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We may incur additional costs or experience delays in completing, or ultimately be unable to complete, the development and commercialization of any product;
−Removed: • i f our competitors are better able to develop products for the diagnosis and treatment of diseases of the central nervous system and the treatment for anaphylaxis that are safer, more effective, less costly, easier to use or otherwise more attractive than our PharmFilm technology, our business will be adversely impacted;
+Added: • if our competitors are better able to develop products for the diagnosis and treatment of diseases of the central nervous system and the treatment for anaphylaxis that are safer, more effective, less costly, easier to use or otherwise more attractive than our PharmFilm technology, our business will be adversely impacted;
• even if our product candidates are approved for commercial sale, if we are unable to develop a sales and marketing infrastructure, we may not be successful in commercializing our products in the United States;
• our ability to commercialize our product candidates will depend in part on the extent to which reimbursement will be available from government and health administration authorities, private health maintenance organizations and health insurers, and other healthcare payors;
−Removed: • any delays or changes to the timing, cost and success of clinical trials for AQST- 109 and our other product candidates;
−Removed: • failure to generate sufficient data in our PK and PD comparability submission for FDA approval of AQST-109;
+Added: • any delays or changes to the timing, cost and success of clinical trials for Anaphylm and our other product candidates;
+Added: • failure to generate sufficient data in our PK and PD comparability submission for FDA approval of Anaphylm;
+Added: • data in our PK and PD comparability as submitted to the FDA for approval of Libervant two to five years is insufficient:
• we have entered into, and may enter into collaborations, licensing arrangements, joint ventures, strategic alliances or partnerships with third-parties that may not result in the development of commercially viable products or the generation of significant future revenues;
−Removed: • we are and will be dependent on third-party contract research organizations to conduct all of our clinical trials.
+Added: • we are and will be dependent on third-party CROs to conduct all of our clinical trials.
If these third parties do not successfully carry out their contractual duties or regulatory obligations or meet expected deadlines, if the third parties need to be replaced or if the quality or accuracy of the data they obtain is compromised due to the failure to adhere to our clinical protocols or regulatory requirements or for other reasons, our preclinical development activities or clinical trials may be extended, delayed, suspended or terminated and we may not be able to obtain regulatory approval for any of our product candidates;
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• if we issue more shares of our Common Stock to raise capital, our current stockholders will incur substantial dilution;
−Removed: • we may be subject to damages resulting from litigation matters currently pending against the Company;
+Added: • we may be subject to damages resulting from litigation matters currently pending against Aquestive;
+Added: • cybersecurity continues to affect businesses and could cause business interruption;
• our business and operations may be adversely affected by the COVID-19 pandemic;
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• acquiring or in-licensing new technologies or development-stage or approved products;
+Added: • activities related to pre-commercialization of products;
• adding clinical, scientific, operational, financial, and management information systems personnel, including personnel to support our product development and to support our operations as a public company;
• experiencing incremental costs due to delays or encountering any issues with any of the above, including, but not limited to, failed or not fully successful trials, complex results, safety issues or other regulatory challenges.
−Removed: We expect to continue to incur net losses for at least the next few years as we pursue the development efforts of our product candidates.
+Added: We expect to continue to incur net losses for at least the next few years as we pursue the development efforts and commercialization of our product candidates.
Our net losses may fluctuate significantly from period to period, depending on regulatory approval developments concerning our product candidates, the timing of our planned clinical trials and expenditures on our other research and development.
We expect our expenses will continue to be substantial in 2024 and future periods as we continue to:
−Removed: • continue to clinically develop AQST-109 and provide supporting data needed for market approval from the FDA;
+Added: • continue to clinically develop Anaphylm and provide supporting data needed for market approval from the FDA;
• continue to seek licensing and other transactions of our product candidates;
1 unchanged sentence
market due to a competitor’s orphan drug market exclusivity status.
−Removed: We expect to continue to manage the timing and level of expenses in light of the declining Suboxone revenues, while focusing on the development and commercialization of AQST-109.
+Added: We expect to continue to manage the timing and level of expenses in light of the declining Suboxone revenues, while focusing on the development and commercialization of Anaphylm.
Until we become profitable, if ever, we expect to need to raise significant additional capital in the future through equity or debt issuances, or both, to continue to manage our expenses to extend our capital runway, in order to further the development, and regulatory approval of our products and product candidates, and to conduct our business.
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We may not be able to raise additional capital or other funding on terms acceptable to us, or at all, and any failure to raise capital as and when needed could compromise our ability to execute on our business plan and cause us to delay or curtail our operations until such funding is received.
−Removed: To the extent that we raise additional funds by issuance of equity securities, our stockholders would experience dilution, and debt financings, if available (and subject to all of the existing restrictions and conditions under the Company's debt instruments) may involve increased restrictive covenants and increased fixed payments or may otherwise further constrain our financial flexibility.
+Added: To the extent that we raise additional funds by issuance of equity securities, our stockholders would experience dilution, and debt financings, if available (and subject to all of the existing restrictions and conditions under our debt instruments) may involve increased restrictive covenants and increased fixed payments or may otherwise further constrain our financial flexibility.
To the extent that we raise additional funds through collaborative or licensing arrangements, it may be necessary to relinquish some rights to our intellectual property or grant licenses on terms that are not favorable to us.
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We will need substantial additional capital to fund our operations, which may not be available on acceptable terms, if at all.
−Removed: The Company’s cash requirements for 2023 and beyond include expenses related to continuing development and clinical evaluation of our products, manufacture and supply costs, costs of regulatory filings, patent prosecution expenses and litigation expenses, as well as costs to comply with the requirements of being a public company operating in a highly regulated industry.
+Added: Our cash requirements for 2024 and beyond include expenses related to continuing development and clinical evaluation of our products, manufacture and supply costs, costs of regulatory filings, patent prosecution expenses and litigation expenses, expenses related to commercialization of our products, as well as costs to comply with the requirements of being a public company operating in a highly regulated industry.
As of December 31, 2023, we had $23.9 million of cash and cash equivalents.
−Removed: On November 3, 2020, we entered into a Purchase and Sale Agreement (the "Monetization Agreement") with MAM Pangolin Royalty, LLC, an affiliate of Marathon Asset Management ("Marathon").
−Removed: Under the terms of the Monetization Agreement, we sold all of our contractual rights to receive royalties and milestone payments due under the Sunovion License Agreement related to Sunovion's apomorphine film product, KYNMOBI®, for the treatment of off episodes in Parkinson’s disease patients, which received approval from the FDA on May 21, 2020.
−Removed: We have received an aggregate amount of $50.0 million through December 31, 2022 under the Monetization Agreement.
−Removed: Under the Monetization Agreement, additional contingent payments of up to $75.0 million may be due to us upon the achievement of worldwide royalty and other commercial targets within a specified timeframe, which could result in total potential proceeds of $125.0 million.
−Removed: Based on the current forecast by Sunovion of estimated KYNMOBI sales as of December 31, 2022, we may not receive any of the additional contingent payments under the Monetization agreement.
−Removed: With the upfront proceeds of the Marathon monetization, we repaid $22.5 million of the Company's Senior Secured Notes due 2025 (the "12.5% Notes"), and issued $4.0 million of new 12.5% Notes in lieu of paying a prepayment premium due to the holders of the 12.5% Notes (the "Holders") under the Indenture dated July 15, 2019, among Aquestive Therapeutics, Inc., as Issuer, any Guarantor that becomes party thereto and U.S.
−Removed: Bank National Association, as Trustee and Collateral Agent (the "Indenture") on the early repayment of the 12.5% Notes.
−Removed: As a result, we reduced the aggregate principal balance of the 12.5% Notes outstanding to $51.5 million, and such aggregate principal amount remains outstanding as of December 31, 2022.
−Removed: In addition, as of the closing of the Marathon monetization transaction, we issued to the holders of the 12.5% Notes warrants to purchase 143,000 shares of our Common Stock.
