What changed in this filing

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Item 1A. Risk Factors

2021-03-17 compared with 2020-03-27 · 640 added, 519 removed, 737 unchanged (61% of the section changed)

Risk Factors.

should consider carefully the following risk factors, together with all of the other information included or incorporated in this

Annual Report.

Each of these risk factors, either alone or taken together, could adversely affect our business, operating results

and financial condition, and adversely affect the value of an investment in our common stock.

There may be additional risks that

we do not know of or that we believe are immaterial that could also impair our business and financial position.

in our common stock involves a high degree of risk.

You should carefully consider the following risk factors before deciding whether

to invest in the Company.

If any of the events discussed in the risk factors below occur, our business, financial condition, results

of operations or prospects could be materially and adversely affected.

In such case, the value and marketability of our common

stock could decline.

RELATED TO OUR FINANCIAL CONDITION AND NEED FOR ADDITIONAL CAPITAL

have never generated revenue from product sales and expect that due to the regulatory constraints on a drug development company

with products in the pre-clinical and early clinical stages, we may never generate revenue from product sales and may continue

to incur significant losses for the foreseeable future.

should carefully consider the risks described below, as well as other information contained in this report, including the consolidated

financial statements and the notes thereto and “Management’s Discussion and Analysis of Financial Condition and Results

of Operations.”

The occurrence of any of the events discussed below could significantly and adversely affect our business,

prospects, results of operations, financial condition, and cash flows.

business is subject to numerous risks and uncertainties that you should consider before investing in our common stock.

The following

is a summary of the principal risk factors we face:

have incurred significant losses since our inception, expect to incur losses over the next several years and may never achieve

or maintain profitability.

have no history of commercializing products.

will need additional funding to pursue our business objectives.

allocated a significant amount of time and resources into developing a treatment for COVID-19, and these efforts may ultimately

be unfruitful.

business and operations may be adversely affected by the evolving and ongoing COVID-19 pandemic.

regulatory approval processes of the FDA and other government authorities are lengthy, time consuming and inherently unpredictable.

we are unable to successfully develop, receive regulatory approval for and commercialize our product candidates, our business

will be harmed.

if we do commercialize one or more products, most pharmaceutical products that achieve commercialization still do not recoup

their cost of capital.

face uncertainties with respect to new United States healthcare legislation which may lead to reduced pricing, among other

cost of our research and development programs may be higher than expected, and there is no assurance that such efforts will

be successful in a timely manner or at all.

in preclinical studies or earlier clinical trials may not be indicative of results in future clinical trials.

may not be successful in our efforts to research, develop, or in-license or acquire product candidates.

face intense competition, which may limit or eliminate our commercial prospects with respect to product candidates.

rely on third parties to research, develop and commercialize certain product candidates, and such third parties may not perform

satisfactorily or act in our best interests.

we are unable to obtain or protect intellectual property rights related to any of our product candidates, we may not be able

to compete effectively in the market.

may become subject to expensive intellectual property litigation to enforce our intellectual property rights or defend against

claims asserted by others.

trading price and volume of our common stock may be volatile, and could decline in which case investors could lose all or

part of their investment.

RELATED TO OUR BUSINESS

business has been and may continue to be affected by the COVID-19 pandemic, and the full extent of such impact remains uncertain.

United States and global impact from the COVID-19 virus has had and/or will have a material adverse effect on us in a number of

ways including:

our scientists and other personnel (or their family members) are infected with the virus, it may hamper our ability to engage

in ongoing research activities;

the third parties on whom we rely can be similarly impacted;

these third parties are affected by COVID-19, they may focus on other activities which they may devote their limited time

to other priorities rather than to our joint research;

have experienced and may in the future experience supply chain disruptions, including shortages, delays and price increases

in laboratory equipment and supplies, which would impact our research activities.

For example, supply shortages caused by

the pandemic have delayed the development of our influenza A virus program;

a result of the continuing impact of the virus, we may fail to get access to third party laboratories which would impact our

research activities;

may face challenges related to restrictions and efforts to avoid further spread of the virus, in our efforts the conduct our

planned clinical trials consistent with normally applicable approaches and good clinical practice standards, and although

regulators including the FDA have offered guidance applicable during the COVID-19 pandemic allowing for flexibility of standards

in certain areas and alternate methods of meeting trial oversight obligations (for example, via remote monitoring), the potential

impact of these challenges cannot be fully predicted at this time.

may encounter difficulties enrolling patients for our contemplated Phase 1 clinical trial or in conducting that trial due

to government actions to contain the outbreak or general public concern;

may fail to appropriately allocate resources or adapt to the rapidly evolving market and regulatory environment caused by

the pandemic, including with respect to our efforts to develop a treatment for COVID-19;

the FDA continues to focus its efforts on the pandemic, there may be material delays in our IND application for our Influenza

A Phase 1 study;

may sustain problems due to the serious short-term and possible longer term economic

disruptions and market volatility as the U.S.

and global economy faces unprecedented

have never generated revenue from product sales and all of our product candidates are currently in the pre-clinical and early

clinical stage, we may continue to incur significant losses for the foreseeable future and never generate revenue from product

are a pre-clinical and early stage clinical, biopharmaceutical discovery and development company.

From inception until 2016, our

operations were limited to organizing and staffing the Company, acquiring and developing intellectual property rights, developing

our technology platform, undertaking basic research on viral replication enzyme targets and conducting preclinical studies for

our initial programs.

We currently have only one product candidate which has completed a Phase 2a clinical trial.

Because of the

need to complete clinical trials, establish safety and efficacy and obtain regulatory approval, which is an expensive and time-consuming

process, we do not anticipate generating revenue from product sales for at least five years and will continue to sustain considerable

We may develop a partnership that could generate income sooner, but there is no guarantee that will be achievable.

date, we have devoted the majority of our financial resources to research and development.

We have financed our operations

primarily through the sale of equity securities and entering into research collaborations.

The results of our operations will

depend, in part, on the rate of future expenditures and our ability to obtain funding through equity or debt financings,

strategic alliances or grants.

We anticipate our expenses will increase substantially if and as we continue our research and

clinical and preclinical development of our product candidates.

We anticipate that if we continue to undertake clinical

studies our expenses will increase even further.

have lost $235 million from inception through December 31, 2019 and expect to continue losing money in the future.

achieve income from operations or have positive cash flow from operations .

We currently expect to initiate

a Phase 1 clinical trial for our Influenza A product candidate in the third quarter of 2021, although with the FDA’s focus

on the COVID-19 pandemic it is possible it could be delayed.

Because of the need to complete clinical trials, establish safety

and efficacy and obtain regulatory approval, which is an expensive and time-consuming process, we do not anticipate generating

revenue from product sales for at least five years and will continue to sustain considerable losses.

We may develop a partnership

that could generate income sooner, but there is no guarantee that will be achievable.

had an accumulated deficit of $245,000,000 from inception through December 31, 2020 and expect to continue losing money in the

We may never achieve income from operations or have positive cash flow from operations .

an early-stage drug development company, our focus is on developing product candidates, obtaining regulatory approvals and commercializing

pharmaceutical products.

As a result, we have lost $235 million from inception through December 31, 2019, expect losses to continue,

As a result, we have lost $245,000,000 from inception through December 31, 2020, expect losses to continue,

and have never generated revenue from product sales.

It is likely that we will need to raise money again in the future.

assure you that we will ever generate income from operations or have positive cash flow from operations.

It is likely that we will need to raise additional capital in the future.

There can be no assurance that we will ever generate income from operations or have positive cash flow from operations.

we have yet to generate any revenue from product sales on which to evaluate our potential for future success and to determine

if we will be able to execute our business plan, it is difficult to evaluate our future prospects and the risk of success or failure

if we will be able to execute our business plan, it is difficult to evaluate our prospects and the likelihood of success or failure

of our business.

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no pharmaceutical product candidates that have generated any commercial revenue, do not expect to generate revenues from the commercial

sale of pharmaceutical products for many years, and might never generate revenues from the sale of pharmaceutical products.

ability to generate revenue and achieve profitability will depend on, among other things, the following:

sale of pharmaceutical products for foreseeable future, and might never generate revenues from the sale of pharmaceutical products.

Our ability to generate revenue and achieve profitability will depend on, among other things, the following:

and validating new therapeutic strategies;

into collaborations with large pharmaceutical or biotechnology companies, similar to our recently announced Collaboration

Agreement with Merck;

into collaborations with large pharmaceutical or biotechnology companies, similar to our Collaboration Agreement with Merck;

our research and preclinical development of pharmaceutical product candidates;

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Our expenses could increase beyond

expectations if we are required by regulatory agencies to perform unanticipated studies and trials.

expectations if we are required by regulatory agencies to perform additional unanticipated studies and trials.

if one or more pharmaceutical product candidates we independently develop is approved for commercial sale, we anticipate incurring

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additional capital or form strategic partnerships to support our research and development activities in the future.

are still in the early stages of development of our product candidates and have no products approved for commercial sale.

pharmaceutical products, including conducting preclinical studies and clinical trials, is capital-intensive.

As a rule, research

and development expenses increase substantially as we advance our product candidates toward clinical programs.

We currently have

one hepatitis C product candidate that has completed a Phase 2a clinical trial and have secured funding of the research and development

of influenza A/B product candidates under our Collaboration Agreement with Merck.

are still in the early stages of development of our product candidates and have no products approved for commercial sale or presently

in clinical trials.

Although our Hepatitis C product advanced through Phase 2a, we are seeking a partner to fund and oversee that

product candidate’s further development.

As stated earlier, we expect to initiate a Phase 1 clinical trial for our Influenza

A product in the third quarter.

Developing pharmaceutical products, including conducting preclinical studies and clinical trials,

is capital-intensive.

As a rule, research and development expenses increase substantially as we advance our product candidates

toward clinical programs.

We currently have one hepatitis C product candidate that has completed a Phase 2a clinical trial and

have secured funding of the research and development of influenza A/B product candidates under our Collaboration Agreement with

See “Item 1 –

Business –

Collaborations

Collaborations –

Merck Collaboration.”

