What changed in this filing

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Item 1A. Risk Factors

2022-11-02 compared with 2022-08-09 · 125 added, 116 removed, 1008 unchanged (19% of the section changed)

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• We are heavily reliant on our partners for access to TALEN gene editing technology for the manufacturing and development of our product candidates.

• Servier's Discontinuation may have adverse consequences.

• Our product candidates are based on novel technologies, which makes it difficult to predict the time and cost of product candidate development and obtaining regulatory approval.

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If we fail to obtain additional financing, we may be unable to complete the development and commercialization of our product candidates.

• We rely and will continue to rely on third parties to conduct our clinical trials and manufacture ALLO-647 and critical raw materials.

• We rely and will continue to rely on third parties to conduct our clinical trials and manufacture our product candidates and critical raw materials.

If these third parties do not successfully carry out their contractual duties or meet expected deadlines, we may not be able to obtain regulatory approval of or commercialize our product candidates.

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For the year ended December 31, 2021, we reported a net loss of $257.0 million.

For the six months ended June 30, 2022, we reported a net loss of $74.8 million.

As of June 30, 2022, we had an accumulated deficit of $1.1 billion.

For the nine months ended September 30, 2022, we reported a net loss of $237.8 million.

As of September 30, 2022, we had an accumulated deficit of $1.1 billion.

We expect to incur significant expenditures for the foreseeable future, and we expect these expenditures to increase as we continue our research and development of, and seek regulatory approvals for, product candidates based on our engineered allogeneic T cell platform.

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If our agreements were terminated or we required other gene editing technology, such a license or technology may not be available to us on reasonable terms, or at all, and advancing other gene editing technology would require significant resources.

In addition, pursuant to the Servier Agreement, we expect Servier to continue to support our clinical trials of ALLO-501 and ALLO-501A for the treatment of patients with R/R NHL.

Should Servier become unable or unwilling to continue providing its share of financial support for the ALLO-501 and ALLO-501A clinical trials, our expenses may be greater than we currently expect and we may have difficulty progressing our clinical trials in a timely manner.

Moreover, as the CALM and PALL clinical trials of UCART19 have completed, we are reliant on Servier for progressing a development strategy for ALL and any development strategy may face challenges, such as regulatory delays and unforeseen expenses if we consolidate programs.

Servier’s Discontinuation of its involvement in the development of CD19 Products may have adverse consequences.

On September 15, 2022, Servier sent a notice of discontinuation of its involvement in the development of all CD19 Products pursuant to the Servier Agreement.

Despite there being no obligation under the terms of the Servier Agreement to do so, Servier believes that we had to exercise the Ex-US Option within a limited timeframe that passed.

Servier also communicated to us that it believes it does not have to contribute to development costs 90 days from its notice of discontinuation, pending our exercise of the Ex-US Option.

We disagree with these assertions relating to both the maintenance of the Ex-US Option as well as contribution to development costs during our consideration of the Ex-US Option.

Any failure of Servier to fulfill its obligations may be harmful to us, and while we would intend to vigorously pursue our rights and remedies to enforce our contractual rights, any legal outcome for such enforcement action is inherently uncertain, will add to our costs and divert management time.

Servier also licenses certain rights to the CD19 Products from Cellectis and sublicenses those rights to us.

Cellectis has challenged certain performance by Servier and has also challenged the ability of Servier to grant a world-wide sublicense.

Servier’s Discontinuation and any subsequent actions may further strain the relationship between Servier and Cellectis, as well as between us and Cellectis.

Any failure to resolve Cellectis challenges could have a significant adverse impact on our business, financial condition and prospects.

Our product candidates are based on novel technologies, which makes it difficult to predict the time and cost of product candidate development and obtaining regulatory approval.*

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We may also experience delays in developing a sustainable, reproducible and scalable manufacturing process or transferring that process to commercial facilities or partners, which may prevent us from completing our clinical studies or commercializing our products on a timely or profitable basis, if at all.

In addition, since we are in the early stages of clinical development, we do not know the doses to be evaluated in pivotal trials or, if approved, commercially.

Finding a suitable dose for our cell therapy product candidates as well as ALLO-647 may delay our anticipated clinical development timelines.

For instance, it will take additional time and expense to transfer the Alloy process to our manufacturing facility and meet regulatory conditions.

In addition, since we are in the early stages of clinical development, we do not know all the doses to be evaluated in pivotal trials or, if approved, commercially.

Finding a suitable dose for our cell therapy product candidates as well as

ALLO-647 may delay our anticipated clinical development timelines.

In addition, our expectations with regard to our scalability and costs of manufacturing may vary significantly as we develop our product candidates and understand these critical factors.

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For instance, allogeneic product candidates may result in GvHD or chromosomal abnormalities not experienced with autologous products.

Additionally, any Phase 2 trial results, such as in the ALPHA2 trial, may not be representative of Phase 1 results, which were based on limited patients.

Even if we collect promising initial clinical data of our product candidates, longer-term data may reveal new adverse events or responses that are not durable.

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Our business and future success depends on our ability to advance clinical development, obtain regulatory approval of, and then successfully commercialize, our lead product candidates, including ALLO-501A.

Because ALLO-501A and ALLO-715 are among the first allogeneic products to be evaluated in the clinic, the failure of any such product candidate, or the failure of other allogeneic T cell therapies, including for reasons due to safety, efficacy or durability, may impede our ability to develop our product candidates, and significantly influence physicians’ and regulators’ opinions in regards to the viability of our entire pipeline of allogeneic T cell therapies.

Because ALLO-501A and ALLO-715 are among the first allogeneic products to be evaluated in the clinic, the failure of any such product candidate, or the failure of other allogeneic T cell therapies, including for reasons due to safety, efficacy or durability, may impede our ability to develop our product candidates, and significantly influence physicians’ and regulators’ opinions in regard to the viability of our entire pipeline of allogeneic T cell therapies.

For instance, all of our clinical trials were put on clinical hold due to an observation in the ALPHA2 trial.

While the clinical hold has been resolved, we plan to seek agreement with the FDA to proceed to Phase 2 on matters such as CMC, including for the use of ALLO-501A manufactured at our own manufacturing facility, and trial designs to evaluate both ALLO-501A and ALLO-647.

Subject to FDA clearance, we expect to proceed to the Phase 2 portion of the trial in adult patients with R/R large B-cell lymphoma in coming weeks.

If we are unable to advance to Phase 2 on our timeline or at all, our business would be significantly harmed.

