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Developing ddRNAi products is expensive, and we expect our research and development expenses to increase substantially in connection with our ongoing activities, particularly as we advance our product candidates in preclinical studies and clinical trials and as we undertake preclinical studies of new product candidates.
−Removed: On August 11, 2023 we closed an underwritten public offering in which we sold 875,949 shares of common stock, 15,126,226 pre-funded warrants to purchase 15,126,226 shares of common stock, and 16,002,175 common warrants to purchase up to 16,002,175 shares of common stock.
−Removed: The combined purchase price for each share of common stock and accompanying common warrant was $1.93, which was allocated as $1.9299 per share of common stock and $0.0001 per common warrant.
−Removed: Each pre-funded warrant was sold together with one common warrant at a combined price of $1.9299, which was allocated as $1.9298 per pre-funded warrant and $0.0001 per common warrant.
−Removed: In addition, the Company granted the underwriter an option to purchase up to 2,331,606 additional shares of common stock and/or up to 2,331,606 additional common warrants.
−Removed: As of August 15, 2023 the underwriter had partially exercised this option and purchased 458,134 additional shares of common stock and 458,134 additional common warrants.
−Removed: Net proceeds from the offering, including the impact of the underwriter’s partial exercise of its option and net of underwriting discounts, commissions, and other offering expenses, totaled $28.6 million.
We estimate that our cash and cash equivalents will be sufficient to fund the Company’s operations for at least the next twelve months after the date that this Annual Report is filed.
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In addition, we cannot guarantee that future financing will be available in sufficient amounts or on terms acceptable to us, if at all.
−Removed: Moreover, the terms of any financing may adversely affect the holdings or the rights of our shareholders, and the issuance of additional securities, whether equity or debt, by us, or the possibility of such issuance, may cause the market price of our common stock to decline.
+Added: Moreover, the terms of any financing may adversely affect the holdings or the rights of our stockholders, and the issuance of additional securities, whether equity or debt, by us, or the possibility of such issuance, may cause the market price of our common stock to decline.
If we incur indebtedness we may be required to agree to restrictive covenants, such as limitations on our ability to incur additional debt, limitations on our ability to acquire, sell or license intellectual property rights and other operating restrictions that could compromise our ability to conduct our business.
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To receive marketing approval, we must, among other things, demonstrate with evidence from clinical trials that the product candidate is both safe and effective for each indication for which approval is sought, and failure can occur in any stage of development.
−Removed: Satisfaction of the marketing approval requirements typically takes several years and the time needed to satisfy them may vary substantially, based on
−Removed: the type, complexity and novelty of the biopharmaceutical product.
+Added: Satisfaction of the marketing approval requirements typically takes several years and the time needed to satisfy them may vary substantially, based on the type, complexity and novelty of the biopharmaceutical product.
We cannot predict if or when we might receive regulatory approvals for any of our product candidates currently under development.
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The numbers, types and sizes of preclinical studies and clinical trials that will be required for regulatory approval varies depending on the product candidate, the disease or condition that the product candidate is designed to address and the regulations applicable to any particular product candidate.
−Removed: Approval policies, regulations or the type and amount of clinical data necessary to gain marketing approval may change during the course of a product candidate’s clinical development and may vary among jurisdictions, and there may be varying interpretations of data obtained from preclinical studies or clinical trials, any of which may cause delays or limitations in the marketing approval or the decision not to approve an application.
+Added: Approval policies, regulations or the type and amount of clinical data necessary to gain marketing approval may change during the course of a product candidate’s clinical development and may vary among jurisdictions, and there may be varying interpretations of data obtained from preclinical studies or clinical trials, any of which may cause
+Added: delays or limitations in the marketing approval or the decision not to approve an application.
Regulatory agencies can delay, limit or deny marketing approval of a product candidate for many reasons, including:
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Obtaining approval of a BLA can be a lengthy, expensive and uncertain process.
−Removed: If we fail to
−Removed: obtain FDA approval to market our product candidates, we will be unable to sell our product candidates in the United States, which will significantly impair our ability to generate revenues.
+Added: If we fail to obtain FDA approval to market our product candidates, we will be unable to sell our product candidates in the United States, which will significantly impair our ability to generate revenues.
In addition, failure to comply with FDA and non-U.S.
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ability to monitor patients adequately during and after treatment.
