Our business is subject to risks and events that, if they occur, could adversely affect our financial condition and results of operations and the trading price of our securities.
−Removed: Except as noted below, our risk factors have not changed materially from those described in “Part I, Item 1A.
−Removed: Risk Factors” of our Annual Report on Form 10-K for the fiscal year ended December 31, 2019, filed with the SEC on February 25, 2020.
−Removed: Risks Related to Our Business, Our Financial Position and Capital Needs
−Removed: Our business has been adversely impacted and could continue to be adversely affected by the evolving and ongoing COVID-19 global pandemic in regions where we or third parties on which we rely have significant manufacturing facilities, concentrations of clinical trial sites or other business operations.
−Removed: The COVID-19 pandemic could adversely affect our operations, including at our headquarters, which is currently subject to a telework order, and at our clinical trial sites, as well as the business or operations of our manufacturers, CROs or other third parties with whom we conduct business.
−Removed: Our business has been adversely affected by the effects of the recent and evolving COVID-19 pandemic, which was declared by the World Health Organization as a global pandemic.
−Removed: The COVID-19 pandemic has resulted in travel and other restrictions in order to reduce the spread of the disease, which, among other things, direct businesses and governmental agencies to cease non-essential operations at physical locations, prohibit certain non-essential gatherings, and order cessation of non-essential travel.
−Removed: In response to these public health directives and orders, we have implemented a virtual operations strategy, including teleworking and other alternative work arrangements for all employees.
−Removed: The effects of our alternative work arrangement policies may negatively impact productivity, disrupt our business and delay our preclinical drug development and clinical trials and timelines, the magnitude of which will depend, in part, on the length and severity of the restrictions and other limitations on our ability to conduct our business in the ordinary course.
−Removed: These and similar, and perhaps more severe, disruptions in our operations could negatively impact our business, operating results and financial condition.
−Removed: Quarantines, executive and similar government orders, and business shutdowns, or the perception that such orders, shutdowns or other restrictions on the conduct of business operations could occur, related to COVID-19 or other infectious diseases could impact personnel at third-party manufacturing facilities in the United States and other countries, or the availability or cost of materials, which would disrupt our supply chain.
−Removed: Some of our third-party manufacturers which we use for the supply of materials for our drug candidates or other materials necessary to manufacture drug product to conduct preclinical studies and clinical trials are located in countries affected by COVID-19, and should they experience disruptions, such as temporary closures or suspension of services, we would likely experience delays in advancing these studies and trials.
−Removed: In addition, our clinical trials have been and may continue to be affected by the COVID-19 pandemic.
−Removed: Clinical site initiation and patient enrollment may be delayed due to prioritization of hospital resources toward the COVID-19 pandemic.
−Removed: Some subjects may not be able to comply with clinical trial protocols if quarantines impede patient movement or interrupt healthcare services.
−Removed: Similarly, our ability to recruit and retain subjects and principal investigators and site staff who, as healthcare providers, may have heightened exposure to COVID-19, may adversely impact our clinical trial
−Removed: For example, in March 2020, we initiated a Phase 2a clinical trial of ATI-450 as a potential treatment for moderate to severe rheumatoid arthritis.
−Removed: Due to the COVID-19 pandemic, we temporarily paused enrollment.
−Removed: We resumed enrolling subjects, and the first subject was dosed, in May 2020.
−Removed: Given the continuing evolution of the COVID-19 pandemic, we modified our anticipated timing for reporting data from this trial to the first half of 2021.
−Removed: The spread of COVID-19, which has caused a broad impact globally, may materially affect us economically.
−Removed: While the potential economic impact brought by, and the duration of, COVID-19 may be difficult to assess or predict, a widespread pandemic could result in significant disruption of global financial markets, reducing our ability to access capital, which could in the future negatively affect our liquidity and impact our ability to make scheduled payments pursuant to our Loan and Security Agreement with SVB.
−Removed: In addition, a recession or market correction resulting from the further spread of COVID-19 could materially affect our business and the value of our common stock.
−Removed: The global pandemic of COVID-19 continues to rapidly evolve.
−Removed: The extent to which the COVID-19 pandemic impacts our business, our preclinical and clinical development and our regulatory efforts will depend on future developments that are highly uncertain and cannot be predicted, such as the geographic spread of the disease, the duration of the outbreak, travel restrictions, quarantines, stay-at-home orders, social distancing requirements and business closures and supply chain and other disruptions in the United States and other countries, and the effectiveness of actions taken in the United States and other countries to contain and treat the disease.