However, in order to conduct trials for our other product candidates, we will need to raise

additional capital to support our operations or form partnerships, in addition to our existing collaborative alliances, which

may give substantial rights to a partner.

However, in order to conduct

trials for our other product candidates, including our potential COVID-19 therapy, we will need to raise additional capital to

support our operations or form partnerships, in addition to our existing collaborative alliances, which may give substantial rights

to a partner.

Such funding or partnerships may not be available to us on acceptable terms, or at all.

Moreover, any future financing may be very dilutive to our existing stockholders.

Moreover, any future financing

may be very dilutive to our existing stockholders.

we move lead compounds through toxicology and other preclinical studies, also referred to as nonclinical studies, we have and

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when required or on acceptable terms, we may be required to:

terms that restrict our ability to issue securities, incur indebtedness, or otherwise raise capital in the future, or restrict

our ability to pay dividends or engage in acquisitions;

significantly

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commercialize ourselves.

we are unable to raise additional capital in sufficient amounts or on terms acceptable to us, we will be prevented from

pursuing development and commercialization efforts, which will have a material adverse effect on our business, operating

results and prospects or may render the Company unable to continue operations.

we are unable to raise additional capital in sufficient amounts or on terms acceptable to us, we will be prevented from pursuing

development and commercialization efforts, which will have a material adverse effect on our business, operating results and prospects

or may render the Company unable to continue operations.

we are unable to rely on certain exemptions from registration under the federal securities laws, as the result of a “disqualifying

involving a director of the Company, it could materially and adversely affect our ability to obtain future financing.

involving a director of the Company, it could adversely affect our ability to obtain future private financing.

January 10, 2019, Dr.

Frost, one of our directors, was permanently enjoined from violating a certain anti-fraud provision of the

Securities Act of 1933, future violations of Section 13(d) of the Exchange Act and Rule 13d-1(a) thereunder, and participating

in penny stock offerings with certain exceptions.

Phillip Frost, one of our directors, was permanently enjoined from violating a certain anti-fraud provision

of the Securities Act of 1933 (the “Securities Act”), future violations of Section 13(d) of the Exchange Act and Rule

13d-1(a) thereunder and participating in penny stock offerings with certain exceptions.

So long as Dr.

Frost is a director, the Company will be unable to rely on certain

exemptions from registration including the exemptions under Regulation A and Rule 506 promulgated under the Securities Act absent

a waiver issued by the Securities and Exchange Commission (the “SEC”).

We have not applied for a waiver, and even

if we do, the SEC may choose not to grant us a waiver.

While there is a statutory exemption for private placements under Section

4(a)(2) of the Securities Act, the absence of the Rule 506 safe harbor under Regulation D could adversely affect our ability to

raise necessary financing in the future on terms favorable to us, or at all.

of the unknown impact from the COVID-19 virus, it may have unanticipated material adverse effects upon us.

United States and global impact from the COVID-19 virus may have a material adverse effect on us in a number of ways including:

our scientists and other personnel (or their family members) are infected with the virus, it may hamper our ability to engage

in ongoing research activities;

we rely on third parties who can be similarly impacted;

these third parties are affected by COVID-19, they may focus on other activities which they may devote their limited time

to other priorities rather than to our joint research;

may experience a shortage of laboratory materials which would impact our research activities;

a result of the continuing impact of the virus, we may fail to get access to third party laboratories which would impact our

research activities;

may sustain problems due to the serious short-term and possible longer term serious economic disruptions as our economy faces

unprecedented uncertainty.

RELATED TO OUR RELIANCE ON THIRD PARTIES

will depend substantially on Merck for the successful research, development and commercialization of our influenza A/B product

January 2019, we entered into the Collaboration Agreement with Merck to research, develop, and commercialize certain proprietary

Frost is a director or

until five years have passed since the injunction, the Company will be unable to rely on certain exemptions from registration

including the exemptions under Rule 506 and Regulation A promulgated under the Securities Act absent a waiver issued by the Securities

and Exchange Commission (the “SEC”).

We have not applied for a waiver, and even if we do, the SEC may choose not to

grant us a waiver.

While there is a statutory exemption for private placements under Section 4(a)(2) of the Securities Act, the

absence of the Rule 506 safe harbor under Regulation D could adversely affect our ability to raise necessary capital in private

It has not and will not affect our ability to raise capital in registered public offerings.

RELATED TO THE DISCOVERY, DEVELOPMENT AND COMMERCIALIZATION OF PRODUCT CANDIDATES

COVID-19 program is in the preclinical stage and we face significant competition from major companies who have developed vaccines

or COVID-19 treatments.

If we fail to gain market share because our competitors develop and successfully commercialize effective

COVID-19 vaccines or therapies or if we fail to obtain or maintain FDA authorization or to otherwise account for uncertainties

surrounding the virus, our business and future prospects could be materially and adversely affected.

COVID-19 program is in the preclinical stage.

We initiated preclinical studies during the second quarter of 2020 and selected

the lead preclinical molecule in the fourth quarter of 2020.

We may be unable to produce an effective therapy in a timely manner

Additionally, we are committing substantial financial and other resources to our COVID-19 program, which may negatively

impact our other programs.

Further, in the wake of the global COVID-19 pandemic a number of third parties, including large biotechnology

and pharmaceutical companies and academic institutions have developed vaccines, at least three of which have FDA approval and

have FDA approval for the treatment of hospitalized patients for, or a vaccine against, COVID-19.

Some of these large pharmaceutical

companies, including Pfizer, Moderna and Janssen Biotech, Inc., have obtained emergency use authorization from the FDA for vaccines

which have demonstrated high efficacy rates and are currently being distributed to the general population, with an initial priority

to the elderly and other more vulnerable individuals.

While our COVID-19 program is focused on treatment rather than prevention,

widespread vaccination limits our prospects with respect to any therapeutic product candidate we develop.

some of our competitors that are also developing treatments for the virus have substantially more resources, including government

funding, than we do and have existing products in significantly more advanced stages of development.

For example, the FDA approved

remdesivir, an investigational antiviral agent developed by Gilead Sciences, Inc.

(“Gilead”), for the treatment of

patients with COVID-19 requiring hospitalization.

In addition, the FDA has issued an emergency use authorization for the investigational

monoclonal antibody therapy for the treatment of mild-to-moderate COVID-19 in adult and pediatric patients.

At least one other

competitor is conducting a combination Phase II/III clinical trial for a treatment using cannabidiol to treat COVID-19 for patients

with heart issues.

Even if we do obtain FDA authorization for a therapeutic product, the FDA may subsequently rescind or limit

such authorization as more information about the product, including its efficacy and side effects, becomes available.

this virus is highly mutative and a number of strains have already arisen, and any treatment we are able to develop and commercialize

will therefore remain subject to the risk that a mutation will occur that produces a strain or strains of the virus to which such

treatment has a diminished effect or is ineffective.

If we are unable to timely advance our COVID-19 program, or if we fail to

gain or maintain a market share as a result of our competitors developing and successfully commercializing vaccines and effective

COVID-19 therapies more quickly than we do, our business and future prospects could be materially and adversely affected.

will depend on Merck for the successful research, development and commercialization of our influenza A/B product candidates.

are party to the Collaboration Agreement, dated January 4, 2019, with Merck to research, develop, and commercialize certain proprietary

influenza A/B antiviral agents.

See “Item 1 –

On January 19, 2021, the Company announced that it had completed all research obligations under

the Collaboration Agreement with Merck, and Merck is now solely responsible for further development of the influenza A/B antiviral

compounds, and will also be solely responsible for the commercialization of any products derived therefrom.

See “Item 1

Business –

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Merck Collaboration”

more information on the Collaboration Agreement.

The success of this collaborative alliance will depend substantially on the efforts

and activities of Merck.

Pursuant to the Collaboration Agreement, in case the joint research committee overseeing the research

program cannot reach an agreement, the ultimate decision-making authority is vested in Merck as to most matters.

Merck will be solely responsible for the development and commercialization of any products derived from the collaboration.

addition, during the term of the research program and for a period of 12 months following the expiration or termination of the

research program under the Collaboration Agreement, we have agreed to work exclusively with Merck on the research and development

of influenza A/B antiviral agents.

During the term of the Collaboration Agreement, we will be unable to conduct, or enable third

parties to conduct, research, development and commercialization activities related to such agents.

These restrictions may impair

our ability to pursue research, development and commercialization opportunities that we would otherwise deem to be beneficial

to our business.

our research collaboration with Merck is terminated or is otherwise unsuccessful, including failure to reach milestones, we

could lose the research program funding, and would not receive milestone payments or royalties, which could materially and

adversely affect our business, our ability to successfully develop and commercialize influenza A/B product candidates and our

future financial condition.

for more information on the Collaboration Agreement.

As such, the success of this collaborative alliance will depend on the efforts and activities of Merck, particularly moving forward.

our research collaboration with Merck is terminated or is otherwise unsuccessful, including failure to reach milestones, we would

not receive milestone payments or royalties, which could materially and adversely affect our ability to successfully develop and

commercialize influenza A/B product candidates and our future financial condition.

to the terms of the Collaboration Agreement, Merck agreed to, among other things, (i) fund the research and development collaboration,

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business strategy or other business issues, which could adversely affect its willingness or ability to fulfill their obligations

our collaboration with Merck is unsuccessful for these or other reasons, or is otherwise terminated for any reason, we may lose

the research program funding, and would not receive the milestone payments or royalties under the Collaboration Agreement.

our collaboration with Merck is unsuccessful for these or other reasons, or is otherwise terminated for any reason, we would not

receive the milestone payments or royalties under the Collaboration Agreement.

pursuant to the Collaboration Agreement Merck will only be obligated to make many of the milestone payments if our influenza A/B

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not receive some or all of the milestone payments under the Collaboration Agreement.

of the foregoing could have a material adverse effect on our business, our ability to successfully develop and commercialize influenza

A/B product candidates and our future financial condition.

of the foregoing could have a material adverse effect on our ability to successfully develop and commercialize influenza A/B product

candidates and our future financial condition.

we form strategic alliances which are unsuccessful or are terminated, we may be unable to develop or commercialize certain product

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so on terms acceptable to us.