−Removed: the COVID-19 pandemic.
We or any potential collaborators plan to seek initial marketing approval for our product candidates in the United States, Canada, Europe and Israel.
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Clinical trials are expensive and time-consuming, and their outcome is uncertain.
−Removed: We may experience delays in initiating and completing any clinical trials that we are conducting or intend to conduct as a result of the COVID-19 pandemic, and we do not know whether our ongoing or planned clinical trials will begin or progress on schedule, need to be redesigned, enroll patients on time or be completed on schedule, or at all.
−Removed: We cannot guarantee that any clinical trials will be initiated or conducted as planned or completed on schedule, if at all.
+Added: We cannot guarantee that any
+Added: clinical trials will be initiated or conducted as planned or completed on schedule, if at all.
A failure of one or more clinical trials can occur at any stage of testing.
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clinical trials of our product candidates may produce negative or inconclusive results, and we may decide, or regulators may require us, to conduct additional clinical trials or discontinue product development programs.
−Removed: the severity, duration and impact of the COVID-19 pandemic.
Further, a clinical trial may be suspended or discontinued by us, our collaborators, the IRBs or the IBCs at the sites in which such trials are being conducted, the data safety monitoring board, or DSMB, for such trial, or by the FDA or comparable foreign regulatory authorities due to a number of factors, including the imposition of a clinical hold or termination of a trial due to failure to conduct the clinical trial in accordance with regulatory requirements or our clinical protocols, unforeseen safety issues or adverse side effects of our product candidate, or a product candidate from another company that shares similar properties, failure to demonstrate adequate benefit from using a product candidate, changes in governmental regulations or administrative actions or lack of adequate funding to continue the clinical trial.
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Treatment with our product candidates may produce undesirable side effects or adverse reactions or events.
−Removed: For example, the AAV vector and related capsid protein, which we are currently using to deliver many of our ddRNAi and silence and replace product candidates, could cause adverse immunological side effects due to preexisting and/or recall responses to the naturally occurring virus from which the vector is engineered, or to the DNA construct product itself.
+Added: For example, the AAV vector and related capsid protein, which we are currently using to deliver many of our ddRNAi and silence and replace product candidates, could cause adverse immunological side effects due to
+Added: preexisting and/or recall responses to the naturally occurring virus from which the vector is engineered, or to the DNA construct product itself.
These responses may also interfere with therapeutic efficacy if not identified and managed optimally.
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Other elements to assure safe use in a mandated REMS could include, but are not limited to, restrictions upon distribution and prescribing, additional prescriber training, establishment of patient registries and other measures that could limit commercialization of the product.
−Removed: Comparable foreign regulating authorities might require adoption of measures similar to a
+Added: Comparable foreign regulating authorities might require adoption of measures similar to a REMS.
Furthermore, if we or others later identify undesirable side effects caused by our product candidate, a number of potentially significant negative consequences could result, including:
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We cannot commercialize a product until the appropriate regulatory authorities have reviewed and approved the product candidate.
−Removed: Even if our product candidates demonstrate safety and efficacy in clinical trials, the regulatory
−Removed: agencies may not complete their review processes in a timely manner, or we may not be able to obtain regulatory approval.
+Added: Even if our product candidates demonstrate safety and efficacy in clinical trials, the regulatory agencies may not complete their review processes in a timely manner, or we may not be able to obtain regulatory approval.
Additional delays may result if an FDA Advisory Committee or comparable foreign regulatory authority recommends non-approval or restrictions on approval.
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Inadequate funding for the FDA and other government agencies could hinder their ability to hire and retain key leadership and other personnel, prevent new products and services from being developed or commercialized in a timely manner or otherwise prevent those agencies from performing normal business functions on which the operation of our business may rely, which could negatively impact our business.
−Removed: The ability of the FDA to review and approve new products can be affected by a variety of factors, including government budget and funding levels, ability to hire and retain key personnel and accept the payment of user fees, and statutory, regulatory, and policy changes.
+Added: The ability of the FDA to review and approve new products can be affected by a variety of factors, including government budget and funding levels, ability to hire and retain key personnel and accept the payment of user
+Added: fees, and statutory, regulatory, and policy changes.
Average review times at the agency have fluctuated in recent years as a result.