−Removed: On October 7, 2021, we entered into the Fourth Supplemental Indenture in connection with the 12.5% Notes.
−Removed: Pursuant to the Fourth Supplemental Indenture, the amortization schedule for the 12.5% Notes has been amended to provide for the date of the first amortization payment to be extended to March 30, 2023.
−Removed: The Fourth Supplemental Indenture did not change the maturity date of June 30, 2025 or the interest payment obligation due under the Notes.
−Removed: On May 13, 2022, pursuant to the Fifth Supplemental Indenture, the Holders agreed to further extend from June 30, 2022 to March 31, 2023 our ability to access, at our option, an additional $30.0 million of 12.5% Notes re-openers under the Indenture.
−Removed: The Fifth Supplemental Indenture also provided that the Company's access to re-openers is subject to the full approval of Libervant by the FDA for sale in the United States, which full approval includes U.S.
−Removed: market access for Libervant.
−Removed: In addition, the Fifth Supplemental Indenture provided that the holders of 12.5% Notes have the right, but not the obligation, to purchase the re-openers.
−Removed: If and to the extent that we access these re-openers, we will grant the Holders warrants to purchase up to 714,000 shares of Common Stock, with the strike price calculated based on the 30-day volume weighted average closing price of our Common Stock at the warrant grant date.
−Removed: In 2019, we established an “at-the-market” (ATM) facility, under which, from time to time, we may offer and sell shares of our Common Stock.
+Added: Capital may be available under our ATM facility, which we initially established in 2019, under which, from time to time, we may offer and sell shares of our Common Stock.
+Added: The ATM facility has approximately $24.0 million worth of shares of Common Stock available at December 31, 2023.
In April 2022, we entered into a Purchase Agreement with Lincoln Park, under which, from time to time, we may cause Lincoln Park to purchase shares of our Common Stock.
−Removed: We may not be able to raise additional capital or secure other funding on terms acceptable to us, or at all, and any failure to raise additional capital or other funding as and when needed for our cash requirements, including payments on our 12.5% Notes, would have a negative impact on our business, financial condition and prospects and on our ability to execute and achieve our business plan.
−Removed: We expect to be subject to the issuer "baby shelf" rules of the SEC upon filing this Annual Report on Form 10-K, which will limit our ability to access all available amounts under our ATM and the Lincoln Park Purchase Agreement and limit our ability to otherwise fully utilize our shelf registration statement for capital raising.
−Removed: See "Liquidity and Capital Resources".
−Removed: If adequate funds are not available for our liquidity needs and cash requirements, as and when needed, from the sources referred to above or otherwise, or at all, we would be required to engage in expense management activities such as reducing staff, delaying, significantly scaling back, or even discontinuing some or all of our current or planned research and development programs and clinical and other product development activities, or reducing our planned commercialization efforts and otherwise significantly reducing our other spending and adjusting our operating plan, and we would need to seek to take other steps intended to improve our liquidity.
−Removed: We also may be required to evaluate additional licensing opportunities, if any become available, of our proprietary product and product candidate programs that we currently plan to self-commercialize or explore other potential liquidity opportunities or other alternatives or options or strategic alternatives, including asset sales, although we cannot assure that any of these actions would be available or available on reasonable terms.
−Removed: If we do not have sufficient funds to continue operations, we could be required to seek bankruptcy protection or other alternatives that would likely result in our stockholders losing most, if not all, of their investment in the Company.
+Added: The Purchase Agreement with Lincoln Park has approximately an equivalent to 6,486,623 shares to purchase at December 31, 2023.
+Added: On November 1, 2023, we reduced our debt payment obligations when we issued (the “Offering”) $45,000 aggregate principal amount of our 13.5% Notes.
+Added: A portion of the net proceeds from the Offering was used to redeem all of the outstanding 12.5% Notes and to pay expenses relating to the Offering, with the balance of the proceeds to be used for general corporate purposes.
+Added: Interest on the 13.5% Notes accrues at a rate of 13.5% per annum and is payable quarterly in arrears on March 30, June 30, September 30 and December 30 of each year (each, a “Payment Date”).
+Added: The 13.5% Notes are interest only until June 30, 2026, whereupon on such date and each Payment Date thereafter, we will also pay an installment of principal of the 13.5% Notes pursuant to a fixed amortization schedule, along with a portion of an Exit Fee determined as of the applicable date of prepayment, payment, acceleration, repurchase or redemption, as the case may be.
+Added: If adequate funds are not available for our liquidity needs and cash requirements, as and when needed, from the sources referred to above or otherwise, or at all, we would be required to engage in expense management activities such as reducing staff, delaying, significantly scaling back, or even discontinuing some or all of our current or planned research and development programs and clinical and other product development activities, or reducing our future commercialization efforts and otherwise significantly reducing our other spending and adjusting our operating plan, and we would need to seek to take other steps intended to improve our liquidity.
+Added: We also may be required to evaluate additional licensing opportunities, if any become available, of our proprietary product candidate programs that we currently plan to self-commercialize or explore other potential liquidity opportunities or other alternatives or options or strategic alternatives, including asset sales, although we cannot assure that any of these actions would be available or available on reasonable terms.
+Added: If we do not have sufficient funds to continue operations, we could be required to seek bankruptcy protection or other alternatives that would likely result in our stockholders losing most, if not all, of their investment in Aquestive.
We may sell additional equity, incur debt or raise funds through licensing arrangements to fund our operations, which may result in dilution to our stockholders, impose restrictions on our business or require us to relinquish proprietary rights.
Aquestive has experienced a history of net losses and our accumulated deficits totaled $319.1 million as of December 31, 2023.
−Removed: The net losses and accumulated deficits were partially offset by gross margins from sales of commercialized licensed and proprietary products, license fees, milestone and royalty payments from commercial licensees and co-development parties.
−Removed: On November 20, 2020, the Company began utilizing the Company's ATM facility.
−Removed: For the year ended December 31, 2022, the Company sold 2,860,538 shares which provided net proceeds of approximately $3.9 million, after deducting commissions and other transaction costs of $0.3 million.
+Added: The net losses and accumulated deficits were partially offset by gross margins from sales of
+Added: commercialized licensed and proprietary products, license fees, milestone and royalty payments from commercial licensees and co-development parties.
+Added: In November 2020, we began utilizing the ATM facility.
+Added: For the year ended December 31, 2023, we sold 4,958,341 shares which provided net proceeds of approximately $9.0 million, after deducting commissions and other transaction costs of $0.5 million.
This ATM facility has approximately $24.0 million available at December 31, 2023.
−Removed: For the year ended December 31, 2021, the Company sold 6,550,486 shares which provided net proceeds of approximately $29.8 million after deducting commissions and other transaction costs of $1.3 million.
Until such time, if ever, that we can generate sufficient revenue to fully fund our operations, we would need to seek additional capital and cash resources through public or private equity or debt financings, third-party funding, marketing and distribution arrangements, as well as other collaborations, strategic alliances and licensing arrangements, or any combination of these approaches.
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• the timing of process validation for particular product candidates;
−Removed: • the timing of addressing any additional data required to obtain FDA approval of AQST-109 and delays as a result thereof;
+Added: • the timing of addressing any additional data required to obtain FDA approval of Anaphylm and delays as a result thereof;
• changes in the timing of and the amount we spend to research, develop, acquire, license or promote new product candidates;
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At December 31, 2023, we had an aggregate principal amount of $45.0 million of outstanding indebtedness, represented by the 13.5% Notes.
−Removed: In the future, we may need to raise additional funds.
+Added: In the future, we will need to raise additional funds.
Because of our indebtedness:
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We are dependent upon the commercial success of our licensed products and other licensing activities to generate revenue for the near future.
−Removed: Although we are in the process of testing and developing proprietary product candidates and may seek to acquire rights in other approved drugs, we anticipate that our ability to generate revenue and to become profitable in the near future will depend upon the continued commercial success of Sympazan, Suboxone, Exservan, Azstarys, and KYNMOBI in the U.S., the continued commercial success of Ondif® in Brazil, and our ability to commercialize our product candidate Libervant subject to FDA approval for U.S.