See “Item 1A –

Risk Factors ‒ We will depend substantially on Merck for the successful

research, development and commercialization of our influenza A/B product candidates.”

If we fail to establish alternative

strategic alliances with third-party partners on terms acceptable to us, or at all, we may be required to limit the size or scope

of one or more of our programs or decrease our expenditures and seek additional funding by other means.

Such events would likely

have a material adverse effect on our results of operations and financial condition.

See also the risk factor entitled “We will depend on Merck for the successful research, development

and commercialization of our influenza A/B product candidates.”

If we fail to establish alternative strategic alliances

with third-party partners on terms acceptable to us, or at all, we may be required to limit the size or scope of one or more of

our programs or decrease our expenditures and seek additional funding by other means.

Such events would likely have a material

adverse effect on our results of operations and financial condition.

expect to rely on third parties to conduct some or all aspects of our compound formulation, research and preclinical testing,

and those third parties may not perform satisfactorily.

do not expect to independently conduct most and certainly not all aspects of our drug discovery activities, compound formulation

research or preclinical testing of product candidates.

We rely and expect to continue to rely on third parties to conduct some

aspects of our preclinical testing and on third-party Clinical Research Organizations (“CROs”) to conduct clinical

if those third parties do not perform satisfactorily our business and future prospects would be materially and adversely affected.

do not expect to independently conduct all aspects of our drug discovery activities, compound formulation research or preclinical

testing of product candidates.

We rely and expect to continue to rely on third parties to conduct some aspects of our preclinical

testing and on third-party Clinical Research Organizations (“CROs”) to conduct clinical trials.

these third parties terminate their engagements, we will need to enter into alternative arrangements which would delay our product

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inability to negotiate manufacturing agreements with third parties under commercially reasonable terms;

or nonrenewal of manufacturing agreements with third parties in a manner or that is costly or damaging to us;

possibility of breach or termination or nonrenewal of manufacturing agreements with third parties in a manner that is costly

or damaging to us;

reliance on a few sources, and sometimes, single sources for raw materials, such that if we cannot secure a sufficient supply

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cost, our clinical trials may be delayed, or we could lose potential revenue.

Manufacturing

issues may arise that could increase product and regulatory approval costs or delay commercialization.

third party manufacturing issues arise, it could increase product and regulatory approval costs or delay commercialization.

third parties scale up manufacturing of product candidates and conduct required stability testing, product, packaging, equipment

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or any approved products.

rely and expect to continue to rely on third parties to conduct, supervise and monitor our clinical trials, and if those third

parties perform in an unsatisfactory manner, it may harm our business.

rely and expect to continue to rely on CROs and clinical trial sites to ensure the proper and timely conduct of our clinical trials.

While we have agreements governing the activities of such CROs and clinical trial sites, we or our partners will have limited

influence over their actual performance.

Nevertheless, we or our partners will be responsible for ensuring that each of our clinical

trials is conducted in accordance with its protocol, and that all legal, regulatory and scientific standards are met.

on the CROs does not relieve us of our regulatory responsibilities.

we expect to continue to rely on third parties to conduct, supervise and monitor our clinical trials, if those third parties perform

in an unsatisfactory manner it may harm our business.

will rely on CROs and clinical trial sites to ensure the proper and timely conduct of our clinical trials.

While we establish

agreements governing the activities of such CROs and clinical trial sites, we or our partners will have limited influence over

their actual performance.

Nevertheless, we or our partners will be responsible for ensuring that each of our clinical trials is

conducted in accordance with its protocol, and that all legal, regulatory and scientific standards are met.

Our reliance on the

CROs does not relieve us of our regulatory responsibilities.

our partners and our CROs must comply with current Good Clinical Practices (“cGCPs”), as defined by the FDA and the

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to repeat such clinical trials, which would delay the regulatory approval process.

contracted CROs will not be our employees, and we cannot control whether they devote sufficient time and resources to our

clinical and nonclinical programs.

These CROs may also have relationships with other commercial entities, including

our competitors, for whom they may also be conducting clinical trials, or other drug development activities that could harm

our competitive position.

If our CROs do not successfully carry out their contractual duties or obligations, fail to meet

expected deadlines, or if the quality or accuracy of the clinical data they obtain is compromised due to failing to adhere to

our clinical protocols or regulatory requirements, or for any other reasons, our clinical trials may be extended, delayed or

terminated, and we may not obtain regulatory approval for, or successfully commercialize our product candidates.

financial results and the commercial prospects for such products and any product candidates we develop would be harmed, our

costs could increase, and our ability to generate revenues could be delayed.

contracted CROs will not be our employees, and we cannot control whether they devote sufficient time and resources to our clinical

and nonclinical programs.

These CROs may also have relationships with other commercial entities, including our competitors, for

whom they may also be conducting clinical trials, or other drug development activities that could harm our competitive position.

If our CROs do not successfully carry out their contractual duties or obligations, fail to meet expected deadlines, or if the

quality or accuracy of the clinical data they obtain is compromised due to failing to adhere to our clinical protocols or regulatory

requirements, or for any other reasons, our clinical trials may be extended, delayed or terminated, and we may not obtain regulatory

approval for, or successfully commercialize our product candidates.

Our financial results and the commercial prospects for such

products and any product candidates we develop would be harmed, our costs could increase, and our ability to generate revenues

could be delayed.

also expect to rely on other third parties to store and distribute drug products for any clinical trials we may conduct.

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of our products, if approved, producing additional losses and depriving us of potential product revenue.

RELATED TO THE DISCOVERY AND DEVELOPMENT OF PRODUCT CANDIDATES

the approach we are taking to discover and develop drugs is novel, it may never lead to marketable products.

are concentrating our antiviral therapeutic product research and development efforts using our proprietary technology, and our

future success depends on the continued successful development of this technology and the products derived from it.

drug products commercialized.

The scientific discoveries that form the basis for our efforts to discover and develop drug product

candidates are relatively new and unproven.

are concentrating our antiviral therapeutic product research and development efforts on using our proprietary technology, and

our future success depends on the continued successful development of this technology and the products derived from it.

never commercialized any products.

The scientific discoveries that form the basis for our efforts to discover and develop drug

product candidates are relatively new and unproven.

The scientific evidence to support the feasibility of developing product candidates

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We may not successfully identify and implement an alternative product development strategy and may as a result cease

we do not succeed in our efforts to identify or discover potential product candidates, your investment may be lost.

we do not succeed in our efforts to identify or discover additional potential product candidates, your investment may be lost.

success of our business depends primarily upon our ability to identify, develop and commercialize antiviral drug products, an

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research methodology or that of our partners may be unsuccessful in identifying potential product candidates;

product candidates may have harmful side effects or may have other characteristics that may make the products unmarketable

or unlikely to receive marketing approval;

product candidates may have harmful side effects or may have other characteristics that make the products unmarketable or

unlikely to receive marketing approval;

or our partners may change their development profiles for potential product candidates or abandon a therapeutic area.

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technical, financial, and human resources.

We may focus our efforts and resources on potential programs or product candidates that

ultimately prove to be unsuccessful.

We may focus our efforts and resources on potential programs or product candidates

that ultimately prove to be unsuccessful.

our future commercial success depends on gaining regulatory approval for our products, we cannot generate revenue without obtaining

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Only a small number of research and development programs result in the commercialization of a product.

The process for obtaining regulatory approval to market a product like our hepatitis C or influenza products is expensive, takes

many years, and can vary substantially based on the type, complexity, and novelty of the product candidates involved.

to generate revenues would be adversely affected if we are delayed or unable to successfully develop our products.

The process for obtaining regulatory approval to market product candidates is expensive, usually takes many years, and can vary

substantially based on the type, complexity, and novelty of the product candidates involved.

Our ability to generate revenues

would be adversely affected if we are delayed or unable to successfully develop our products.

cannot guarantee that any marketing application for our product candidates will be approved.

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of our product candidates.

obtaining marketing approval from regulatory authorities for the sale of product candidates, we or our partners must conduct

extensive preclinical studies and clinical trials to demonstrate the safety and efficacy of the product candidates in humans.

Clinical trials are expensive, difficult to design and implement, can take many years to complete and are uncertain as to

A failure of one or more clinical trials can occur at any stage of testing.

The outcome of preclinical studies and

early clinical trials may not be predictive of the success of later clinical trials, and interim results of a clinical trial

do not predict final results.

Moreover, preclinical and clinical data are often susceptible to varying interpretations and

analyses, and many companies that have believed their product candidates performed satisfactorily in preclinical studies and

clinical trials have nonetheless failed to obtain marketing approval for their products.

that may cause a delay or unsuccessful completion of clinical development include, as examples:

obtaining marketing approval from regulatory authorities for the sale of product candidates, we or our partners must conduct extensive

preclinical studies and clinical trials to demonstrate the safety and efficacy of the product candidates in humans.

Clinical trials

are expensive, difficult to design and implement, can take many years to complete and are uncertain as to outcome.

one or more clinical trials can occur at any stage of testing.

The outcome of preclinical studies and early clinical trials may

not be predictive of the success of later clinical trials, and interim results of a clinical trial do not predict final results.

Moreover, preclinical, and clinical data are often susceptible to varying interpretations and analyses, and many companies that

have believed their product candidates performed satisfactorily in preclinical studies and clinical trials have nonetheless failed

to obtain marketing approval for their products.

that may cause a delay or unsuccessful completion of clinical development include, among other things:

in agreeing with the FDA or other regulatory authorities on final clinical trial design;

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sites dropping out of a trial to the detriment of enrollment;

required to add new clinical sites;

or inconclusive results of clinical trials of our product candidates;

and expenses required to add new clinical sites;

by our contract manufacturers in producing and delivering sufficient supply of clinical trial materials.