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Separately, in response to the COVID-19 pandemic, the FDA postponed most inspections of foreign manufacturing facilities and products, postponed routine surveillance inspections of domestic manufacturing facilities and is conducting only teleconference meetings.
−Removed: Regulatory authorities outside the United States may adopt similar restrictions or other policy measures in response to the COVID-19 pandemic.
+Added: Regulatory authorities in the United States and outside the United States may adopt similar restrictions or other policy measures in response to any future similar events.
If a prolonged government shutdown occurs, it could significantly impact the ability of the FDA to timely review and process our regulatory submissions, which could have a material adverse effect on our business.
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We do not have any products on the market and are early in our development efforts.
−Removed: All of our product candidates are in preclinical development.
Our product candidates derived from our platform technology may not successfully complete investigational new drug, or IND, enabling studies, and our research programs may fail to identify other potential product candidates for clinical development for a number of reasons.
−Removed: Our and our collaborators’ research methodology may be unsuccessful in identifying potential product candidates, our potential product candidates may not demonstrate the necessary preclinical outcomes to progress to clinical studies, or our product candidates may be shown to have harmful side effects or may have other characteristics that may make the products unmarketable or unlikely to receive marketing approval.
+Added: Our and our collaborators’ research methodology may be unsuccessful in identifying potential product candidates, our potential product candidates
+Added: may not demonstrate the necessary preclinical outcomes to progress to clinical studies, or our product candidates may be shown to have harmful side effects or may have other characteristics that may make the products unmarketable or unlikely to receive marketing approval.
If any of these events occur, we may be forced to discontinue our development efforts for a program or programs.
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We rely on third parties for certain aspects of the research, development, commercialization and marketing of our current and any future product candidates.
−Removed: Other than as provided for in our collaboration agreements, we have no control over the resources, time and effort that our collaborators may devote to the development of product candidates.
+Added: Other than as provided for in our collaboration agreements, we have no control over the resources, time and effort that our collaborators may devote to the development of product
We are dependent on our collaborators to conduct some aspects of the research and development of each of our product candidates, and expect to need access to them to facilitate and/or to complete the regulatory process.
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Suppliers and manufacturers must meet applicable manufacturing requirements and undergo rigorous facility and process validation tests required by regulatory authorities in order to comply with regulatory standards, such as cGMP.
−Removed: In the event that any of our suppliers or manufacturers fails to comply with such requirements or to perform its obligations to us in relation to quality, timing or otherwise, or if our supply of components or other materials becomes limited or interrupted for other reasons, we may be forced to manufacture the materials ourselves or enter into an agreement with another third party, which would be costly and delay any future clinical trials.
+Added: In the event that any of our suppliers or manufacturers fails to comply with such requirements or to perform its obligations to us in relation to quality, timing or otherwise, or if our supply of components or other
+Added: materials becomes limited or interrupted for other reasons, we may be forced to manufacture the materials ourselves or enter into an agreement with another third party, which would be costly and delay any future clinical trials.
In some cases, the technical skills or technology required to manufacture our product candidates may be unique or proprietary to the original manufacturer and we may have difficulty, or there may be contractual restrictions prohibiting us from, transferring such skills or technology to another third party.
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If a dispute arises, it may result in costly patent office procedures and litigation, and our collaborator may refuse to pay us while the dispute is ongoing.
−Removed: Furthermore, regardless of any resort to legal action, a dispute with a collaborator over intellectual property rights may damage our relationship with that collaborator and may also harm our reputation in the industry.
+Added: Furthermore, regardless of any resort to legal action, a dispute with a collaborator over intellectual property rights may damage our relationship with that collaborator and may also harm our reputation
+Added: in the industry.
Even if we are entitled to payments from our collaborators, we may not actually receive these payments, or we may experience difficulties in collecting the payments to which we believe we are entitled.
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These agreements typically limit the rights of the third parties to use or disclose our confidential information, such as trade secrets.
−Removed: Despite these contractual provisions, the need to share trade secrets and other confidential information increases the risk that such trade secrets become known by potential competitors, are inadvertently incorporated into the technology of others, or
−Removed: are disclosed or used in violation of these agreements.
+Added: Despite these contractual provisions, the need to share trade secrets and other confidential information increases the risk that such trade secrets become known by potential competitors, are inadvertently incorporated into the technology of others, or are disclosed or used in violation of these agreements.