+Added: Although we are in the process of testing and developing proprietary product candidates and may seek to acquire rights in other approved drugs, we anticipate that our ability to generate revenue and to become profitable in the near future will depend upon the continued commercial success of Sympazan, Suboxone, Exservan, and Azstarys in the U.S., the continued commercial success of Ondif in Brazil, and our ability to commercialize our product candidate Libervant subject to FDA approval for U.S.
market access, including our ability to overcome the current orphan drug market exclusivity of another approved drug, which is difficult to establish and with limited precedent.
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If our current products are not commercially successful, our ability to generate manufacturing and sale margins and licensing or royalty revenues will be impaired.
−Removed: Without those revenues, our ability to continue planned development initiatives and commercialization efforts would be limited.
+Added: Without those revenues, our ability to continue planned development initiatives and commercialization efforts
+Added: would be limited.
Due to our dependence on the commercial success of our products, delays or setbacks in the commercial success of any of these products would likely materially adversely affect our business, prospects, results and operations and financial consideration.
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The litigation involves allegations that we have engaged in conduct intended to interfere with the introduction of generic drug products that would compete with Suboxone in the marketplace.
−Removed: On October 19, 2022, the court in that lawsuit entered an order dismissing all claims against the Company in the lawsuit.
−Removed: The order dismissing all claims against the Company could be appealed by the plaintiffs in the case.
−Removed: The Company is not able to determine or predict whether the plaintiffs will appeal the order or the ultimate outcome of this proceeding or provide a reasonable estimate or range of estimates of the possible outcome or loss, if any, in this matter.
+Added: On October 19, 2022, the court in that lawsuit entered an order dismissing all claims against Aquestive in the lawsuit.
+Added: The order dismissing all claims against Aquestive could be appealed by the plaintiffs in the case.
+Added: We are not able to determine or predict whether the plaintiffs will appeal the order or the ultimate outcome of this proceeding or provide a reasonable estimate or range of estimates of the possible outcome or loss, if any, in this matter.
For more information, please see Part II Item 8.
Financial Statements and Supplementary Data, Note 22, Contingencies .
−Removed: KYNMOBI ® is commercialized by Sunovion Pharmaceuticals, Inc., therefore, it is unlikely we will receive additional contingent payments pursuant to the Monetization Agreement in the amount or at the time we have planned, or at all, and any failure to receive such payments would have a material adverse impact on our financial position and capital needs.
−Removed: On November 3, 2020, we entered into a Purchase and Sale Agreement (the "Monetization Agreement") with MAM Pangolin Royalty, LLC, an affiliate of Marathon Asset Management ("Marathon").
−Removed: Under the terms of the Monetization Agreement, we sold all of our contractual rights to receive royalties and milestone payments due under the Sunovion License Agreement related to Sunovion's apomorphine film product, KYNMOBI, for the treatment of off episodes in Parkinson’s disease patients, which received approval from the FDA on May 21, 2020.
−Removed: We have received an aggregate amount of $50.0 million through December 31, 2022 under the Monetization Agreement.
−Removed: Under the Monetization Agreement, additional aggregate contingent payments of up to $75.0 million may be due to us upon the achievement of worldwide royalty and other commercial targets within a specified timeframe, which could result in total potential proceeds of $125.0 million.
−Removed: Based on the current forecast by Sunovion of estimated KYNMOBI sales as of December 31, 2022, the Company likely may not receive any of the additional contingent payments under the Monetization agreement.
−Removed: With the upfront proceeds received under the Monetization Agreement, we repaid $22.5 million of the 12.5% Notes, and issued $4.0 million of new 12.5% Notes in lieu of paying a prepayment premium due to the Holders under the Indenture on the early repayment of the 12.5% Notes, reducing the aggregate principal balance of 12.5% Notes outstanding to $51.5 million as of December 31, 2022.
Risks Related to Development and Commercialization of Our Products and Product Candidates
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market access.
−Removed: On September 25, 2020, we received a Complete Response Letter (CRL) from the FDA for Libervant.
+Added: On September 25, 2020, we received a CRL from the FDA for Libervant.
The FDA issues a CRL to indicate that the review cycle for an application is complete, but the application cannot be approved in its current form.
−Removed: In the CRL, the FDA cited that, in a study submitted by the Company with the NDA, certain weight groups showed a lower drug exposure level than desired.
+Added: In the CRL, the FDA cited that, in a study submitted by Aquestive with the NDA, certain weight groups showed a lower drug exposure level than desired.
In a Type A meeting with the FDA in November 2021, the FDA confirmed that these issues may be addressed by utilizing modeling and simulations for an updated dosing regimen.
−Removed: The Company resubmitted a revised weight-based dosing regimen with modeling and simulations in December 2020.
−Removed: In February 2021, the FDA provided feedback on the December 2020 submission which provided clarity regarding the information that the FDA expected to see in our
−Removed: population pharmacokinetic (PK) model and safety data as it relates specifically to the patient population included in the studies.
−Removed: In June 2021, we resubmitted our New Drug Application ("NDA") to the FDA.
+Added: We resubmitted a revised weight-based dosing regimen with modeling and simulations in December 2020.
+Added: In February 2021, the FDA provided feedback on the December 2020 submission which provided clarity regarding the information that the FDA expected to see in our population pharmacokinetic (PK) model and safety data as it relates specifically to the patient population included in the studies.
+Added: In June 2021, we resubmitted our NDA to the FDA.
In July 2021, the FDA accepted our resubmission filing of the NDA and assigned a PDUFA target goal date of December 23, 2021.
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Concurrently, we spoke with the FDA Office of Orphan Products Development and provided additional information supplementing our original correspondence to the group.
−Removed: On December 20, 2021, we received notification from the FDA that it was not ready to act by the PDUFA target goal date of December 23, 2021 for the Company’s NDA for Libervant Buccal Film, and was unable to provide an estimate of the timing of an expected action.
+Added: On December 20, 2021, we received notification from the FDA that it
+Added: was not ready to act by the PDUFA target goal date of December 23, 2021 for our NDA for Libervant Buccal Film and was unable to provide an estimate of the timing of an expected action.
On February 15, 2022, the FDA notified us that it was continuing to consider whether the orphan-drug exclusivity granted for another approved product affects the approvability of Libervant and could not provide a specific update regarding timeliness or an anticipated action date for approval of Libervant.
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This process from development to commercialization can take many years and will likely require the expenditure of substantial resources beyond the proceeds we currently have on hand, without any guarantee or assurance that we will be successful with regulatory approval, or commercial success, of such product candidate.
−Removed: Even if we obtain approval from the FDA and comparable foreign regulatory authorities for our current and future product candidates, any approval might contain significant limitations related to use restrictions for specified age groups, warnings, precautions or contraindications, or may be subject to burdensome post-approval study or risk management requirements.
+Added: Even if we obtain approval from the FDA and comparable foreign regulatory authorities for our current and future product candidates, any approval might contain significant limitations related to use restrictions for specified age groups,
+Added: warnings, precautions or contraindications, or may be subject to burdensome post-approval study or risk management requirements.
If we are unable to obtain regulatory approval, or any approval contains significant limitations, we may not be able to obtain sufficient funding or generate sufficient revenue to continue the development of that product candidate or any other product candidate that we may in-license, develop or acquire in the future.
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• the FDA disagreeing as to the design, protocol or implementation of our clinical studies;
−Removed: • the delay or refusal of regulators or institutional review boards, or IRBs, to authorize us to commence a clinical trial at a prospective trial site;
+Added: • the delay or refusal of regulators or IRBs, to authorize us to commence a clinical trial at a prospective trial site;
• changes in regulatory requirements, policies and guidelines;
−Removed: • delays or failure to reach an agreement on acceptable terms with prospective clinical research organizations, or CROs, and clinical trial sites;
+Added: • delays or failure to reach an agreement on acceptable terms with prospective CROs, and clinical trial sites;
• the inability to enroll or delays in enrolling a sufficient number of patients in trials, particularly in orphan indications, to observe statistically significant treatment effects in the trial;
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It is possible that we may not complete development of our product candidates or obtain regulatory approval for those product candidates.