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product development costs will also increase if we experience delays in testing or in obtaining marketing approvals.

not know whether any clinical trials will begin as planned, will need to be restructured or will be completed on schedule, if

Significant clinical trial delays also could shorten any periods during which we may have the exclusive right to

commercialize our product candidates or allow our competitors to bring products to market before we do, which would impair

our ability to successfully commercialize our product candidates and may harm our business and results of operations.

inability to successfully complete preclinical and clinical development, whether independently or with our partners, could

cause additional costs to us or impair our ability to generate revenues from our product candidates, including product sales,

milestone payments, profit sharing or royalties.

know whether any clinical trials will begin as planned, will need to be restructured or will be completed on schedule, if at all.

Significant clinical trial delays also could shorten any periods during which we may have the exclusive right to commercialize

our product candidates or allow our competitors to bring products to market before we do, which would impair our ability to successfully

commercialize our product candidates and may harm our business and results of operations.

Any inability to successfully complete

preclinical and clinical development, whether independently or with our partners, could cause additional costs to us or impair

our ability to generate revenues from our product candidates, including product sales, milestone payments, profit sharing or royalties.

product candidates may cause adverse effects or have other properties that could delay or prevent their regulatory approval or

limit the scope of any approved label or market acceptance.

events (“AEs”) or serious adverse events (SAEs”), that may be observed during clinical trials of our product

candidates could cause us, other reviewing entities, clinical trial sites or regulatory authorities to interrupt, delay or halt

such trials and could cause denial of regulatory approval.

If AEs or SAEs are observed in any clinical trials of our product candidates,

including those our partners may develop under alliance agreements, our or our partners’

ability to obtain regulatory approval

for product candidates may be negatively impacted.

or unexpected side effects caused by an approved product could result in significant negative consequences, including:

events (“AEs”) or serious adverse events (“SAEs”), that may be observed during clinical trials of our

product candidates could cause us, other reviewing entities, clinical trial sites or regulatory authorities to interrupt, delay

or halt such trials and could cause denial of regulatory approval.

If AEs or SAEs are observed in any clinical trials of our product

candidates, including those our partners may develop under alliance agreements, our or our partners’

ability to obtain regulatory

approval for product candidates may be negatively impacted.

or unexpected side effects caused by an approved product could result in significant negative consequences, including the following:

authorities may withdraw prior approval of the product or impose restrictions on its distribution in the form of a modified

risk evaluation and mitigation strategy;

risk evaluation and

strategy (“REMS”) which may restrict the manner in which the product can be distributed or administered;

may be required to add labeling statements, such as warnings or contraindications;

may be required to change the way the product is administered or conduct additional clinical trials;

may decide or be forced to temporarily or permanently remove the affected product from the marketplace;

could be sued and held liable for harm caused to patients;

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a warning letter asserting we are in violation of the law;

a REMS or other restrictions on the manufacturing, marketing or use of the product;

an injunction or impose civil or criminal penalties or monetary fines;

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defense of any government investigation of alleged violations of law, or any lawsuit alleging such violations, could require us

to expend significant time and resources in response and could generate negative publicity.

The occurrence of any event or penalty

described above may prevent or inhibit our ability to commercialize our products and generate revenues.

to expend significant time and resources and could generate negative publicity.

Further, the FDA’s and other regulatory

authorities’

policies may change, and additional government regulations may be enacted that could prevent, limit or delay

regulatory approval of our product candidates or increase the cost of compliance.

The occurrence of any event or penalty described

above may prevent or inhibit our ability to commercialize our products and generate revenues.

may not succeed in obtaining or maintaining necessary rights to drug compounds and processes for our development pipeline through

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third-party intellectual property rights on terms that would allow us to make an appropriate return on our investment.

unable to successfully obtain rights to required third-party intellectual property rights, our business, financial condition and

prospects for growth could suffer.

unable to successfully obtain rights to required third-party intellectual property rights, our business, financial condition,

and prospects for growth could suffer.

third parties may be developing competitive products without our knowledge, we may later learn that competitive products are superior

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of these events may occur after we have spent substantial sums in connection with the clinical research of one or more product

with governmental regulations regarding the treatment of animals used in research could increase our operating costs, which would

adversely affect the commercialization of our technology.

Animal Welfare Act (“AWA”), is the United States federal law that covers the treatment of certain animals used in

The AWA imposes a wide variety of specific regulations that govern the humane handling, care, treatment and transportation

of certain animals by producers and users of research animals, most notably relating to personnel, facilities, sanitation, cage

size, feeding, watering and shipping conditions.

Third parties with whom we contract are subject to registration, inspections

and reporting requirements.

Some states have their own regulations, including general anti-cruelty legislation, which establish

certain standards for handling animals.

If we or our contractors fail to comply with United States and foreign laws and regulations,

as applicable, concerning the treatment of animals used in research, we may be subject to fines and penalties and adverse publicity,

and our operations could be adversely affected.

perception of ethical and social issues may limit or discourage the type of research we conduct.

clinical trials will involve people, and we and third parties with whom we contract also conduct research using animals.

authorities could, for public health or other reasons, limit the use of human or animal research or prohibit the use of our technology.

In addition, animal rights activists may protest or make threats against our facilities, which may cause property damage and delay

our research.

Ethical and other concerns about our methods, including our use of human subjects in clinical trials and our use

of animal testing, could adversely affect our market acceptance.

have limited experience in conducting and managing the preclinical development activities and clinical trials necessary to obtain

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To date, with one exception, we have not entered a compound into

human clinical trials.

We may be unable to progress our other product candidates undergoing preclinical testing into clinical

Success in preclinical testing and early clinical trials does not ensure that later clinical trials will succeed, and

favorable initial results from a clinical trial do not determine outcomes in subsequent clinical trials.

The indications of use

for which we are pursuing development may have clinical effectiveness endpoints not previously reviewed or validated by the FDA

or foreign regulatory authorities, which may complicate or delay our effort to obtain marketing approval.

We cannot guarantee

that our clinical trials will succeed.

In fact, most compounds fail in clinical trials, even at companies far larger and more

experienced than us.

human clinical trials, although we expect to initiate a Phase I trial for our Influenza A product candidate in the third quarter

We may be unable to progress our other product candidates undergoing preclinical testing into clinical trials.

in preclinical testing and early clinical trials does not ensure that later clinical trials will succeed, and favorable initial

results from a clinical trial do not determine outcomes in subsequent clinical trials.

The indications of use for which we are

pursuing development may have clinical effectiveness endpoints not previously reviewed or validated by the FDA or foreign regulatory

authorities, which may complicate or delay our effort to obtain marketing approval.

We cannot guarantee that our clinical trials

will succeed.

In fact, most compounds fail in clinical trials, even at companies far larger and more experienced than us.

have not obtained marketing approval or commercialized any of our product candidates.

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our product candidates, or might be significantly delayed in doing so, which will materially harm our business.

RELATED TO OUR INTELLECTUAL PROPERTY

RELATED TO OUR BUSINESS OPERATIONS AND INDUSTRY

we cannot obtain or protect intellectual property rights related to our future products and product candidates, we may not be

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patents with claims that cover the products in the United States or in other countries.

There is no assurance that all of the

potentially relevant prior art relating to our patents and patent applications has been found;

such prior art can invalidate a

patent or prevent a patent from issuing based on a pending patent application.

Even if patents do successfully issue, third parties

may challenge their validity, enforceability or scope, which may cause such patents to be narrowed or invalidated.

Even if unchallenged,

our patents and patent applications may not adequately protect our intellectual property or prevent others from designing around

There is no assurance that all potentially

relevant prior art relating to our patents and patent applications has been found;

such prior art can invalidate a patent or prevent

issuance of a patent based on a pending patent application.

Even if patents do successfully issue, third parties may challenge

their validity, enforceability or scope, which may cause such patents to be narrowed or invalidated.

Even if unchallenged, our

patents and patent applications may not adequately protect our intellectual property or prevent others from designing around our

the patent applications we hold or have in-licensed regarding our programs or product candidates fail to issue or if their breadth

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research companies to release clinical study reports summarizing clinical trial data.

However, with a low response rate to this

initiative thus far, the FDA may consider making release of clinical study reports mandatory and may consider making additional

information publicly available on a routine basis in response to concerns expressed by the academic community, including information

we may consider to be trade secrets or other proprietary information.

If the FDA takes these measures, we may be forced to disclose

propriety information about our product candidates and research, which could materially harm our business.

Following the completion of this pilot program

in March 2020, the FDA may consider making release of clinical study reports mandatory and may consider making additional information

publicly available on a routine basis in response to concerns expressed by the academic community emphasized by the COVID-19 pandemic,

including information we may consider to be trade secrets or other proprietary information.

If the FDA takes these measures, we

may be forced to disclose propriety information about our product candidates and research, which could materially harm our business.

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

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and financial condition.

intellectual property infringement claims may prevent or delay our development and commercialization efforts.

third-party intellectual property infringement claims are asserted against us, it may prevent or delay our development and commercialization

efforts and have a material adverse effect on our business and future prospects.

commercial success depends in part on our avoiding infringement on the patents and proprietary rights of third parties.

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There may be third-party patents

or patent applications with claims to materials, formulations, methods of manufacture or methods for treatment related

to the use or manufacture of our product candidates.

Because patent applications can take many years to issue, there may be

patent applications currently pending that may later result in patents that our product candidates may infringe.

parties may obtain patents in the future and claim that use of our technologies infringes on these patents.

third-party patents were to be held by a court of competent jurisdiction to cover the manufacturing process of any of our

product candidates, any molecules 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.

Similarly, if any third-party patents were to be held by a court of

competent jurisdiction to cover aspects of our formulations, processes for manufacture or methods of use, including

combination therapy, the holders of any such patents may be able to block our ability to develop and commercialize the

applicable product candidate unless we obtained a license or until such patent expires.

In either case, such a license may

not be available on commercially reasonable terms or at all.

or patent applications with claims to materials, formulations, methods of manufacture or methods for treatment related to the

use or manufacture of our product candidates.

Because patent applications can take many years to issue, there may be patent applications

currently pending that may later result in patents that our product candidates may infringe upon.

Third parties may obtain patents

in the future and claim that use of our technologies infringes on these patents.

If any third-party patents were to be held by

a court of competent jurisdiction to cover the manufacturing process of any of our product candidates, any molecules 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.