Given that our proprietary position is based, in part, on our know-how and trade secrets, discovery by a third party of our trade secrets or other unauthorized use or disclosure would impair our intellectual property rights and protections in our product candidates.
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Moreover, we cannot be certain that we will be able to successfully develop this capability.
−Removed: will be competing with many companies that currently have extensive and well- funded marketing and sales operations to recruit, hire, train and retain marketing and sales personnel.
+Added: We will be competing with many companies that currently have extensive and well- funded marketing and sales operations to recruit, hire, train and retain marketing and sales personnel.
We also face competition in our search for third parties to assist us with the sales and marketing efforts of our product candidates.
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Even if we obtain approval for a product candidate, we may not generate or sustain revenue from sales of the product if the product cannot be sold at a competitive cost or if it fails to achieve market acceptance by physicians, patients, third-party payers or others in the medical community.
−Removed: These market participants may be hesitant to adopt a novel treatment based on ddRNAi or silence and replace technology, and we may not be able to convince the medical community and third-party payers to accept and use, or to provide favorable reimbursement for, any product candidates developed by us or our existing or future collaborators.
+Added: These market participants may be hesitant to adopt a novel treatment based on ddRNAi or silence and replace technology, and we may not be able
+Added: to convince the medical community and third-party payers to accept and use, or to provide favorable reimbursement for, any product candidates developed by us or our existing or future collaborators.
Market acceptance of our product candidates will depend on, among other factors:
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Our estimates regarding potential market size for any indication may be materially different from what we discover to exist at the time we commence commercialization, if any, for a product, which could result in significant changes in our business plan and have a material adverse effect on our business, financial condition, results of operations and prospects.
−Removed: Events such as the COVID-19 pandemic and other public health crises may materially and adversely affect our business, financial condition and results of operations.
−Removed: The development and commercialization of our products is dependent on the efforts of our third-party collaborators, as we rely on third parties to conduct our preclinical studies and clinical trials, and for our supply of research and development, preclinical and clinical development biologics and other materials.
−Removed: Accordingly, our operations and supply chain could be subject to significant disruptions to the extent that our third-party partners are impacted by the COVID-19 pandemic or the associated governmental actions.
−Removed: There may be related restrictions or delays with respect to clinical trials and preclinical studies, as well as the export, import or shipment of raw materials, drug substance or drug product that could materially delay our business or clinical trials.
−Removed: Further, certain of our research and development efforts are conducted globally, including our ongoing development of our silence and replace therapeutic for the treatment of Oculopharyngeal Muscular Dystrophy (OPMD), and will be dependent upon our ability to initiate clinical sites and enroll patients despite the ongoing COVID-19 pandemic.
−Removed: We had also implemented work-from-home measures for the majority of our employees between March 2020 and June 2021, resulting in a reduction of laboratory work and a halt of non-essential business travel.
−Removed: As we transition our employees back to our premises, there is a risk that COVID-19 infections occur at our offices or laboratory facilities and significantly affect our operations.
−Removed: Additionally, if any of our critical vendors are impacted, our business could be affected if we become unable to timely procure essential equipment, supplies or services in adequate quantities and at acceptable prices.
−Removed: Moreover, the COVID-19 outbreak has caused significant disruption to the global economy and in the global and U.S.
−Removed: financial markets.
−Removed: This could impact our ability to raise additional funding, which may not be available on acceptable terms, if at all.
−Removed: The extent to which COVID-19 impacts our results will depend on future developments, which are highly uncertain and cannot be predicted, including new information which may emerge concerning the severity of COVID-19 and the actions to contain COVID-19 or treat its impact, among others.
−Removed: In addition, due to the speed with which the COVID-19 situation is developing and evolving, there is uncertainty around its ultimate impact on public health, business operations and the overall economy;
−Removed: therefore, the negative impact on our financial position, operating results and liquidity cannot be reasonably estimated at this time, but the impact may be material.
We face competition from entities that have developed or may develop product candidates for our target disease indications, including companies developing novel treatments and technology platforms based on modalities and technology similar to ours.
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We compete with a variety of multinational pharmaceutical companies and specialized biotechnology companies, as well as technology being developed at universities and other research institutions.
−Removed: Our competitors have developed, are developing or could develop product candidates and processes competitive with our product candidates.
+Added: Our competitors have developed, are
+Added: developing or could develop product candidates and processes competitive with our product candidates.