While the clinical hold has been resolved, we could be subject to a clinical hold in the future due to unexpected observations, adverse patient outcomes or other issues.

All of our product candidates, including our lead product candidates, will require additional clinical and non-clinical development, regulatory review and approval in multiple jurisdictions, substantial investment, access to sufficient commercial manufacturing capacity and significant marketing efforts before we can generate any revenue from product sales.

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Future undesirable or unacceptable side effects caused by our product candidates could cause us or regulatory authorities to interrupt, delay or halt clinical trials and could result in a more restrictive label or the delay or denial of regulatory approval by the FDA or other comparable foreign regulatory authorities.

Results of our clinical trials could reveal a high and unacceptable severity and prevalence of side effects or unexpected characteristics.

Results of our clinical trials could reveal a high and

unacceptable severity and prevalence of side effects or unexpected characteristics.

Approved autologous CAR T therapies and those under development have shown frequent rates of CRS, neurotoxicity, serious infections, prolonged cytopenia and hypogammaglobulinemia, and adverse events have resulted in the death of patients.

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In addition, we utilize a lymphodepletion regimen, which generally includes fludarabine, cyclophosphamide and ALLO-647, that may cause serious adverse events.

For instance, because the regimen will cause a transient and sometimes prolonged immune suppression, patients will have an increased risk of infection,

such as to COVID-19, that may be unable to be cleared by the patient and ultimately lead to other serious adverse events or death.

For instance, because the regimen will cause a transient and sometimes prolonged immune suppression, patients will have an increased risk of infection, such as to COVID-19, that may be unable to be cleared by the patient and ultimately lead to other serious adverse events or death.

Our lymphodepletion regimen has caused and may also cause prolonged cytopenia and aplastic anemia.

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Assuming we are able to proceed with clinical development, if unacceptable toxicities arise in the development of our product candidates, we could suspend or terminate our trials or the FDA or comparable foreign regulatory authorities could order us to cease clinical trials or deny approval of our product candidates for any or all targeted indications.

The data safety monitoring board may also suspend or terminate a clinical trial at any time on various grounds, including a finding that the research patients are being exposed to an unacceptable health risk, including risks inferred from other unrelated immunotherapy trials.

Any data safety monitoring board may also suspend or terminate a clinical trial at any time on various grounds, including a finding that the research patients are being exposed to an unacceptable health risk, including risks inferred from other unrelated immunotherapy trials.

Treatment-related side effects could also affect patient recruitment or the ability of enrolled subjects to complete the trial or result in potential product liability claims.

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In addition, for any trials that may be completed, we cannot guarantee that the FDA or foreign regulatory authorities will interpret the results as we do, and more trials could be required before we submit our product candidates for approval.

additional resources, which may not be available to us, to conduct additional trials in support of potential approval of our product candidates.

To the extent that the results of the trials are not satisfactory to the FDA or foreign regulatory authorities for support of a marketing application, approval of our product candidates may be significantly delayed, or we may be required to expend significant additional resources, which may not be available to us, to conduct additional trials in support of potential approval of our product candidates.

Initial, interim and preliminary data from our clinical trials that we announce or publish from time to time may change as more patient data become available and are subject to audit and verification procedures that could result in material changes in the final data.

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• failure to perform in accordance with the FDA’s good clinical practice (GCP) requirements or applicable regulatory guidelines in other countries;

• transfer of manufacturing processes to any new CMO or our own manufacturing facilities or any other development or commercialization partner for the manufacture of product candidates;

• delays or failures in the transfer of manufacturing processes to any CMO or our own manufacturing facility or any other development or commercialization partner for the manufacture of product candidates;

• delays in having patients complete participation in a study or return for post-treatment follow-up;

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• delays or failure to secure supply agreements with suitable raw material suppliers, or any failures by suppliers to meet our quantity or quality requirements for necessary raw materials, including due to suppliers prioritizing COVID-19 specific treatments or vaccines;

• delays in manufacturing, testing, releasing, validating, or importing/exporting sufficient stable quantities of our product candidates for use in clinical studies or the inability to do any of the foregoing, including due to our ALLO-647 CMO or other vendors prioritizing COVID-19 specific treatments or vaccines.

• delays in manufacturing, testing, releasing, validating, or importing/exporting sufficient stable quantities of our product candidates for use in clinical studies or the inability to do any of the foregoing, including due to our CMOs or other vendors prioritizing COVID-19 specific treatments or vaccines.

The COVID-19 pandemic may also increase the risk of certain of the events described above and delay our development timelines.

Any inability to successfully complete preclinical and clinical development could result in additional costs to us or impair our ability to generate revenue.

In addition, as we transition manufacturing of certain of our product candidates from our prior cell therapy CMO to our manufacturing facility, we will be required to meet certain regulatory conditions, such as establishing comparability with the product candidates manufactured at our prior CMO, and our inability to meet such conditions would result in investment of additional resources, a delay in using our manufacturing facility for production and extend our clinical trial timelines.

Similar conditions may apply if we make manufacturing or formulation changes to our product candidates.

In addition, as we transition manufacturing of certain of our product candidates from our CMO to our manufacturing facility, we will be required to meet certain regulatory conditions, such as establishing comparability with the product candidates manufactured at our CMO, and our inability to meet such conditions would result in investment of additional resources, a delay in using our manufacturing facility for production and extend our clinical trial timelines.

Similar conditions may apply if we make manufacturing or formulation changes to our product

Clinical study delays could also shorten any periods during which our products have patent protection and may allow our competitors to bring products to market before we do, which could impair our ability to successfully commercialize our product candidates and may harm our business and results of operations.

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For our clinical trials of our product candidates, we contract or will contract with academic medical centers and hospitals experienced in the assessment and management of toxicities arising during clinical trials.

Nonetheless, these centers

and hospitals may have difficulty observing patients and treating toxicities, which may be more challenging due to personnel changes, inexperience, shift changes, house staff coverage or related issues.

Nonetheless, these centers and hospitals may have difficulty observing patients and treating toxicities, which may be more challenging due to personnel changes, inexperience, shift changes, house staff coverage or related issues.

This could lead to more severe or prolonged toxicities or even patient deaths, which could result in us or the FDA delaying, suspending or terminating one or more of our clinical trials, and which could jeopardize regulatory approval.

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We may experience difficulties in patient enrollment in our clinical trials for a variety of reasons.

For example, as we

progress the ALPHA2 and EXPAND trials, we may face enrollment challenges, including an unwillingness of sites to participate, the exclusion of patients with certain disease characteristics or the ineligibility of patients that have received prior autologous CAR T therapies, which continue to gain adoption.

