What changed in this filing

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Item 1A. Risk Factors

2023-08-11 compared with 2023-05-12 · 37 added, 39 removed, 647 unchanged (11% of the section changed)

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Our short history as an operating company makes any assessment of our future success or viability subject to significant uncertainty.

We will encounter risks and difficulties frequently experienced by early-stage companies in rapidly evolving fields.

We will encounter risks and

difficulties frequently experienced by early-stage companies in rapidly evolving fields.

If we do not address these risks successfully, our business will suffer.

We have incurred significant net losses in each period since our inception and anticipate that we will continue to incur net losses in for the foreseeable future and may never achieve or maintain profitability .

We are not profitable and have incurred significant losses in each period since our inception, including net losses of $2.9 million for the three months ended March 31, 2023, $12.1 million for the year ended December 31, 2022.

We are not profitable and have incurred significant losses in each period since our inception, including net losses of $6.3 million for the six months ended June 30, 2023, $12.1 million for the year ended December 31, 2022.

We have not commercialized any products and have never generated any revenue from product sales.

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If we are unable to raise capital when needed or on attractive terms, we could be forced to delay, reduce or eliminate our research and development programs or any future commercialization efforts.

As of March 31, 2023, we had approximately $7.2 million in cash.

As of June 30, 2023, we had approximately $9.1 million in cash.

In June 2021, we completed the IPO for net cash proceeds of $14.8 million after deducting underwriting discounts and commissions and offering expenses.

In July 2022, we completed a registered direct offering and concurrent private placement for net cash proceeds of $3.7 million after deducting placement agent fees and offering expenses.

We believe that, based upon our current operating plan, our existing capital resources will not be sufficient to fund our anticipated operations for at least 12 months from the issuance of our financial statements for the period ended March 31, 2023.

In May 2023, we completed a registered direct offering and concurrent private placement for net cash

proceeds of $3.5 million after deducting placement agent fees and offering expenses.

Our future capital requirements and the period for which we expect our existing resources to support our operations may vary significantly from what we expect.

Our monthly spending levels vary based on new and ongoing research and development and other

corporate activities.

Our monthly spending levels vary based on new and ongoing research and development and other corporate activities.

Because the length of time and activities associated with successful research and development of our product candidates is highly uncertain, we are unable to estimate the actual funds we will require for development and any approved marketing and commercialization activities.

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To the extent that we raise additional capital through the sale of equity or debt securities, your ownership interest will be diluted, and the terms may include liquidation or other preferences that adversely affect your rights as a stockholder.

The incurrence of indebtedness would result in increased fixed payment obligations and could involve restrictive covenants, such as limitations on our ability to incur additional debt, limitations on our ability to acquire or license intellectual property rights and other operating restrictions that could adversely impact our ability to conduct our business.

incurrence of indebtedness would result in increased fixed payment obligations and could involve restrictive covenants, such as limitations on our ability to incur additional debt, limitations on our ability to acquire or license intellectual property rights and other operating restrictions that could adversely impact our ability to conduct our business.

If we raise additional funds through strategic partnerships and alliances and licensing arrangements with third parties, we may have to relinquish valuable rights to our technologies or product candidates, or grant licenses on terms unfavorable to us.

If we are unable to raise additional capital through equity or debt

financings when needed (including if we are unable to do so as a result of the COVID-19 pandemic), we may be required to delay, limit, reduce or terminate our product development or future commercialization efforts, or grant rights to develop and market product candidates that we would otherwise develop and market ourselves.

If we are unable to raise additional capital through equity or debt financings when needed (including if we are unable to do so as a result of the COVID-19 pandemic), we may be required to delay, limit, reduce or terminate our product development or future commercialization efforts, or grant rights to develop and market product candidates that we would otherwise develop and market ourselves.

We are reliant on the success of our lead product candidate, ibezapolstat, which we are developing for the treatment of CDI.

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If ibezapolstat or any of our other future product candidates receive marketing approval, such products may nonetheless fail to gain sufficient market acceptance by physicians, patients, third-party payors and others in the medical community.

If these products do not achieve an adequate level of acceptance, we may not generate significant product revenues or revenue from collaboration

agreements or any profits from operations.