−Removed: Accordingly, we do not yet know the full extent of the impacts on our business, our preclinical and clinical development and regulatory activities, healthcare systems or the global economy as a whole.
−Removed: However, these impacts could adversely affect our business, financial condition, results of operations and growth prospects.
−Removed: In addition, to the extent the ongoing COVID-19 pandemic adversely affects our business and results of operations, it may also have the effect of heightening many of the other risks and uncertainties described in “Part I, Item 1A.
+Added: Our risk factors have not changed materially from those described in “Part I, Item 1A.
Risk Factors” of our Annual Report on Form 10-K for the fiscal year ended December 31, 2020, filed with the SEC on February 25, 2021.
−Removed: We may not be able to generate sufficient cash to service our indebtedness, including the Loan and Security Agreement with SVB.
−Removed: In March 2020, we entered into the Loan and Security Agreement with SVB, pursuant to which we borrowed $11.0 million.
−Removed: Our obligations under the Loan and Security Agreement are secured by substantially all of our assets except for our intellectual property, and we may not encumber our intellectual property without SVB’s prior written consent.
−Removed: The Loan and Security Agreement contains customary representations, warranties and covenants by us, which covenants, among other things, limit our ability, subject to specified exceptions, to convey, sell, lease, transfer, assign or otherwise dispose of our assets;
−Removed: engage in any business other than the businesses currently engaged in by us or reasonably related thereto;
−Removed: liquidate or dissolve;
−Removed: undergo specified change of control events;
−Removed: create, incur, assume or be liable for indebtedness;
−Removed: create, incur, allow or suffer any liens on our property;
−Removed: pay dividends and make other restricted payments;
−Removed: make investments;
−Removed: or enter into any material transactions with our affiliates.
−Removed: Our obligations under the Loan and Security Agreement are subject to acceleration upon the occurrence of specified events of default, including a material adverse change in our business, operations or financial condition.
−Removed: We may also enter into other debt agreements in the future which may contain similar or more restrictive terms.
−Removed: Our ability to make scheduled monthly payments or to refinance our debt obligations depends on numerous factors, including the amount of our cash reserves and our actual and projected financial and operating performance.
−Removed: These amounts and our performance are subject to certain financial and business factors, as well as prevailing economic and competitive conditions, including the impact of the COVID-19 pandemic, some of which may be beyond our control.
−Removed: We cannot guarantee that we will maintain a level of cash reserves or cash flows from operating activities sufficient to permit us to pay the principal, premium, if any, and interest on our existing or future indebtedness.
−Removed: If our cash flows and capital resources are insufficient to fund our debt service obligations, we may be forced to reduce or delay capital expenditures, sell assets or operations, seek additional capital or restructure or refinance our indebtedness.
−Removed: We cannot guarantee that we would be able to take any of these actions, or that these actions would permit us to meet our scheduled debt service obligations.
−Removed: Failure to comply with the covenants and conditions of the Loan and Security Agreement could result in an event of default, which could result in an acceleration of amounts due under the Loan and Security Agreement.
−Removed: not have sufficient funds or may be unable to arrange for additional financing to repay our indebtedness or to make any accelerated payments, and SVB could seek to enforce security interests in the collateral securing such indebtedness, which would harm our business.
−Removed: Risks Related to the Development and Potential Commercialization of Our Drug Candidates
−Removed: Our clinical trials may fail to demonstrate the safety and efficacy of our drug candidates, or serious adverse or unacceptable side effects may be identified during the development of our drug candidates, which could increase our costs or necessitate the abandonment or limitation of the development of our drug candidates or prevent or delay our ability to pursue strategic alternatives, including identifying and consummating transactions with third-party partners, to further develop, obtain marketing approval for and/or commercialize our drug candidates.
−Removed: If our drug candidates are associated with side effects in clinical trials or have characteristics that are serious or unexpected, our costs could increase or we may need to abandon their development or limit development to more narrow uses in which the side effects or other characteristics are less prevalent, less severe or more acceptable from a risk-benefit perspective.
−Removed: The FDA or an institutional review board may also require that we suspend, discontinue, or limit our clinical trials based on safety information.
−Removed: Such findings could further result in regulatory authorities failing to provide marketing authorization for our drug candidates.
−Removed: Many drug candidates that initially showed promise in early stage testing have later been found to cause side effects that prevented further development of the drug candidate.