The timely completion of clinical trials in accordance with their protocols depends, among other things, on our ability to enroll a sufficient number of patients who remain in the study until its conclusion.

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For instance, the development of autologous CAR T cell therapies continues to rapidly advance, and, more recently, Janssen Pharmaceutical Companies of Johnson & Johnson announced the FDA approval of an autologous CAR T cell therapy for the treatment of adults with R/R multiple myeloma, Gilead Sciences announced the FDA approval of an autologous CAR T cell therapy for the initial treatment of R/R LBCL and Bristol Myers Squibb announced the FDA approval of an autologous CAR T cell therapy for R/R LBCL after one prior therapy.

The compelling results and related approvals impacts our ability to enroll patients with R/R multiple myeloma or R/R LBCL in our clinical trials.

Moreover, patients eligible for allogeneic CAR T cell therapies but ineligible for autologous CAR T cell

therapies due to aggressive cancer and inability to wait for autologous CAR T cell therapies may be at greater risk for complications and death from therapy.

We also may experience risks associated with a new class of therapies, bispecific antibodies, which have recently been approved for multiple myeloma and are expected to be approved for LBCL.

The compelling results and related approvals impact our ability to enroll patients with R/R multiple myeloma or R/R LBCL in our clinical trials.

Moreover, patients eligible for allogeneic CAR T cell therapies but ineligible for autologous CAR T cell therapies due to aggressive cancer and inability to wait for autologous CAR T cell therapies may be at greater risk for complications and death from therapy.

Delays in patient enrollment may result in increased costs or may affect the timing or outcome of our clinical trials, which could prevent completion of these trials and adversely affect our ability to advance the development of our product candidates.

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The EMA also recommended that alemtuzumab only be given in a hospital with ready access to intensive care facilities and specialists who can manage serious adverse reactions.

Based on the recommendations, we have added relevant new safety information to certain of our clinical trial documentation, including informed consent forms.

recommendations, we have added relevant new safety information to certain of our clinical trial documentation, including informed consent forms.

Our product candidates will also continue to be administered at specialized centers, which are experienced at managing patients with advanced malignancies as well as toxicities associated with immunomodulatory therapies.

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ALLO-647 may cause serious adverse events that alemtuzumab may cause, including fatal adverse events, immune thrombocytopenia, glomerular nephropathies, thyroid disorders, autoimmune cytopenias, autoimmune hepatitis, hemophagocytic lymphohistiocytosis, acquired hemophilia and infections, stroke, and progressive multifocal leukoencephalopathy.

In addition, we are exploring various dosing strategies for lymphodepletion in our

clinical trials, such as higher and lower dosing of ALLO-647 in combination with fludarabine and cyclophosphamide, which may increase the risk of serious adverse events.

In addition, we are exploring various dosing strategies for lymphodepletion in our clinical trials, such as higher and lower dosing of ALLO-647 in combination with fludarabine and cyclophosphamide, which may increase the risk of serious adverse events.

See "Business--Product Pipeline and Development Strategy" in our Annual Report for information on safety events.

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We cannot be sure that the manufacturing processes employed by us or the technologies that we incorporate for manufacturing will result in consistent T cell production that will be safe and effective.

In February 2019, we entered into a lease for approximately 118,000 square feet to develop a state-of-the-art cell therapy manufacturing facility in Newark, California, and initiated manufacturing under current good manufacturing practices (cGMP) in the second half of 2021.

We are in the process of transitioning manufacturing of certain of our product candidates from our prior cell therapy CMO, where we have ceased production, to our manufacturing facility, which will require that we meet certain regulatory conditions, such as establishing comparability with the product candidates manufactured at our CMO, and our inability to meet such conditions would result in investment of additional resources, a delay in using our manufacturing facility for production and extend our clinical trial timelines.

In February 2019, we entered into a lease for approximately 118,000 square feet to develop a state-of-the-art cell therapy manufacturing facility in Newark, California.

We decided to initiate the Phase 2 trial of ALLO-501A with material manufactured utilizing the Alloy process at our CMO, rather than material manufactured at our manufacturing facility that did not use the Alloy process, and may subsequently transition the Alloy process to our manufacturing facility during the course of our Phase 2 trials.

This approach remains subject to FDA review, and may ultimately result in increased costs and delays in conducting the ALPHA2 trial and EXPAND trial, submitting a biologics license application (BLA) or gaining FDA approval of ALLO-501A.

In addition, we may be unable to manufacture additional Alloy material at the CMO or transition the Alloy manufacturing process to our manufacturing facility for ALLO-501A as well as for our other product candidates, which could delay our clinical trials.

Similar conditions may apply if we make manufacturing or formulation changes to our product candidates.

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Manufacturers of cell therapy products often encounter difficulties in production, particularly in scaling out and validating initial production and ensuring the absence of contamination.

These problems include difficulties with production costs and yields, quality control, including stability of the product, operator error, shortages of qualified personnel, as well as compliance with strictly enforced federal, state and foreign regulations.

The application of new regulatory guidelines or parameters, such as those related to release testing, may also adversely affect our ability to manufacture our product candidates.

Furthermore, if contaminants are discovered in our supply of product candidates or in the manufacturing facilities, such supply may have to be discarded and our manufacturing facilities may need to be closed for an extended period of time to investigate and remedy the contamination.

Furthermore, if contaminants are discovered in our supply of product candidates or in the manufacturing facilities, such supply may have to be discarded and our manufacturing facility may need to be closed for an extended period of time to investigate and remedy the contamination.

We cannot assure you that any stability or other issues relating to the manufacture of our product candidates will not occur in the future.

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Our ability to compete in the highly competitive biotechnology and pharmaceutical industries depends upon our ability to attract and retain highly qualified managerial, scientific and medical personnel.

We are highly dependent on our management, scientific and medical personnel, including our Executive Chair, our President and Chief Executive Officer, our Chief Financial Officer, our Executive Vice President of Research & Development and Chief Medical Officer, our Chief Technical Officer, and our General Counsel.

We are highly dependent on our management, scientific and medical personnel, including our Executive Chair, our President and Chief Executive Officer, our Chief Financial Officer, our Executive Vice President of Research & Development, our Chief Technical Officer, and our General Counsel.

The loss of the services of any of our executive officers, other key employees, and other scientific and medical advisors, and our inability to find suitable replacements could result in delays in product development and harm our business.

We conduct substantially all of our operations at our facilities in South San Francisco.

We conduct substantially all of our operations at our facilities in the San Francisco Bay area.