Similarly, if

any third-party patents were to be held by a court of competent jurisdiction to cover aspects of our formulations, processes for

manufacture or methods of use, including combination therapy, the holders of any such patents may be able to block our ability

to develop and commercialize the applicable product candidate unless we obtained a license or until such patent expires.

case, such a license may not be available on commercially reasonable terms or at all.

making intellectual property claims against us may obtain injunctive or other equitable relief, which could block our ability

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Defense of these claims, regardless of their merit,

involves substantial litigation expense and would be a substantial diversion of our management’s attention from our business.

If a claim of infringement against us succeeds, we may have to pay substantial damages, possibly including treble damages and

attorneys’

fees for willful infringement, pay royalties, redesign our infringing products or obtain one or more licenses

from third parties, which may be impossible or require substantial time and monetary expenditure.

may need to obtain licenses to intellectual property rights from third parties.

may need to obtain licenses from third parties to advance our research or allow commercialization of our product candidates.

may fail to obtain these licenses at a reasonable cost or on reasonable terms, if at all.

In that event, we would be unable to

further develop and commercialize one or more of our product candidates, which could harm our business significantly.

involves substantial litigation expense and diversion of our management’s attention from our business.

If a claim of infringement

against us succeeds, we may have to pay substantial damages, possibly including treble damages and attorneys’

fees for willful

infringement, pay royalties, redesign our infringing products or obtain one or more licenses from third parties, which may be

impossible or require substantial time and monetary expenditure.

of the costs involved in defending patent litigation, we currently lack and may in the future lack the capital to defend our intellectual

property rights.

depend on intellectual property licensed from third parties in our Coronavirus program and termination of any of these licenses

could have a material adverse effect on our business.

our Coronavirus program we leverage the rights to preclinical leads from our two License Agreements with KSURF.

See “Item

Business –

Research and Development Update –

Coronavirus infections”

for more information on these

License Agreements.

depend on the patents, know-how and other intellectual property, licensed from KSURF for the development and, if approved, commercialization

of our COVID-19 therapy.

If these licenses are terminated, or found to be unenforceable, it could result in the loss of significant

rights and could harm our ability to commercialize our future product candidates in the Coronavirus program.

License Agreements impose certain obligations on us, including obligations to use diligent efforts to meet development thresholds

and payment obligations.

Failure by us to comply with such obligations may result in termination of the respective License Agreement.

If KSURF terminates these License Agreements, we may not be able to proceed with our Coronavirus program or discover, develop

or commercialize any other product candidates covered by these agreements.

the License Agreements are complex, and contain certain provisions which may be susceptible to multiple interpretations.

disputes may arise between us and our licensors regarding intellectual property subject to a license agreement, including those

scope of rights, if any, granted under the license agreement and other interpretation-related issues;

and to what extent our technology and processes infringe on intellectual property of the licensor that is not subject to the

license agreement;

our licensor or its licensor had the right to grant the license agreement;

third parties are entitled to compensation or equitable relief, such as an injunction, for our use of the intellectual property

without their authorization;

right to sublicense patent and other rights to third parties under collaborative development relationships;

we are complying with our obligations with respect to the use of the licensed technology in relation to our development and

commercialization of product candidates;

involvement in the prosecution and enforcement of the licensed patents and our licensors’

overall patent prosecution

and enforcement strategy;

allocation of ownership of inventions and know-how resulting from the joint creation or use of intellectual property by our

licensors and by us and any future partners or collaborators;

amounts of royalties, milestones or other payments due under the license agreement.

resolution of any contract interpretation disagreement that may arise could narrow what we believe to be the scope of our rights

to the relevant intellectual property or technology, or increase what we believe to be our financial or other obligations under

the relevant agreement.

may need to obtain additional licenses to intellectual property rights from third parties.

may need to obtain additional licenses from third parties to advance our research or allow commercialization of our product candidates.

We may fail to obtain these licenses at a reasonable cost or on reasonable terms, if at all.

In that event, we would be unable

to further develop and commercialize one or more of our product candidates, which could harm our business significantly.

provide any assurances that third-party patents do not exist that might be enforced against our products, resulting in either

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and/or other forms of compensation to third parties

Because of the costs involved in defending patent litigation, we currently

lack and may in the future lack the capital to defend our intellectual property rights.

may be involved in lawsuits to protect or enforce our patents or the patents of our licensors, which could be expensive, time-consuming

and unsuccessful.

may infringe our patents or the patents of our licensors.

licensing and acquisition of third-party intellectual property rights is a competitive practice, and companies that may be more

established, or have greater resources than we do, may also be pursuing strategies to license or acquire third-party intellectual

property rights that we may consider necessary or attractive in order to develop and commercialize our product candidates.

established companies may have a competitive advantage over us due to their larger size and cash resources or greater clinical

development and commercialization capabilities.

We may not be able to successfully complete such negotiations and ultimately acquire

the rights to the intellectual property surrounding product candidates that we may seek to acquire, in which case our business

could be harmed.

may in the future be involved in lawsuits to protect or enforce our patents or the patents of our licensors, which could be expensive,

time-consuming and unsuccessful.

may infringe on our patents or the patents of our licensors.

To counter such infringement or unauthorized use, we may be required

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in countries where the laws may not protect those rights as fully as in the United States.

of the substantial amount of discovery required in intellectual property litigation, there is a risk that some of our

confidential information could be compromised by disclosure during this type of litigation.

There could also be public

announcements of the results of hearings, motions or other interim proceedings or developments.

If securities analysts or

investors perceive these results to be negative, it could have a material adverse effect on the price of our securities.

may be subject to claims our that employees, consultants or independent contractors have wrongfully used or disclosed confidential

of the substantial amount of discovery required in intellectual property litigation, there is a risk that some of our confidential

information could be compromised by disclosure during this type of litigation.

There could also be public announcements of the

results of hearings, motions or other interim proceedings or developments.

If securities analysts or investors perceive these

results to be negative, it could have a material adverse effect on the price of our common stock.

may be subject to claims that our employees, consultants or independent contractors have wrongfully used or disclosed confidential

information of third parties.

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biotechnology and pharmaceutical industries may cause even more resources being concentrated in our competitors.

Competition may

increase further because of advances in the commercial applicability of technologies and greater availability of capital for investment

in these industries.

Our competitors may develop, acquire or license drug products that are more effective or less costly than

any product candidate we may develop.

the exception of one product candidate, all of our programs are in a preclinical development stage and are targeted toward indications

for which there are approved products on the market or product candidates in clinical development.

We will face competition from

other drugs that are or will be approved for the same therapeutic indications.

Our ability to compete successfully will depend

largely on our ability to leverage our experience in drug discovery and development to:

Additionally,

smaller or early-stage companies of which we may not be aware could also prove to be material competitors, particularly through

collaborative arrangements with larger, more well-established companies or by competing with us for limited resources and strategic

alliances with our current or prospective partners.

Competition may increase further because of advances in the commercial applicability

of technologies and greater availability of capital for investment in these industries.

Our competitors may develop, acquire or

license drug products that are more effective or less costly than any product candidate we may develop.

programs we are focusing on are in a preclinical development stage and are targeted toward indications for which there are approved

products on the market or product candidates in clinical development.

We will face competition from other drugs that are or will

be approved for the same therapeutic indications.

Our ability to compete successfully will depend largely on our ability to leverage

our experience in drug discovery and development to:

and develop therapeutics superior to other products in the market;

qualified scientific, product development and commercial personnel;

and retain qualified scientific, product development and commercial personnel;

patent and/or other proprietary protection for our technology platform and product candidates;

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and commercialize.

We will not achieve our business plan if the acceptance of these products is inhibited by price competition

or the reluctance of physicians to switch from existing drug products to our products, or if physicians switch to other new drug

products or reserve our products for use in limited circumstances.

Additionally, the biopharmaceutical industry is characterized

by rapid technological and scientific change, and we may not be able to adapt to these rapid changes to the extent necessary to

keep up with competitors or at all.

The inability to compete with existing or subsequently introduced drug products would have

a material adverse impact on our business, financial condition and prospects.

For example, the widespread distribution of COVID-19 vaccines which the FDA recently authorized for emergency

use will reduce the demand for any therapeutic product we develop to treat symptoms caused by the virus.

We will not achieve our

business plan if the acceptance of our products is inhibited by price competition or the reluctance of physicians to switch from

existing drug products to our products, or if physicians switch to other new drug products or reserve our products for use in

limited circumstances.

Additionally, the biopharmaceutical industry is characterized by rapid technological and scientific change,

and we may not be able to adapt to these rapid changes to the extent necessary to keep up with competitors or at all.

The inability

to compete with existing or subsequently introduced drug products would have a material adverse impact on our business, financial

condition and prospects.

pharmaceutical companies may invest heavily to accelerate discovery and development of novel compounds or to in-license novel

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relative convenience, ease of administration and acceptance by physicians, patients and healthcare payors;

prevalence and severity of any AEs or SAEs;

prevalence and severity of any adverse effects or serious adverse effects;

or warnings in the label approved by FDA and/or foreign regulatory authorities for such products;

of alternative treatments;

timing of market introduction of our products relative to competitive products and the availability of alternative treatments;

and cost-effectiveness;

execution and effectiveness of our or any collaborators’

execution and effectiveness of our or any partners’

sales and marketing strategies;

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ability to obtain and maintain sufficient third-party payor coverage or reimbursement.

our current product candidates are approved, we expect sales to generate substantially all of our product revenues for the foreseeable

future, and as such, the failure of these products to find market acceptance would harm our business.

we obtain regulatory approval for one product candidate, we expect sales to generate substantially all of our product revenues,

and as such, the failure of these products to find market acceptance would adversely affect our results of operations.

insurance and/or government coverage and adequate reimbursement are not available for our product candidates, it could impair

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and no uniform policy of coverage and reimbursement for products exists among third-party payors in the United States.

we obtain coverage for a given product, the resulting reimbursement payment rates might not be adequate for us to achieve or sustain

profitability or may require co-payments that patients find unacceptable.

If reimbursement is not available, or is available at

limited levels, we may not be able to successfully commercialize product candidates we develop.

trend in the U.S.

healthcare industry is cost containment.