−Removed: Even if we do complete development and obtain regulatory approval for our product candidates, our product candidates may not gain market acceptance among patients, physicians, nurses, pharmacists, the medical community or third-party payors, which is critical to commercial success.
+Added: Even if we do complete development and obtain regulatory approval for our product candidates, our product candidates may not gain market acceptance among patients, physicians, nurses, pharmacists, the medical community or
+Added: third-party payors, which is critical to commercial success.
Market acceptance of our products and any product candidate for which we receive approval depends on a number of factors, including:
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Therefore, coverage and reimbursement for products can differ significantly from payor to payor.
−Removed: As a result, the coverage determination process is generally a time-consuming and costly process that requires us to provide scientific and clinical support for the use of our products to each payor separately, with no assurance that coverage and adequate reimbursement will be applied consistently or obtained in the first instance.
+Added: As a result, the coverage determination process is generally a time-consuming and costly process that requires us to provide scientific and clinical support for the use of our products to each payor
+Added: separately, with no assurance that coverage and adequate reimbursement will be applied consistently or obtained in the first instance.
Furthermore, rules and regulations regarding reimbursement change frequently, in some cases on short notice, and we believe that changes in these rules and regulations are likely.
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A person or entity no longer needs to have actual knowledge of this statute or specific intent to violate it;
−Removed: • federal civil and criminal false claims laws, including, without limitation, the False Claims Act, and civil monetary penalty laws which prohibit, among other things, individuals or entities from knowingly presenting, or causing to be presented, claims for
−Removed: payment or approval from Medicare, Medicaid or other government payors that are false or fraudulent or making a false statement to avoid, decrease or conceal an obligation to pay money to the federal government.
+Added: • federal civil and criminal false claims laws, including, without limitation, the False Claims Act, and civil monetary penalty laws which prohibit, among other things, individuals or entities from knowingly presenting, or causing to be presented, claims for payment or approval from Medicare, Medicaid or other government payors that are false or fraudulent or making a false statement to avoid, decrease or conceal an obligation to pay money to the federal government.
The PPACA provides, and recent government cases against pharmaceutical and medical device manufacturers support, the view that federal Anti-Kickback Statute violations and certain marketing practices, including off-label promotion, may implicate the False Claims Act;
−Removed: • the federal Health Insurance Portability and Accountability Act of 1996, or HIPAA, which created federal criminal statutes that prohibit a person from knowingly and willfully executing a scheme or making false or fraudulent statements to defraud any healthcare benefit program, regardless of the payor ( e.g., public or private);
+Added: • HIPAA created federal criminal statutes that prohibit a person from knowingly and willfully executing a scheme or making false or fraudulent statements to defraud any healthcare benefit program, regardless of the payor ( e.g., public or private);
• HIPAA, as amended by the Health Information Technology for Economic and Clinical Health Act, or HITECH, which imposes certain requirements relating to the privacy, security and transmission of individually identifiable health information without appropriate authorization on entities subject to the rule, such as health plans, healthcare clearinghouses and certain healthcare providers, and their respective business associates who provide services involving the creation, use or disclosure of HIPAA protected health information;
1 unchanged sentence
(i) payments or other “transfers of value” made to physicians, physician assistants, nurse practitioners, clinical nurse specialists, certified nurse anesthetists, certified nurse-midwives and teaching hospitals;
−Removed: and (ii) ownership and investment interests held by physicians and their immediate family members, with such information being made publicly available through a searchable website;
+Added: and (ii) ownership and investment
+Added: interests held by physicians and their immediate family members, with such information being made publicly available through a searchable website;
• state and foreign law equivalents of each of the above federal laws;
19 unchanged sentences
• expansion of eligibility criteria for Medicaid programs by, among other things, allowing states to offer Medicaid coverage to certain individuals with income at or below 133% of the federal poverty level, thereby potentially increasing a manufacturer’s Medicaid rebate liability;
−Removed: • expansion of manufacturers’ rebate liability under the Medicaid Drug Rebate Program by increasing the minimum rebate for both branded and generic drugs and revising the definition of “average manufacturer price,” or AMP, for calculating and reporting Medicaid drug rebates on outpatient prescription drug prices and extending rebate liability to prescriptions for individuals enrolled in Medicare Advantage plans;
+Added: • expansion of manufacturers’ rebate liability under the Medicaid Drug Rebate Program by increasing the minimum rebate for both branded and generic drugs and revising the definition of “average manufacturer price,” or AMP,
+Added: for calculating and reporting Medicaid drug rebates on outpatient prescription drug prices and extending rebate liability to prescriptions for individuals enrolled in Medicare Advantage plans;
• addition of more entity types eligible for participation in the Public Health Service 340B drug pricing program, or the 340B program;
• establishment of the Medicare Part D coverage gap discount program by requiring manufacturers to provide a 50% point-of-sale-discount off the negotiated price of applicable brand drugs to eligible beneficiaries during their coverage gap period as a condition for the manufacturers’ outpatient drugs to be covered under Medicare Part D;
−Removed: • the Bipartisan Budget Act of 2018, or BBA, that among other things, increased the manufacturer’s subsidy under this program from 50% to 70% of the negotiated price, beginning in 2019;
+Added: • the BBA, that among other things, increased the manufacturer’s subsidy under this program from 50% to 70% of the negotiated price, beginning in 2019;
• a new Patient-Centered Outcomes Research Institute to oversee, identify priorities in, and conduct comparative clinical effectiveness research, along with funding for such research;
32 unchanged sentences
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 for or commercialize our product candidates and our business could be substantially harmed.
−Removed: We have relied upon and plan to continue to rely upon third-party contract research organizations, or CROs, to monitor and manage data for our preclinical and clinical programs.
+Added: We have relied upon and plan to continue to rely upon third-party CROs to monitor and manage data for our preclinical and clinical programs.
We rely on these parties for execution of our preclinical studies and clinical trials, and control only certain aspects of their activities.
4 unchanged sentences
We cannot assure you that upon inspection by a given regulatory authority, such regulatory authority will determine that any of our clinical trials comply with GCP regulations.
−Removed: In addition, our clinical trials must be conducted with product produced under the current good manufacturing practice, or cGMP, regulations.
+Added: In addition, our clinical trials must be conducted with product produced under the current cGMP regulations.
While we have agreements governing activities of our CROs, we have limited influence over their actual performance.
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If these third parties do not successfully carry out their contractual duties or meet expected deadlines, we will not be able to complete, or may be delayed in completing, clinical trials required to support future regulatory submissions and approval of our product candidates and we would likely be in default in our supply commitments and obligations for our licensed products, which could result in the termination of our supply agreements, our incurring potential default damages and our loss of significant revenues.
−Removed: Our licensed products and product candidates are highly reliant on very complex sterile techniques and personnel aseptic techniques.
The facilities used by us, and by our third-party API manufacturers, to manufacture our licensed products and product candidates must maintain a compliance status acceptable to the FDA or other applicable regulatory authorities pursuant to inspections that will be conducted after we submit our NDA to the FDA.
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In addition, we have no control over the ability of third-party API manufacturers to maintain adequate quality control, quality assurance and qualified personnel.
−Removed: Further, as we scale up manufacturing of our product candidates and conduct required stability testing, product, packaging, equipment and process-related issues may require refinement or resolution in order for us to proceed with our planned clinical trials and obtain regulatory approval for commercialization of our product candidates.
+Added: Further, as we scale up manufacturing of our product
+Added: candidates and conduct required stability testing, product, packaging, equipment and process-related issues may require refinement or resolution in order for us to proceed with our planned clinical trials and obtain regulatory approval for commercialization of our product candidates.
