintain a minimum bid price of $1.00 per share for continued listing on Nasdaq. On June 5, 2023, Acer received another letter from the listing qualifications department staff of Nasdaq indicating that Acer is not in compliance with the $1.00 minimum bid price requirement for continued listing on the Nasdaq Capital Market pursuant to Nasdaq listing rule 5550(a)(2). In accordance with Nasdaq listing rules, Acer has 180 calendar days, or until December 4, 2023, to regain compliance with respect to the minimum bid price requirement (i.e., the closing bid price of Acer’s common stock must meet or exceed $1.00 per share for a minimum of ten consecutive business days during the compliance period ending December 4, 2023).

There can be no assurance that Acer will be able to regain or maintain compliance with Nasdaq listing standards. Acer’s failure to continue to meet these requirements could result in Acer’s common stock being

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delisted from the Nasdaq Capital Market. If Acer’s common stock were delisted from the Nasdaq Capital Market, among other things, this could result in a number of negative implications, including reduced market price and liquidity of Acer’s common stock as a result of the loss of market efficiencies associated with the Nasdaq, the loss of federal preemption of state securities laws, as well as the potential loss of confidence by suppliers, partners, employees and institutional investor interest, fewer business development opportunities, greater difficulty in obtaining financing and breaches of or events of default under certain contractual obligations (including an event of default under the loan agreement for the Marathon Convertible Notes).

Acer has been a defendant in securities litigation in the past and may become the target of securities litigation in the future, which may be costly and time-consuming to defend.

Following periods of market volatility in the price of a company’s securities or the reporting of unfavorable news, security holders have often instituted class action litigation. This risk is especially relevant for Acer because pharmaceutical companies like Acer have experienced significant stock price volatility in recent years. For example, Acer was named in a putative securities class action complaint and several stockholder derivative actions, which have been subsequently settled, as a result of the decline in Acer’s stock price following a 2019 Complete Response Letter from the FDA regarding Acer’s NDA for EDSIVO^™. If Acer become involved in this type of litigation in the future, regardless of the outcome, Acer could incur substantial legal costs and Acer’s management’s attention could be diverted from the operation of Acer’s business, causing Acer’s business to suffer.

Acer’s “blank check” preferred stock could be issued to prevent a business combination not desired by management or Acer’s majority stockholders.

Acer’s charter authorizes the issuance of “blank check” preferred stock with such designations, rights and preferences as may be determined by Acer’s Board of Directors without stockholder approval. Acer’s preferred stock could be utilized as a method of discouraging, delaying, or preventing a change in control and as a method of preventing stockholders from receiving a premium for their shares in connection with a change of control.

Future sales of Acer’s common stock or the issuance of additional debt, convertible debt or other equity securities could cause dilution, and the sale of such common stock by Acer or by holders of Acer’s Marathon Convertible Notes, or the perception that such sales may occur, could cause the price of Acer’s stock to decline.

Sales of additional shares of Acer common stock, as well as securities convertible into or exercisable for common stock, could result in substantial dilution to Acer’s stockholders and cause the market price of Acer’s common stock to decline. An aggregate of 24,463,726 shares of common stock were outstanding as of August 1, 2023. As of such date, another 3,011,506 shares of common stock were issuable upon exercise of outstanding options, 1,000,000 shares of common stock were issuable upon exercise of warrants issued to SWK pursuant to the SWK Credit Agreement, the Marathon Convertible Notes were outstanding and convertible by the holders into shares of common stock (including 2,400,000 shares upon conversion of the original principal amount, without taking into account the limitations on the conversion of the Marathon Convertible Notes, plus additional shares if accrued but unpaid interest on the Marathon Convertible Notes is converted into shares of common stock), and 2,920,306 shares of common stock were issuable pursuant to a common stock purchase warrant Acer sold in a private placement concurrent with the March 2023 Offering (as defined below). A substantial majority of the outstanding shares of Acer’s common stock, as well as a substantial majority of the shares of common stock issuable upon exercise of outstanding options, are freely tradable without restriction or further registration under the Securities Act.

Acer may sell additional shares of common stock, as well as securities convertible into or exercisable for common stock, in subsequent public or private offerings. For example, Acer sold 2,335,000 shares of common stock and pre-funded warrants to purchase up to 585,306 shares of common stock pursuant to a registered direct

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offering as well as warrants to purchase up to 2,920,306 shares of common stock in a concurrent private placement which closed on March 24, 2023 (the “March 2023 Offering”). Acer may also issue additional shares of common stock, as well as securities convertible into or exercisable for common stock, to finance future acquisitions. Acer will need to raise additional capital in order to initiate or complete additional development activities for all of Acer’s product candidates or to pursue additional disease indications for Acer’s product candidates, and this may require Acer to issue a substantial amount of securities (including common stock as well as securities convertible into or exercisable for common stock). There can be no assurance that Acer’s capital raising efforts will be able to attract the capital needed to execute on Acer’s business plan and sustain Acer’s operations. Moreover, Acer cannot predict the size of future issuances of Acer’s common stock, as well as securities convertible into or exercisable for common stock, or the effect, if any, that future issuances and sales of Acer’s securities will have on the market price of Acer’s common stock. Sales of substantial amounts of Acer’s common stock by Acer or by the holders of Acer’s Marathon Convertible Notes, as well as securities convertible into or exercisable for common stock, including shares issued in connection with an acquisition or securing funds to complete any clinical trial plans, or the perception that such sales could occur, may result in substantial dilution and may adversely affect prevailing market prices for Acer’s common stock. In addition, the perception in the public markets that the holders of Acer’s Marathon Convertible Notes may sell all or a portion of their shares upon conversion as a result of Acer’s registration of such shares for resale by the holders could also in and of itself have a material adverse effect on the market price of Acer’s common stock.

On November 9, 2018, Acer entered into a sales agreement with Roth Capital Partners, LLC, and on March 18, 2020, an amended and restated sales agreement was entered into with JonesTrading Institutional Services LLC and Roth Capital Partners, LLC. The agreement provides a facility for the offer and sale of shares of common stock from time to time having an aggregate offering price of up to $50.0 million depending upon market demand and subject to various limitations, in transactions deemed to be an at-the-market offering. Acer has no obligation to sell any shares of common stock pursuant to the agreement and may at any time suspend sales pursuant to the agreement. Each party may terminate the agreement at any time without liability. As of June 30, 2023, $29.0 million remained available under this facility.

Acer presently does not intend to pay cash dividends on Acer’s common stock.

Acer currently anticipates that no cash dividends will be paid on Acer’s common stock in the foreseeable future. While Acer’s dividend policy will be based on the operating results and capital needs of the business, it is anticipated that all earnings, if any, will be retained to finance the future expansion of Acer’s business.

Acer may issue debt and equity securities or securities convertible into equity securities, any of which may be senior to Acer’s common stock as to distributions and in liquidation, which could negatively affect the value of Acer’s common stock.

In the future, Acer may attempt to increase Acer’s capital resources by entering into debt or debt-like financing that is unsecured or secured by up to all of Acer’s assets, or by issuing additional debt or equity securities, which could include issuances of secured or unsecured commercial paper, medium-term notes, senior notes, subordinated notes, guarantees, preferred stock, hybrid securities, or securities convertible into or exchangeable for equity securities. In the event of Acer’s liquidation, Acer’s lenders and holders of Acer’s debt and preferred stock would receive distributions of available assets before distributions to the holders of Acer’s common stock. Because Acer’s decision to incur debt and issue securities in future offerings may be influenced by market conditions and other factors beyond Acer’s control, Acer cannot predict or estimate the amount, timing or nature of Acer’s future offerings or debt financings. Further, market conditions could require Acer to accept less favorable terms for the issuance of Acer’s securities in the future.

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Because a prior year merger resulted in an ownership change under Section 382 of the Internal Revenue Code, Acer’s pre-merger net operating loss carryforwards and certain other tax attributes will be subject to limitation or elimination. The net operating loss carryforwards and certain other tax attributes of Acer’s former wholly-owned subsidiary may also be subject to limitations as a result of ownership changes.

Under Sections 382 and 383 of the Internal Revenue Code of 1986, as amended, if a corporation undergoes an “ownership change,” the corporation’s ability to use its pre-change net operating loss carryforwards and other pre-change tax attributes to offset its post-change income and taxes may be limited. In general, an “ownership change” occurs if there is a cumulative change in a company’s ownership by “five-percent shareholders” that exceeds 50 percentage points over a rolling three-year period. Similar rules may apply under state tax laws. Acer experienced an ownership change on July 17, 2015 and August 3, 2018, and may experience ownership changes in the future as a result of previous or future transactions in Acer’s stock, some of which may be outside Acer’s control. As a result, if Acer earns net taxable income, Acer’s ability to use Acer’s pre-change net operating loss carryforwards, or other pre-change tax attributes, to offset U.S. federal and state taxable income and taxes may be subject to significant limitations.