Competitive therapeutic treatments include those that have already been approved and accepted by the medical community, patients and third-party payers, and any new treatments that enter the market.
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This increasingly competitive landscape may compromise the development of our product candidates.
−Removed: We are aware of multiple companies that are working in the field of RNAi therapeutics, including Alnylam, Arbutus, Arrowhead.
+Added: We are aware of multiple companies that are working in the field of RNAi therapeutics, including Alnylam, Arbutus, and Arrowhead.
Some of our current product candidates, if approved, would compete with approved and currently marketed treatments.
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In the United States, the Patient Protection and Affordable Care Act, as amended by the Health Care Education Reconciliation Act, each enacted in March 2010, as amended, or the ACA, greatly expanded health insurance coverage in the United States, but has also been the target of litigation and Congressional reform efforts since its adoption, including unsuccessful efforts to seek repeal of the entire ACA.
−Removed: While efforts to strike down the ACA in the courts currently seem stalled, uncertainty regarding the future of the ACA remains, including with respect to legislative efforts.
−Removed: Any significant efforts at the federal or state levels to reform the healthcare system by
−Removed: changing the way healthcare is provided or funded—including through the expansion of Medicare to larger sections of the population—could have a material impact on our business.
+Added: While efforts to strike down the ACA
+Added: in the courts currently seem stalled, uncertainty regarding the future of the ACA remains, including with respect to legislative efforts.
+Added: Any significant efforts at the federal or state levels to reform the healthcare system by changing the way healthcare is provided or funded—including through the expansion of Medicare to larger sections of the population—could have a material impact on our business.
In addition, the ACA, and similar laws, may cause such organizations to limit both coverage and level of reimbursement for new products approved and, as a result, they may not cover or provide adequate payment for our product candidates.
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We cannot predict what healthcare reform initiatives may be adopted in the future.
−Removed: It is possible that additional governmental action is taken to address the COVID-19 pandemic.
Further federal, state and foreign legislative and regulatory developments are likely, and we expect ongoing initiatives to increase pressure on biopharmaceutical product pricing.
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Treasury Department.
−Removed: Changes to tax laws (which changes may have retroactive application) could adversely affect us or holders of our common stock, warrants and pre-funded warrants.
−Removed: In recent years, many such changes have been made and
−Removed: changes are likely to continue to occur in the future.
+Added: Changes to tax laws (which changes may have retroactive application) could adversely affect us or holders of our
+Added: common stock, warrants and pre-funded warrants.
+Added: In recent years, many such changes have been made and changes are likely to continue to occur in the future.
Future changes in U.S.
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analogous state and foreign laws and regulations, such as state anti-kickback and false claims laws, which may apply to sales or marketing arrangements and claims involving healthcare items or services reimbursed by non-governmental third-party payers, including private insurers;
−Removed: state and foreign laws that require biopharmaceutical or biotechnology companies to comply with the industry voluntary
−Removed: compliance guidelines and the relevant compliance guidance promulgated by the federal government or otherwise restrict payments that may be made to healthcare providers;
+Added: state and foreign laws
+Added: that require biopharmaceutical or biotechnology companies to comply with the industry voluntary compliance guidelines and the relevant compliance guidance promulgated by the federal government or otherwise restrict payments that may be made to healthcare providers;
state and foreign laws that require biopharmaceutical or biotechnology manufacturers to report information related to payments and other transfers of value to physicians and other healthcare providers or marketing expenditures;
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The competition for collaborators is significant, and the negotiation process is time- consuming and complex.
−Removed: Any new collaboration may be on terms that are not optimal for us, and we may not be able to maintain any new or existing collaboration if, for example, development or approval of a product
−Removed: candidate is delayed, sales of an approved product candidate do not meet expectations or the collaborator discontinues the collaboration.
+Added: Anew collaboration may be on terms that are not optimal for us and we may not be to
+Added: maintain any new or existing collaboration if, for example, development or approval of a product candidate is delayed, sales of an approved product candidate do not meet expectations or the collaborator discontinues the collaboration.
Any such collaboration, or other strategic transaction, may require us to incur non- recurring or other charges, increase our expenditures, pose significant integration or implementation challenges or disrupt our management or business.
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To the extent that any disruption or security breach were to result in a loss of, or damage to, our data or applications, or inappropriate disclosure of confidential or proprietary information, we could incur liability and the further development and commercialization of our product candidates could be delayed and become more expensive.