Third-party payors have attempted to control costs by limiting coverage

and the amount of reimbursement for particular products.

Further, third-party payors are increasingly challenging prices charged

for pharmaceutical products, and many third-party payors may refuse to provide coverage and reimbursement for particular drugs

when an equivalent generic drug or a less expensive therapy is available.

There can be no assurance that coverage and reimbursement

will be available for any product we commercialize.

Even if we obtain coverage for a given product, the resulting reimbursement

payment rates might not be adequate for us to achieve or sustain profitability or may require co-payments that patients find unacceptable.

If reimbursement is not available, or is available at limited levels, we may not be able to successfully commercialize product

candidates we develop.

to the recent change in the United States presidency, we expect increased regulation as well as uncertainty, which may adversely

affect our business.

the inauguration of President Biden, we expect that the FDA, the Centers for Disease Control and other agencies which affect our

business may increase their regulatory efforts.

At the senior administrative level, new regulators with a regulatory zeal may

tighten existing regulations and that approach may also be taken in the routine interactions between staff and our scientists

Increased regulation and enforcement may lead to increased costs and further delays in getting approvals, which may

adversely affect our business.

pressures on our drug candidates, including as the result of proposed legislative changes, may negatively impact our future results

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jurisdictions that could affect our ability to sell products profitably.

For example, in May 2018, the Trump administration issued

a plan to lower drug prices, including among other things the disclosure of list prices in television ads, increasing negotiated

discounts in Medicare, banning pharmacy gag clauses, adopting real-time prescription benefit tools, and boosting low-cost generic

and biosimilar competition.

In January 2019, the Trump administration proposed a rule to lower prescription drug prices and out-of-pocket

costs by banning rebates on prescription drugs paid by manufacturers to pharmacy benefit managers, Part D plans and Medicaid managed

care organizations to increase the use and sales of their products.

in February 2019, President Trump expressed concern that prescription drug prices in Canada are approximately 50% of prescription

drug prices in the United States.

At the same time, the current Democratic Presidential candidate is advocating for a Medicare-for-all

While expanding Medicare would increase the demand for prescription drugs, there is a likelihood that Medicare will

be required to negotiate drug prices, which could adversely affect our future prospects.

President Biden has proposed a new health plan that would

rely on a “Medicare-like”

public option for individuals who are not on Medicare and transition to a Medicare-for-All

single payor system in the future.

Among other things, it will seek to:

prescription prices by permitting Medicare to negotiate prices;

price increases;

prices for drugs which do not have competition;

consumers to buy prescriptions from other countries.

changes are subject to Congressional approval and we cannot predict what, if any, of these broad proposals or other legislation

the state level, individual states are increasingly aggressive in passing legislation and implementing regulations designed to

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and marketing cost disclosure and transparency measures.

These measures could reduce the ultimate demand for our products, if

approved, or put pressure on our product pricing.

The availability of generic treatments may also substantially increase pricing

pressures on, and reduce reimbursement for, our future products.

The potential application of user fees to generic drug products

may expedite approval of additional generic drug treatments.

We expect to experience additional pricing pressures in connection

with sale of any of our products, due to the trend toward managed healthcare, the increasing influence of health maintenance organizations

and additional legislative changes.

In addition, regional healthcare authorities and individual hospitals

are increasingly using bidding procedures to determine which pharmaceutical products and suppliers will be included in their prescription

drug and other healthcare programs.

These measures could reduce the ultimate demand for our products, or put pressure on our product

The availability of generic treatments may also substantially increase pricing pressures on, and reduce reimbursement

for, our future products.

The potential application of user fees to generic drug products may expedite approval of additional

generic drug treatments.

We expect to experience additional pricing pressures in connection with the sale of any of our products,

due to the trend toward managed healthcare, the increasing influence of health maintenance organizations and additional legislative

some non-U.S.

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product candidates, we may be unable to generate any revenues from product sales.

do not have an organization for the sales, marketing and distribution of pharmaceutical products and the cost of establishing

do not have a team with experience in the sales, marketing and distribution of pharmaceutical products and the cost of establishing

and maintaining such an organization may exceed the cost-effectiveness of doing so.

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current and future partners may not dedicate sufficient resources to the commercialization of our product candidates or may otherwise

fail in their commercialization due to factors beyond our control.

If we are unable to establish effective alliances to enable

the sale of our product candidates to healthcare professionals and in geographical regions, including the United States, that

will not be covered by our own marketing and sales force, or if our potential future strategic partners do not successfully commercialize

the product candidates, our ability to generate revenues from product sales will be adversely affected.

we are unable to establish adequate sales, marketing and distribution capabilities, whether independently or with third

parties, we may not be able to generate sufficient product revenue and may not become profitable.

We will be competing with

many companies that have extensive and well-funded marketing and sales operations.

Without an internal team or the support of

a third-party to perform marketing and sales functions, we may be unable to compete successfully against these more

established companies.

fail in their commercialization efforts due to factors beyond our control.

If we are unable to establish effective alliances to

enable the sale of our product candidates to healthcare professionals and in geographical regions, including the United States,

that will not be covered by our own marketing and sales force, or if our potential future strategic partners do not successfully

commercialize the product candidates, our ability to generate revenues from product sales will be adversely affected.

we are unable to establish adequate sales, marketing and distribution capabilities, whether independently or with third parties,

we may not be able to generate sufficient product revenue and may not become profitable.

We will be competing with many companies

that have extensive and well-funded marketing and sales operations.

Without an internal team or the support of a third-party to

perform marketing and sales functions, we may be unable to compete successfully against these more established companies.

we obtain approval to commercialize any approved products outside of the United States, a variety of risks associated with international

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typhoons, floods and fires.

RELATED TO OUR BUSINESS OPERATIONS AND INDUSTRY

we lose key management or scientific personnel, cannot recruit qualified employees, directors, officers, or other personnel or

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affect our ability to operate our business and our results of operations.

face potential product liability, and, if successful claims are brought against us, we may incur substantial liability and costs.

we face potential product liability if claims are brought against us, we may incur substantial liability and costs.

our product candidates in clinical trials and the sale of any products for which we obtain marketing approval exposes us to the

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monetary awards to patients or other claimants;

scrutiny and product recalls, withdrawals or labeling, marketing or promotional restrictions;

inability to commercialize our product candidates;

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Any losses or damages we incur could have a material adverse effect on our operations.

The recent coronavirus pandemic has the

potential to impact our business in both the short and long run.

At the moment there is uncertainty to both the extent and duration

of the effect on employees and supply lines.

See the Risk Factor in this Report concerning the COVID-19 virus.

See also risk factor entitled “Because

of the unknown impact from the COVID-19 pandemic, it may have unanticipated material adverse effect upon us.”

our information technology systems are compromised, the information we store and process, including our intellectual property,

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information stored there could be accessed by third parties, publicly disclosed, lost or stolen.

Any such access, disclosure,

misappropriation or other loss of information could result in disruption of our operations, including our existing and future

research collaborations, and damage our reputation, which in its turn could harm our business and future results of operations.

we fail to comply with environmental, health and safety laws and regulations, we could become subject to fines or penalties or

incur costs that could have a material adverse effect on our business.

Any such unauthorized access,

disclosure, misappropriation or other loss of information could result in disruption of our operations, including our existing

and future research collaborations, and damage our reputation, which in its turn could harm our business and future results of

we fail to comply with applicable laws and regulations, including environmental, health and safety laws and regulations, we could

become subject to fines or penalties or incur costs that could have a material adverse effect on our business.

are subject to numerous environmental, health and safety laws and regulations, including those governing laboratory procedures

and the handling, use, storage, treatment and disposal of hazardous materials and wastes.

Our operations involve using hazardous

and flammable materials, including chemicals and biological materials.

Our operations also produce hazardous waste products.

generally contract with third parties for the disposal of these materials and wastes.

We cannot eliminate the risk of contamination

or injury from these materials.

If contamination occurs or injury results from our use of hazardous materials, we could be held

liable for any resulting damages, and any liability could exceed our resources.

We also could incur significant costs associated

with civil or criminal fines and penalties.

and the handling, use, storage, treatment and disposal of hazardous materials and wastes, and the treatment of animals used in

Our operations involve using hazardous and flammable materials, including chemicals and biological materials.

Our operations

also produce hazardous waste products.

We generally contract with third parties for the disposal of these materials and wastes.

We cannot eliminate the risk of contamination or injury from these materials.

If contamination occurs or injury results from our

use of hazardous materials, we could be held liable for any resulting damages, and any liability could exceed our resources.

also could incur significant costs associated with civil or criminal fines and penalties.

Federal Occupational Safety and Health Administration has established extensive requirements relating to workplace safety for

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RELATED TO OUR COMMON STOCK

we believe the recent volatility of our stock price was caused by our announcement of our License Agreement and our acquisition

of rights to use the licensed patents to seek a treatment for coronavirus as well as norovirus, the increase in our stock price

may be temporary for a number of reasons.

increase in our stock price and trading volume may be temporary for a number of reasons, which may cause investors to lose money.

we announced our entry into the License Agreement with the Kansas State University Research Foundation, the price of our common

stock surged from $0.49 as of February 21 to the closing price of $1.77 on February 26 and our daily trading volume also increased

substantially during that time.

Additionally, after our March 6, 2020 announcement regarding the initiation of our coronavirus

program, our trading volume remained extremely high relative the prior 12-month period.

Since then, our stock price has fallen

to a closing price of $0.68 per share on March 26, 2020.

Our common stock may continue to be volatile and could

materially fall for a number of reasons including:

stock surged from $0.49 on February 21, 2020 to the closing price of $1.77 on February 26, 2020 and our daily trading volume also

increased substantially during that time.

After our March 6, 2020 announcement regarding the initiation of our Coronavirus program,

our trading volume remained extremely high relative to the prior 12-month period.

Then, from September to November 2020, our stock

price hovered at or below approximately $1.00 per share before temporarily surging to $2.16 per share on November 30, 2020 with

our trading volume again increasing dramatically as well.