This region is headquarters to many other biopharmaceutical companies and many academic and research institutions.

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We have grown rapidly and will need to continue to grow the size of our organization, and we may experience difficulties in managing this growth.*

As of August 1, 2022, we had 344 full-time employees.

As of November 1, 2022, we had 356 full-time employees.

As our development, manufacturing and commercialization plans and strategies develop, we have rapidly expanded our employee base and expect to add managerial, operational, sales, research and development, marketing, financial and other personnel.

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In addition, we face significant competition in seeking appropriate strategic partners and the negotiation process is time-consuming and complex.

Moreover, we may not be successful in our efforts to establish a strategic partnership or other alternative arrangements for our product candidates because they may be deemed to be at too early of a stage of development for collaborative effort and third parties may not view our product candidates as having the requisite potential to demonstrate safety and efficacy.

may not view our product candidates as having the requisite potential to demonstrate safety and efficacy.

Any delays in entering into new strategic partnership agreements related to our product candidates could delay the development and commercialization of our product candidates in certain geographies for certain indications, which would harm our business prospects, financial condition and results of operations.

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We may acquire other businesses, products or technologies as well as pursue joint ventures or investments in complementary businesses.

The success of our strategic transactions, including our acquisition of CAR T cell assets from Pfizer, licenses with Cellectis, Servier, Notch, Antion, joint

venture with Overland Pharmaceuticals (CY) Inc.

The success of our strategic transactions, including our acquisition of CAR T cell assets from Pfizer, licenses with Cellectis, Servier, Notch, Antion, joint venture with Overland Pharmaceuticals (CY) Inc.

and any future strategic transactions depends on the risks and uncertainties involved including:

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• increases in our expenses and reductions in our cash available for operations and other uses;

• inability of our strategic partners to access suitable capital;

• disruption in or termination of our relationships with collaborators or suppliers as a result of such a transaction;

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Further, if approved, we will require significant additional capital in order to launch and commercialize our product candidates.

As of June 30, 2022, we had $686.1 million in cash and cash equivalents and investments.

As of September 30, 2022, we had $637.3 million in cash and cash equivalents and investments.

Changing circumstances may cause us to consume capital significantly faster than we currently anticipate, and we may need to spend more money than currently expected because of circumstances beyond our control.

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Any of the above events could significantly harm our business, prospects, financial condition and results of operations and cause the price of our common stock to decline.

If our security measures, or those of our CROs, CMOs, collaborators, contractors, consultants or other third parties upon whom we rely, are compromised now, or in the future, or the security, confidentiality, integrity or availability of our information technology, software, services, networks, communications or data is compromised, limited or fails, we could experience a material adverse impact including, without limitation, a material interruption to our operations, including our clinical trials, harm to our reputation, significant fines, penalties and liability, or a breach or triggering of data protection laws, privacy policies and data protection obligations.*

If our security measures, or those of our CROs, CMOs, collaborators, contractors, consultants or other third parties upon whom we rely, are compromised or the security, confidentiality, integrity or availability of our information technology, software, services, networks, communications or data is compromised, limited or fails, we could experience a material adverse impact.*

In the ordinary course of our business, we may collect, process, store and transmit proprietary, confidential and sensitive information, including personal data (including health information), intellectual property, trade secrets, and proprietary business information owned or controlled by ourselves or other parties.

We may also share or receive sensitive information with our partners, CROs, CMO, or other third parties.

We may also share or receive sensitive information with our partners, CROs, CMOs, or other third parties.

Our ability to monitor these third parties’ information security practices is limited, and these third parties may not have adequate information security measures in place.

Our internal computer systems and those of our CROs, CMO, collaborators, and other contractors or consultants are vulnerable to damage from computer viruses, unauthorized access, cybersecurity threats, and telecommunication and electrical failures.

Our internal computer systems and those of our CROs, CMOs, collaborators, contractors, consultants or other third parties are vulnerable to damage from computer viruses, unauthorized access, cybersecurity threats, and telecommunication and electrical failures.

In addition, the COVID-19 pandemic has intensified our dependence on information technology systems as many of our critical business activities are currently being conducted remotely.

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These threats come from a variety of sources, including traditional computer “hackers,” threat actors, personnel (such as through theft or misuse), sophisticated nation-states, and nation-state-supported actors.

Cyberattacks could include, but are not limited to, the deployment of harmful malware (including as a result of advanced persistent threat intrusions), denial-of-service (such as credential stuffing), social engineering attacks (including through phishing attacks), viruses, ransomware, supply chain attacks, personnel misconduct or error and other similar threats.

Some actors now engage and are expected to continue to engage in cyber-attacks, including without limitation nation-state actors for geopolitical reasons and in conjunction with military conflicts and defense activities.

During times of war and other major conflicts, we, and the third parties upon which we rely, may be vulnerable to a heightened risk of these attacks, including retaliatory cyber-attacks, that could materially disrupt our systems and operations, supply chain, and ability to produce and distribute our product candidates.

Cyberattacks could include, but are not limited to, the deployment of harmful malware (including as a result of advanced persistent threat intrusions), denial-of-service (such as credential stuffing), credential harvesting, social engineering attacks (including through phishing attacks), viruses, ransomware, supply chain attacks, personnel misconduct or error and other similar threats.

We may also be the subject of software bugs, server malfunction, software or hardware failures, loss of data or other information technology assets, adware, telecommunications failures or other similar issues.

In particular, ransomware attacks, including those from organized criminal threat actors, nation-states, and nation-state supported actors, are becoming increasingly prevalent and severe and can lead to significant interruptions, delays, or outages in our operations, disruptions to our clinical trials, loss of data (including data related to clinical trials), significant expense to restore data or systems, reputational loss and the diversion of funds.

In particular, ransomware attacks are becoming increasingly prevalent and severe and can lead to significant interruptions, delays, or outages in our operations, disruptions to our clinical trials, loss of data (including data related to clinical trials), significant expense to restore data or systems, reputational loss and the diversion of funds.

Extortion payments may alleviate the negative impact of a ransomware attack, but we may be unwilling or unable to make such payments due to, for example, applicable laws or regulations prohibiting such payments.

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Although we have implemented security measures designed to protect against security incidents, there can be no assurance that these measures will be effective.

We may be unable in the future to detect vulnerabilities in our information technology systems because such threats and techniques change frequently, are often sophisticated in nature, and may not be detected until after a security incident has occurred.

Despite our efforts to identify and remediate vulnerabilities, if any, in our information technology systems, our efforts may not be successful.