−Removed: As a result of COVID-19, we may face increased cybersecurity risks due to our reliance on internet technology and the number of our employees that are working remotely, which may create additional opportunities for cybercriminals to exploit vulnerabilities.
+Added: We may face increased cybersecurity risks due to our reliance on internet technology and the number of our employees that are working remotely, which may create additional opportunities for cybercriminals to exploit vulnerabilities.
Cyber-attacks, breaches, interruptions or other data security incidents could result in legal claims or proceedings, liability under federal or state laws that protect the privacy of personal information, regulatory penalties, significant remediation costs, disrupt key business operations and divert attention of management and key information technology resources.
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It is also possible that we or our current licensors or licensees, or any future licensors or licensees, will fail to identify or obtain sufficient protection for patentable aspects of inventions made in the course of development and commercialization activities before it is too late to obtain patent protection on them.
−Removed: Therefore, our patents and patent applications may not be prosecuted
−Removed: and enforced in a manner consistent with the best interests of our business.
−Removed: It is possible that defects of form in the preparation or filing of our patents or patent applications may exist, or may arise in the future, for example with respect to proper priority claims, inventorship, claim scope, patent term adjustments, etc., although we are unaware of any such defects.
+Added: Therefore, our patents and patent applications may not be prosecuted and enforced in a manner consistent with the best interests of our business.
+Added: It is possible that defects of form in the preparation or filing of our patents or patent applications may exist, or may arise in the future, for example
+Added: with respect to proper priority claims, inventorship, claim scope, patent term adjustments, etc., although we are unaware of any such defects.
If we or our current licensors or licensees, or any future licensors or licensees, fail to establish, maintain or protect such patents and other intellectual property rights, such rights may be reduced or eliminated.
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This risk is material in light of the length of the development process of our products and lifespan of our current patent portfolio.
−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 or that we elect not to patent, processes for which patents are difficult to enforce and any other elements of our product candidate discovery and development processes that involve proprietary know-how, information or technology that is not covered by patents.
+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 or that we elect not to patent, processes for which patents are difficult to enforce and any other elements of our product candidate discovery and
+Added: development processes that involve proprietary know-how, information or technology that is not covered by patents.
However, trade secrets can be difficult to protect.
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We have not had and do not have primary control over these activities for certain of our patents or patent applications and other intellectual property rights we license, and therefore cannot guarantee that these patents and applications will be prosecuted or enforced in a manner consistent with the best interests of our business.
−Removed: We cannot be certain that such activities by third parties have been or will be conducted in compliance with applicable laws and regulations or will result in valid and enforceable patents and other intellectual property rights.
+Added: We cannot be certain that such activities by third parties have
+Added: been or will be conducted in compliance with applicable laws and regulations or will result in valid and enforceable patents and other intellectual property rights.
Additionally, we may not be able to control the publication or other disclosures of research carried out by our licensors relating to technology that could otherwise prove patentable.
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Because patent applications can take many years to issue, there may be currently pending patent applications which may later result in issued patents that our product candidates may be accused of infringing.
−Removed: In addition, third parties may obtain patents in
−Removed: the future and claim that use of our technologies infringes upon these patents.
+Added: In addition, third parties may obtain patents in the future and claim that use of our technologies infringes upon these patents.
If any third-party patents were held by a court of competent jurisdiction to cover the manufacturing process, methods of use or formulations of any of our product candidates, any DNA constructs formed during the manufacturing process or any final product itself, the holders of any such patents may be able to block our ability to commercialize such product candidate unless we obtained a license under the applicable patents, or until such patents expire.
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To counter infringement or unauthorized use, we may be required to file infringement claims, which can be expensive and time-consuming.
−Removed: In addition, in an infringement proceeding, a court may decide that a patent of ours or our licensors is not valid, is unenforceable or is not infringed, 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.
+Added: In addition, in an infringement proceeding, a court may decide that a patent of ours or our licensors is not valid, is unenforceable or is not infringed, or may refuse to stop the other party from using the technology at issue on the
+Added: grounds that our patents do not cover the technology in question.
An adverse result in any litigation or defense proceedings could put one or more of our patents at risk of being invalidated or interpreted narrowly and could put our patent applications at risk of not issuing.