Additionally, a similar trend occurred on January 20, 2021 as our stock

price abruptly increased from $1.51 per share to $2.35 per share and our trading volume increased to nearly 22 million shares

after we announced the completion of our research obligations under the Merck Collaboration Agreement.

Our common stock may continue

to be volatile and could materially fall for a number of reasons including:

Announcements

by competitors that they are initiating human trials of drugs to treat the coronavirus or with respect to a possible vaccine;

announcement that the rapid spread of the coronavirus has receded;

relating to the availability of vaccines and approval of new vaccines;

Announcements

by the FDA of final approval of vaccines and treatments for COVID-19;

Announcements

relating to the spread of new variants of COVID-19;

Announcements

by competitors that they are initiating human trials of drugs to treat COVID-19;

that the rapid spread of COVID-19 has receded;

disclosure that the use of our technology and the patents we licensed do not appear promising for the treatment of this virus;

continued large declines in major stock market indexes which causes investors to sell our common stock;

announcement concerning the initiation of or delay in clinical trials for our Influenza A product candidate;

Merck’s

announcements concerning our Influenza A/B product candidate;

termination of any other factors which may have created the unusual volatility and spike in volume.

cannot assure you that our stock price and volume will stabilize, in which case investors may sustain large losses

the current price and volume level is reduced, investors may sustain large losses.

to factors beyond our control, our common stock price may be volatile, or may decline regardless of our operating performance,

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and volume fluctuations in the overall stock market from time-to-time;

the current bull market ends, investors may sell our common stock to meet margin calls on other stocks or as the result of

economic disruptions;

in the market prices and trading volumes of biotechnology stocks generally, or those in our peer group in particular;

announcements concerning the initiation and results of clinical trials;

in operating performance and stock market valuations of other biotechnology companies generally, or those in our industry

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our company or our failure to meet these estimates or the expectations of investors;

financial projections we may provide to the public, any changes in those projections or our failure to meet those projections.

announcements

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or anticipated changes in our operating results or fluctuations in our operating results;

involving us, our current or former officers and directors, our stockholders, our industry, or investigations by regulators

into our operations or those of our competitors;

or disputes concerning our intellectual property or other proprietary rights;

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securities, securities class action litigation has often been instituted against these companies.

This litigation, if instituted

Any litigation, if instituted

against us, could result in substantial costs and a diversion of our management’s attention and resources.

Proceedings”

for a description of certain pending litigation.

future impairment in the carrying value of goodwill and in-process research and development assets could depress our stock price.

we incur any future impairment in the carrying value of our goodwill asset, it could depress our stock price.

Historically,

we had a significant amount of goodwill and indefinite-lived intangible assets for in-process research and development (“IPR&D”)

on our balance sheet.

Goodwill and indefinite-lived intangible assets must be evaluated for impairment annually or more frequently

we had a significant amount of goodwill on our balance sheet.

Goodwill must be evaluated for impairment annually or more frequently

if events indicate it is warranted.

If the carrying value of a reporting unit or IPR&D asset exceeds its current fair value,

the goodwill or IPR&D asset is considered impaired.

Events and conditions that could result in impairment in the value of

our indefinite-lived assets and goodwill include, but are not limited to, significant negative industry or economic trends, significant

decline in the Company’s stock price for a sustained period of time, significant decline in market capitalization relative

to net book value, limited funding that could delay development efforts, significant changes in the manner of use of the assets

or the strategy for the Company’s overall business, safety or efficacy issues that surface during development efforts, or

preclinical and clinical outcomes that reduce the probability for technical and regulatory success of our product candidates.

have fully written-off our IPR&D, and we no longer have an IPR&D asset as of December 31, 2018;

refer to “Item 7

Management’s Discussion and Analysis –

Critical Accounting Policies and Estimates –

Business Combinations

and Intangible Assets.”

December 31, 2019 and 2018, the Company had goodwill of $19,092,343 and $65,195,000 respectively.

Based on the fair value of its

reporting unit, measured by the Company’s Nasdaq market capitalization and an income based

analysis, which exceeded the carrying value at December 31, 2019;

we have incurred an impairment charge of approximately $46,100,000

from our goodwill as of December 31,2019.

If the carrying value of a reporting unit asset exceeds its current fair value, the goodwill

asset is considered impaired.

Events and conditions that could result in impairment in the value of our goodwill include, but

are not limited to, significant negative industry or economic trends, significant decline in the Company’s stock price for

a sustained period of time, significant decline in market capitalization relative to net book value, limited funding that could

delay development efforts, significant changes in the manner of use of the assets or the strategy for the Company’s overall

business, safety or efficacy issues that surface during development efforts, or preclinical and clinical outcomes that reduce

the probability for technical and regulatory success of our product candidates.

did not incur any impairment to goodwill during the year ended December 31, 2020 and during the year ended December 31, 2019,

we had incurred an impairment charge of approximately $46,100,000 from our goodwill reducing it to $19,092,343.

may in the future be required to record additional impairment charges to write-off goodwill which is also related to our merger

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As a result, these

stockholders, acting together, would have the ability to control the outcome of matters submitted to our stockholders for approval,

including the election of directors and any merger, consolidation or sale of all or substantially all of our assets.

Raymond Schinazi, our former Board Chairman, and Dr.

Philip Frost, a director and certain other stockholders entered into a Stockholders

Rights Agreement in November 2014 when we acquired another company headed by Dr.

stockholders, acting together, would have the ability to influence or control the outcome of matters submitted to our stockholders

for approval, including the election of directors and any merger, consolidation or sale of all or substantially all of our assets.

Raymond Schinazi, our former Board Chairman, owns approximately 14.3% of our common stock.

Schinazi and Dr.

Philip Frost, a director, and certain other stockholders entered into a Stockholders Rights Agreement in November

This Agreement gives each of Dr.

Frost (and certain other stockholders) the right to designate three directors to a seven-person board of directors and

together agree upon the seventh designee.

In addition, our principal stockholders, acting together, would have the ability to

control the management and affairs of our company.

Accordingly, this concentration of ownership might harm the market price of

our common stock by:

Schinazi (together with certain other stockholders) and Dr.

Frost (together with certain

other stockholders) the right to designate three directors to a seven-person board of directors and together agree upon the seventh

In addition, our principal stockholders, acting together, would have the ability to control the management and affairs

of our company.

Accordingly, this concentration of ownership might harm the market price of our common stock by:

deferring or preventing a change in corporate control;

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a potential acquirer from making a tender offer or otherwise attempting to obtain control of us.

the Stockholder Rights Agreement provides Dr.

Schinazi and Dr.

Frost and certain other Company stockholders with rights including

the right to approve future financings and a right of first refusal, which have not been impediments to date.

However, in the

event of any future disagreements between Dr.

Schinazi and Dr.

Frost, we may be unable to raise future capital we need or make

concessions to one of these directors, which may adversely affect us or result in added expenses.

Schinazi did not consent

to our most recent financing in March 2020.

We are uncertain what impact this may have upon us.

sales and issuances of our common stock or rights to purchase common stock, including under our equity incentive plan, could cause

additional dilution of the percentage ownership of our stockholders and could cause our stock price to fall.

November 2019 and February and March 2020 we conducted public offerings in which we issued a total of approximately 17.03 million

shares of common stock and raised a total of approximately $20.8 million in gross proceeds.

While we expect that these financings

will be sufficient to fund our operations for more than the 12 months, significant additional capital may be needed in the future

to continue our planned operations.

To the extent we have raised and continue to raise additional capital by issuing equity securities,

our stockholders may experience substantial dilution.

We may sell common stock, convertible securities or other equity securities

in one or more transactions at prices and in a manner we determine from time to time.

If we sell common stock, convertible securities

or other equity securities in more than one transaction, investors may be materially diluted by subsequent sales.

may also result in material dilution to our existing stockholders, and new investors could gain rights superior to our existing

stockholders.

our Equity Incentive Plans, our management may grant stock options and other equity-based awards to our employees, directors and

Approximately 3,588,377 million shares of common stock are available for future grant.

are currently involved in a class action lawsuit, a related derivative action, and other litigation, and may in the future be

involved in other legal proceedings, which may be expensive and time consuming to defend, and, if resolved adversely, could harm

our business and financial condition.

and certain current and former executive officers and directors of the Company are currently defendants in a class action lawsuit

filed with the U.S.

District Court for the District of New Jersey alleging violation of Section 10(b) of the Exchange Act and

Rule 10b-5 promulgated thereunder, and a related derivative action lawsuit filed with the U.S.

Court for the Western District of Washington and may become involved in additional legal proceedings in the future.

proceedings can be time consuming, divert management’s attention and resources and cause us to incur significant expenses.

While we believe we have insurance coverage for the class action suit and the derivative action, our insurance carrier has initially

declined to cover the lawsuits.

While we are seeking to reverse this decision, even if we can do so the amount of insurance may

be insufficient.

Furthermore, because litigation is inherently unpredictable, the results of any such actions may have a material

adverse effect on our business, and financial condition, and cause our stock price to decrease.

“Item 3 –

Legal Proceedings”

for more information.

to meet the continued listing requirements of The Nasdaq Capital Market, could result in delisting of our common stock, which

in its turn would negatively affect the price of our common stock and limit investors’

issuances of our common stock or rights to purchase our common stock could cause additional dilution of the percentage ownership

of our stockholders and could cause our stock price to fall.

the year ended December 31, 2020 we conducted public offerings in which we issued a total of approximately 35,289,000 shares of

common stock and raised a total of approximately $35,783,000 in net proceeds.

Through March 15, 2021, we sold an additional 1,030,000

common shares and received net proceeds of $2,072,047 pursuant to our At-the-Market Offering Agreement.

While we expect that these

financings will be sufficient to fund our operations for more than the 12 months, significant additional capital may be needed

in the future to continue our planned operations.

To the extent we have raised and continue to raise additional capital by issuing

equity securities, our stockholders may experience substantial dilution.

We may sell common stock, convertible securities or other

equity securities in one or more transactions at prices and in a manner we determine from time to time.