In the future, for example, we may identify impurities in the product manufactured by us or for us for commercial supply, which could result in increased scrutiny by the regulatory agencies, delays in our clinical program and regulatory approval, increases in our operating expenses, or failure to obtain or maintain approval for our licensed products and product candidates.
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If we or our manufacturers were to encounter any of these difficulties, or otherwise fail to comply with their contractual obligations, our ability to manufacture our products, or to make our product candidates available for clinical trials and development purposes or to further commercialize any of our licensed products and product candidates in the United States, would be jeopardized.
−Removed: Any delay or interruption in our ability to meet commercial
−Removed: demand may result in the loss of significant potential revenues and could adversely affect our ability to gain market acceptance for approved products as well as a potential default of our supply commitments or obligations.
+Added: Any delay or interruption in our ability to meet commercial demand may result in the loss of significant potential revenues and could adversely affect our ability to gain market acceptance for approved products as well as a potential default of our supply commitments or obligations.
In addition, any delay or interruption in the supply of clinical trial supplies could delay the completion of clinical trials, increase the costs associated with maintaining clinical trial programs and, depending upon the period of delay, require us to commence new clinical trials at additional expense or terminate clinical trials completely.
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We, along with our third-party providers, must comply with all applicable regulatory requirements of the FDA and foreign authorities.
−Removed: We, or our API and component manufacturers, must supply all necessary documentation in support of our regulatory filings for our product candidates on a timely basis and must adhere to the FDA’s good laboratory practices, or GLP, and cGMP regulations enforced by the FDA through its facilities inspection program, and the equivalent standards of the regulatory authorities in other countries.
+Added: We, or our API and component manufacturers, must supply all necessary documentation in support of our regulatory filings for our product candidates on a timely basis and must adhere to the FDA’s GLP and cGMP regulations enforced by the FDA through its facilities inspection program, and the equivalent standards of the regulatory authorities in other countries.
Any failure by us or by our third-party API or component manufacturers to comply with cGMP or failure to scale-up manufacturing processes, including any failure to deliver sufficient quantities of product candidates in a timely manner, could lead to a delay in, or failure to obtain, regulatory approval of any of our product candidates.
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In some cases, we may be responsible for continuing development of a product or product candidate or research program under a collaboration, and the payment we receive from our licensee may be insufficient to cover the cost of this development.
−Removed: Moreover, collaborations and sales and marketing arrangements are complex and time consuming to negotiate, document and implement, and they may require substantial resources to maintain.
+Added: Moreover, collaborations and sales and marketing
+Added: arrangements are complex and time consuming to negotiate, document and implement, and they may require substantial resources to maintain.
We are subject to a number of additional risks associated with our dependence on collaborations with third parties, the occurrence of which could cause our collaborative arrangements to fail, including that:
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We may experience difficulties in managing growth if our business expands to meet future needs, which could disrupt our operations.
−Removed: Although it is not expected to be imminent, if our Company needs to expand to meet demands in growth of our manufacturing operations, commercialization of Libervant, if granted U.S.
+Added: Although it is not expected to be imminent, if we need to expand to meet demands in growth of our manufacturing operations, commercialization of Libervant, if granted U.S.
market access, or additions to our product pipeline in the future, we would expect to expand our employee base to increase our managerial, scientific and engineering, operational, sales, marketing, financial and other resources and to hire more consultants and contractors.
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We have procured product liability insurance with respect to the sale of our licensed products and all clinical trials performed to date for which we were responsible ( i.e., in respect of our internal product pipeline).
−Removed: Further, we may seek to expand our insurance coverage for our licensed products and our marketing and commercialization of any future approved product candidates as well as other risks related to our business.
+Added: Further, we may seek to expand our insurance coverage for our
+Added: licensed products and our marketing and commercialization of any future approved product candidates as well as other risks related to our business.
Our current product liability insurance coverage may not be sufficient to reimburse us for any expenses or losses we may suffer.
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Despite the implementation of security measures, our internal computer systems and those of third parties with which we contract are vulnerable to damage from cyber-attacks, computer viruses, unauthorized access, natural disasters, terrorism, war and telecommunication and electrical failures.
−Removed: We have previously been the target of a phishing attack that resulted in unauthorized access to email.
−Removed: While our systems have been secured and strengthened, there can be no assurance that we will not experience cyber-attacks in the future, suffer indirect consequences from cyber-attack on a third-party, or fail to anticipate, identify or offset such threats of potential cyber-attacks or security breaches in a timely manner.
+Added: We have previously been the target of a phishing attack that resulted in unauthorized access to our email system.
+Added: While our systems have been secured and strengthened, there can be no assurance that we will not experience cyber-attacks in the future, suffer indirect consequences from a cyber-attack on a third-party, or fail to anticipate, identify or offset threats of potential cyber-attacks or security breaches in a timely manner.
This is especially so considering the nature of cyber-attack techniques, which change frequently, can be difficult to detect for extended periods of time and often are not recognized until they succeed.
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We cannot eliminate the risk of accidental contamination or injury from these materials, which could cause an interruption of our commercialization efforts, research and development efforts and business operations, environmental damage resulting in costly clean-up and liabilities under applicable laws and regulations governing the use, storage, handling and disposal of these materials and specified waste products.
−Removed: We cannot guarantee that
−Removed: that the safety procedures utilized by third-party manufacturers and suppliers with whom we may contract will comply with the standards prescribed by laws and regulations or will eliminate the risk of accidental contamination or injury from these materials.
+Added: We cannot guarantee that that the safety procedures utilized by third-party manufacturers and suppliers with whom we may contract will comply with the standards prescribed by laws and regulations or
+Added: will eliminate the risk of accidental contamination or injury from these materials.
In such an event, we may be held liable for any resulting damages and such liability could exceed our resources and U.S.
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These events have resulted in the withdrawal of drug products, revisions to drug labeling that further limit use of the drug products and the establishment of risk management programs that may, for example, restrict distribution of drug products after approval.
−Removed: The Food and Drug Administration Amendments Act of 2007, or FDAAA, grants significant expanded authority to the FDA, much of which is aimed at improving the safety of drug products before and after approval.
+Added: The FDAAA, grants significant expanded authority to the FDA, much of which is aimed at improving the safety of drug products before and after approval.
In particular, the FDAAA authorizes the FDA to, among other things, require post-approval studies and clinical trials, mandate changes to drug labeling to reflect new safety information and require risk evaluation and mitigation strategies for certain drugs, including certain currently approved drugs.
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The patent applications that we own, or in-license, may fail to result in issued patents with claims that cover the products or product candidates, if approved, in the United States or in foreign countries or territories.
−Removed: If this were to occur, early generic competition could be expected against our products and product candidates, if approved.
+Added: If this were to occur,
+Added: early generic competition could be expected against our products and product candidates, if approved.
There may be relevant prior art relating to our patents and patent applications which could invalidate a patent or prevent a patent from issuing based on a pending patent application.
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Therefore, these patents and patent applications may not be prosecuted and enforced in a manner consistent with the best interests of our business.
−Removed: In addition to the protection afforded by patents, we rely on trade secret protection and confidentiality agreements to protect proprietary know-how that is not patentable, processes for which patents are difficult to enforce or which we choose not to seek to patent, and any other elements of our drug development and reformulation processes that involve proprietary know-how, information or technology that is not covered by
+Added: In addition to the protection afforded by patents, we rely on trade secret protection and confidentiality agreements to protect proprietary know-how that is not patentable, processes for which patents are difficult to enforce or which we choose not to seek to patent, and any other elements of our drug development and reformulation processes that involve proprietary know-how, information or technology that is not covered by patents.
Although we generally require all of our colleagues to assign their inventions to us, and we generally seek to have all of our colleagues, consultants, advisors and any third parties who have access to our proprietary know-how, information or technology to enter into confidentiality agreements, we cannot provide any assurances that all such agreements have been duly executed or that our trade secrets and other confidential proprietary information will not be disclosed or that competitors will not otherwise gain access to our trade secrets or independently develop substantially equivalent information and techniques.