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In addition, the laws of some foreign countries do not protect intellectual property rights to the same extent as federal and state laws in the United States.
−Removed: In addition, we may
−Removed: at times in- license third-party technologies for which limited international patent protection exists and for which the time period for filing international patent applications has passed.
+Added: In addition, we may at times in- license third-party technologies for which limited international patent protection exists and for which the time period for filing international patent applications has passed.
Consequently, we may not be able to prevent third parties from practicing our inventions in all countries outside the United States, or from selling or importing products made using our inventions in and into the United States or other jurisdictions.
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Risks Related to an Investment in Our Common Stock
+Added: A number of our stockholders hold significant amounts of our common stock and unexercised warrants to acquire common stock, and therefore could exert significant influence over us.
+Added: While our stockholder base and relative holdings may change over time, a number of institutional investors and similar stockholders currently hold significant ownership positions in our outstanding common stock and outstanding Warrants to acquire Common Stock.
+Added: In addition, in connection with the April 2024 private placement, we entered into the Board Designation Agreement with Suvretta Capital pursuant to which the Company appointed Kishen Mehta to the Board.
+Added: The interests of these significant stockholders might not always coincide with the interests of other stockholders, and any influence exerted over our business and affairs by these significant stockholders directly or through an appointee to the Board might not always coincide with the wishes of other stockholders.
+Added: In addition, the control and influence held by these significant stockholders might have the effect of delaying, deferring, or preventing a transaction or change in control of us, which might involve a premium price for shares of our Common Stock, or which otherwise could have been in your best interests as a stockholder
The market price and trading volume of our common stock may be volatile and may be affected by economic conditions beyond our control.
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changes in trading volume of our common stock on Nasdaq;
−Removed: sales of our common stock by us, our executive officers or our shareholders in the future;
+Added: sales of our common stock by us, our executive officers or our stockholders in the future;
conditions in the financial markets or changes in general economic conditions.
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The price of our common stock may decline, which means you may experience a decrease in the value of your shares of our common stock regardless of our operating performance or prospects.
−Removed: In the past, following periods of volatility in the market price of a company’s securities, shareholders often instituted securities class action litigation against that company.
+Added: In the past, following periods of volatility in the market price of a company’s securities, stockholders often instituted securities class action litigation against that company.
If we were involved in a class action suit, it could divert the attention of senior management and, if adversely determined, could cause us significant financial harm.
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The presence of any material weaknesses in our internal control over financial reporting could result in financial statement errors which, in turn, could lead to errors in our financial reports and/or delays in our financial reporting, which could require us to restate our operating results.
−Removed: We might not identify one or more material weaknesses in our internal controls in connection with evaluating our compliance with Section 404(a) of the Sarbanes- Oxley Act.
+Added: We might not identify one or more material
+Added: weaknesses in our internal controls in connection with evaluating our compliance with Section 404(a) of the Sarbanes- Oxley Act.
In order to maintain and improve the effectiveness of our disclosure controls and procedures and internal controls over financial reporting, we will need to expend significant resources and provide significant management oversight.
−Removed: Implementing any appropriate changes to our internal controls may require specific compliance training of our directors and employees, entail substantial costs in order to modify
−Removed: our existing accounting systems, take a significant period of time to complete and divert management’s attention from other business concerns.
+Added: Implementing any appropriate changes to our internal controls may require specific compliance training of our directors and employees, entail substantial costs in order to modify our existing accounting systems, take a significant period of time to complete and divert management’s attention from other business concerns.
These changes may not, however, be effective in maintaining the adequacy of our internal control.
−Removed: If we are unable to conclude that we have effective internal controls over financial reporting, investors may lose confidence in our operating results, the price of our common stock could decline and we may be subject to litigation or regulatory enforcement actions.
+Added: The report of our management for the fiscal year ended June 30, 2024 is included in Item 9A – Controls and Procedures of this Annual Report on Form 10-K.
+Added: As further outlined in that report, our management has concluded that our internal control over financial reporting was not effective as of June 30, 2024, due to a material weakness in our internal controls resulting from our accounting personnel not being able to process and account for complex, non-routine transactions in accordance with GAAP.
+Added: Such finding related to how the exercise price adjustment feature in the Company’s Series 2 warrant agreement was triggered by the Company’s August 11, 2023 public offering.
