Item 1A. Risk Factors
Item 1A. Risk Factors
There have been no material changes to the Risk Factors
previously disclosed in our 2024 Form 10-K and our quarterly report for the period ended September 30, 2024 (the “Q1 2025 10-Q”).
The risks described in our 2024 Form 10-K, our Q1 2025 10-Q and below are not the only risks facing our company. Additional risks and
uncertainties not currently known to the Company or that we currently deem to be immaterial also may materially adversely affect our business,
financial condition, and/or operating results.
Risks Relating to Our Business and Industry
We rely and will continue to rely on third parties
to conduct our clinical trials. If these third parties do not successfully carry out their contractual duties or meet expected deadlines
or do not successfully perform and comply with regulatory requirements, we may not be able to obtain regulatory approval of or commercialize
our product candidates.
We depend, and will continue to depend, on third parties,
including, but not limited to, contract research organizations (“CROs”), clinical trial sites and clinical trial principal
investigators, contract laboratories, IRBs, manufacturers, suppliers, and other third parties to conduct our clinical trials, including
those for our drug candidates bezisterim (NE3107) and BIV201. We rely heavily on these third parties over the course of our clinical trials,
and we control only certain aspects of their activities. Nevertheless, we retain ultimate responsibility for ensuring that each of our
studies is conducted in accordance with the protocol and applicable legal, regulatory, and scientific standards and regulations, and our
reliance on third parties does not relieve the Company of our regulatory responsibilities. We and these third parties are required to
comply with cGCPs, which are regulations and guidelines enforced by the FDA and comparable foreign regulatory authorities for the conduct
of clinical trials on product candidates in clinical development. Regulatory authorities enforce cGCPs through periodic inspections and
for-cause inspections of clinical trial principal investigators and trial sites. If, due to the failure of either the Company or a third
party, a clinical trial fails to comply with applicable cGCPs, FDA’s IND requirements, other applicable regulatory requirements,
or requirements set forth in the applicable IRB-approved protocol, the Company may be required to conduct additional clinical trials to
support our marketing applications, which would delay the regulatory approval process.
Although we design the clinical trials for our product
candidates, our CROs are tasked with facilitating and monitoring these trials. As a result, many aspects of our clinical development programs,
including site and investigator selection, and the conduct, timing, and monitoring of the study, is outside our direct control, either
partially or in whole. Our reliance on third parties to conduct clinical trials also results in less direct control over the collection,
management, and quality of data developed through clinical trials than would be the case if we were relying entirely upon our own employees.
Communicating with third parties can also be challenging, potentially leading to mistakes as well as difficulties in coordinating activities.
Our business may be impacted if any of these third parties violates applicable federal, state, or foreign laws and/or regulations, including
but not limited to FDA’s IND regulations, cGCPs, fraud and abuse or false claims laws, healthcare privacy and data security laws,
or provide the Company or government agencies with inaccurate, misleading, or incomplete data.
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Risks Relating To Our Common Stock
You may experience future dilution as a result
of future equity offerings or if we issue shares subject to options, warrants, stock awards or other arrangements.
As of December 31, 2024, our Articles of Incorporation,
as amended, authorize the issuance of 800,000,000 shares of Common Stock, and we had 18,478,307 shares of Common Stock issued and 18,451,981
issued and outstanding. Accordingly, we may issue up to an additional 781,548,019 shares of Common Stock. The future issuance of Common
Stock may result in substantial dilution in the percentage of our Common Stock held by our then existing stockholders. We may value any
Common Stock in the future on an arbitrary basis. The issuance of Common Stock for future services or acquisitions or other corporate
actions may have the effect of diluting the value of the shares held by our investors, might have an adverse effect on any trading market
for our Common Stock and could impair our ability to raise capital in the future through the sale of equity securities.
In order to raise additional capital, we may in the
future offer additional shares of our Common Stock or other securities convertible into or exchangeable for our Common Stock. We may sell
shares or other securities in offerings at a price per share that is less than the current market price of our securities, and investors
purchasing shares or other securities in the future could have rights superior to existing stockholders. The sale of additional shares
of our Common Stock or other securities convertible into or exchangeable for our Common Stock would dilute all of our stockholders, and
if such sales of convertible securities into or exchangeable into our Common Stock occur at a deemed issuance price that is lower than
the current exercise price of our outstanding warrants sold to Acuitas Group Holdings, LLC (“Acuitas”) in August 2022, the
exercise price for those warrants would adjust downward to the deemed issuance price pursuant to price adjustment protection contained
within those warrants.
As of December 31, 2024, there were warrants outstanding to purchase
an aggregate of 9,600,835 shares of our Common Stock at exercise prices ranging from $1.37 to $125.00 per share and 967,811 shares issuable
upon exercise of outstanding options at exercise prices ranging from $1.90 to $420.90 per share and restricted stock units totaling 97,067.
We may also grant additional options, warrants or equity awards. To the extent such shares are issued, the interest of holders of our
Common Stock will be diluted.
Moreover, we are obligated to issue shares of our
Common Stock upon achievement of certain clinical, regulatory and commercial milestones with respect to certain of our drug candidates
(i.e., bezisterim (NE3107), NE3291, NE3413, and NE3789) pursuant to the asset purchase agreement, dated April 27, 2021, by and among the
Company, NeurMedix and Acuitas, as amended on May 9, 2021. The achievement of these milestones could result in the issuance of up to 1.8
million shares of our Common Stock, further diluting the interest of holders of our Common Stock.
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Text extracted from the filing as submitted to EDGAR. Formatting, tables and exhibits are simplified for reading; the original document is authoritative for anything you rely on.