We have experienced attempts to compromise our information technology systems or otherwise cause a security incident, but, to our knowledge, such attempts have been unsuccessful.

In addition, from time to time, our vendors inform us of security incidents.

To date, our review of such incidents as reported to us did not reveal material information being lost, Allogene-specific security vulnerabilities or provide any useful information or insight into our systems or environment.

However, we may not have all information related to such incidents and future incidents could have an adverse impact on our business.

We may be unable to detect vulnerabilities in our information technology systems because such threats and techniques change frequently, are often sophisticated in nature, and may not be detected until after a security incident has occurred.

Despite our efforts to identify and remediate exploitable critical vulnerabilities, if any, in our information technology systems, our efforts may not be successful.

Further, we may experience delays in developing and deploying remedial measures designed to address any such identified vulnerabilities.

Any failure to prevent or mitigate security incidents or improper access to, use of, or disclosure of our clinical data or patients’ personal data could result in significant liability under state, federal, and international law and may cause a material adverse impact to our reputation, affect our ability

to conduct our clinical trials and potentially disrupt our business.

In addition, privacy advocates and industry groups have proposed, and may propose, standards with which we are legally or contractually bound to comply.

We may also face heightened physical and information technology risks due to our sharing office space with other tenants at certain of our sites.

Applicable data protection laws, privacy policies and data protection obligations may require us to notify relevant stakeholders of security incidents.

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For example, over the last several years, the U.S.

government has shut down several times and certain regulatory agencies, such as the FDA and the SEC, have had to furlough critical FDA, SEC and other government employees and stop critical activities.

government has shut down several times and certain regulatory agencies, such as the FDA and the SEC, have

had to furlough critical FDA, SEC and other government employees and stop critical activities.

If a prolonged government shutdown occurs, it could significantly impact the ability of the FDA to timely review and process our regulatory submissions, which could have a material adverse effect on our business.

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Business disruptions could seriously harm our future revenue and financial condition and increase our costs and expenses.*

In addition to the business disruptions caused by the COVID-19 pandemic or cybersecurity attacks described above, our operations, and those of our CMO, CROs, clinical trial sites and other contractors and consultants, could be subject to other disruptions, including those caused by earthquakes, power shortages, telecommunications failures, water shortages, floods, hurricanes, tsunamis, typhoons, fires, extreme weather conditions, medical epidemics, wars and other geopolitical conflicts (such as Russia military action against Ukraine) and other natural or man-made disasters or business interruptions, for which we are predominantly self-insured.

In addition to the business disruptions caused by the COVID-19 pandemic or cybersecurity attacks described above, our operations, and those of our CMOs, CROs, clinical trial sites and other contractors and consultants, could be subject to other disruptions, including those caused by earthquakes, power shortages, telecommunications failures, water shortages, floods, hurricanes, tsunamis, typhoons, fires, extreme weather conditions, medical epidemics, wars and other geopolitical conflicts (such as Russia military action against Ukraine) and other natural or man-made disasters or business interruptions, for which we are predominantly self-insured.

The occurrence of any of these business disruptions could seriously harm our operations and financial condition and increase our costs and expenses.

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The ultimate impact on us, our significant suppliers and our general infrastructure of being located near major earthquake faults and fire and flood zones and being consolidated in certain geographical areas is unknown, but our operations and financial condition could suffer in the event of a major earthquake, fire, flood or other natural disaster.

Our relationships with customers, physicians, and third-party payors are subject, directly or indirectly, to federal, state, local and foreign healthcare fraud and abuse laws, false claims laws, health information privacy and security laws, and other

healthcare laws and regulations.

If we or our employees, independent contractors, consultants, commercial partners and vendors violate these laws, we could face substantial penalties.

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Accordingly, we are, or may become, subject to numerous federal, state, local and international data privacy and security laws, regulations, guidance, and industry standards as well as external and internal privacy and security policies, contracts and other obligations that apply to our processing of personal data and the processing of personal data on our behalf.

In the United States, federal, state, and local governments have enacted numerous data privacy and security laws, including data breach notification laws, personal data privacy laws, and consumer protection laws.

For example, the federal Health Insurance Portability and Accountability Act of 1996 (HIPAA), as amended by the Health Information Technology for Economic and Clinical Health Act (HITECH), and their respective implementing regulations, imposes requirements relating to the privacy, security and transmission of individually identifiable health information.

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Although there are limited exemptions for clinical trial data under the CCPA, as our business progresses, the CCPA may become applicable and significantly impact our business activities and exemplifies the vulnerability of our business to evolving regulatory environment related to personal data and protected health information.

Furthermore, it is anticipated that the California Privacy Rights Act of 2020 (CPRA), effective January 1, 2023, will expand the CCPA.

Furthermore, it is anticipated that the California Privacy Rights Act of 2020 (CPRA), effective January 1, 2023, will expand the CCPA’s requirements, including applying to personal information of business representatives and employees and establishing a new regulatory agency to implement and enforce the law.

In addition, other states have enacted or proposed data privacy laws.

For example, Virginia passed the Consumer Data Protection Act, Colorado passed the Colorado Privacy Act, and Utah passed the Consumer Privacy Act, all of which become effective in 2023.

For example, Virginia passed the Consumer Data Protection Act, Colorado passed the Colorado Privacy Act, Connecticut passed the Act Concerning Personal Data Privacy and Online Monitoring, and Utah passed the Consumer Privacy Act, all of which become effective in 2023.

Additionally, several states and localities have enacted statutes banning or restricting the collection of biometric information.

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limiting our ability to collaborate with parties that are subject to such cross-border data transfer or localization laws;

or requiring us to

increase our personal data processing capabilities and infrastructure in foreign jurisdictions at significant expenses.

or requiring us to increase our personal data processing capabilities and infrastructure in foreign jurisdictions at significant expenses.

Further, individuals may initiate litigation related to processing of their personal data.

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and imprisonment of company officials.

Any of these events could have a material adverse effect on our reputation, business, or financial condition, including but not limited to:

loss of actual or prospective customers, collaborators or partners;

interruptions or stoppages in clinical trials;

inability to process personal data or to operate in certain jurisdictions;

limited ability to develop or commercialize our products;

expenditure of time and resources to defend any claim or inquiry;

adverse publicity;

or revision or restructuring of our operations.

Any of these events could have a material adverse effect on our reputation, business, or financial condition.

If product liability lawsuits are brought against us, we may incur substantial liabilities and may be required to limit commercialization of our product candidates.