−Removed: Before any potential third-party partners can obtain marketing approvals for the commercial sale of our drug candidates, we must demonstrate through lengthy, complex and expensive preclinical testing and clinical trials that our drug candidates are both safe and effective for use in each target indication, and failures can occur at any stage of testing.
−Removed: Clinical trials often fail to demonstrate safety and efficacy of the drug candidate studied for the target indication.
−Removed: Additionally, if we or others identify undesirable side effects caused by our drugs, a number of potentially significant negative consequences could result, including:
−Removed: ● we may need to abandon the development or limit the further development of our drug candidates, including in various populations and indications;
−Removed: ● regulatory authorities may withdraw approval to market such product;
−Removed: ● regulatory authorities may require additional warnings on the labels;
−Removed: ● a medication guide outlining the risks of such side effects for distribution to patients may be required;
−Removed: ● we could be sued and held liable for harm caused to patients;
−Removed: ● our reputation and physician or patient acceptance of our drug candidates, if approved, may suffer;
−Removed: ● our ability to pursue strategic alternatives, including identifying and consummating transactions with third-party partners, to further develop, obtain marketing approval for and/or commercialize our drug candidates would be harmed.
−Removed: For example, in June 2020 we announced our support of an investigator-initiated trial of ATI-450 in hospitalized patients with COVID-19.
−Removed: Although the COVID-19 trial is not sponsored by us, the use of ATI-450 in a hospitalized and severely ill patient population may be associated with adverse events and risks that could jeopardize our development of ATI-450 in other populations and indications, including our trials in subjects with rheumatoid arthritis and CAPS.
−Removed: Any of these events could prevent us from pursuing strategic alternatives, including identifying and consummating transactions with third-party partners, to further develop, obtain marketing approval for and/or commercialize the particular drug candidate and could significantly harm our business, results of operations and prospects.
−Removed: Risks Related to Ownership of Our Common Stock
−Removed: Exclusive forum provisions in our amended and restated certificate of incorporation and amended and restated bylaws could limit our stockholders’ ability to obtain a favorable judicial forum for disputes with us or our directors, officers or other employees.
−Removed: Our amended and restated certificate of incorporation provides that the Court of Chancery of the State of Delaware is the exclusive forum for the following types of actions or proceedings under Delaware statutory or common law:
−Removed: (i) any derivative action or proceeding brought on our behalf, (ii) any action asserting a claim for breach of a fiduciary duty owed by any of our directors, officers or other employees to us or our stockholders, (iii) any action asserting a claim arising pursuant to any provision of the Delaware General Corporation Law, our amended and restated certificate of incorporation or our amended and restated bylaws or (iv) any action asserting a claim governed by the internal affairs doctrine.
−Removed: This provision would not apply to suits brought to enforce a duty or liability created by the Exchange Act.
−Removed: Furthermore, Section 22 of the Securities Act creates concurrent jurisdiction for federal and state courts over all such Securities Act actions.
−Removed: Accordingly, both state and federal courts have jurisdiction to entertain such claims.
−Removed: To prevent having to litigate claims in multiple jurisdictions and the threat of inconsistent or contrary rulings by different courts, among other considerations, our amended and restated bylaws provide the federal district courts of the United States of America will be the exclusive forum for resolving any complaint asserting a cause of action arising under the Securities Act.
−Removed: While the Delaware courts have determined that such choice of forum provisions are facially valid, a stockholder may nevertheless seek to bring a claim in a venue other than those designated in the exclusive forum provisions.
−Removed: In such instance, we would expect to vigorously assert the validity and enforceability of the exclusive forum provisions of our amended and restated certificate of incorporation and our amended and restated bylaws.
−Removed: This may require significant additional costs associated with resolving such action in other jurisdictions and there can be no assurance that the provisions will be enforced by a court in those other jurisdictions.
−Removed: Our amended and restated certificate of incorporation and amended and restated bylaws further provide any person or entity purchasing or otherwise acquiring any interest in shares of our common stock is deemed to have notice of and consented to the foregoing provisions.
−Removed: These exclusive forum provisions may limit a stockholder’s ability to bring a claim in a judicial forum that it finds favorable for disputes with us or our directors, officers, or other employees, which may discourage lawsuits against us and our directors, officers and other employees.
−Removed: If a court were to find either exclusive-forum provision to be inapplicable or unenforceable in an action, we may incur further significant additional costs associated with resolving the dispute in other jurisdictions, all of which could seriously harm our business.
Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.