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The legal systems of certain countries, particularly certain developing countries, do not favor the enforcement of patents, trade secrets and other intellectual property protection, which could make it difficult for us to stop the infringement of our patents or marketing of competing products in violation of our proprietary rights generally.
−Removed: Proceedings to enforce our patent rights in other jurisdictions, whether or not successful, could result in substantial costs and divert our efforts and attention from other aspects of our business, could put our patents at risk of being invalidated or interpreted narrowly and our patent applications at risk of not issuing as patents, and could provoke third parties to assert claims against us.
+Added: Proceedings to enforce our patent rights in other jurisdictions, whether or not successful, could result in substantial costs and divert our efforts and attention from other aspects of our business, could put our patents at risk of being invalidated or
+Added: interpreted narrowly and our patent applications at risk of not issuing as patents, and could provoke third parties to assert claims against us.
We may not prevail in any lawsuits that we initiate, and the damages or other remedies awarded, if any, may not be commercially meaningful.
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These include provisions that affect the way patent applications will be prosecuted and may also affect patent litigation.
−Removed: The United States Patent and Trademark Office, or USPTO, has developed new and untested regulations and procedures to govern the full implementation of the Leahy-Smith Act, and many of the substantive changes to patent law associated with the Leahy-Smith Act, and in particular, the first to file provisions, only
−Removed: became effective in March 2013.
+Added: The United States Patent and Trademark Office, or USPTO, has developed new and untested regulations and procedures to govern the full implementation of the Leahy-Smith Act, and many of the substantive changes to patent law associated with the Leahy-Smith Act, and in particular, the first to file provisions, only became effective in March 2013.
The Leahy-Smith Act has also introduced procedures making it easier for third parties to challenge issued patents, as well as to intervene in the prosecution of patent applications.
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Changes in either patent laws or in interpretations of patent laws in the United States and other countries may materially diminish the value of our intellectual property or narrow the scope of our patent protection.
−Removed: We are currently, and in the future will likely continue to be, involved in lawsuits to protect or enforce our patents or the patents of our licensors, which are expensive, require us to expend substantial financial resources, are time consuming, may continue for many years for one or more claims and may be unsuccessful.
−Removed: Competitors may infringe our patents or the patents of any licensors and potential licensors.
+Added: We are currently, and in the future will likely continue to be, involved in lawsuits to protect or enforce our patents.
+Added: These lawsuits are expensive and require us to expend substantial financial resources, are time consuming, may continue for many years for one or more claims and may be unsuccessful.
+Added: Competitors may infringe our patents or the patents of any potential licensors.
To counter infringement or unauthorized use, we have been, and in the future may be, required to file infringement claims, which are expensive and time-consuming.
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Of these, cases against all but one of the six generic companies have been resolved.
−Removed: We are also seeking to enforce our patent rights in multiple cases as further described in Part II Item 8.
−Removed: Financial Statements and Supplementary Data, Note 20.
−Removed: Contingencies .
+Added: We are also seeking to enforce our patent rights as further described in Part II Item 8.
+Added: Financial Statements and Supplementary Data, Note 22, Contingencies .
In an infringement proceeding, a court may decide that a patent of ours or our licensors 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.
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There is a risk that additional third parties may choose to engage in litigation with us to enforce or to otherwise assert their patent rights against us.
−Removed: Even if we believe any of those claims are without merit, a court of competent jurisdiction could hold that these third-party patents are valid, enforceable and infringed, and the holders of any such patents may be able to block our ability to commercialize such product or product candidates unless we obtain a license under the applicable patents, or until such patents expire or are finally determined to be invalid or unenforceable.
+Added: Even if we believe any of those claims are without merit, a court of competent jurisdiction could hold that these third-party patents are valid, enforceable and infringed, and the holders of any such patents may be able to block our ability to commercialize such product or product candidates unless we obtain a license under the applicable patents, or until such patents expire or are finally
+Added: determined to be invalid or unenforceable.
Similarly, if any third-party patents were held by a court of competent jurisdiction to cover aspects of our technology, holders of any such patents may be able to block our ability to develop and commercialize the applicable product or product candidate unless we obtained a license or until such patent expires or is finally determined to be invalid, unenforceable or not infringed by our product or technology.
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The commercial opportunity for our products or product candidates could be significantly harmed if competitors are able to develop and commercialize alternative formulations of our products or product candidates that are different from ours and do not infringe our issued patents covering our products or use of our products.
−Removed: Suboxone, Zuplenz, Sympazan, Exservan, KYNMOBI, and Azstarys have been approved by the FDA, and other product candidates may be approved by the FDA in the future.
+Added: Suboxone, Zuplenz, Sympazan and Exservan have been approved by the FDA, and other product candidates may be approved by the FDA in the future.
As additional products of ours are on the market, one or more third parties may also challenge the patents that we control covering our products, which could result in the invalidation or unenforceability of some or all of the relevant patent claims of our issued patents covering our products.
1 unchanged sentence
In patent litigation in the United States, defendant counterclaims alleging invalidity and/or unenforceability are common, and there are numerous grounds upon which a third-party can assert invalidity or unenforceability of a patent.
−Removed: parties may also raise similar claims before administrative bodies in the United States or abroad, even outside the context of litigation.
+Added: Third parties may also raise similar claims before administrative bodies in the United States or abroad, even outside the context of litigation.
Such mechanisms include re-examination, post-grant review, and equivalent proceedings in foreign jurisdictions ( e.g., opposition proceedings).
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In addition, Bratton Capital Management L.P.
−Removed: beneficially owned, directly, approximately 18.4% of our outstanding common stock as of December 31, 2022.
−Removed: Therefore, these stockholders may have, through their respective ownership positions, the ability to effectively influence or control matters requiring stockholder approval, including elections of directors, amendments of our organizational documents or approval of any merger, sale of assets or other major corporate transaction.
+Added: and its affiliates beneficially owned, directly, approximately 14.8% of our outstanding common stock as of December 31, 2023.
+Added: Therefore, these stockholders may have, through their respective ownership positions, the ability to influence matters requiring stockholder approval, including elections of directors, amendments of our organizational documents or approval of any merger, sale of assets or other major corporate transaction.
This may prevent or discourage unsolicited acquisition proposals or offers for our Common Stock that you may believe are in your best interest as one of our stockholders.
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If an “excess parachute payment” is made to Mr.
−Removed: Schobel, we may incur substantial costs related to a change in control of the Company due to the gross-up payment and the lost federal tax deduction for Mr.
+Added: Schobel, we may incur substantial costs related to a change in control of Aquestive due to the gross-up payment and the lost federal tax deduction for Mr.
Schobel’s excess parachute payments.
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These provisions may frustrate or prevent any attempts by our stockholders to replace or remove our current management by making it more difficult for stockholders to replace members of our board of directors, which is responsible for appointing the members of our management.
−Removed: In addition, we are subject to Section 203 of the Delaware General Corporation Law, which generally prohibits a Delaware corporation from engaging in any of a broad range of business combinations with an interested stockholder for a period of three years following the date on which the stockholder became an interested stockholder, unless such transactions are approved by our board of directors.
+Added: In addition, we are subject to Section 203 of the Delaware General Corporation
+Added: Law, which generally prohibits a Delaware corporation from engaging in any of a broad range of business combinations with an interested stockholder for a period of three years following the date on which the stockholder became an interested stockholder, unless such transactions are approved by our board of directors.
This provision could have the effect of delaying or preventing a change of control, whether or not it is desired by or beneficial to our stockholders.
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Our amended and restated certificate of incorporation designates the Court of Chancery of the State of Delaware as the sole and exclusive forum for certain types of actions and proceedings that may be initiated by our stockholders, which could limit our stockholders’ ability to obtain a favorable judicial forum for disputes with us or our directors, officers or employees.