Because of their ownership of Acer’s common stock, insiders may influence significant corporate decisions.

As of June 30, 2023, Acer’s executive officers and directors and their affiliates beneficially owned or controlled 15% of the outstanding shares of Acer’s common stock. Accordingly, these executive officers, directors and their affiliates will have substantial influence over the outcome of corporate actions requiring stockholder approval, including the election of directors, any merger, consolidation or sale of all or substantially all of Acer’s assets or any other significant corporate transactions. This concentration of ownership may also delay or prevent a change of control of Acer’s company, even if such a change of control would benefit Acer’s other stockholders.

Anti-takeover provisions in Acer’s organizational documents and Delaware law might discourage, delay, or prevent an acquisition attempt or change in control of Acer’s company that you might consider favorable.

Acer’s certificate of incorporation and bylaws contain provisions that may delay or prevent an acquisition or change in control of Acer’s company. Among other things, these provisions:

Further, as a Delaware corporation, Acer is also subject to provisions of Section 203 of the Delaware General Corporation Law regulating corporate takeovers. Section 203 generally prohibits Acer from engaging in a business combination with interested stockholders subject to certain exceptions.

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These anti-takeover provisions and other provisions under Delaware law, Acer’s charter and Acer’s bylaws could discourage, delay or prevent a transaction involving an acquisition attempt or a change in control of Acer’s company, including actions that Acer’s stockholders may deem advantageous, or negatively affect the trading price of Acer’s common stock. These provisions could also discourage proxy contests and make it more difficult for you and other stockholders to elect directors of your choosing and to cause Acer to take other corporate actions you desire.

Acer’s certificate of incorporation designates the Court of Chancery of the State of Delaware as the sole and exclusive forum for certain types of actions and proceedings that may be initiated by Acer’s stockholders, which could limit a stockholder’s ability to bring a claim in a judicial forum that the stockholder believes is more convenient or favorable for disputes with Acer or Acer’s directors, officers or other employees.

Acer’s certificate of incorporation provides that, unless Acer consents in writing to the selection of an alternative forum, the Court of Chancery of the State of Delaware shall be the sole and exclusive forum for:

Section 27 of the Exchange Act creates exclusive federal jurisdiction over all suits brought to enforce any duty or liability created by the Exchange Act or the rules and regulations thereunder. As a result, the exclusive forum provision will not apply to suits brought to enforce any duty or liability created by the Exchange Act or any other claim for which the federal courts have exclusive jurisdiction. Section 22 of the Securities Act creates concurrent jurisdiction for federal and state courts over all suits brought to enforce any duty or liability created by the Securities Act or the rules and regulations thereunder. As a result, the exclusive forum provision will not apply to suits brought to enforce any duty or liability created by the Securities Act or any other claim for which the federal and state courts have concurrent jurisdiction.

Any person or entity purchasing or otherwise acquiring any interest in shares of Acer’s capital stock shall be deemed to have notice of and consented to the provisions of Acer’s certificate of incorporation described above. This choice of forum provision may limit a stockholder’s ability to bring a claim in a judicial forum that the stockholder believes is more convenient or favorable for disputes with Acer or Acer’s directors, officers or other employees, which may discourage such lawsuits against Acer and Acer’s directors, officers and other employees. Alternatively, if a court were to find these provisions of Acer’s certificate of incorporation inapplicable to, or unenforceable in respect of, one or more of the specified types of actions or proceedings, Acer may incur additional costs associated with resolving such matters in other jurisdictions, which could adversely affect Acer’s business, financial condition or results of operations.

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CAUTIONARY STATEMENT CONCERNING FORWARD-LOOKING STATEMENTS

Statements contained in this proxy statement/prospectus and the documents incorporated by reference herein that are not strictly historical, including statements regarding the proposed Merger, uncertainties as to the timing of the consummation of the Merger and the ability of the parties to consummate the Merger; the satisfaction of the conditions precedent to consummation of the Merger, including the approval of Acer’s stockholders; the ability to obtain required regulatory approvals at all or in a timely manner; any litigation related to the Merger; disruption of Acer’s or Zevra’s current plans and operations as a result of the Merger; the ability of Acer or Zevra to retain and hire key personnel; competitive responses to the Merger; unexpected costs, charges or expenses resulting from the Merger; the ability of Zevra to successfully integrate Acer’s operations, products, product candidates and technology; the ability of Zevra to implement its plans, forecasts and other expectations with respect to Acer’s business after the completion of Merger and realize additional opportunities for growth and innovation; the ability of Zevra to realize the anticipated synergies and related benefits from the Merger in the anticipated amounts or within the anticipated timeframes or at all; the ability to maintain relationships with Zevra’s and Acer’s respective employees, customers, other business partners and governmental authorities and any other statements regarding events or developments that Zevra and Acer believe or anticipate will or may occur in the future, may be “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act and Section 21E of the Exchange Act and involve a number of risks and uncertainties. There are a number of important factors that could cause actual events to differ materially from those suggested or indicated by such forward-looking statements, many of which are outside of the control of Zevra and Acer, and you should not place undue reliance on any such forward-looking statements. These factors include risks and uncertainties related to, among other things:

Merger-related risk factors

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General risk factors

The forward-looking statements made herein speak only as of the date hereof and none of Zevra, Acer or any of their respective affiliates assumes any obligation to update or revise any forward-looking statement, whether as a result of new information, future events and developments or otherwise, except as required by law.

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THE MERGER

Relevant Historical Background for Acer

Relief Collaboration and Credit Facilities

On March 19, 2021, Acer and Relief Therapeutics Holding AG (“Relief”) entered into a Collaboration Agreement (“Relief Collaboration”) for the development and commercialization of Acer’s OLPRUVA^™ for the treatment of various inborn errors of metabolism, including for the treatment of UCDs and MSUD. Pursuant to the Relief Collaboration, (i) Acer retained development and commercialization rights for OLPRUVA^™ in the United States, Canada, Brazil, Turkey and Japan, (ii) the parties agreed to split net profits from such territories 60:40 in favor of Relief, and (iii) Relief licensed rights for OLPRUVA^™ for the rest of the world with a royalty obligation to Acer of 15% on net sales by Relief.

On March 4, 2022, Acer entered into a Credit Agreement (the “SWK Credit Agreement”) with the lenders party thereto and SWK as the agent, sole lead arranger and sole bookrunner, which provided for a senior secured term loan of $6.5 million. Pursuant to a January 30, 2023 amendment, SWK loaned Acer an additional $7.0 million, so the principal amount of such senior secured loan increased to $13.5 million. The SWK Loans currently bear interest at an annual rate of 16%, amortize at a monthly rate of $0.6 million, and are secured by a first priority lien on all assets of Acer. The maturity date of the SWK Loans is March 4, 2024, and upon any repayment Acer is obligated to pay an exit fee such that the lenders receive an aggregate amount (inclusive of all principal, interest and origination and other fees paid prior to repayment) equal to 1.5 times the outstanding principal amount of the SWK Loans, or an amount that would currently equal approximately $19.5 million. The SWK Credit Agreement includes a requirement for Acer to maintain a minimum amount of unencumbered (other than the liens in favor of SWK and Marathon) liquid assets which was originally set at $3.0 million. but has since been reduced through several steps and is currently set at $0.5 million. On June 16, 2023, SWK sold the SWK Loans to Nantahala Capital Management, LLC (“Nantahala”). Over the course of its relationship with SWK pursuant to the SWK Credit Agreement, Acer from time to time issued to SWK warrants to acquire an aggregate of 1.0 million shares of Acer’s common stock with exercise prices ranging from $1.00 to $2.46 per share, with a weighted average exercise price of $1.62 per share.