If these products do not achieve an adequate level of acceptance, we may not generate significant product revenues or revenue from collaboration agreements or any profits from operations.

The degree of market acceptance of our product candidates, if approved for commercial sale, will depend on a number of factors, including:

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DeLuccia and Robert G.

The loss of the services of any of these individuals would significantly impede implementation and execution of our business strategy and result in the failure to reach our goals.

The loss of the services of any of these individuals would significantly impede implementation and execution of

our business strategy and result in the failure to reach our goals.

We do not carry key person life insurance on any member of our management, which would leave us uncompensated for the loss of any member of our management.

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Many drug candidates fail in the early stages of clinical development for safety and tolerability issues or for insufficient clinical activity, despite promising pre-clinical results.

Accordingly, no assurance can be made that a safe and efficacious dose can be found for these compounds or that they will ever enter into advanced clinical trials alone or in combination with other product candidates.

Accordingly, no assurance can be made that a safe and

efficacious dose can be found for these compounds or that they will ever enter into advanced clinical trials alone or in combination with other product candidates.

Moreover, success in early clinical trials does not mean that later clinical trials will be successful because product candidates in later-stage clinical trials may fail to demonstrate sufficient safety or efficacy despite having progressed through initial clinical testing.

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Individually reported outcomes of patients treated in clinical trials may not be representative of the entire population of treated patients in such studies.

In addition, larger scale Phase 3 studies, which are often conducted internationally, are inherently

subject to increased operational risks compared to earlier stage studies, including the risk that the results could vary on a region to region or country to country basis, which could materially adversely affect the outcome of the study or the opinion of the validity of the study results by applicable regulatory agencies.

In addition, larger scale Phase 3 studies, which are often conducted internationally, are inherently subject to increased operational risks compared to earlier stage studies, including the risk that the results could vary on a region to region or country to country basis, which could materially adversely affect the outcome of the study or the opinion of the validity of the study results by applicable regulatory agencies.

From time to time, we may publicly disclose top-line or preliminary data from our clinical trials, which is based on a preliminary analysis of then available data, and the results and related findings and conclusions are subject to change following a more comprehensive review of the data related to the particular study or trial.

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Prior to our IPO in June 2021, we were a private company with limited accounting and finance personnel, adequate review processes and other resources with which to address our internal controls and procedures.

Based on the evaluation of our internal controls, we previously concluded that our disclosure controls and procedures were not effective as of March 31, 2022 as a result of a previously identified material weakness in our internal control over financial reporting due to inadequate segregation of duties resulting from the size of our Company and our limited personnel.

Based on the evaluation of our internal controls, we previously concluded that our disclosure controls and procedures were not effective as of June 30, 2022 as a result of a previously identified material weakness in our internal control over financial reporting due to inadequate segregation of duties resulting from the size of our Company and our limited personnel.

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 our annual or interim financial statements will not be prevented or detected on a timely basis.

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We can give no assurance that additional material weaknesses in our internal control over financial reporting will not be identified in the future.

Our failure to implement and maintain effective internal control over financial reporting could result in errors

in our financial statements that could result in a restatement of our financial statements and cause us to fail to meet our reporting obligations.

Our failure to implement and maintain effective internal control over financial reporting could result in errors in our financial statements that could result in a restatement of our financial statements and cause us to fail to meet our reporting obligations.

Risks Related to Regulatory Approval

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Since then, numerous efforts have been made to repeal, amend or administratively limit the ACA in whole or in part.

For example, the Tax Cuts and Jobs Act (“TCJA”), signed into law by President Trump in 2017, repealed the individual health

insurance mandate, which is considered a key component of the ACA.

For example, the Tax Cuts and Jobs Act (“TCJA”), signed into law by President Trump in 2017, repealed the individual health insurance mandate, which is considered a key component of the ACA.

In December 2018, a U.S.

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with our own focused, specialized sales force.

We plan to evaluate the potential for utilizing additional collaboration, distribution and

marketing arrangements with third parties to commercialize ibezapolstat in other jurisdictions where we retain commercialization rights.