+Added: Specifically, the exercise price of the Series 2 Warrants was reset as of that date from $11.22 to $1.9299.
+Added: The adjustment to the exercise price of such warrants results, solely for accounting purposes, in a deemed dividend totaling $618,987.
+Added: This amount was not recognized in the Company’s reported results for the quarter ended September 30, 2023, the three- and six-month periods ending December 31, 2023, and the three- and nine-month periods ending March 31, 2024.
+Added: The impact of this adjustment to the exercise price will be accounted for as an increase in the Company’s accumulated deficit with an offsetting increase in Additional Paid-In Capital.
+Added: In addition, the deemed dividend will be added to the Company’s net loss, increasing loss attributable to common stockholders for purposes of computing earnings per share (See Note 15 to the Notes to Consolidated Financial Statements titled “Updated quarterly results”).
+Added: Management evaluated the adjustments and concluded that it was immaterial, both qualitatively and quantitatively.
+Added: Management concluded that we lack sufficient personnel and outside consultants with technical accounting expertise to process and account for complex and non-routine transactions.
+Added: A material weakness is a deficiency, or combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of our annual or interim financial statements will not be prevented or detected on a timely basis.
+Added: Notwithstanding the material weakness identified above, management has concluded that the particular transaction at issue was not material to the Company In order to remediate this matter, we plan to retain the assistance of additional accounting experts to assist in the accounting and reporting of complex, non-routine transactions.
+Added: Such remedial measures will take time to implement and test and there can be no assurance that such measures will be sufficient to remedy the material weakness identified or that additional material weaknesses or other control or significant deficiencies will not be identified in the future.
+Added: If we continue to experience material weaknesses in our internal controls or fail to maintain or implement required new or improved controls, investors may lose confidence in our operating results, the price of our common stock could decline and we may be subject to litigation or regulatory enforcement actions.
In addition, if we are unable to meet the requirements of Section 404 of the Sarbanes-Oxley Act, our common stock may not be able to remain listed on Nasdaq.
2 unchanged sentences
For the foreseeable future, we currently intend to retain all available funds and any future earnings to support our operations and to finance the growth and development of our business.
−Removed: Any future determination to declare cash dividends will be made at the discretion of our Board, subject to compliance with applicable laws and covenants under current or future credit facilities, which may restrict or limit our ability to pay dividends, and will depend on our financial condition, operating results, capital requirements, general business conditions and other factors that our Board may deem relevant.
+Added: Any future determination to declare cash dividends will be made at the discretion of our Board, subject to compliance with applicable laws and covenants under current or future credit facilities, which may restrict or limit our ability to pay dividends, and will depend on our financial condition, operating results, capital requirements, general business conditions and other factors that our Board may deem
We do not anticipate paying any cash dividends on our common stock in the foreseeable future.
12 unchanged sentences
We have a limited number of unreserved, authorized shares.
−Removed: If we seek equity financing we may need to use a significant percentage of our unreserved authorized shares of common stock in such an offering, and would therefore need stockholder approval to implement an increase in
−Removed: our authorized shares of common stock or a reverse stock split in order to issue additional shares of common stock in the future.
+Added: If we seek equity financing we may need to use a significant percentage of our unreserved authorized shares of common stock in such an offering, and would therefore need stockholder approval to implement an increase in our authorized shares of common stock or a reverse stock split in order to issue additional shares of common stock in the future.
Our certificate of incorporation and the Delaware General Corporation Law, or the DGCL, currently require the approval of stockholders holding not less than a majority of all outstanding shares of capital stock entitled to vote in order to approve an increase in our authorized shares of common stock or a reverse stock split.
3 unchanged sentences
If no registration is effective at the time a warrant holder seeks to exercise their warrants, we would be obligated to issue shares to such warrant holder in a “cashless exercise” in exchange for such holder’s warrants, in which case we would not receive the cash that we would otherwise receive in an exercise of warrants for cash.
−Removed: Unresolved Staff Comments.
−Removed: Our corporate headquarters and our research and development facility is located in Hayward, California, and consists of approximately 7,295 square feet of leased office space under a lease that expires in June 2025.
−Removed: Management believes that these facilities are suitable and adequate to meet our anticipated needs.
−Removed: Legal Proceedings.
−Removed: We are not currently a party to any material legal proceedings.
−Removed: Mine Safety Disclosures.
−Removed: Not applicable.
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.