On March 4, 2022, the same day Acer entered into the SWK Credit Agreement, Acer also entered into a Convertible Note Purchase Agreement (the “Marathon Note Agreement”) with the Marathon Holders pursuant to which Acer issued to the Marathon Holders the Marathon Convertible Notes. The Marathon Convertible Notes bear interest at an annual rate of 6.5%, with such interest payable quarterly, and are secured by a second lien on collateral representing substantially all assets of Acer, although such security interest is subordinated to Acer’s obligations under the SWK Loans pursuant to a Subordination Agreement (the “Marathon Note Subordination Agreement”). Subject to restrictions on Acer’s ability to make payments toward the Marathon Convertible Notes as set forth in the Marathon Note Subordination Agreement, Acer is subject to a current requirement to repurchase the Marathon Convertible Notes at a price equal to the sum of (i) $15.3 million (which includes certain fees required to be paid pursuant to the Marathon Convertible Notes), plus (ii) $0.5 million for each 30-day period following September 12, 2023, to the date of repurchase (prorated for any partial period), plus (iii) any accrued but unpaid interest on the Marathon Convertible Notes to the date of repurchase. On July 25, 2023, Marathon sold the Marathon Convertible Notes to Nantahala. At such time as Nantahala had acquired both the SWK Loans and the Marathon Convertible Notes, Nantahala possessed the ability (which it never exercised) to waive the restrictions in the Marathon Note Subordination Agreement with respect to a repurchase by Acer of the Marathon Convertible Notes, meaning that Acer could have become subject to an immediate obligation to repurchase the Marathon Convertible Notes. Moreover, a default with respect to such repurchase obligation would have triggered a cross-default of the SWK Loan, thus obligating Acer also to pay immediately the full repayment obligation of the SWK Loan.

As described below, in connection with and effective immediately prior to entering into the Merger Agreement and the Bridge Loan to Acer, Zevra purchased the SWK Loans and the Marathon Convertible Notes from Nantahala.

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Strategic Review, Outreach and Engagement

In order to fund further progress in Acer’s four programs (i.e., (i) OLPRUVA^™ (sodium phenylbutyrate) for oral suspension which was approved by the FDA in December, 2022 for the treatment of UCDs involving deficiencies of CPS, OTC or AS, (ii) EDSIVO^™ (celiprolol) for the treatment of vascular Ehlers-Danlos syndrome in patients with a confirmed type III collagen (COL3A1) mutation (the “vEDS Indication”) which is in late stage clinical development, (iii) ACER-801 (osanetant) for the treatment of vasomotor symptoms, post-traumatic stress disorder, and prostate cancer, although the ACER-801 program is currently on pause while Acer conducts a thorough review of the full data set of results from its Phase 2a proof of concept clinical trial (where topline results showed that ACER-801 was safe and well-tolerated but did not achieve statistical significance when evaluating ACER-801’s ability to decrease the frequency or severity of hot flashes in postmenopausal women), and (iv) ACER-2820 (emetine), a host-directed therapy against a variety of viruses, including Ebola, cytomegalovirus, Zika and dengue), Acer engaged in outreach to numerous potential strategic partners over the 15-month period leading up to the execution of the Merger Agreement with Zevra. This outreach entailed preliminary discussions with respect to potential sale, licensing or partnering transactions involving one or more of Acer’s programs as well as potential transactions involving the entire company. As part of this process, 55 different parties were contacted by Acer’s management, 23 of those parties executed confidentiality agreements with Acer, nine of the parties executing confidentiality agreements were provided access to a data room prepared by Acer with respect to Acer and its programs (the “Acer Data Room”), and Acer engaged in substantive discussions with four of those parties (including Zevra) regarding a potential transaction. Other than with respect to Zevra and the Merger, the parties engaging with Acer in substantive discussions either terminated those discussions with Acer or Acer elected to decline any proposals discussed with such parties during such engagement as not providing an acceptable outcome for Acer, including acceptable benefits for Acer Stockholders.

In parallel, Acer’s management also engaged in active outreach to various potential sources of equity and debt financing. Following its March 21, 2023 financing with an institutional accredited investor (the “March 2023 Offering”) pursuant to which Acer received aggregate gross proceeds of approximately $2.7 million (and net proceeds of approximately $2.3 million) from the sale (i) in a registered direct offering of an aggregate of 2,335,000 shares of its common stock and pre-funded warrants to purchase up to 585,306 additional shares of common stock at an exercise price of $0.001 per share and (ii) in a concurrent private placement of warrants to purchase the March 2023 Common Warrants (i.e., up to 2,920,306 shares of Acer Common Stock at an exercise price of $0.791 per share), with a combined purchase price for one share and one March 2023 Common Warrant of $0.916 (or a combined purchase price for one pre-funded warrant and one March 2023 Common Warrant of $0.915). During this period over 150 potential investors were contacted, 32 of which executed confidentiality agreements, and 11 of the investors executing confidentiality agreements were provided access to the Acer Data Room. Although Acer’s outreach generated interest in a potential financing, at no point did Acer’s management believe that the level of interest generated would produce the requisite capital needed by Acer on acceptable terms (if at all) to achieve Acer’s requirements and objectives, including (i) to launch and commercialize in the United States OLPRUVA^™ for oral suspension for the treatment of UCDs involving deficiencies of CPS, OTC or AS, (ii) to continue development of EDSIVO^™, (iii) to pay off and/or restructure the SWK Loans and the Marathon Convertible Notes, (iv) to fund existing trade debt as well as the ongoing costs of Acer’s operations, and (v) if possible, to reacquire certain economic and territorial rights to OLPRUVA^™ from Relief (i.e., to effect the OLPRUVA Rights Restructuring as defined and detailed below).

With respect to certain specific steps and actions undertaken by Acer, in May 2022, Jeff Davis, Acer’s Chief Business Officer, and Chris Schelling, Acer’s Chief Executive Officer, contacted potential strategic partners and investors to arrange in-person meetings during the BIO International Convention which took place in San Diego from June 13-16, 2022. During that conference, Messrs. Davis and Schelling met with over 20 potential partners and investors, including Party A, a mid-size pharmaceutical company with which Acer had previously entered into a confidentiality and non-disclosure agreement on January 4, 2022, Party C, a subsidiary of a mid-size pharmaceutical manufacturer with which Acer subsequently entered into a confidentiality and non-disclosure

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agreement on June 20, 2022, and Party D, a publicly traded biopharma company with which Acer subsequently entered into a confidentiality and non-disclosure agreement on July 28, 2022.

During July 2022, officers of Acer and representatives of Party B, a private equity firm with which Acer had entered into a confidentiality and non-disclosure agreement on February 1, 2022, held several meetings to review detailed information with respect to Acer’s programs, including OLPRUVA^™ and EDSIVO^™. Such meetings led to specific discussions regarding a potential acquisition by Party B of Acer’s interest in OLPRUVA^™ (i.e., excluding the rights to OLPRUVA^™ held by Relief pursuant to the Relief Collaboration). On September 6, 2022, Party B advised Acer during a meeting between officers of Acer and representatives of Party B that the rights of Relief pursuant to the Relief Collaboration made the financial metrics of a potential acquisition of Acer’s interest in OLPRUVA^™ unattractive to Party B, and that as a consequence Party B would not pursue further discussions with Acer. Party B’s position was confirmed in a follow-up call between officers of Acer and representatives of Party B on September 27, 2022.

From July 2022 to January 2023, officers of Acer and officers of Relief engaged in numerous discussions regarding a potential acquisition by Relief of Acer’s interest in OLPRUVA^™ (i.e., the rights to OLPRUVA^™ not otherwise held by Relief pursuant to the Relief Collaboration). However, the parties were unable to agree on the financial terms or deal structure for such a transaction.

On August 2, 2022, Acer provided Party C with access to the Acer Data Room after engaging in diligence discussions and exchanges with Party C during July 2022. On August 13, 2022, Acer received a non-binding proposal from Party C for the acquisition of all rights to OLPRUVA^™ (i.e., including the rights to OLPRUVA^™ held by Relief pursuant to the Relief Collaboration and free of any liens, including the liens represented by the secured SWK Loans and the secured Marathon Convertible Notes). Acer promptly advised Party C that the economics of such proposal (which consisted of a $2.0 million upfront payment, another payment of $8.0 million upon FDA approval of OLPRUVA^™ for oral suspension for the treatment of UCDs involving deficiencies of CPS, OTC or AS, a tiered royalty of 10% to 15% on net sales of OLPRUVA^™, and certain contingent milestone payments based upon sales of OLPRUVA^™) were inadequate and substantially below the minimum that Acer believed would be required for Acer to reacquire the rights to OLPRUVA^™ held by Relief, to repay or restructure the SWK Loans and the Marathon Convertible Notes so as to effect the release of their associated security interests in OLPRUVA^™ and thereafter to provide reasonable value to the Acer Stockholders. On October 4, 2022, officers of Acer and representatives of Party C engaged in a further discussion during which Party C indicated that its August 13, 2022 proposal was a best and final position.

