What changed in this filing

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Item 4. Controls and Procedures

2022-05-13 compared with 2021-11-30 · 38 added, 37 removed, 8 unchanged (90% of the section changed)

Controls and Procedures

maintain a system of disclosure controls and procedures, as defined in Rule 13a-15(e) or Rule 15d-15(e) under the Securities Exchange

Act of 1934, as amended (the “Exchange Act”), which is designed to provide reasonable assurance that information required

to be disclosed in our reports filed pursuant to the Exchange Act is accumulated and communicated to management in a timely manner.

recognizes that any disclosure controls and procedures, no matter how well designed and operated, can provide only reasonable assurance

of achieving their objectives.

Because there are inherent limitations in all control systems, no evaluation of controls can provide absolute

assurance that all control issues and instances of fraud have been or will be detected.

of Disclosure Controls and Procedures

management, with the participation of our Chief Executive Officer and Corporate Controller, evaluated, as of the end of the period

covered by this Quarterly Report on Form 10-Q, the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e)

management, with the participation of our principal executive officer and principal financial officer, evaluated, as of

the end of the period covered by this Form 10-Q, the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e)

and 15d-15(e) under the Exchange Act).

Based on that evaluation, and as a result of the material weakness described below, our Chief

Executive Officer and Corporate Controller concluded that, as of September 30, 2021, our disclosure controls and procedures were

not effective at the reasonable assurance level.

Executive Officer and Senior Director Finance concluded that, as of March 31, 2022, our disclosure controls and procedures were not effective

at the reasonable assurance level.

Weaknesses in Internal Control Over Financial Reporting

material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is

1 unchanged sentence

on a timely basis.

connection with the audits of our financial statements as of and for the years ended December 31, 2020 and December 31, 2019,

we identified a material weakness in our internal control over financial reporting.

The material weakness we identified pertains

to our oversight of work being performed for the Company by third-party service providers;

as the Company’s management review control

over information produced by a third-party service provider was not sufficiently precise to identify an error.

Specifically, as part

of the valuation of an intangible asset in connection with the acquisition of Cutanea, we failed to identify a computational

error within the valuation model for the Xepi ® intangible asset.

we have taken steps to enhance our internal control environment and continue to address the underlying cause of the material weakness

by the creation of additional controls including those designed to strengthen our review and validation of the work product from third-party

service providers, the steps we have taken to date, and that we are continuing to implement, may not be sufficient to remediate this

material weakness or to avoid the identification of material weaknesses in the future.

We will monitor the effectiveness of our remediation

plan and will make changes we determine to be appropriate.

are still in process of remediating this material weakness as of September 30, 2021.

If we are unable to remediate this material weakness,

or if we identify additional material weaknesses in the future or otherwise fail to maintain an effective system of internal control,

we may not be able to accurately or timely report our financial condition or results of operations, which may adversely affect investor

confidence in us and, as a result, our stock price.

II – OTHER INFORMATION

connection with the audits of our financial statements as of and for the years ended December 31, 2021 and December 31, 2020, we identified

a material weakness in our internal control over financial reporting.

The previously identified material weakness pertains to our oversight

of work being performed for the Company by third-party service providers;

as the Company’s management review control over information

produced by third-party service providers was not sufficiently precise to identify errors.

Specifically, as part of the valuation of

an intangible asset in connection with the acquisition of Cutanea, we failed to identify a computational error within the valuation model

for the Xepi ® intangible asset.

In addition, in 2021 an error in the valuation of the same intangible asset was identified

relating to insufficient information being provided to the third-party consultant in connection with an impairment assessment.

to the previously identified deficiency pertaining to management’s review of work performed by specialists, management has implemented

measures designed to improve our internal control over financial reporting including formalized reviews of transactions handled by the

However, in light of the prior year control deficiency, the remediation is still considered to be in process.

We will monitor

the effectiveness of our remediation plan and will continue to make changes we determine to be appropriate.

As a result, management has

concluded that the material weakness was not fully remediated as of March 31, 2022.

will continue its remediation work by adding steps to the engagement of third-party specialists for assistance with complex or judgmental

accounting areas, including checks and balances over the proper flow of information to the specialist to allow for an adequate understanding

of the transaction.

previously noted, we are still in process of remediating this material weakness as of March 31, 2022.

If we are unable to remediate this

material weakness, or if we identify additional material weaknesses in the future or otherwise fail to maintain an effective system of

internal control, we may not be able to accurately or timely report our financial condition or results of operations, which may adversely

affect investor confidence in us and, as a result, our stock price.

in Internal Control Over Financial Reporting

were no changes in our internal control over financial reporting during the most recent fiscal quarter ended March 31, 2022 that materially

affected, or is reasonably likely to materially affect, our internal control over financial reporting (as defined in Rule 13a-15(f) under

the Exchange Act).

OTHER INFORMATION

Legal Proceedings

discussion of Legal Proceedings in Note 18 to the financial statements included in Part 1, Item 1 of this report.

a smaller reporting company, we are not required to provide disclosure pursuant to this item in this Form 10-Q.

However, you should

carefully consider the “Risk Factors” included in the Final Prospectus, for a discussion

of important factors that could materially affect our business, financial condition and/or operating results.

information regarding legal proceedings in which we are involved, see Note 23 - Commitments and Contingencies under the subsection titled

“Legal Proceedings” in our Notes to Financial Statements in Part I, Item 1 of this Quarterly Report on Form 10-Q.

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 4. Controls and Procedures