If we sell common stock,

convertible securities or other equity securities in more than one transaction, investors may be materially diluted by subsequent

These sales may also result in material dilution to our existing stockholders, and new investors could gain rights superior

to our existing stockholders.

sales of large amounts of our common stock in the public market or a perception that such sales might occur could cause a decrease

in our stock price.

of March 15, 2021, out of approximately 71.5 million shares of common stock outstanding, approximately 56 million are either free

trading or may be sold without volume or manner of sale limitations under Rule 144.

The remainder of our shares, because they

are held by our officers, directors and Dr.

Schinazi, 10% shareholder, who we deem affiliates, are subject to additional restrictions

as described below.

general, Rule 144 provides that any person who is not an affiliate of the Company and has not been an affiliate for 90 days, and

who has held restricted common stock for at least six months, is entitled to sell their restricted stock freely, provided that

we stay current in our SEC filings.

After one year, a non-affiliate may sell without any restrictions other than we must be current

in our filings for the second year.

shares of common stock outstanding which are held by affiliates of the Company are subject to additional restrictions.

may sell the greater of (i) one percent of our outstanding stock or (ii) as long as our common stock is listed on The Nasdaq Capital

Market (“Nasdaq”) the average weekly trading volume over a prior four week period after a six-month holding period

with the following restrictions:

are current in our filings;

manner of sale provisions;

Additionally,

as of December 31, 2020, we had 1,780,000 options and 243,000 warrants outstanding that, if fully exercised, would result in the

issuance of 2,023,000 shares of common stock and 2.3 million shares of common stock remain available for future grants under the

Cocrystal Pharma, Inc.

2015 Equity Incentive Plan.

sales of substantial amounts of shares of our common stock in the public market, or the perception that those sales may occur,

could cause the market price of our common stock to decline significantly, even if our business is performing well.

we fail to meet the Nasdaq continued listing requirements, it could result in delisting of our common stock, negatively affect

the price of our common stock and limit investors’

ability to trade in our common stock.

common stock trades on The Nasdaq Capital Market (“Nasdaq”).

Nasdaq rules impose certain continued listing requirements,

including the minimum $1 bid price, corporate governance standards and number of public stockholders.

On December 13, 2019, we

were notified by Nasdaq that we were not compliant with its closing bid price requirement because the closing bid price of our

common stock was below $1.00 per share for 30 consecutive trading days.

While we have regained compliance and this matter has

since been resolved, if we fail to meet these continued listing requirements in the future, Nasdaq may take steps to delist our

common stock.

If our common stock is delisted from The Nasdaq Capital Market, we could face significant material adverse consequences,

common stock is listed on Nasdaq.

Nasdaq rules impose certain continued listing requirements, including the minimum $1 bid price,

corporate governance standards and number of public stockholders.

In two separate instances on December 13, 2019 and on November

4, 2020, we were notified by Nasdaq that we were not compliant with its closing bid price requirement because the closing bid

price of our common stock was below $1.00 per share for 30 consecutive trading days.

While we subsequently regained compliance

with respect to each such occurrence, if we fail to meet these continued listing requirements in the future Nasdaq may delist

our common stock.

If our common stock is delisted, we could face significant material adverse consequences, including:

limited availability of market quotations for our common stock;

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limited amount of news and analyst coverage for our company;

limited ability to issue additional securities or obtain additional financing in the future.

limited ability to raise capital in the future.

ability to use our net operating loss carry forwards and certain other tax attributes may be limited.

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credits) to offset its post-change income may be limited.

We believe that, with the RFS Pharma and Discovery mergers and other

transactions that have occurred over the past three years, we may have triggered an “ownership change”

We believe that, with the RFS Pharma, LLC and Cocrystal Discovery, Inc.

mergers and other transactions that have occurred more than six years ago, we may have triggered an “ownership change”

We may also experience ownership changes in the future because of subsequent shifts in our stock ownership.

If we earn net taxable

income, our ability to use our pre-change net operating loss carry forwards to offset U.S.

generate taxable income, our ability to use our pre-change NOLs carry forwards to offset U.S.

federal taxable income may be subject

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the use of NOLs is suspended or otherwise limited, which could accelerate or permanently increase state taxes owed.

do not intend to pay dividends on our common stock so any returns will be limited to the value of our stock.

have never declared or paid any cash dividends on our common stock.

We anticipate we will retain future earnings for the development,

operation and expansion of our business and do not anticipate declaring or paying any cash dividends for the foreseeable future.

Any return to stockholders will therefore be limited to the appreciation of their stock.

we may not attract the attention of major brokerage firms, it could have a material impact upon the price of our common stock.

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for us to attract new investors when we acquire additional capital.

sales of our common stock could cause the market price for our common stock to decline, even if our business is performing well.

of March 28, 2020, we had approximately 52.1 million shares of common stock outstanding, approximately 36.9 million of which are

either free trading or may be sold without volume or manner of sale limitations under Rule 144.

The remainder of our shares, because

they are held by affiliates, are subject to additional restrictions as described below.

general, Rule 144 provides that any person who is not an affiliate of the Company and has not been an affiliate for 90 days, and

who has held restricted common stock for at least six months, is entitled to sell their restricted stock freely, provided that

we stay current in our SEC filings.

After one year, a non-affiliate may sell without any restrictions.

largest stockholder, Dr.

Raymond Schinazi, who beneficially owned 19.7% of our common stock as of March 29, 2020, resigned as

our Board Chairman in February 2019.

However, a Stockholder Rights Agreement he signed in 2014, in which another principal shareholder

is a party, requires that we continue to treat him as an affiliate.

shares of common stock outstanding which are held by affiliates of the Company are subject to additional restrictions.

may sell after a six-month holding period with the following restrictions:

are current in our filings;

manner of sale provisions;

sales of substantial amounts of shares of our common stock in the public market, or the perception that those sales will occur,

could cause the market price of our common stock to decline significantly, even if our business is performing well.

may issue preferred stock which could make it more difficult for a third-party to acquire us and could depress our stock price .

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may issue one or more additional series of preferred stock that have more than one vote per share, so long as the Board obtains

the majority approval of each of the groups of stockholders who formerly held our Series A and Series B.

This could permit our

Board to issue preferred stock to investors who support our management and give effective control of our business to our management.

Issuance of preferred stock could block an acquisition resulting in both a drop in our stock price and a decline in interest of

our common stock.

This could make it more difficult for stockholders to sell their common stock.

This could also cause the market

price of our common stock shares to drop significantly, even if our business is performing well.

the majority approval of each of the groups of stockholders who formerly held our Series A and Series B Convertible Preferred

Stock, which is no longer authorized.

This could permit our Board to issue preferred stock to investors who support our management

and give effective control of our business to our management.

Issuance of preferred stock could block an acquisition resulting

in both a drop in our stock price and a decline in interest of our common stock.

This could make it more difficult for stockholders

to sell their common stock.

This could also cause the market price of our common stock shares to drop significantly, even if our

business is performing well.

amended and restated Bylaws provide for an exclusive forum in the Court of Chancery of the State of Delaware for certain disputes

between us and our stockholders, and the exclusive forum in the Delaware federal courts for the resolution of any complaint asserting

a cause of action under the Securities Act and the Exchange Act.

amended and restated Bylaws provide that unless the Company consents in writing to the selection of an alternative forum, the

Court of Chancery of the State of Delaware (or, if such court does not have subject matter jurisdiction thereof, the U.S.

Court of Delaware) will, to the fullest extent permitted by law, be the sole and exclusive forum for:

(i) any derivative action

or proceeding brought on behalf of the Company (except to the extent that the Exchange Act provides otherwise), (ii) any action

asserting a claim of breach of a fiduciary duty owed by any director or officer (or affiliate of any of the foregoing) of the

Company to the Company or the Company’s stockholders, (iii) any action asserting a claim arising pursuant to any provision

of the Delaware General Corporation Law, the Company’s Certificate of Incorporation or Bylaws, or (iv) any other action

asserting a claim arising under, in connection with, and governed by the internal affairs doctrine.

The amended and restated Bylaws

further provide that unless the Company consents in writing to the selection of an alternative forum, the federal district courts

of the United States of America located in Delaware will be the exclusive forum for the resolution of any complaint asserting

a cause of action arising under the Securities Act or the Exchange Act and any person or entity purchasing or otherwise acquiring

or holding any interest in shares of capital stock of the Company will be deemed to have notice of and consented to these provisions.

believe these provisions may benefit us by providing increased consistency in the application of Delaware law and federal securities

laws by chancellors and judges, as applicable, particularly experienced in resolving corporate disputes, efficient administration

of cases on a more expedited schedule relative to other forums and protection against the burdens of multi-forum litigation.

a court were to find the choice of forum provision that is contained in our amended and restated Bylaws to be inapplicable or

unenforceable in an action, we may incur additional costs associated with resolving such action in other jurisdictions, which

could materially adversely affect our business, results of operations, and financial condition.

For example, Section 22 of the

Securities Act provides that state and federal courts have concurrent jurisdiction over claims to enforce any duty or liability

created by the Securities Act or the rules and regulations promulgated thereunder.

Accordingly, there is uncertainty as to whether

a court would enforce such a forum selection provision as written in connection with claims arising under the Securities Act.

While to date, the Delaware Supreme Court has upheld the exclusive jurisdiction provisions in certificates of incorporation for

claims under the Securities Act, no court has ruled on the exclusive venue provision for claims under the Securities Act or the

Exchange Act.

Accordingly, if a stockholder files a Securities Act claim or an Exchange Act claim in another federal district

court and we seek to rely upon the Delaware venues, we may not be successful.

the choice of forum provisions in our Bylaws may have the effect of severing certain causes of action between federal and state

courts, stockholders seeking to assert claims against us or any of our current or former director, officer, other employee, agent,

or stockholder, may be discouraged from bringing such claims due to a possibility of increased litigation expenses arising from

litigating multiple related claims in two separate courts.

The choice of forum provisions may therefore limit a stockholder’s

ability to bring a claim in a judicial forum that it finds favorable for disputes with us or any of our current or former director,

officer, other employee, agent, or stockholder.

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.

What changed 10-K

Item 1A. Risk Factors