On August 12, 2022, Party E, a publicly traded pharmaceutical company with commercial assets in rare diseases, entered into a confidentiality and non-disclosure agreement with Acer. On August 16, 2022, officers of Acer and representatives of Party E held a meeting to review detailed information with respect to OLPRUVA^™. On September 2, 2022, officers of Acer and representatives of Party E engaged in an exchange regarding a potential acquisition by Party E of Acer’s interest in OLPRUVA^™ (i.e., excluding the rights to OLPRUVA^™ held by Relief pursuant to the Relief Collaboration). On September 15, 2022, Party E informed Acer that it was unable to invest any resources toward further pursuit of a potential transaction with Acer. Although Party E subsequently engaged in additional due diligence activities through November 2022, Party E discontinued all activities as of December 2, 2022, due to its need to focus on other matters.

On August 30, 2022, Party F, a private mid-size pharmaceutical company, entered into a confidentiality agreement with Acer. On December 2, 2022, Party F made a non-binding proposal to acquire ACER-001 (i.e., including the rights to OLPRUVA^™ held by Relief pursuant to the Relief Collaboration and free of any liens, including the liens represented by the secured SWK Loans and the secured Marathon Convertible Notes) for a single payment of $42.0 million. Acer promptly advised Party F that the economics of such proposal were inadequate and substantially below the minimum that Acer believed would be required for Acer to reacquire the rights to OLPRUVA^™ held by Relief, to repay or restructure the SWK Loans and the Marathon Convertible Notes so as to effect the release of their associated security interests in OLPRUVA^™ and thereafter to provide reasonable value to the Acer Stockholders.

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On November 1, 2022, Party D made a non-binding proposal to acquire EDSIVO^™ for a $2.0 million upfront payment, up to $50.0 million in payments based upon the achievement of regulatory milestones and a royalty of 10% on net sales. Acer advised Party F that the economics of such proposal were inadequate and substantially below the minimum that Acer believed would be required for Acer to repay or restructure the SWK Loans and the Marathon Convertible Notes so as to effect the release of their associated security interests in EDSIVO^™ and thereafter to provide reasonable value to the Acer Stockholders. After briefly engaging in further discussion regarding the EDSIVO^™ program, Party D discontinued engagement with Acer due to its stated need to focus on other matters.

On December 27, 2022, Acer announced that OLPRUVA^™ for oral suspension had been approved by the FDA for the treatment of UCDs involving deficiencies of CPS, OTC or AS. Prompted by such approval, a representative of Party C contacted an officer of Acer to express continued interest in acquiring OLPRUVA^™, but without modifying the terms of its previously expressed proposal.

On December 30, 2022, Acer engaged H.C. Wainwright & Co. LLC to act as Acer’s exclusive agent, advisor or underwriter in an offering of equity or equity-linked securities. This engagement culminated with the March 2023 Offering, described above.

On January 20, 2023, Acer engaged a financial advisory firm, to approach potential providers of debt financing to support the commercialization of OLPRUVA^™, the continued clinical development of EDSIVO^™, and the restructuring of the SWK Loans and the Marathon Convertible Notes. From the time of such engagement through the execution of the Merger Agreement with Zevra, this financial advisory firm (and/or Acer’s management with the assistance of such firm) engaged with 39 potential lenders, of which 22 entered into non-disclosure agreements with Acer and six of those were provided access to the Acer Data Room.

On January 30, 2023, Acer borrowed an additional $7.0 million from SWK pursuant to the SWK Loan. As a part of such transaction, the Marathon Convertible Notes were amended to add the repurchase obligation referenced above. In addition, Acer and MAM Aardvark, LLC concurrently terminated a Credit Agreement (pursuant to which no funding to Acer had yet occurred).

On February 21, 2023, Mr. Schelling, the Chief Executive Officer of Acer, met with the Chief Executive Officer of Party A about a possible combination of Acer with an affiliate of Party A, although no specific terms were discussed and no specific proposal was made.

On March 16, 2023, Mr. Davis, Acer’s Chief Business Officer, and Mr. Schelling, Acer’s Chief Executive Officer, engaged in a meeting with key representatives of Party B to discuss party B’s potential acquisition of Acer, although no specific terms were discussed and no specific proposal was made.

On March 17, 2023, Acer announced topline results from its phase 2a proof of concept clinical trial to evaluate ACER-801 (osanetant) as a potential treatment for moderate to severe vasomotor symptoms associated with menopause, which showed that ACER-801 was safe and well-tolerated but did not achieve statistical significance when evaluating ACER-801’s ability to decrease the frequency or severity of hot flashes in postmenopausal women. Shortly thereafter, Acer paused further development of ACER-801 (as well as Acer’s outreach with respect to potential partnering discussions involving ACER-801) to conduct a thorough review of the full data set.

On March 22, 2023, Acer announced the March 2023 Offering.

On March 24, 2023, Party B informed Acer that Party B was withdrawing from further discussions with Acer as it was seeking a broader rare disease platform with more currently approved products than Acer could provide.

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On March 30, 2023, Acer made a proposal to Party A that would have entailed a combination of Acer and a non-U.S. subsidiary of Party A (with Acer’s stockholders and Party A owning the resulting entity) as well as a financing by Party A of that combined company. In response, Party A informed Acer that Party A was withdrawing from further discussions with Acer due to perceived transaction complexity and differences of perspective on the relative valuations of Acer and Party A’s subsidiary.

On April 1, 2023, Acer engaged a financial advisory firm, as an additional resource to approach potential providers of certain financing transactions. From the time of such engagement through the execution of the Merger Agreement with Zevra, this financial advisory firm (and/or Acer’s management with the assistance of such firm) engaged with 69 potential lenders, of which 10 entered into non-disclosure agreements with Acer and of which five of those were provided access to the Acer Data Room.

On April 25, 2023, Mr. Schelling and Joshua Schafer, the Chief Commercial Officer of Zevra, engaged in discussion on a non-confidential basis about a potential strategic transaction between Acer and Zevra. This conversation occurred following outreach to Mr. Schafer by Steve Aselage, the Chairman of Acer’s Board.

On May 25, 2023, following several months of discussions between officers of Acer and officers of Relief (after it was determined in January 2023 that the parties were unable to agree on the financial terms or deal structure for a potential acquisition by Relief of Acer’s interest in OLPRUVA^™ - i.e., the rights to OLPRUVA^™ not otherwise held by Relief pursuant to the Relief Collaboration), the parties reached alignment on potential financial terms for a restructuring of the arrangements between the parties with respect to global rights and economic terms for OLPRUVA^™ (the “OLPRUVA Rights Restructuring”). However, the parties acknowledged that, among other considerations and conditions, any such restructuring would require external financing to enable Acer to perform the required upfront obligations, as well as a restructuring of the liens on the assets of Acer (including Acer’s rights in OLPRUVA^™) represented by the SWK Loans and the Marathon Convertible Notes.

On June 12, 2023, after executing a mutual non-disclosure agreement, Acer provided Zevra with access to the Acer Data Room. Over the course of the next several months, each of the parties engaged in an extensive due diligence review with respect to the other party in the context of a potential strategic transaction.

On June 16, 2023, the Acer Board met with members of Acer’s management and representatives of Pillsbury Winthrop Shaw Pittman LLP (“Pillsbury”), counsel to Acer, and reviewed the status of Acer’s efforts to source financing for Acer (whether debt, equity or a combination of both), the prospects for (and Acer’s ongoing activities with respect to) a potential strategic transaction, and potential restructuring alternatives. Acer’s Board also approved the engagement of William Blair & Company, LLC (“William Blair”) to render certain financial and capital markets advisory services to Acer. This initial engagement was limited to advice with respect to potential equity financing alternatives and did not include any agreement to evaluate any other financing or strategic alternatives, including the proposed Merger with Zevra.

On June 22, 2023, Acer received $1.0 million in cash funding from Mr. Schelling in exchange for the issuance to Mr. Schelling of Acer’s unsecured promissory note (the “Schelling Note”).