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For example, we may be sued if our product candidates cause or are perceived to cause injury or are found to be otherwise unsuitable during clinical testing, manufacturing, marketing or sale.

Any such product liability claims may include allegations of defects in manufacturing, defects in design, a failure to warn of dangers inherent in the product, negligence, strict liability or a breach of warranties.

such product liability claims may include allegations of defects in manufacturing, defects in design, a failure to warn of dangers inherent in the product, negligence, strict liability or a breach of warranties.

Claims could also be asserted under state consumer protection acts.

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These third parties may also have relationships with other commercial entities, including our competitors, for whom they may also be conducting clinical studies or other drug development activities, which could affect their performance on our behalf.

If these third parties do not successfully carry out their contractual duties or obligations or meet expected deadlines, if they need to be replaced or if the quality or accuracy of the

clinical data they obtain is compromised due to the failure to adhere to our clinical protocols or regulatory requirements or for other reasons, our clinical trials may be extended, delayed or terminated and we may not be able to complete development of, obtain regulatory approval of or successfully commercialize our product candidates.

If these third parties do not successfully carry out their contractual duties or obligations or meet expected deadlines, if they need to be replaced or if the quality or accuracy of the clinical data they obtain is compromised due to the failure to adhere to our clinical protocols or regulatory requirements or for other reasons, our clinical trials may be extended, delayed or terminated and we may not be able to complete development of, obtain regulatory approval of or successfully commercialize our product candidates.

As a result, our financial results and the commercial prospects for our product candidates would be harmed, our costs could increase and our ability to generate revenue could be delayed.

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As a result, delays occur, which can materially impact our ability to meet our desired clinical development timelines.

We rely on third parties to manufacture ALLO-647 and store our clinical product supplies, and we may have to rely on third parties to produce and process our product candidates, if approved.*

ALLO-647 is manufactured in the United States by our CMO, and we manage all other aspects of the supply, including planning, CMO oversight, disposition and distribution logistics.

There can be no assurance that we will not experience supply or manufacturing issues.

We do not have long-term agreements in place with our CMO for the manufacture of ALLO-647.

If we are unable to contract with our CMO on acceptable terms or at all, our clinical development program would be delayed and our business would be significantly harmed.

We have built our own manufacturing facility for the manufacturing of our cell therapy product candidates, and the transition of manufacturing to our own facility requires significant investment and that we meet certain regulatory conditions, which may delay or extend our clinical trial timelines.

We rely on third parties to manufacture and store our clinical product supplies, and we may have to rely on third parties to produce and process our product candidates, if approved.*

Our product candidates are manufactured in the United States by our CMOs, and we manage all other aspects of the supply, including planning, CMO oversight, disposition and distribution logistics.

For example, in the past, Servier was responsible for UCART19 manufacturing, and experienced UCART19 supply issues that limited its ability to recruit new patients.

There can be no assurance that we will not experience supply or manufacturing issues in the future.

We do not have long-term agreements in place with CMOs for the manufacture of our cell therapies or of ALLO-647.

If we are unable to contract with CMOs on acceptable terms or at all, our clinical development program would be delayed and our business would be significantly harmed.

While we have built our own manufacturing facility for cell therapies, the transition of manufacturing to our own facility will require significant investment and that we meet certain regulatory conditions, which may delay or extend our clinical trial timelines.

We have not yet caused our product candidates to be manufactured or processed on a commercial scale and may not be able to achieve manufacturing and processing and may be unable to create an inventory of mass-produced, off-the-shelf product to satisfy demands for any of our product candidates.

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Our current and potential future CMOs may also be required to shut down in response to the spread of COVID-19 or they may prioritize manufacturing for COVID-19 therapies or vaccines.

In addition, our CMOs have certain responsibilities for storage of raw materials and in the past have lost or failed to adequately store our raw materials.

We also rely on third parties to store our released product candidates, and any failure to adequately store our product candidates could result in significant delay to our development timelines.

Any additional or future damage or loss of raw materials or product candidates could materially

impact our ability to manufacture and supply our product candidates.

Any additional or future damage or loss of raw materials or product candidates could materially impact our ability to manufacture and supply our product candidates.

Each of these risks could delay our clinical trials, the approval, if any of our product candidates by the FDA or the commercialization of our product candidates or result in higher costs or deprive us of potential product revenue.

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In addition, the lead time needed to establish a relationship with a new supplier can be lengthy, and we may experience delays in meeting demand in the event we must switch to a new supplier.

The time and effort to qualify a new supplier, including to meet any regulatory requirements for such qualification, could result in additional costs, diversion of resources or reduced manufacturing yields, any of which would negatively impact our operating results.

The time and effort to qualify a new supplier, including to meet any regulatory requirements for such qualification, could result in additional costs, delays, diversion of resources or reduced manufacturing yields, any of which would negatively impact our operating results.

Further, we may be unable to enter into agreements with a new supplier on commercially reasonable terms, which could have a material adverse impact on our business.

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Although we believe that we and our suppliers’ procedures for using, handling, storing and disposing of these materials comply with legally prescribed standards, we and our suppliers cannot completely eliminate the risk of contamination or injury resulting from medical or hazardous materials.

For instance, while we are currently in compliance, we have had an environmental notice of violation at our manufacturing facility.

For instance, we have had and may continue to have environmental notice of violations at our manufacturing facility.

As a result of any such contamination or injury, we may incur liability or local, city, state or federal authorities may curtail the use of these materials and interrupt our business operations.

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The research, testing, manufacturing, labeling, approval, selling, import, export, marketing, and distribution of drug products, including biologics, are subject to extensive regulation by the FDA and other regulatory authorities in the United States.

We are not permitted to market any biological drug product in the United States until we receive approval of a biologics license application (BLA) from the FDA.

We are not permitted to market any biological drug product in the United States until we receive approval of a BLA from the FDA.

We have not previously submitted a BLA to the FDA, or similar approval filings to comparable foreign authorities.

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• recruiting suitable patients to participate in a trial;

• having patients complete a trial, including having patients enrolled in clinical trials dropping out of the trial before the product candidate is manufactured and returned to the site, or return for post-treatment follow-up;

• having patients complete a trial, including having patients enrolled in clinical trials dropping out of the trial prior to treatment, or return for post-treatment follow-up;

• clinical trial sites deviating from trial protocol or dropping out of a trial;

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We could also encounter future delays if physicians encounter unresolved ethical issues associated with enrolling patients in clinical trials of our product candidates in lieu of prescribing existing treatments that have established safety and efficacy profiles.