−Removed: Our amended and restated certificate of incorporation provides that, subject to limited exceptions, the Court of Chancery of the State of Delaware will be the sole and exclusive forum for any derivative action or proceeding brought on our behalf, any action asserting a claim of breach of a fiduciary duty owed by any of our directors, officers or other employees to us or our stockholders, any action asserting a claim against us
−Removed: arising pursuant to any provision of the Delaware General Corporation Law, our amended and restated certificate of incorporation or our amended and restated bylaws, any action to interpret, apply, enforce or determine the validity of our certificate of incorporation or our amended and restated bylaws or any other action asserting a claim against us that is governed by the internal affairs doctrine.
+Added: Our amended and restated certificate of incorporation provides that, subject to limited exceptions, the Court of Chancery of the State of Delaware will be the sole and exclusive forum for any derivative action or proceeding brought on our behalf, any action asserting a claim of breach of a fiduciary duty owed by any of our directors, officers or other employees to us or our stockholders, any action asserting a claim against us arising pursuant to any provision of the Delaware General Corporation Law, our amended and restated certificate of incorporation or our amended and restated bylaws, any action to interpret, apply, enforce or determine the validity of our certificate of incorporation or our amended and restated bylaws or any other action asserting a claim against us that is governed by the internal affairs doctrine.
Any person or entity purchasing or otherwise acquiring any interest in shares of our capital stock shall be deemed to have notice of and to have consented to the provisions of our amended and restated certificate of incorporation described above.
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impact on employees and others or interruption of clinical trial visits or study procedures which may impact the integrity of subject data and clinical study endpoints;
−Removed: and interruption or delays in the operations of the U.S.
−Removed: FDA, and comparable foreign regulatory agencies, which may impact regulatory review and approval timelines.
+Added: and interruption or delays in the operations of the FDA, and comparable foreign regulatory agencies, which may impact regulatory review and approval timelines.
• If any third-party in our supply chain for any materials, including active pharmaceutical ingredients and other raw materials supply, which we need for our product candidates for our clinical trials and for the approved products we manufacture and distribute, are adversely impacted by restrictions resulting from the coronavirus pandemic, including staffing shortages, production slowdowns, or disruptions in freight and other transportation services and delivery distribution systems, our supply chain may be disrupted, limiting our ability to manufacture our product candidates for our clinical trials, conduct our research, development and clinical operations, and manufacture, distribute and sell our approved products.
1 unchanged sentence
However, we would expect that our colleagues in our research and development laboratory and manufacturing facilities would continue to work on site, with appropriate safety and health measures reimplemented in order to reduce risk of transmission, as they did throughout the pandemic.
−Removed: Should such a resurgence occur, our increased reliance on colleagues and other third parties on whom we rely working from home or having health issues may negatively impact productivity and could limit commercial launch activities for any new approved product, or disrupt, delay, or otherwise adversely impact our business.
+Added: Should such a resurgence occur, our increased reliance on colleagues and other third parties on whom we rely on working from home or having health issues may negatively impact productivity and could limit commercial launch activities for any new approved product, or disrupt, delay, or otherwise adversely impact our business.
In addition, this could increase our cybersecurity risk, create data accessibility concerns, and make us more susceptible to communication disruptions, any of which could adversely impact our business operations.
Our colleagues conducting research and development activities might not be able to access our laboratory or manufacturing facilities for an extended period of time as a result of any further closure of our facilities as well as the possibility of further governmental restrictions.
−Removed: As a result, this could delay timely completion of preclinical activities, including completing Investigational New Drug (IND)/Clinical Trial Application (CTA) enabling studies or our ability to select future development candidates, and initiation of clinical or other of our development programs and production and delivery of our products.
+Added: As a result, this could delay timely completion
+Added: of preclinical activities, including completing Investigational New Drug (IND)/Clinical Trial Application (CTA) enabling studies or our ability to select future development candidates, and initiation of clinical or other of our development programs and production and delivery of our products.
• The FDA and comparable foreign regulatory agencies may experience disruptions, have slower response times or be under-resourced to continue to monitor our clinical trials or to conduct required activities and review of our product candidates seeking regulatory review and such disruptions could materially affect the development, timing and approval of our product candidates.
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We do not yet know the full extent of potential delays or impacts on our business, our clinical trials, our research programs, the manufacturing, marketing, distribution and sale of our approved products, the healthcare system or the global economy.
−Removed: Given the uncertainties, the Company is unable to provide assurance that operations can be maintained as planned prior to the COVID-19 pandemic.
+Added: Given the uncertainties, we are unable to provide assurance that operations can be maintained as planned prior to the COVID-19 pandemic.
Our future success depends on our ability to retain key executives and to attract, retain and motivate qualified personnel
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In the European Union, the collection and use of personal health data has been governed by the provisions of the EU Data Protection Directive.
−Removed: The EU General Data Protection Regulation (GDPR) replaced the Data Protection Directive (with an enforcement date of May 25, 2018) and is designed to harmonize data privacy laws across Europe and to protect all EU citizens’ data privacy and will have a significant impact on how certain data is processed and handled.
+Added: The EU General Data Protection Regulation (GDPR) replaced the Data Protection Directive (with an enforcement date of May 25, 2018) and is designed to harmonize data privacy laws across Europe and to protect all EU citizens’ data privacy and will have a significant impact on
+Added: how certain data is processed and handled.
The European Union data protection laws and regulations impose strict obligations and restrictions on the ability to collect, analyze and transfer personal data, including health data clinical trials.
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Litigation may be necessary to defend against these claims.
−Removed: There is no guarantee of success in defending these
−Removed: claims and even if we are successful, litigation could result in substantial cost and be a distraction to our management and other colleagues from our core business.
+Added: There is no guarantee of success in defending these claims and even if we are successful, litigation could result in substantial cost and be a distraction to our management and other colleagues from our core business.
The market price of our Common Stock may be volatile and fluctuate substantially, which could result in substantial losses for purchasers of our Common Stock.
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• the other factors described in this “Risk Factors” section.
−Removed: If securities analysts do not publish research or reports about our business or if they publish negative evaluations of our stock, the price of our Common Stock could decline.
+Added: If securities analysts do not publish research or reports about our business or if they publish negative evaluations of our Company, the price of our Common Stock could decline.
The trading market for our Common Stock relies, in part, on the research and reports that industry and financial analysts publish about us or our business.
2 unchanged sentences
If any analysts then covering our business cease to cover our stock, we could lose visibility in the market for our stock, which in turn could cause our stock price to decline.
−Removed: We are an “emerging growth company,” and in addition, we are also a “smaller reporting company”, and we cannot be certain if the reduced reporting requirements applicable to emerging growth companies or smaller reporting companies will make our Common Stock less attractive to investors.
−Removed: We are an “emerging growth company,” as defined in the JOBS Act, and a “smaller reporting company”, as defined in Rule 405 under the Securities Act.
−Removed: For as long as we continue to be an emerging growth company, we may take advantage of exemptions from various reporting requirements that are applicable to other public companies that are not “emerging growth companies,” including exemption from compliance with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements, and exemptions from the requirements of holding a non-binding advisory vote on executive compensation.
−Removed: We will remain an emerging growth company until the earlier of (1) the last day of the fiscal year (a) following the fifth anniversary
−Removed: of the completion of our IPO (which is December 31, 2023), (b) in which we have total annual gross revenue of at least $1.07 billion, or (c) in which we are deemed to be a large accelerated filer, which means the market value of our common stock that is held by non-affiliates exceeds $700 million as of the last business day of our most recently completed second fiscal quarter, and (2) the date on which we have issued more than $1.0 billion in non-convertible debt during the prior three-year period.
−Removed: We also qualify as a “smaller reporting company,” meaning we are not an investment company, an asset-backed issuer, or a majority-owned subsidiary of a parent company that is not a "smaller reporting company" which allows us to take advantage of many of the same exemptions from disclosure requirements including reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements and certain reduced financial disclosures in our periodic reports, including this Annual Report on Form 10-K.