On July 12, 2023, Zevra provided Acer with a non-binding proposal to enter into the Merger on the following terms: (i) Zevra would provide the Acer Stockholders with a total of $15.0 million in shares of Zevra Common Stock (based upon the 20-day trailing volume-weighted average price of such stock on the date of execution of a definitive agreement); (ii) Zevra would provide Acer with a total of $30.0 million in cash to (x) settle all obligations owed under the SWK Loans and the Marathon Convertible Notes (with the requirement that all such indebtedness be fully settled) and (y) make the $10.0 million upfront payment contemplated by the OLPRUVA Rights Restructuring (with the requirement that the OLPRUVA Rights Restructuring be fully implemented); (iii) Zevra would provide the Acer Stockholders with a series of one-time cash payments of up to $64.5 million pursuant to CVRs, as follows: (A) if annual net sales of OLPRUVA^™ equal or exceed

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$35.0 million, a $7.0 million payment; (B) if annual net sales of OLPRUVA^™ equal or exceed $50.0 million, a $7.5 million payment; (C) if annual net sales of OLPRUVA^™ equal or exceed $100.0 million, a $10.0 million payment; (D) if annual net sales of OLPRUVA^™ equal or exceed $200.0 million, a $10.0 million payment; (E) if the FDA approves MSUD as an indication for OLPRUVA^™, a $10.0 million payment; (F) if the European Medicines Agency (the “EMA”) approves MSUD as an indication for OLPRUVA^™, a $5.0 million payment; (G) if the FDA approves EDSIVO^™ for the vEDS Indication, a $10.0 million payment; and (H) if the EMA approves EDSIVO^™ for the vEDS Indication, a $5.0 million payment; and (iv) Zevra would provide Acer with a working capital loan of up to $7.0 million for a period of up to three months to be used to support the launch of OLPRUVA^™ in the United States. Acer promptly advised the Acer Board regarding the Zevra proposal and also updated William Blair and Pillsbury over the next several days regarding the proposal and developments.

On July 18, 2023, following extensive engagement with Acer’s Board, Acer provided a response to Zevra’s July 12, 2023 proposal as follows: (i) the upfront payment by Zevra to Acer Stockholders should include a $5.0 million cash payment in addition to the $15.0 million stock payment included in Zevra’s July 12, 2023 proposal; (ii) rather than cap Zevra’s obligations relative to the SWK Loans and the Marathon Convertible Notes at $20.0 million (i.e., the $30.0 million payment proposed less the $10.0 million upfront payment required for the OLPRUVA Rights Restructuring) as provided in Zevra’s July 12, 2023 proposal, Zevra should be responsible for any amounts owed to effect a termination or an assumption of the SWK Loans and the Marathon Convertible Notes; (iii) in addition to the $34.5 million in sales milestone payments in respect of OLPRUVA^™ pursuant to CVRs as proposed by Zevra in its July 12, 2023 proposal, Zevra should provide $30.0 million in regulatory milestones for OLPRUVA^™ (consisting of a $15.0 million payment if the FDA approves MSUD as an indication for OLPRUVA^™ and a $15.0 million payment if any additional indication for OLPRUVA^™ is approved), representing an increase of $15.0 million in payments for regulatory milestones in respect of OLPRUVA^™ as compared with Zevra’s July 12, 2023 proposal, and $30.0 million in regulatory milestones for EDSIVO^™ (consisting of a $10.0 million payment upon submission to the FDA of an application for approval of EDSIVO^™ for the vEDS Indication and a $20.0 million payment if the FDA approves EDSIVO^™ for the vEDS Indication), representing an increase of $15.0 million in payments for regulatory milestones in respect of EDSIVO^™ as compared with Zevra’s July 12, 2023 proposal; and (iv) Zevra’s proposed bridge loan should be for up to a total of $13.0 million (as compared with the $7.0 million in Zevra’s July 12, 2023 proposal) in order to cover all of the ordinary course expenses of Acer, both those accrued as of the date of signing of any merger agreement as well as additional expenses anticipated to be incurred prior to any closing or termination of any merger transaction.

On July 18, 2023, the Gilmartin Group, Acer’s investor relations advisor, initiated outreach under confidentiality arrangements to a select group of highly accredited investors regarding a potential equity financing for Acer. As part of such efforts, a total of 83 potential investors were contacted, 23 of such investors elected to enter into confidentiality arrangements to be advised of the potential issuer and the nature of the financing, and introductory meetings were held between officers of Acer and 12 of such investors. Although several investors (including Nantahala) expressed interest in a potential financing (including, with respect to Nantahala, the equitization of a portion of the indebtedness of Acer held by Nantahala), Acer was not able to achieve sufficient interest from potential investors prior to entering into the Exclusivity Agreement (defined below) with Zevra on August 16, 2023, including with respect to a financing that would have enabled Acer to make substantial progress toward: (i) launching and commercializing in the United States OLPRUVA^™ for oral suspension for the treatment of UCDs involving deficiencies of CPS, OTC or AS; (ii) continuing development of EDSIVO^™ (iii) paying off and/or restructuring the SWK Loans and the Marathon Convertible Notes; (iv) funding existing trade debt as well as the ongoing costs of Acer’s operations; and (v) effecting the OLPRUVA Rights Restructuring.

On July 21, 2023, Zevra provided a counterresponse to Acer’s July 18, 2023 response with the following features: (i) Zevra would provide Acer Stockholders with the same upfront payment offered in Zevra’s July 12, 2023 proposal (i.e., a total of $15.0 million in shares of Zevra Common Stock based upon the 20-day trailing volume-weighted average price of such stock on the date of execution of a definitive agreement) and warrants to acquire another $8.0 million in shares of Zevra Common Stock with an exercise price reflecting a 15% premium

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and a term of 12 months; (ii) Zevra would provide Acer with a total of $35.0 million in cash to (x) settle all obligations owed under the SWK Loans and the Marathon Convertible Notes (with the requirement that all such indebtedness be fully settled) and (y) make the $10.0 million upfront payment contemplated by the OLPRUVA Rights Restructuring (with the requirement that the OLPRUVA Rights Restructuring be fully implemented); (iii) Zevra would provide the stockholders of Acer with one-time cash payments of up to $74.5 million pursuant to CVRs as follows: (A) if annual net sales of OLPRUVA^™ equal or exceed $35.0 million, a $7.0 million payment; (B) if annual net sales of OLPRUVA^™ equal or exceed $50.0 million, a $7.5 million payment; (C) if annual net sales of OLPRUVA^™ equal or exceed $100.0 million, a $10.0 million payment; (D) if annual net sales of OLPRUVA^™ equal or exceed $200.0 million, a $10.0 million payment; (E) if the FDA approves MSUD as an indication for OLPRUVA^™, a $10.0 million payment; (F) if any additional indication for OLPRUVA^™ is approved, a $10.0 million payment; and (G) if the FDA approves EDSIVO^™ for the vEDS Indication, a $20.0 million payment; and (iv) Zevra would provide Acer with a working capital loan of up to $6.0 million for a period of up to three months to be used to support the launch of OLPRUVA^™ in the United States, with Zevra also expected to assume the outstanding liabilities of Acer as part of the consummation of a Merger.

On July 24, 2023, the Acer Board met with members of Acer’s management and representatives of Pillsbury to review the status of Acer’s efforts to source financing for Acer (whether debt or equity or a combination of both), the prospects for (and Acer’s ongoing activities with respect to) a potential strategic transaction, and potential restructuring alternatives. In particular, the Acer Board reviewed and provided Acer’s management with guidance regarding the status of Acer’s discussions with Zevra, including as reflected in the response provided by Acer to Zevra on July 18, 2023, and Zevra’s counterresponse provided to Acer on July 21, 2023, as well as the status of Acer’s efforts to negotiate with Relief regarding definitive arrangements in respect of the OLPRUVA Rights Restructuring.

On August 3, 2023, Zevra provided Acer with a revised non-binding proposal for a Merger with Acer on the following terms: (i) Zevra would provide the stockholders of Acer with the same upfront payment offered in Zevra’s initial July 12, 2023 proposal (i.e., a total of $15.0 million in shares of Zevra Common Stock based upon the 20-day trailing volume-weighted average price of such stock on the date of execution of a definitive); (ii) rather than cap Zevra’s obligations relative to the SWK Loans and the Marathon Convertible Notes at $25.0 million (i.e., the $35.0 million payment proposed in Zevra’s counterresponse provided to Acer on July 21, 2023, less the $10.0 million upfront payment required for the OLPRUVA Rights Restructuring), Zevra would be responsible for any amounts owed (and would negotiate directly with Nantahala) to effect a termination or an assumption by Zevra of the SWK Loans and the Marathon Convertible Notes; (iii) Zevra would pay the $10.0 million upfront payment required for the OLPRUVA Rights Restructuring (as contemplated in Zevra’s initial July 12, 2023 proposal), but not until the Closing; (iv) Zevra would pay the $1.0 million plus accrued interest owed under the Schelling Note, but not until the Closing; (v) Zevra would expect to assume the outstanding liabilities of Acer as part of the consummation of the Merger; (vi) Zevra would provide Acer with a working capital loan of up to $6.0 million for a period of up to three months to be used to support the launch of OLPRUVA^™ in the United States; and (vii) Zevra would provide the stockholders of Acer with one-time cash payments of up to $81.0 million (and in certain cases more) pursuant CVRs as follows: (A) if annual net sales of OLPRUVA^™ equal or exceed $35.0 million, a $7.0 million payment; (B) if annual net sales of OLPRUVA^™ equal or exceed $50.0 million, a $7.0 million payment; (C) if annual net sales of OLPRUVA^™ equal or exceed $100.0 million, a $10.0 million payment; (D) if annual net sales of OLPRUVA^™ equal or exceed $200.0 million, a $10.0 million payment; (E) if the FDA approves MSUD as an indication for OLPRUVA^™, a $12.0 million payment; (F) if any additional indication for OLPRUVA^™ is approved, a $10.0 million payment; (G) if the FDA approves EDSIVO^™ for the vEDS Indication, a $20.0 million payment; (H) if Zevra receives funding of at least $20.0 million from a governmental entity for the development of ACER-2820 for the treatment of any indication, and within three years of such funding, Zevra grants a license to a third party for the purpose of developing and commercializing ACER-2820, or sells the ACER-2820 intellectual property to a third party or Zevra or an affiliate obtains FDA approval for the use of ACER-2820 for treatment of any indication, then a payment equal to the greater of (x) 10% of the total cash consideration paid to the Zevra for the license or sale of the ACER-2820 intellectual property or (y) $5.0 million; and (I) if the FDA issues a priority review voucher (“PRV”) to

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Zevra for approval of ACER-2820, and Zevra thereafter sells that PRV, then a milestone payment equal to 10% of the total cash consideration paid to Zevra for the PRV.