Further, a clinical trial may be suspended or terminated by us, the IRBs for the institutions in which such trials are being conducted or by the FDA or other regulatory authorities due to a number of factors, including failure to conduct the clinical trial in accordance with regulatory requirements or our clinical protocols, inspection of the clinical trial operations or trial site by the FDA or other regulatory authorities resulting in the imposition of a clinical hold, unforeseen safety issues or adverse side effects, failure to demonstrate a benefit from using a product candidate, changes in governmental regulations or administrative actions, lack of adequate funding to continue the clinical trial, or based on a recommendation by the Data Safety Monitoring Committee.

The FDA’s review of our data of our clinical trials may, depending on the data, also result in the delay, suspension or termination of one or more of our clinical trials, which would also delay or prevent the initiation of our other planned clinical trials.

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Because we are developing novel CAR T cell immunotherapy product candidates that are unique biological entities, the regulatory requirements that we will be subject to are not entirely clear.

Even with respect to more established products that fit into the categories of gene therapies or cell therapies, the regulatory landscape is still developing.

Even with respect to more established products that

fit into the categories of gene therapies or cell therapies, the regulatory landscape is still developing.

For example, regulatory requirements governing gene therapy products and cell therapy products have changed frequently and the FDA has recently issued draft guidance relevant to our product candidates, including relating to CMC matters, manufacturing at a single versus multiple sites and clinical study design.

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Phase 3 clinical studies typically involve hundreds of patients, have significant costs and take years to complete.

We expect registrational trials for ALLO-501A and any other allogeneic CAR T product candidates to be designed to evaluate the efficacy of the product candidate in a pivotal, multicenter clinical trial in patients who have exhausted available treatment options.

If the results are sufficiently compelling, we intend to discuss with the FDA submission of a BLA for the relevant product candidate.

However, we do not have any agreement or guidance from the FDA that our regulatory development plans will be sufficient for advancing to a Phase 2 trial of ALLO-501A or submitting a BLA.

We expect ongoing FDA feedback on our trials, some of which may lead to changes in the trials, which could cause future delays to our trials.

In addition, even if we believe the results are sufficiently compelling, such as for both the ALPHA2 trial and EXPAND trial, the FDA could ultimately require longer-term follow-up results, additional data from our clinical trials or additional trials that could delay or prevent our first BLA submission.

The FDA may require that we conduct a comparative trial against an approved therapy including potentially an approved autologous T cell therapy, which would significantly delay our development timelines and require substantially more resources.

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The FDA may grant accelerated approval for our product candidates and, as a condition for accelerated approval, the FDA may require a sponsor of a drug or biologic receiving accelerated approval to perform post-marketing studies to verify and describe the predicted effect on irreversible morbidity or mortality or other clinical endpoint, and the drug or biologic may be subject to withdrawal procedures by the FDA that are more accelerated than those available for regular approvals.

We believe our accelerated approval strategy is warranted given the limited alternatives for patients with R/R cancers, but the FDA may ultimately require a Phase 3 clinical trial prior to approval, particularly since our product candidates represent a novel treatment.

our accelerated approval strategy is warranted given the limited alternatives for patients with R/R cancers, but the FDA may ultimately require a Phase 3 clinical trial prior to approval, particularly since our product candidates represent a novel treatment.

In addition, the standard of care may change with the approval of new products in the same indications that we are studying.

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In addition, we expect regulatory authorities will require us to demonstrate the safety of ALLO-647 and its contribution to the overall benefit to risk ratio of the lymphodepletion regimen through a randomized study with a cohort of patients that do not receive ALLO-647.

We plan to assess ALLO-647 in a separate registrational trial that we plan to initiate later this year, subject to the advancement of the ALPHA2 trial and FDA clearance.

We cannot be certain we will be able to successfully initiate a registrational trial of ALLO-647 or obtain regulatory approval of ALLO-647 in a timely manner or at all.

We plan to assess ALLO-647 in a separate registrational trial, the EXPAND trial, that we are working to initiate.

We cannot be certain when or whether we will be able to successfully initiate and enroll the EXPAND trial in a timely manner or that the outcome of this study will support FDA approval.

For instance, enrolling two studies, ALPHA2 and EXPAND, that target the same indication may delay enrollment completion, and difference in data between the trials would introduce other regulatory review complications that would adversely impact both trials.

Any delays to ALLO-647 approval could delay any approval or commercialization of our allogeneic CAR T cell product candidates.

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There is no assurance that we will be able to obtain RMAT designation or FTD for any of our additional product candidates.

RMAT designation and FTD do not change the FDA’s standards for product approval, and there is no assurance that such designation will result in expedited review or approval or that the approved indication will not be narrower than the indication covered by the designation.

RMAT designation and FTD do not change the FDA’s standards for product approval, and there is no assurance that such designation will result in expedited review or approval or

that the approved indication will not be narrower than the indication covered by the designation.

Additionally, RMAT designation and FTD can be revoked if the criteria for eligibility cease to be met as clinical data emerges.

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Furthermore, the FDA can waive orphan exclusivity if we are unable to manufacture sufficient supply of our product or if a subsequent applicant demonstrates clinical superiority over our product.

The FDA granted orphan drug designation to ALLO-605 for the treatment of multiple myeloma.

The FDA granted orphan drug designation to ALLO-605 and ALLO-715 for the treatment of multiple myeloma.

We plan to seek orphan drug designation for additional product candidates in specific orphan indications in which there is a medically plausible basis for the use of these products, but may never receive such designations.

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We expect physicians in the large bone marrow transplant centers to be particularly important to the market acceptance of our products and we may not be able to educate them on the benefits of using our product candidates for many reasons.

For example, certain of the product candidates that we will be developing target a cell surface marker that may be present on cancer cells as well as

non-cancerous cells.

For example, certain of the product candidates that we will be developing target a cell surface marker that may be present on cancer cells as well as non-cancerous cells.

It is possible that our product candidates may kill these non-cancerous cells, which may result in unacceptable side effects, including death.

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Such reforms could have an adverse effect on anticipated revenue from product candidates that we may successfully develop and for which we may obtain regulatory approval and may affect our overall financial condition and ability to develop product candidates.

Any reduction in reimbursement from Medicare or other

government programs may result in a similar reduction in payments from private payors, which may adversely affect our future profitability.

Any reduction in reimbursement from Medicare or other government programs may result in a similar reduction in payments from private payors, which may adversely affect our future profitability.

Our business could be negatively impacted by environmental, social and corporate governance (ESG) matters or our

reporting of such matters.*

There is an increasing focus from certain investors, employees, partners, and other stakeholders concerning ESG matters.