−Removed: In addition, we are eligible to remain a smaller reporting company, for so long as we have a public float (based on our Common Stock equity) of less than $250 million measured as of the last business day of our most recently completed second fiscal quarter or a public float (based on our Common Stock equity) or less than $700 million as of such date and annual revenues of less than $100 million during the most recently completed fiscal year.
+Added: As of December 31, 2023, we are no longer an “emerging growth company,” but still remain a “smaller reporting company”, and we cannot be certain if the reduced reporting requirements applicable to smaller reporting companies will make our Common Stock less attractive to investors.
+Added: As of December 31, 2023, we were no longer an “emerging growth company,” as defined in the JOBS Act.
+Added: While we were an emerging growth company, we were able to take advantage of exemptions from various reporting requirements that are applicable to other public companies that are not “emerging growth companies,” including exemption from compliance with the auditor attestation requirements of Section 404(b) of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements, and exemptions from the requirements of holding a non-binding advisory vote on executive compensation.
+Added: Even though we are no longer an emerging growth company, we remain exempt from the auditor attestation requirements of Section 404(b) of the Sarbanes-Oxley Act pursuant to rules of the SEC.
+Added: We remain a “smaller reporting company”, as defined in Rule 405 under the Securities Act which means that we are not an investment company, an asset-backed issuer, or a majority-owned subsidiary of a parent company that is not a “smaller reporting company” which allows us to take advantage of many of the same exemptions from disclosure requirements including reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements and certain reduced financial disclosures in our periodic reports, including this Annual Report on Form 10-K.
+Added: In addition, we are eligible to remain a smaller reporting company, for so long as we have a public float (based on our Common Stock equity) of less than $250 million measured as of the last business day of our most recently completed second fiscal quarter or a public float (based on our Common Stock equity) of less than $700 million as of such date and annual revenues of less than $100 million during the most recently completed fiscal year.
We cannot predict if investors will find our Common Stock less attractive because we may rely on these exemptions.
If some investors find our Common Stock less attractive as a result of these disclosure exemptions, there may be a less active trading market for our Common Stock and our stock price may be more volatile.
−Removed: Under the JOBS Act, emerging growth companies can also delay adopting new or revised accounting standards until such time as those standards apply to private companies.
−Removed: As an emerging growth company, we have elected to take advantage of the extended transition period afforded by the JOBS Act for the implementation of new or revised accounting standards and, as a result, we expect to comply with new or revised accounting standards not later than the relevant dates on which adoption of such standards is required for public emerging growth companies.
If we fail to maintain an effective system of internal control over financial reporting, we may not be able to accurately report our financial results or prevent fraud.
4 unchanged sentences
Inferior internal controls could also cause investors to lose confidence in our reported financial information, which could have a negative effect on the trading price of our Common Stock.
−Removed: If we fail to or exceed $1.00 per share for a minimum of ten consecutive business days by June 28, 2023, the Company's common stock may become subject to delisting pursuant to Nasdaq's Listing Rule 5450(a)(1).
−Removed: On December 30, 2022, the Company received a notice from The Nasdaq Stock Market (“Nasdaq”) that the Company is not in compliance with Nasdaq’s Listing Rule 5450(a)(1), as the minimum bid price of the Company’s Common Stock has been below $1.00 per share for 30 consecutive business days (the “Minimum Bid Price Requirement”).
−Removed: The notification of noncompliance has no immediate effect on the listing or trading of the Company’s Common Stock on The Nasdaq Global Market.
−Removed: The Company has 180 calendar days, or until June 28, 2023, to regain compliance with the Minimum Bid Price Requirement.
−Removed: To regain compliance, the minimum bid price of the Company’s Common Stock must meet or exceed $1.00 per share for a minimum of ten consecutive business days during this 180-calendar day grace period.
−Removed: In the event the Company does not regain compliance with the Minimum Bid Price Requirement by June 28, 2023, the Company may be eligible for an additional 180-calendar day compliance period if it elects to transfer to The Nasdaq Capital Market to take advantage of the additional compliance period offered on that market.
−Removed: To qualify, the Company would be required to meet the continued listing requirement for market value of publicly held shares and all other initial listing standards for The Nasdaq Capital Market, with the exception of the bid price requirement, and would need to provide written notice of its intention to cure the bid price deficiency during the second compliance period.
−Removed: If the Company does not regain compliance with the Minimum Bid Price Requirement by the end of the compliance period (or the second compliance period, if applicable), the Company’s Common Stock will become subject to delisting.
−Removed: In the event that the Company receives notice that its Common Stock is being delisted, the Nasdaq listing rules permit the Company to appeal a delisting determination by the Staff to a hearings panel.
Sales of a substantial number of shares of our Common Stock in the public market by our existing stockholders would cause our stock price to fall.
2 unchanged sentences
Certain holders of our securities are entitled to rights with respect to the registration of their shares under the Securities Act.
−Removed: Registration of these shares under the Securities Act have resulted in a substantial amount of these shares becoming freely tradable without restriction under the Securities Act.
+Added: Registration of these shares under the Securities Act have resulted in a substantial amount of these shares becoming freely
+Added: tradable without restriction under the Securities Act.
Any sales of securities by these stockholders could have a material adverse effect on the trading price of our Common Stock.
−Removed: Adverse developments affecting the financial services industry could adversely affect out current and projected business operations and our financial conditions and results of operation.
+Added: Adverse developments affecting the financial services industry could adversely affect our current and projected business operations and our financial conditions and results of operation.
Adverse developments that affect financial institutions, such as events involving liquidity that are rumored or actual, have in the past and may in the future lead to bank failures and market-wide liquidity problems.
−Removed: For example, on March 10, 2023, Silicon Valley Bank ("SVB") was closed by the California Department of Financial Protection and Innovation, which appointed the Federal Deposit Insurance Corporation ("FDIC") as receiver.
+Added: For example, on March 10, 2023, Silicon Valley Bank was closed by the California Department of Financial Protection and Innovation, which appointed the FDIC as receiver.
Similarly, on March 12, 2023, Signature Bank and Silvergate Capital Corp.
were each sent into receivership.
−Removed: The Department of the Treasury, the Federal Reserve and the FDIC released a statement that indicated that all depositors of SVB would have access to all of their funds, including funds held in uninsured deposit accounts, after only one business day of closure.
−Removed: Department of Treasury, FDIC and Federal Reserve Board have announced a program to provide up to $25 billion of loans to financial institutions secured by certain of such government securities held by financial institutions to mitigate the risk of potential losses on the sale of such instruments, widespread demands for customer withdrawals or other liquidity needs of financial institutions for immediate liquidity may exceed the capacity of such program.
−Removed: There is no guarantee, however, that the U.S.
+Added: Although the Department of the Treasury, the Federal Reserve and the FDIC in that situation took action to mitigate the risk of potential losses on the sale of such instruments, widespread demands for customer withdrawals or other liquidity needs of financial institutions for immediate liquidity may exceed the capacity of such program, there is no guarantee, however, that the U.S.
Department of Treasury, FDIC and Federal Reserve Board will provide access to uninsured funds in the future in the event of the closure of other banks or financial institutions, or that they would do so in a timely fashion.
−Removed: We do not hold cash deposits or securities at SVB and have not experienced any adverse impact to our liquidity or to our current and projected business operations, financial condition or results of operations.
−Removed: However, uncertainty remains over liquidity concerns in the broader financial services industry, and our business, our business partners, or industry as a whole may be adversely impacted in ways that we cannot predict at this time.
Although we assess our banking relationships as we believe necessary or appropriate, our access to cash in amounts adequate to finance or capitalization our current projected future business operations could be significantly impaired by factors that affect the financial institutions with which we have banking relationships, and in turn, us.
10 unchanged sentences
Any business partner or supplier bankruptcy or insolvency, or any breach or default by a business partner or supplier, or the loss of any significant business partner or supplier relationships, could result in material adverse impacts on our current and/or projected business operations and financial condition.
−Removed: Unresolved Staff Comments
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.