We plan to evaluate the potential for utilizing additional collaboration, distribution and marketing arrangements with third parties to commercialize ibezapolstat in other jurisdictions where we retain commercialization rights.

There are risks involved with establishing our own sales and marketing capabilities and entering into arrangements with third parties to perform these services.

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If we were to experience an unexpected loss of supply of any of our product candidates or any of our future product candidates for any reason, whether as a result of manufacturing, supply or storage issues or otherwise, we could experience delays, disruptions, suspensions or terminations of, or be required to restart or repeat, any pending or ongoing clinical trials.

For example, the extent to which the COVID-19 pandemic impacts our ability to procure sufficient supplies for the development of our products and product candidates will depend on the severity and duration of the spread of the virus, and the actions undertaken to contain COVID-19 or treat its effects.

For example, the extent to which the

COVID-19 pandemic impacts our ability to procure sufficient supplies for the development of our products and product candidates will depend on the severity and duration of the spread of the virus, and the actions undertaken to contain COVID-19 or treat its effects.

We expect to continue to rely on third-party manufacturers for the commercial supply of any of our product candidates for which we obtain marketing approval.

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Because we rely on third parties and do not have the ability to conduct preclinical studies or clinical trials independently, we have less control over the timing, quality and other aspects of preclinical studies and clinical trials than we would if we conducted them on our own.

These investigators, CROs and consultants are not our employees and we have limited control over the amount of time and resources that they dedicate to our programs.

These investigators, CROs and consultants are not our employees and we have limited control over the amount of time and resources that they dedicate to our

These third parties may have contractual relationships with other entities, some of which may be our competitors, which may draw time and resources from our programs.

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If we cannot contract with acceptable third parties on commercially reasonable terms, or at all, or if these third parties do not carry out their contractual duties, satisfy legal and regulatory requirements for the conduct of preclinical studies or clinical trials or meet expected deadlines, our preclinical and clinical development programs could be delayed and otherwise adversely affected.

In all events, we are responsible for ensuring that each of our preclinical studies and clinical trials is conducted in accordance with the

general investigational plan and protocols for the trial.

In all events, we are responsible for ensuring that each of our preclinical studies and clinical trials is conducted in accordance with the general investigational plan and protocols for the trial.

The FDA and other health authorities require preclinical studies to be conducted in accordance with GLP and clinical trials to be conducted in accordance with GCP, including conducting, recording and reporting the results of clinical trials to assure that data and reported results are credible and accurate and that the rights, integrity and confidentiality of clinical trial participants are protected.

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These regulations include:

● the Federal Healthcare Anti-Kickback Statute that prohibits, among other things, persons from knowingly and willfully soliciting, offering, receiving or providing remuneration, directly or indirectly, in cash or in kind, to induce or reward, or in return for, either the referral of an individual for, or the purchase, order or recommendation of, any good or service, for which payment may be made under a federal healthcare program such as Medicare and Medicaid, and which will constrain our marketing practices and the marketing practices of our licensees, educational programs, pricing policies, and relationships with healthcare providers or other entities;

constrain our marketing practices and the marketing practices of our licensees, educational programs, pricing policies, and relationships with healthcare providers or other entities;

● the federal physician self-referral prohibition, commonly known as the Stark Law, which prohibits physicians from referring Medicare or Medicaid patients to providers of “designated health services” with whom the physician or a member of the physician’s immediate family has an ownership interest or compensation arrangement, unless a statutory or regulatory exception applies;

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An unfavorable outcome could require us to cease using the related technology or to attempt to license rights from the prevailing party.

Our business could be harmed if the prevailing party does not

offer us a license on commercially reasonable terms.

Our business could be harmed if the prevailing party does not offer us a license on commercially reasonable terms.

We may not be able to prevent, alone or with our licensors (if any), misappropriation of our intellectual property rights, both in the U.S.

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These provisions might discourage, delay or prevent a change in control of our company or a change in our management.

The existence of these provisions could adversely affect the voting power of holders of common stock and limit the price that investors might be willing to pay in the future for shares of our common stock.

The existence of these provisions could adversely affect the voting power of holders of common stock and limit the price that investors

might be willing to pay in the future for shares of our common stock.