On August 3, 2023, Acer contacted Party B to inquire whether Party B had any interest in reengaging in discussions regarding a potential acquisition of Acer, and Party B confirmed its prior statement that it had no such interest.

On August 11, 2023, the Acer Board met with members of Acer’s management and representatives of Pillsbury to review the status of Acer’s efforts to source financing for Acer (whether debt or equity or a combination of both), the prospects for (and Acer’s ongoing activities with respect to) a potential strategic transaction, and potential restructuring alternatives. Acer’s management advised the Acer Board that Acer’s available unencumbered liquid assets at that time were only marginally above the $0.5 million threshold required by the terms of the SWK Loan. The Acer Board reviewed and provided Acer’s management with guidance regarding the status of Acer’s discussions with Zevra, including as reflected in the revised proposal provided by Zevra to Acer on August 3, 2023. After a detailed review of the status of Acer’s efforts to negotiate with Relief regarding definitive arrangements in respect of the OLPRUVA Rights Restructuring, the Acer Board approved the OLPRUVA Rights Restructuring contingent upon Acer securing in the near-term an ability to finance the payment of the required upfront fee of $10.0 million.

On August 16, 2023, after Acer’s management consulted with the Acer Board and provided an update to the Board on Acer’s liquidity (including that Acer’s cash runway was not expected to be sufficient for purposes of making Acer’s payroll as of the end of August), and as a requirement from Zevra for continued discussions with respect to a potential strategic transaction between the parties, Acer entered into an arrangement with Zevra, which provided for a period of 30 days of exclusive negotiations and the possibility of a further 15-day extension (the “Exclusivity Agreement”). As a consequence of the execution of the Exclusivity Agreement, Acer suspended its activities with respect to sourcing financing for Acer (whether debt or equity or a combination of both).

On August 21, 2023, Bryan Cave Leighton Paisner LLP (“Bryan Cave”), Zevra’s counsel, delivered to Acer a draft of the Merger Agreement. Over the next several days, Bryan Cave delivered to Acer and Pillsbury drafts of various other transaction documents, including a form of the CVR Agreement as well as a Bridge Loan Facility. Also on August 21, 2023, William Blair was formally retained to act as financial advisor to Acer in connection with a possible business combination between Zevra and Acer.

From August 21, 2023 to August 30, 2023, the parties and their respective counsel engaged in numerous meetings and calls, as well as successive exchanges of drafts, with respect to the terms and conditions of the proposed Merger, including as reflected in the Merger Agreement, the CVR Agreement and the Bridge Loan Facility.

On August 28, 2023, the Acer Board met with members of Acer’s management, representatives of Pillsbury, counsel to Acer, and representatives of William Blair, financial advisor to Acer, with respect to the proposed Merger with Zevra. In advance of such meeting, near-final drafts of the various transaction documents in respect of the proposed Merger had been circulated to the members of the Acer Board. As part of such meeting, representatives of Acer’s management provided the Acer Board with reports on (i) Acer’s efforts to explore potential strategic transactions for Acer as well as potential financing opportunities for Acer, (ii) the status of Acer’s balance sheet, including with respect to the obligations represented by the SWK Loans and the Marathon Convertible Notes, and (iii) the terms of the proposed Merger, including (A) the upfront consideration for Acer’s Stockholders in the form of shares of Zevra Common Stock, (B) the potential downstream consideration based upon cash payments pursuant to the CVRs that could be triggered by commercial and regulatory milestones with respect to OLPRUVA^™, regulatory milestones with respect to EDSIVO^™ and development milestones with respect to ACR-2820, (C) the effective assumption by Zevra of Acer’s obligations under the SWK Loans and the Marathon Convertible Notes, (D) the financing available to Acer pursuant to the Bridge Loan Facility, (E) the

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availability to Acer of a feature that would, under certain circumstances, allow Acer to terminate the Merger Agreement in order to pursue a superior opportunity, and (F) the potential payment by Acer in certain instance of the Termination Fee. Representatives from William Blair then delivered to the Acer Board the opinion of William Blair, orally, as to the fairness, from a financial point of view, to the Acer Stockholders, of the Merger Consideration to be paid to the Acer Stockholders pursuant to the terms and subject to the conditions set forth in the Merger Agreement, as of August 28, 2023 (i.e., the date of the meeting of the Acer Board), which opinion was based on and subject to the various assumptions made, procedures followed, matters considered and limitations and qualifications on the review undertaken by William Blair, and following the meeting, subsequently confirmed in its written opinion delivered on and as of August 28, 2023, to such effect as more fully described under the heading “The Merger—Opinion of Acer’s Financial Advisor,” beginning on page 94 in this proxy statement/prospectus. As part of the meeting, the Acer Board determined that the terms of the Merger Agreement and the other transactions contemplated by the Merger Agreement are fair to and in the best interests of Acer and its stockholders, approved and declared advisable the Merger Agreement and the transactions contemplated by the Merger Agreement, including the Merger, directed that the Merger Agreement be submitted to Acer’s Stockholders for adoption, and recommended that Acer’s Stockholders vote in favor of the adoption of the Merger Agreement.

In the morning of August 30, 2023, the Zevra Board met by videoconference and determined by unanimous vote that the Merger Agreement and the other transactions contemplated by the Merger Agreement were advisable and in the best interests of Zevra and its stockholders, and approved the Merger Agreement and the transactions contemplated by the Merger Agreement, including the Merger.

Following the approval of the Merger and the Merger Agreement by the Zevra Board, Acer and Zevra finalized and executed the Bridge Loan Facility and Merger Agreement on August 30, 2023.

On August 30, 2023, representing a condition to the execution of the Merger Agreement with Zevra (including the upfront payment described below that was immediately funded by Zevra in connection with the Bridge Loan Facility), Acer announced that it had entered into the following arrangements with Relief (i.e., the OLPRUVA Rights Restructuring), subject to a cap of $56.5 million with respect to payments to Relief under clauses (ii), (iii) and (iv): (i) termination of the Collaboration and License Agreement, dated March 19, 2021, by and between Acer and Relief; (ii) immediate payment of an upfront fee to Relief of $10.0 million, with an additional payment to Relief of $1.5 million due on the first-year anniversary of the $10.0 million payment; (iii) payment to Relief of a 10% royalty on net sales of OLPRUVA^™ worldwide, excluding the European Union, Liechtenstein, San Marino, Vatican City, Norway, Iceland, Principality of Monaco, Andorra, Gibraltar, Switzerland, United Kingdom, Albania, Bosnia, Kosovo, Montenegro, Serbia and North Macedonia (“Geographical Europe”); (iv) payment to Relief of 20% of any value received by Acer from certain third parties relating to OLPRUVA^™ licensing or divestment rights; and (v) an Exclusive License Agreement (the “Exclusive License Agreement”), dated August 28, 2023, by and between Relief and Acer, pursuant to which Relief will hold exclusive development and commercialization rights for OLPRUVA^™ in Geographical Europe, with Acer having the right to receive a royalty of up to 10% of the net sales of OLPRUVA^™ in Geographical Europe.

Also on August 30, 2023, representing a condition to the execution of the Merger Agreement, Zevra finalized and executed the Loan and Note Purchase Agreements with Nantahala (as described under “Other Agreement Related to the Merger Agreement—Loan and Note Purchase Agreements” below) and purchased from Nantahala the SWK Loans and the Marathon Convertible Notes. On August 31, 2023, Zevra and Acer issued a joint press release announcing the execution of the Merger Agreement and the proposed Merger and the transactions related thereto.