While we have internal efforts directed at ESG matters and preparations for any increased required future disclosures, we may be perceived to be not acting responsibly in connection with these matters, which could negatively impact us.

Moreover, the SEC has recently proposed, and may continue to propose, certain mandated ESG reporting requirements, such as the SEC’s proposed rules designed to enhance and standardize climate-related disclosures, which, if finally approved, would significantly increase our compliance and reporting costs and may also result in disclosures that certain investors or other stakeholders deem to negatively impact our reputation or that harm our stock price.

In addition, we currently do not report our environmental emissions, and lack of reporting could result in certain investors declining to invest in our common stock.

Risks Related to Our Intellectual Property

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This type of patent does not prevent a competitor from making and marketing a product that is identical to our product for an indication that is outside the scope of the patented method.

Moreover, even if competitors do not actively promote their product for our targeted indications, physicians may prescribe these products “off-label.” Although off-label prescriptions may infringe or contribute to the infringement of method of use patents, the practice is common and such infringement is difficult to prevent or prosecute.

or contribute to the infringement of method of use patents, the practice is common and such infringement is difficult to prevent or prosecute.

The strength of patents in the biotechnology and pharmaceutical field involves complex legal and scientific questions and can be uncertain.

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Furthermore, the laws of some foreign countries do not protect proprietary rights to the same extent or in the same manner as the laws of the United States.

For example, we plan to transfer technology to Allogene Overland or its affiliates in certain developing countries, and we cannot be

certain that we or Allogene Overland or any of its affiliates will be able to protect or enforce any proprietary rights in these countries.

For example, we plan to transfer technology to Allogene Overland or its affiliates in certain developing countries, and we cannot be certain that we or Allogene Overland or any of its affiliates will be able to protect or enforce any proprietary rights in these countries.

As a result, we may encounter significant problems in protecting and defending our intellectual property both in the United States and abroad.

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patents held by third parties that may be considered by those third parties to be relevant to cell-based therapies.

Generally, conducting clinical trials and other development activities in the United States is not considered an act of infringement.

Generally, conducting clinical trials and other development activities in the United

States is not considered an act of infringement.

If and when any of our product candidates is approved by the FDA, third parties may then seek to enforce their patents by filing a patent infringement lawsuit against us.

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To counter infringement or unauthorized use, we may be required to file infringement claims, which can be expensive and time-consuming.

In addition, in an infringement proceeding, a court may decide that one or more of our patents is not valid or is unenforceable or may refuse to stop the other party from using the technology at issue on the grounds that our patents do not cover the technology in question.

In addition, in an infringement

proceeding, a court may decide that one or more of our patents is not valid or is unenforceable or may refuse to stop the other party from using the technology at issue on the grounds that our patents do not cover the technology in question.

An adverse result in any litigation or defense proceedings could put one or more of our patents at risk of being invalidated, held unenforceable or interpreted narrowly and could put one or more of our pending patent applications at risk of not issuing.

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Consequently, we may not be able to prevent third parties from practicing our inventions in all countries outside the United States, or from selling or importing products made using our inventions in and into the United States or other jurisdictions.

Competitors may use our technologies in jurisdictions where we have not obtained patent

protection to develop their own products and further, may export otherwise infringing products to territories where we have patent protection, but enforcement is not as strong as that in the United States.

Competitors may use our technologies in jurisdictions where we have not obtained patent protection to develop their own products and further, may export otherwise infringing products to territories where we have patent protection, but enforcement is not as strong as that in the United States.

These products may compete with our products and our patents or other intellectual property rights may not be effective or sufficient to prevent them from competing.

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In addition to the factors discussed in this “Risk Factors” section, these factors include:

• the commencement, enrollment or results of our clinical trials of our product candidates or any future clinical trials we or Servier may conduct, or changes in the development status of our product candidates;

• our or Servier’s decision to initiate a clinical trial, not to initiate a clinical trial or to terminate an existing clinical trial;

• the commencement, enrollment or results of our clinical trials of our product candidates or any future clinical trials we may conduct, or changes in the development status of our product candidates;

• our decision to initiate a clinical trial, not to initiate a clinical trial or to terminate an existing clinical trial;

• adverse results or delays in clinical trials;

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• our failure to commercialize our product candidates;

• adverse regulatory decisions, including failure to receive regulatory approval to advance to the Phase 2 portion of the ALPHA2 trial of ALLO-501A;

• adverse regulatory decisions;

• changes in laws or regulations applicable to our products, including but not limited to clinical trial requirements for approvals;

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• introduction of new products or services offered by us or our competitors;

• changes in the status of one or more of our license or collaboration agreements, including any material amendments or terminations;

• changes in the status of one or more of our license or collaboration agreements, including any material disputes, amendments or terminations;

• announcements of significant acquisitions, strategic partnerships, joint ventures or capital commitments by us or our competitors;

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Complying with Section 404 requires a rigorous compliance program as well as adequate time and resources.

We may not be able to complete our internal control evaluation, testing and any required remediation in a

timely fashion.

We may not be able to complete our internal control evaluation, testing and any required remediation in a timely fashion.

Additionally, if we or our auditors identify one or more material weaknesses in our internal control over financial reporting, we will not be able to assert that our internal controls are effective.

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The global credit and financial markets have experienced extreme volatility and disruptions in the past.

These disruptions can result in severely diminished liquidity and credit availability, increase in inflation, declines in consumer confidence, declines in economic growth, increases in unemployment rates and uncertainty about economic stability.

These disruptions have resulted and may continue to result in severely diminished liquidity and credit availability, high inflation, declines in consumer confidence, declines in economic growth, and uncertainty about economic stability.

There can be no assurance that further deterioration in credit and financial markets and confidence in economic conditions will not occur.

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We are unable to predict the effect that sales may have on the prevailing market price of our common stock.

Our business could be negatively impacted by environmental, social and corporate governance (ESG) matters or our reporting of such matters.*

There is an increasing focus from certain investors, employees, partners, and other stakeholders concerning ESG matters.

We may be, or be perceived to be, not acting responsibly in connection with these matters, which could negatively impact us.

For instance, the SEC has recently proposed ESG reporting requirements, which, if approved, would significantly increase our costs.

In addition, we currently do not report our environmental emissions, and lack of reporting or future reporting could result in certain investors from declining to invest in our common stock.

If securities or industry analysts issue an adverse or misleading opinion regarding our stock, our stock price and trading volume could decline.

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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