Furthermore, we have the authority to issue shares of our preferred stock without further stockholder approval, the rights of which will be determined at the discretion of the board of directors and that, if issued, could operate as a “poison pill” to dilute the stock ownership of a potential hostile acquirer to prevent an acquisition that our board of directors does not approve.

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Our largest stockholders will exercise significant influence over our company for the foreseeable future, including the outcome of matters requiring stockholder approval.

Our officers, directors and their affiliates currently collectively own 4,200,849 shares of our common stock (on an as-converted basis) or approximately 31% of our outstanding shares of common stock (on an as-converted basis) as of March 31, 2023.

Accordingly, if these stockholders were to choose to act together, they could have a significant influence over all matters requiring stockholder approval, including the election of directors and approval of significant corporate transactions, such as a merger or other sale of our company or all or a significant percentage of our assets.

Our officers, directors and their affiliates currently collectively own 4,363,099 shares of our common stock (on an as-converted basis) or approximately 29% of our outstanding shares of common stock (on an as-converted basis) as of June 30, 2023.

Accordingly, if these stockholders were to choose to act together, they could have a significant influence over all matters requiring

stockholder approval, including the election of directors and approval of significant corporate transactions, such as a merger or other sale of our company or all or a significant percentage of our assets.

This concentration of ownership could limit your ability to influence corporate matters and may have the effect of delaying or preventing a third party from acquiring control over us.

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Should we fail to satisfy the Nasdaq’s continued listing requirements, such as the corporate governance requirements or the minimum closing bid price requirement, Nasdaq may take steps to delist our common stock.

Such a delisting would likely have a

negative effect on the price of our common stock, and would impair your ability to sell or purchase our common stock when you wish to do so.

Such a delisting would likely have a negative effect on the price of our common stock, and would impair your ability to sell or purchase our common stock when you wish to do so.

In the event of a delisting, we would take actions to restore our compliance with Nasdaq’s listing requirements, but we can provide no assurance that any such action taken by us would allow our common stock to become listed again, stabilize the market price or improve the liquidity of our common stock, prevent our common stock from dropping below Nasdaq’s minimum bid price requirement or prevent future non-compliance with the Nasdaq’s listing requirements.

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It is not always possible to identify and deter employee misconduct, and the precautions we take to detect and prevent this activity may not be effective in controlling unknown or unmanaged risks or losses or in protecting us from governmental investigations or other actions or lawsuits stemming from a failure to comply with these laws or regulations.

If any such actions are instituted against us and we are not

successful in defending ourselves or asserting our rights, those actions could have a significant impact on our business, including the imposition of significant fines or other sanctions.

If any such actions are instituted against us and we are not successful in defending ourselves or asserting our rights, those actions could have a significant impact on our business, including the imposition of significant fines or other sanctions.

There may be limitations on the effectiveness of our internal controls, and a failure of our control systems to prevent error or fraud may materially harm us .

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We are subject to numerous environmental, health and safety laws and regulations, including those governing laboratory procedures and the handling, use, storage, treatment and disposal of hazardous materials and wastes.

From time to time and in the future, our operations may involve the use of hazardous and flammable materials, including chemicals and biological materials, and

may also produce hazardous waste products.

From time to time and in the future, our operations may involve the use of hazardous and flammable materials, including chemicals and biological materials, and may also produce hazardous waste products.

Even if we contract with third parties for the disposal of these materials and waste products, we cannot completely eliminate the risk of contamination or injury resulting from these materials.

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or any action asserting a claim against us that is governed by the internal affairs doctrine.

Notwithstanding the foregoing, the exclusive forum provision does not apply to suits brought to enforce any liability or duty created by the Exchange Act, the Securities Act or any other claim for which the federal courts have exclusive jurisdiction.

Notwithstanding the foregoing, the exclusive

forum provision does not apply to suits brought to enforce any liability or duty created by the Exchange Act, the Securities Act or any other claim for which the federal courts have exclusive jurisdiction.

Unless we consent in writing to the selection of an alternative forum, the federal district courts of the U.S.

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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.

What changed 10-Q

Item 1A. Risk Factors