Acer’s Reasons for the Merger

During the course of its evaluation of the Merger Agreement and the transactions contemplated by the Merger Agreement, Acer’s Board held meetings, consulted frequently with Acer’s senior management, consulted with

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Pillsbury (legal counsel), consulted, as it relates to the fairness opinion, with William Blair (financial advisor) who had spent significant time with management, and reviewed a significant amount of information. Acer’s Board considered the following factors in reaching its conclusion to approve the Merger Agreement and the transactions contemplated thereby and to recommend that the Acer Stockholders vote in favor of the adoption of the Merger Agreement, all of which the Acer Board viewed as supporting its decision:

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In the course of its deliberations, the Acer Board also considered a variety of risks and other countervailing factors related to entering into the Merger Agreement, including:

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The foregoing information and factors considered by the Acer Board are not intended to be exhaustive, but are believed to include certain material factors considered by the Acer Board in evaluating the Merger. In view of the wide variety and complexity of factors considered in connection with its evaluation of the Merger, the Acer Board did not find it useful, and did not attempt, to quantify, rank or otherwise assign relative weights to these factors. In considering the factors described above, individual members of the Acer Board may have given different weight to different factors. The Acer Board conducted an overall review of the factors described above and considered the factors generally to be favorable to, and to support, its determination that entering into the Merger Agreement and consummating the Merger is in the best interest of Acer Stockholders.

Opinion of Acer’s Financial Advisor

William Blair was retained to act as financial advisor to Acer in connection with a possible business combination. Pursuant to its engagement, the Acer Board requested that William Blair render an opinion to the Acer Board as to the fairness, from a financial point of view, to the Acer Stockholders (other than such holders who properly exercised their appraisal rights with respect to their Acer Common Stock), of the Merger Consideration to be paid to the Acer Stockholders pursuant to the terms and subject to the conditions set forth in the Merger Agreement. On August 28, 2023, William Blair delivered its oral opinion to the Acer Board (subsequently confirmed in its written opinion dated August 28, 2023) that, based upon and subject to the assumptions, qualifications and limitations stated in its written opinion, as of the date of such opinion, the Merger Consideration was fair, from a financial point of view, to the Acer Stockholders.

THE FULL TEXT OF WILLIAM BLAIR’S WRITTEN OPINION, DATED AUGUST 28, 2023, IS ATTACHED AS APPENDIX C TO THIS PROXY STATEMENT/PROSPECTUS AND INCORPORATED INTO THIS PROXY STATEMENT/PROSPECTUS BY REFERENCE. YOU ARE URGED TO READ THE ENTIRE FAIRNESS OPINION CAREFULLY AND IN ITS ENTIRETY TO LEARN ABOUT THE ASSUMPTIONS MADE, PROCEDURES FOLLOWED, MATTERS CONSIDERED AND LIMITS ON THE SCOPE OF THE REVIEW UNDERTAKEN BY WILLIAM BLAIR IN RENDERING ITS OPINION. THE ANALYSIS PERFORMED BY WILLIAM BLAIR SHOULD BE VIEWED IN ITS ENTIRETY; NONE OF THE METHODS OF ANALYSIS SHOULD BE VIEWED IN ISOLATION. WILLIAM BLAIR’S FAIRNESS OPINION WAS PROVIDED TO THE ACER BOARD FOR ITS USE AND BENEFIT IN CONNECTION WITH ITS CONSIDERATION OF THE TRANSACTION CONTEMPLATED BY THE MERGER AGREEMENT AND RELATES ONLY TO THE FAIRNESS, AS OF THE DATE OF WILLIAM BLAIR’S FAIRNESS OPINION AND FROM A FINANCIAL POINT OF VIEW, TO THE ACER STOCKHOLDERS OF THE MERGER CONSIDERATION IN CONNECTION WITH THE MERGER. WILLIAM BLAIR DID NOT ADDRESS THE MERITS OF THE UNDERLYING DECISION BY ACER TO ENGAGE IN THE MERGER, AND ITS FAIRNESS OPINION DOES NOT CONSTITUTE A RECOMMENDATION TO ANY ACER STOCKHOLDER AS TO HOW SUCH ACER STOCKHOLDER SHOULD VOTE WITH RESPECT TO THE MERGER. THE FOLLOWING SUMMARY OF WILLIAM BLAIR’S FAIRNESS OPINION IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO THE FULL TEXT OF ITS FAIRNESS OPINION ATTACHED TO THIS PROXY STATEMENT/PROSPECTUS AS APPENDIX C.

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In connection with William Blair’s review of the Merger and the preparation of its opinion, William Blair examined or discussed:

William Blair also held discussions with members of the senior management of Acer to discuss the foregoing, considered other matters that it deemed relevant to its inquiry, and took into account the accepted financial and investment banking procedures and considerations that it deemed relevant. William Blair was advised by senior management of Acer that without third party funding, Acer currently has insufficient liquidity to operate the business and execute on the Forecasts through fourth quarter 2023 and beyond.

In rendering its opinion, William Blair assumed and relied, without independent verification and with the consent of the Acer Board, upon the accuracy and completeness of all the financial, legal, regulatory, tax, accounting and other information examined by or otherwise reviewed or discussed with William Blair for purposes of its fairness opinion including, without limitation, the Forecasts, Sensitivities and Management’s Illustrative Liquidation Analysis provided by senior management of Acer, and William Blair assumes no responsibility or liability therefor. William Blair did not make or obtain an independent valuation or appraisal of the assets, liabilities or solvency of Acer or Zevra. William Blair was advised by the senior management of Acer that the Forecasts examined by William Blair were reasonably prepared on bases reflecting the best currently

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available estimates and judgments of the senior management of Acer, and at the direction of Acer, William Blair applied the Sensitivities to the Forecasts. In that regard, William Blair assumed, with the consent of the Acer Board, that (i) the Forecasts would be achieved in the amounts and at the times contemplated thereby taking into account the Sensitivities, and (ii) all material assets and liabilities (contingent or otherwise) of Acer were as set forth in Acer’s financial statements or other information made available to William Blair. William Blair assumed no responsibility for, and did not express an opinion with respect to the Forecasts, the Sensitivities, the Management’s Illustrative Liquidation Analysis, or other prospective financial information or the estimates and judgments on which they were based. William Blair was advised by senior management of Acer that the Forecasts were prepared based on cash accounting principles and not in accordance with GAAP. William Blair was advised by senior management of Acer to not take into account the impact of any potentially realizable existing net operating loss carryforwards and credits (collectively, “NOLs”) in rendering the opinion due to potential future limitations on the use thereof. William Blair expressed no opinion as to the realizability or use of any existing or future NOLs by any person, whether before or after the Effective Time. William Blair did not consider and expressed no opinion as to the amount or nature of the compensation to any of Acer’s officers, directors or employees (or any class of such persons) relative to the Merger Consideration payable to Acer’s other stockholders. In addition, William Blair did not express an opinion as to the consideration to be received in connection with the Merger with respect to the Acer warrants. William Blair assumed no responsibility for and expressed no view as to the appropriateness of the probability adjustments related to the CVR milestone payments, including any inherent forecasts or the assumptions on which they were based. Senior management of Acer advised William Blair, and William Blair assumed with Acer’s consent, that the Management’s Illustrative Liquidation Analysis was reasonably prepared in good faith on bases reflecting the best currently available estimates and judgments of such management as to the future financial results and condition of Acer, and William Blair expressed no view or opinion with respect to the Management’s Illustrative Liquidation Analysis or the assumptions upon which it was based.

At the direction of the senior management of Acer, William Blair assumed that the Management’s Illustrative Liquidation Analysis provided a reasonable basis on which to evaluate Acer and the transaction contemplated by the Merger Agreement, and William Blair, at the direction of the senior management of Acer, used and relied upon the Management’s Illustrative Liquidation Analysis for purposes of its analysis and opinion. In this regard, the senior management of Acer advised William Blair, and William Blair relied upon such advice, that (i) Acer’s financial condition raised substantial doubt as to its ability to continue as a going concern, (ii) Acer’s cash, cash equivalents and marketable securities would be insufficient to enable Acer to fund normal operations through fourth quarter 2023, (iii) Acer would require substantial additional financing to achieve its goals, (iv) Acer had not obtained financing on terms acceptable to it, (v) Acer’s failure to conclude the transaction contemplated by the Merger Agreement or an alternative strategic transaction would force it to consider other strategic alternatives such as wind-down and dissolution, and (vi) any proceeds the holders of Acer Common Stock would receive in a liquidation and dissolution of Acer would be materially less on a per-share basis than the Merger Consideration to be received by such holders in the proposed transaction contemplated by the Merger Agreement.

William Blair expressed no opinion as to any terms or other aspects of the transactions contemplated by the Merger Agreement (other than the Merger Consideration, to the extent specified in the opinion), including, without limitation, the form or structure of the transactions contemplated by the Merger Agreement, or tax and accounting consequences thereof. William Blair’s opinion was based upon general economic, market, financial and other conditions existing on, and other information disclosed to William Blair as of, the date of its opinion. It should be understood that, although subsequent developments may affect William Blair’s opinion, William Blair does not have any obligation to update, revise or reaffirm its opinion. William Blair has not made any determination as to legal matters related to the transactions contemplated by the Merger Agreement. William Blair assumed that the final executed Merger Agreement (including the CVR Agreement), would not materially differ from the drafts of the Merger Agreement reviewed by William Blair, and William Blair assumed that the Merger and issuance of CVRs and enforcement of the CVR Agreement would be consummated on the terms described in the Merger Agreement, without any waiver of any material terms or conditions by any party thereto.

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Due to the unique nature of the business of Acer, William Blair did not believe that the results of the selected companies analysis or precedent transactions analysis related to Acer were meaningful for purposes of its opinion.

William Blair expressed no opinion as to the price at which Acer Common Stock or Zevra Common Stock will trade at any future time or as to the effect of the Merger on the trading prices of Acer Common Stock or Zevra Common Stock. Such trading prices may be affected by a number of factors, including but not limited to (i) dispositions of the common stock of Zevra by stockholders within a short period of time after the Effective Time, (ii) changes in prevailing interest rates and other factors which generally influence the price of securities, (iii) adverse changes in the current capital markets, (iv) the occurrence of changes in the financial condition, business, assets, results of operations or prospects of Acer or of Zevra or in the markets where they provide goods or services, (v) any necessary actions by or restrictions of federal, state or other governmental agencies or regulatory authorities, and (vi) timely completion of the Merger on terms and conditions that are acceptable to all parties in interest.

The following is a summary of the material financial analyses performed and material factors considered by William Blair to arrive at its opinion. William Blair performed certain procedures, including each of the financial analyses described below, and reviewed with the Acer Board the assumptions upon which such analyses were based, as well as other factors. Although the summary does not purport to describe all of the analyses performed or factors considered by William Blair in this regard, it does set forth those considered by William Blair to be material in arriving at its fairness opinion. The financial analyses summarized below include information presented in a tabular format. In order to fully understand the financial analyses performed by William Blair, the tables must be read together with the text of each summary. The tables alone do not constitute a complete description of the financial analyses performed by William Blair. Considering the data set forth in the tables below without considering the full narrative description of the financial analyses, including the methodologies and assumptions underlying the analyses, could create a misleading or incomplete view of the financial analyses performed by William Blair. The order of the summaries of the analyses described below does not represent the relative importance or weight given to those analyses by William Blair.

Analysis of Consideration

For purposes of the financial analyses summarized below, the term Merger Consideration refers to an implied price of $1.89 per share of Acer Common Stock calculated as (i) Stock Consideration of $0.62 per share of Acer Common Stock based on Zevra’s share price of $5.11 as of August 28, 2023, and total Zevra shares issued to Acer of 2,970,511 (based on an implied exchange ratio of 0.1214 shares of Zevra Common Stock for each share of Acer Common Stock, calculated by applying $15.0 million of upfront Stock Consideration divided by Zevra’s 20-Day VWAP of $5.05 as of August 28, 2023, per the framework outlined in the Merger Agreement), and (ii) CVR consideration equal to $1.27 per share of Acer Common Stock, on a probability-weighted and net present value basis.

At the time William Blair made its presentation to the Acer Board on August 28, 2023, Zevra’s Acquisition Proposal for the CVRs was expressed in terms of aggregate values payable upon achievement of each CVR milestone, rather than per share amounts. Accordingly, in performing their financial analyses, William Blair derived per share amounts for the amounts payable upon achievement of each CVR milestone by dividing such aggregate amounts by the number of fully diluted shares outstanding, using the treasury stock method, based upon information provided by the senior management of Acer.

For analytical purposes, William Blair calculated the net present value (“NPV”) of the CVR milestone payments as set forth in the following table based upon certain probability of success and timing assumptions prepared by senior management and confirmed by the Acer Board, and approved for William Blair’s use on August 24, 2023, in each case as described in the table below. For purposes of this analysis, William Blair

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utilized a discount rate of 21.5%, the midpoint of the 20% to 23% range of discount rates based on William Blair’s respective analyses of Acer’s weighted average cost of capital, to calculate the NPV of potential payments pursuant to the CVRs as of August 28, 2023. The upfront payment was not discounted for purposes of these calculations. There is no guarantee that the conditions triggering any or all of the CVR milestone payments will be satisfied or, if triggered, when such conditions will be satisfied.

CVR Consideration Summary

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Acer Financial Analyses

Acer Discounted Cash Flow Analysis

William Blair utilized the Forecasts to perform a discounted cash flow analysis of Acer’s projected future free cash flows for the five months ending December 31, 2023 through December 31, 2038, performing such analysis on both Management Plan 1 and Management Plan 2. See “Management Forecasts” beginning on page 104 for more information. Using the discounted cash flow methodology, William Blair calculated the present values of the projected after-tax unlevered free cash flows for Acer. In this analysis, William Blair exercised its professional judgment, based on its experience and expertise, and used the perpetuity growth method to estimate a terminal value of Acer by utilizing a perpetuity growth rate of negative 80.0% and assumed an effective tax rate of 26.0%, per estimates of senior management of Acer. To discount the projected unlevered free cash flows and assumed terminal value to present value, William Blair used discount rates ranging from 20.0% to 23.0%. The discount rate range was derived based upon a weighted average cost of capital using the capital asset pricing model.

At the direction of the senior management of Acer, given the liquidity position of Acer and the need for additional capital to finance the operations of Acer to achieve the Forecasts, William Blair assumed, per senior management of Acer, an immediate equity capital raise of $40.0 million in order to fund operations of Management Plan 1 and an immediate equity capital raise of $60.0 million in order to fund operations of Management Plan 2. Reflecting the Sensitivities, each capital raise was conducted ranging from a 25% – 75% discount to the closing stock price as of August 28, 2023 (the latest practicable trading day for reference prior to the entry into the Merger Agreement). Also at the direction of senior management of Acer, William Blair excluded the impact of existing NOLs due to their expected de minimis value arising from potential future limitations on their use but included the impact of NOLs created during the applicable forecast period.

William Blair aggregated the present value of the after-tax unlevered free cash flows over the applicable forecast period, the present value of the potential tax savings expected to result from utilization of Acer’s future NOLs ($3.2 million and $7.0 million for Management Plan 1 and Management Plan 2, respectively), and the present value of the assumed terminal value. William Blair then derived a range of implied equity values per share by subtracting Acer’s net debt as of July 31, 2023, and the upfront and buy-out payments to Relief Therapeutics, and dividing such amount by Acer’s total diluted shares outstanding as of August 28, 2023 (as adjusted to take into account the impact of dilutive securities based on the treasury stock method at the implied share price), and further adjusted to incorporate the pro forma impacts of the referenced capital raises in the preceding paragraph. This analysis resulted in (i) a range of implied equity values of $0.90 to $2.71 per share with respect to Management Plan 1 and (ii) a range of implied equity values of $1.13 to $3.63 per share with respect to Management Plan 2.

Acer Management’s Illustrative Liquidation Analysis

William Blair reviewed and considered Management’s Illustrative Liquidation Analysis prepared by management of Acer and noted that the estimates resulted in an aggregate implied equity value for Acer ranging from approximately negative $57.1 million to negative $23.5 million, implying no proceeds for Acer Stockholders, as compared to the Merger Consideration of $1.89 per share.

Acer M&A Premiums Paid Analysis

William Blair reviewed data from 664 acquisitions of U.S. publicly traded companies announced across all industries since January 1, 2010, in which 100% of the target’s equity was acquired with equity values between $25.0 million and $125.0 million. Specifically, William Blair analyzed the acquisition price per share as a premium to the closing share price one day, one week and one month prior to the announcement of each transaction. William Blair compared the range of resulting per share common share price premiums for the reviewed transactions to the premiums implied by the Merger Consideration based on common stock prices one

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day, one week and one month prior to August 28, 2023 (the latest practicable trading day for reference prior to the entry into the Merger Agreement). Information regarding the premiums from William Blair’s analysis of selected transactions is set forth in the following table: