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Item 1A. Risk Factors

2021-03-30 compared with 2020-03-16 · 836 added, 716 removed, 762 unchanged (67% of the section changed)

Summary Risk Factors

The following is a summary of material risks that could affect

our business.

This summary may not contain all of our material risks, and it is qualified in its entirety by the more detailed

risk factors set forth below.

Risks Related to our Financial Position and Need for Additional

We have a history of operating losses, expect to incur

additional operating losses in the future and may never be profitable.

Our cost of operations could increase significantly more than what we expect depending on the costs to complete our development

program for DefenCath/Neutrolin.

We will need to finance our future cash needs through public or private equity offerings, debt financings or corporate collaboration

and licensing arrangements.

Any additional funds that we obtain may not be on terms favorable to us or our stockholders and may

require us to relinquish valuable rights.

Risks Related to the Development and Commercialization

of Our Product Candidates

Defencath, our lead product candidate, has received Fast Track designation and Qualified Infectious Disease Product designation

from FDA, but we cannot provide assurances that these designations will not be rescinded.

If the FDA requires a second clinical trial for DefenCath or imposes additional manufacturing requirements

to approve the New Drug Application, the development of DefenCath will take longer and cost more to complete, and we will need

significant additional funds to undertake a second trial, if required.

Our only product Neutrolin is only approved in Europe and is still in development in the United States.

Final approval by regulatory authorities of our product candidates for commercial use may be delayed, limited or prevented,

any of which would adversely affect our ability to generate operating revenues.

Successful development and commercialization of our other products is uncertain.

If 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 harm our business.

The successful commercialization of Neutrolin will depend on obtaining coverage and reimbursement for use of Neutrolin from

third-party payors.

Physician and patients may not accept and use our products.

Changes in funding for the FDA and other government agencies or future government shutdowns or disruptions could cause delays

in the submission and regulatory review of marketing applications, which could negatively impact our business or prospects.

The outbreak of the novel coronavirus disease, COVID-19, or other pandemic, epidemic or outbreak of an infectious disease may

materially and adversely impact our business, including our preclinical studies and clinical trials.

Clinical trials required for our product candidates may be expensive and time-consuming, and their outcome is uncertain.

If we fail to comply with international regulatory requirements, we could be subject to regulatory delays, fines or other penalties.

We do not have, and may never obtain, the regulatory approvals we need to market our product candidates outside of the European

Even if approved, our products will be subject to extensive post-approval regulation.

Risks Related to Our Business and Industry

Competition and technological change may make our product candidates and technologies less attractive or obsolete.

Healthcare policy changes, including reimbursement policies for drugs and medical devices, may have an adverse effect on our

business, financial condition and results of operations.

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

or experience increases in compensation costs, our business may materially suffer.

If we are unable to hire additional qualified personnel, our ability to grow our business may be harmed.

We may not successfully manage our growth.

We face the risk of product liability claims and the amount of insurance coverage we hold now or in the future may not be adequate

to cover all liabilities we might incur.

We may be exposed to liability claims associated with the use of hazardous materials and chemicals.

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and global economic conditions may pose challenges to our business strategy, which relies on funding from the

financial markets or collaborators.

Risks Related to Our Intellectual Property

If we materially breach or default under any of our license agreements, the licensor party to such agreement will have the

right to terminate the license agreement, which termination may materially harm our business.

If we and our licensors do not obtain protection for and successfully defend our respective intellectual property rights, competitors

may be able to take advantage of our research and development efforts to develop competing products.

Ongoing and future intellectual property disputes could require us to spend time and money to address such disputes and could

limit our intellectual property rights.

The decisions by the European and German patent offices may affect patent rights in other jurisdictions.

If we infringe the rights of third parties we could be prevented from selling products and forced to pay damages and defend

against litigation.

Risks Related to Dependence on Third Parties

We currently have no internal marketing and sales organization and currently rely and intend to continue to rely on third parties

to market, sell, and distribute Neutrolin outside of the U.S.

We may seek a sales partner in the U.S.

if DefenCath receives FDA

approval or we may undertake marketing and sales of DefenCath in the U.S.

If we are unable to enter into or maintain

agreements with third parties to market and sell DefenCath or any other product after approval or are unable to find a sales partner

or establish our own marketing and sales capabilities, we may not be able to generate significant or any product revenues.

If we or our collaborators are unable to manufacture our products in sufficient quantities or are

unable to obtain regulatory approvals for a manufacturing facility, we may be unable to meet demand for our products and we may

lose potential revenues.

Corporate and academic collaborators may take actions that delay, prevent, or undermine the success of our products.

Data provided by collaborators and others upon which we rely that has not been independently verified could turn out to be

false, misleading, or incomplete.

We rely on third parties to conduct our clinical trials and pre-clinical studies.

If those parties do not successfully carry

out their contractual duties or meet expected deadlines, our product candidates may not advance in a timely manner or at all.

We will depend on third party suppliers and contract manufacturers for the manufacturing of our product candidates and have

no direct control over the cost of manufacturing our product candidates.

Increases in the cost of manufacturing our product candidates

would increase our costs of conducting clinical trials and could adversely affect our future profitability.

Risks Related to Our Common Stock

We will need additional financing to fund our activities in the future, which likely will dilute our stockholders.

Our executive officers and directors may sell shares of their stock, and these sales could adversely affect our stock price.

Our common stock price has fluctuated considerably and is likely to remain volatile, in part due to the limited market for

our common stock and you could lose all or a part of your investment.

A significant number of additional shares of our common stock may be issued at a later date, and their sale could depress the

market price of our common stock.

Provisions in our corporate charter documents and under Delaware law could make an acquisition of us, which may be beneficial

to our stockholders, more difficult.

If we fail to comply with the continued listing standards of the Nasdaq Global Market, it may result in a delisting of our

common stock from the exchange.

Laws, rules and regulations relating to public companies may be costly and impact our ability to attract and retain directors

and executive officers.

Our internal control over financial reporting and our disclosure controls and procedures may not prevent all possible errors

that could occur.

Security breaches and other disruptions could compromise our information and expose us to liability, which would cause our

business and reputation to suffer.

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

common stock.

Related to Our Financial Position and Need for Additional Capital

have a history of operating losses, expect to incur additional operating losses in the future and may never be profitable.

Our prospects must be considered in light

of the uncertainties, risks, expenses, and difficulties frequently encountered by companies in the early stages of operation.

We incurred net losses of approximately $16.4 million and $26.8 million for the years ended December 31, 2019 and 2018, respectively.

prospects must be considered in light of the uncertainties, risks, expenses, and difficulties frequently encountered by companies

in the early stages of operation.

We incurred net losses of approximately $22.0 million and $16.4 million for the years ended

December 31, 2020 and 2019, respectively.

As of December 31, 2020, we had an accumulated deficit of approximately $217.4 million.

We expect to incur substantial additional

operating expenses over the next several years as our research, development, pre-clinical testing, clinical trial and commercialization

activities increase as we develop and commercialize Neutrolin and our other product candidates.

As a result, we expect to experience

negative cash flow as we fund our operating losses and capital expenditures.

The amount of future losses and when, if ever, we

will achieve profitability are uncertain.

Neutrolin was launched in December 2013 and is currently available for distribution

in certain European Union and Middle East countries.

We have not generated any significant commercial revenue and do not expect

to generate substantial revenues from Neutrolin unless and until it is approved by the United States Food and Drug Administration

(“FDA”) and launched in the United States (“U.S.”) market, and we might never generate significant revenues

from the sale of Neutrolin or any other products.

Our ability to generate revenue and achieve profitability will depend on, among

other things, the following:

obtaining FDA approval of Neutrolin for the prevention of catheter-related bloodstream infections

(“CRBSIs”) in patients with end-stage renal disease receiving hemodialysis through a central venous catheter;

launching and marketing Neutrolin in the U.S., if approved by the FDA;

successfully marketing Neutrolin in foreign countries in

which it is approved for sale;

obtaining necessary regulatory approvals for our other product candidates from the FDA and, if

sought, international regulatory agencies;

establishing manufacturing, sales, and marketing arrangements, either alone or with

third parties;

We expect to incur substantial additional operating expenses over the next several years as our research, development, pre-clinical

testing, clinical trial and commercialization activities increase as we develop and commercialize DefenCath and our other product

As a result, we expect to experience negative cash flow as we fund our operating losses and capital expenditures.

The amount of future losses and when, if ever, we will achieve profitability are uncertain.

Neutrolin was launched in December

2013 and is currently available for distribution in certain European Union and Middle East countries.

We have not generated any

significant commercial revenue and do not expect to generate substantial revenues from DefenCath unless and until it is approved

by the United States Food and Drug Administration (“FDA”) and launched in the United States (“U.S.”) market,

and we might never generate significant revenues from the sale of DefenCath or any other products.

Our ability to generate revenue

and achieve profitability will depend on, among other things, the following:

obtaining FDA approval of DefenCath for the prevention

of catheter-related bloodstream infections (“CRBSIs”) in patients with kidney failure receiving hemodialysis through

a central venous catheter;

successfully launching and marketing DefenCath in the U.S., if approved by the FDA;

successfully marketing

Neutrolin in foreign countries in which it is approved for sale;

obtaining necessary regulatory approvals for our other product

candidates from the FDA and, if sought, international regulatory agencies;

establishing manufacturing, sales, and marketing arrangements,

either alone or with third parties;

and raising sufficient funds to finance our activities.

We might not succeed at any of these undertakings.

are unsuccessful at some or all of these undertakings, our business, prospects, and results of operations may be materially adversely

We might not succeed at any of these

undertakings.

If we are unsuccessful at some or all of these undertakings, our business, prospects, and results of operations

may be materially adversely affected.

cost of operations could increase significantly more than what we expect depending on the costs to complete our development program

for Neutrolin.

for DefenCath.

operations are subject to a number of factors that can affect our operating results and financial condition.

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and our ability to raise capital to support our operations.

To date, our commercial operations have not

generated sufficient revenues to enable profitability.

As of December 31, 2019, we had an accumulated deficit of $195.4 million,

and incurred net losses of $16.4 million for the year then ended.

Based on the current development plans for Neutrolin in both

and foreign markets (including the concluded hemodialysis Phase 3 clinical trial in the U.S.) and our other operating

requirements, management believes that the existing cash at December 31, 2019 plus funding raised through March 12, 2020, will

be sufficient to fund operations into the second quarter of 2021.

We will need additional funding for a second Phase 3 clinical

trial, if required by the FDA, and funding for the commercialization of Neutrolin upon FDA approval.

Our continued operations will ultimately

depend on our ability to raise additional capital through various potential sources, such as equity and/or debt financings, strategic

relationships, potential strategic transactions or out-licensing of our products in order to complete the development of Neutrolin

and until we achieve profitability, if ever.

We can provide no assurances that such financing or strategic relationships will

be available on acceptable terms, or at all.

Without this funding, we could be required to delay, scale back or eliminate some

or all of our research and development programs which would likely have a material adverse effect on our business.

To date, our commercial operations have not generated sufficient

revenues to enable profitability.

As of December 31, 2020, we had an accumulated deficit of $217.4 million, and incurred net losses

of $22.0 million for the year then ended.

Based on the current development plans for DefenCath and Neutrolin in both the U.S.

foreign markets (including the concluded hemodialysis Phase 3 clinical trial in the U.S.) and our other operating requirements,

management believes that the existing cash at December 31, 2020, after taking into consideration the $41.5 million of net proceeds

received in January and February 2021 from the at-the-market program, will be sufficient to fund operations at least into the second

half of 2022.

We will need additional funding for the commercialization of DefenCath upon FDA approval and funding for the label

expansion studies for DefenCath into oncology and total parenteral nutrition.

continued operations will ultimately depend on our ability to raise additional capital through various potential sources, such

as equity and/or debt financings, strategic relationships, potential strategic transactions or out-licensing of our products in

order to complete the development of DefenCath and until we achieve profitability, if ever.

We can provide no assurances that

such financing or strategic relationships will be available on acceptable terms, or at all.

Without this funding, we could be

required to delay, scale back or eliminate some or all of our research and development programs which would likely have a material

adverse effect on our business.

will need to finance our future cash needs through public or private equity offerings, debt financings or corporate collaboration

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require us to relinquish valuable rights.

We have launched Neutrolin in certain European

Union and Middle East countries, but to date have no other approved product on the market and have not generated significant product

revenue from Neutrolin to date.

Unless and until we receive applicable regulatory approval for Neutrolin in the U.S., we cannot

sell Neutrolin in the U.S.

Therefore, for the foreseeable future, we will have to fund all of our operations and capital expenditures

from Neutrolin sales in Europe and other foreign markets, if approved, cash on hand, additional financings, licensing fees and

We believe that our cash resources as of

December 31, 2019 plus funding raised through March 12, 2020 will be sufficient to fund operations into the second quarter of 2021.

Nevertheless, we may need to raise additional funds through financings or strategic relationships if our costs exceed our expectations,

as well as funds for our operations beyond the first quarter of 2021.

We can provide no assurances that any financing or strategic

relationships will be available to us on acceptable terms, or at all.

We expect to continue to use significant cash to fund our

operations as we seek FDA approval of Neutrolin in the U.S., commercialize Neutrolin in Europe and other markets, pursue development

of our medical devices and other business development activities, and incur additional legal costs to defend our intellectual property.

have launched Neutrolin in certain European Union and Middle East countries, but to date have no other approved product on the

market and have not generated significant product revenue from Neutrolin to date.

Unless and until we receive applicable regulatory

approval for DefenCath in the U.S., we cannot sell DefenCath in the U.S.

Therefore, for the foreseeable future, we will have to

fund all of our operations and capital expenditures from Neutrolin sales in Europe and other foreign markets, if approved, cash

on hand, additional financings, licensing fees and grants.

We believe that our cash resources as of December 31, 2020,

after taking into consideration the $41.5 million of net proceeds received in January and February 2021 from the at-the-market

program, will be sufficient to fund operations at least into the second half of 2022.

Nevertheless, we may need to raise additional

funds through financings or strategic relationships if our costs exceed our expectations, as well as funds for our operations beyond

the second half of 2022.

We can provide no assurances that any financing or strategic relationships will be available to us on

acceptable terms, or at all.

We expect to continue to use significant cash to fund our operations as we seek FDA approval of DefenCath

in the U.S., commercialize Neutrolin in Europe and other markets, pursue development of our medical devices and other business

development activities, and incur additional legal costs to defend our intellectual property.

raise needed capital, we may sell additional equity or debt securities, obtain a bank credit facility, or enter into a corporate

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Related to the Development and Commercialization of Our Product Candidates

Neutrolin®,

our lead product candidate, has received Fast Track designation and Qualified Infectious Disease Product designation from FDA,

but we cannot provide assurances that these designations will not be rescinded.

is being developed as a catheter lock solution for the prevention of CRBSIs in patients with end-stage renal disease receiving

hemodialysis through a central venous catheter.

FDA has determined that Neutrolin will be regulated as a New Drug, because it

contains the new chemical entity taurolidine as a novel antimicrobial agent.

After we filed the Investigational New Drug Application

(“IND”), FDA granted designations as Fast Track and a Qualified Infectious Disease Product (“QIDP”) in

January 2015.

Fast Track is designed to facilitate development of a drug that is intended to treat a serious or life-threatening

condition and address an unmet medical need.

Fast Track confers eligibility to request priority review of an NDA, with FDA’s

decision regarding potential priority review to be made after receipt of a complete application.

QIDP was established pursuant

to the Generating Antibiotic Incentives Now (“GAIN”) Act and creates incentives for the development of antibacterial

and antifungal drug products that treat serious or life-threatening infections.

Subject to the specified statutory limitations,

a drug that is designated as QIDP and is approved for the use for which the QIDP designation was granted will receive a 5-year

extension to any exclusivity for which the application qualifies upon approval, such as the 5 year exclusivity for a new chemical

We cannot provide assurances that Neutrolin will retain these designations and continue to receive the benefits conferred,

or that it will receive priority review.

If we do not receive priority review, we would be subject to the standard FDA review

goal of ten months.

the FDA requires a second clinical trial for Neutrolin to approve the New Drug Application, the development of Neutrolin will

take longer and cost more to complete and we will need significant additional funds to undertake a second trial.

two pivotal clinical trials to demonstrate safety and effectiveness of Neutrolin are generally required by the FDA to secure marketing

approval in the U.S., FDA will in some cases accept one adequate and well-controlled trial, where it is a large multicenter trial

with a broad range of subjects and investigation sites with procedures to include trial quality that has demonstrated a clinically

meaningful and statistically very persuasive effect on prevention of a disease with potentially serious outcome.

light of the interim and full analysis results, and the Data Safety Monitoring Board (“DSMB”) recommendation, we have

discussed with the FDA the appropriate next steps for the development of Neutrolin based on the results of our Phase 3 clinical

trial, LOCK-IT-100.

We plan to proceed with submission of the NDA for Neutrolin based on the results of LOCK-IT-100.

from LOCK-IT-100 are sufficient will be a review issue with the FDA.

has granted our request for rolling submission and review of the NDA for Neutrolin®

as a catheter lock solution for the prevention

of CRBSIs in patients with end stage renal disease receiving hemodialysis through a central venous catheter.

We also may elect

to request review of the NDA pursuant to the Limited Population Pathway for Antibacterial and Antifungal Drugs (“LPAD”)

pathway, in addition to the standard approval process.

LPAD, passed as part of the 21st Century Cures Act, is a new program intended

to expedite the development and approval of certain antibacterial and antifungal drugs which meet three criteria:

to treat serious or life-threatening infections;

is being developed as a catheter lock solution for the reduction of CRBSIs in patients with kidney failure receiving hemodialysis

through a central venous catheter.

The FDA has determined that DefenCath will be regulated as a New Drug, because it contains

the new chemical entity taurolidine as a novel antimicrobial agent.

After we filed the Investigational New Drug Application (“IND”),

FDA granted designations as Fast Track and a Qualified Infectious Disease Product (“QIDP”) in January 2015.

is designed to facilitate development of a drug that is intended to treat a serious or life-threatening condition and address

an unmet medical need.

Fast Track confers eligibility to request priority review of an NDA, with FDA’s decision regarding

potential priority review to be made after receipt of a complete application.

QIDP was established pursuant to the Generating

Antibiotic Incentives Now (“GAIN”) Act and creates incentives for the development of antibacterial and antifungal

drug products that treat serious or life-threatening infections.

Subject to the specified statutory limitations, a drug that is

designated as QIDP and is approved for the use for which the QIDP designation was granted will receive a 5-year extension to any

exclusivity for which the application qualifies upon approval, such as the 5 year exclusivity for a new chemical entity.

provide assurances that DefenCath will retain these designations and continue to receive the benefits conferred.

the FDA requires a second clinical trial for DefenCath or imposes additional manufacturing requirements to approve the New Drug

Application, the development of DefenCath will take longer and cost more to complete, and we will need significant additional

funds to undertake a second trial, if required.

Although two pivotal

clinical trials to demonstrate safety and effectiveness of DefenCath are generally required by the FDA to secure marketing approval

in the U.S., FDA will in some cases accept one adequate and well-controlled trial, where it is a large multicenter trial with a

broad range of subjects and investigation sites with procedures to include trial quality that has demonstrated a clinically meaningful

and statistically very persuasive effect on prevention of a disease with potentially serious outcome.

We discussed submission of

the NDA with the FDA based on the data from LOCK-IT-100 and were granted our request for rolling submission and review of the NDA

for DefenCath as a catheter lock solution for the prevention of CRBSIs in patients with end stage renal disease receiving hemodialysis

through a central venous catheter.

In August 2020, the FDA accepted the DefenCath NDA for filing and granted our request for priority

review, with a PDUFA date of February 28, 2021.

As we announced in March 2021, the FDA informed us in a Complete Response Letter

that it will not approve the NDA in its present form, because of concerns at the third-party manufacturing facility and a requirement

to conduct a manual extraction study to demonstrate that the labeled volume can be consistently withdrawn from the vials.

to meet with the FDA to obtain agreement on the proposed resolutions of the deficiencies.

The FDA did not request additional clinical

data and did not identify any deficiencies related to the data submitted on the efficacy and safety of DefenCath from LOCK-IT-100.

In draft labeling discussed with FDA, the FDA added that the initial approval will be for the limited population of patients with

kidney failure receiving hemodialysis through a central venous catheter.

This is consistent with our request for approval of the

NDA pursuant to the Limited Population Pathway for Antibacterial and Antifungal Drugs (“LPAD”) pathway, which was passed

as part of the 21st Century Cures Act.

LPAD is intended to expedite the development and approval of certain antibacterial and antifungal

drugs which meet three criteria:

intended to treat serious or life-threatening infections;

in limited populations of patients;

and with unmet needs.

The LPAD pathway

provides for a streamlined clinical development program for a limited population that may involve smaller, shorter or fewer clinical

Even if an applicant requests for review pursuant to the LPAD pathway, such a review is not guaranteed.

FDA has the flexibility

to grant full approval of a drug regardless of a request for review under LPAD.

Approval under the LPAD pathway is for a

limited population, and if we were to obtain approval under this pathway it would be for the limited population of patients with

end stage renal disease receiving hemodialysis through a central venous catheter, which is the intended indication for use.

of an LPAD approved product will specify the use in the limited population.

FDA could deny the request for consideration

under LPAD and require additional information or studies to be collected prior to a drug approval, as LPAD is not a substitution

for demonstrating the safety and effectiveness of a drug as required under the Sections 505(c) and (d) of the Federal Food D&C

We can provide no assurances that the FDA will not require a second clinical trial prior to approving the NDA for Neutrolin.

Were the FDA to require a second clinical trial, the clinical development program for Neutrolin will be more expensive and will

take longer to complete.

We may need to raise significant additional funds to undertake and complete a second trial.

or not and how quickly we complete a second Phase 3 clinical trial would be dependent in part upon the size and scope of the trial,

the rate of enrollment of patients, and the rate we collect, clean, lock and analyze the clinical trial database.

to facilitate expanding the label, we may choose to pursue a clinical trial in a different catheter population, such as oncology

or total parenteral nutrition.

We could be required to incur additional costs and extend the anticipated time for completion

of the trial.

If we experience issues related to the clinical trial results, we may incur additional costs and delays in the trial,

and may not be able to complete the clinical trial in a cost-effective or timely manner, which would have an adverse effect on

our development program for Neutrolin®

as a treatment for catheter-related bloodstream infections.

The LPAD pathway provides for a streamlined clinical development program for a limited population that may

involve smaller, shorter or fewer clinical trials.

Labeling of an LPAD approved product will specify the use in the limited population.

However, until the NDA is approved, if we experience issues related to the clinical trial results, we may incur additional costs

and delays in the trial, and may not be able to complete the clinical trial in a cost-effective or timely manner, which would have

an adverse effect on our development program for DefenCath as a treatment for catheter-related bloodstream infections.

only product Neutrolin is only approved in Europe and is still in development in the United States.

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Mark approval in Europe, and we started sales in Germany in December 2013.

We also are pursuing development of Neutrolin in the

We also are pursuing development of DefenCath in the

Our product commercialization and development efforts may not lead to commercially viable products for any of several reasons.

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in the marketplace.

Neutrolin will require significant additional development, including the preparation and filing of an NDA,

DefenCath will require significant additional development, including the preparation and filing of an NDA,

possibly a second clinical trial, and/or investment by us or our collaborators as we continue its commercialization, as will any

other product candidates.

April 2017, we entered into a commercial collaboration with Hemotech SAS covering France and certain overseas territories.

have entered into agreements with a Saudi Arabian company to market and sell Neutrolin in Saudi Arabia, and with a South Korean

company to market, sell and distribute Neutrolin in South Korea upon receipt of regulatory approval in that country.

commercial sales in Germany and a distributor agreement for the United Arab Emirates.

Consequently, we will be dependent on these

companies and individuals for the success of sales in those countries and any other countries in which we receive regulatory approval

and in which we contract with third parties for the marketing, sale and/or distribution of Neutrolin.

If these companies or individuals

do not perform for whatever reason, our business, prospects and results of operations will be adversely affected.

Finding a suitable

replacement organization or individual for these or any other companies or individuals with whom we might contract could be difficult,

which would further harm our business, prospects and results of operations.

The negotiation and consummation of collaboration

agreements typically involve simultaneous discussions with multiple potential collaborators and require significant time and resources.

In addition, in attracting the attention of pharmaceutical and biotechnology company collaborators, we compete with numerous other

third parties with product opportunities as well as the collaborators’

own internal product opportunities.

We may not be

able to consummate collaborative agreements, or we may not be able to negotiate commercially acceptable terms for these agreements

In April 2017, we entered

into a commercial collaboration with Hemotech SAS covering France and certain overseas territories.

We have an agreement with a

South Korean company to market, sell and distribute Neutrolin in South Korea upon receipt of regulatory approval in that country,

which requires approval by the U.S.

We also have commercial sales in Germany and a distributor agreement for the United Arab

Emirates, which is pursuant to the EU CE Mark.

Consequently, we will be dependent on these companies and individuals for the success

of sales in those countries and any other countries in which we receive regulatory approval and in which we contract with third

parties for the marketing, sale and/or distribution of Neutrolin.

If these companies or individuals do not perform for whatever

reason, our business, prospects and results of operations will be adversely affected.

Finding a suitable replacement organization

or individual for these or any other companies or individuals with whom we might contract could be difficult, which would further

harm our business, prospects and results of operations.

The negotiation and consummation of collaboration agreements typically

involve simultaneous discussions with multiple potential collaborators and require significant time and resources.

in attracting the attention of pharmaceutical and biotechnology company collaborators, we compete with numerous other third parties

with product opportunities as well as the collaborators’ own internal product opportunities.

We may not be able to consummate

collaborative agreements, or we may not be able to negotiate commercially acceptable terms for these agreements.

Final approval by regulatory authorities

of our product candidates for commercial use may be delayed, limited or prevented, any of which would adversely affect our ability

to generate operating revenues.

Our ability to generate

operating revenue will be severely limited until we, a licensee, or a potential collaborator successfully commercializes DefenCath

in the United States.

We may experience unforeseen events during product development that may substantially delay or prevent product

For example, in the course of conducting a clinical trial, the FDA could order the temporary, or permanent, discontinuation

at any time if it believes that the clinical trial either is not being conducted in accordance with FDA requirements or presents

an unacceptable risk to the clinical trial patients.

An Institutional Review Board (“IRB”) may also require the clinical

trial at the site to be halted, either temporarily or permanently, for failure to comply with the IRB’s requirements or if

the trial poses an unexpected serious harm to clinical trial patients.

The FDA or an IRB may also impose conditions on the conduct

of a clinical trial.

Clinical trial sponsors may also choose to discontinue clinical trials as a result of risks to clinical trial

patients, a lack of favorable results, or changing business priorities.

The clinical development,

manufacturing, labeling, packaging, storage, recordkeeping, export, marketing, promotion and distribution, and other possible activities

relating to our product candidates are subject to extensive regulation by the FDA and other regulatory agencies.

Failure to comply

with applicable regulatory requirements may, either before or after product approval, subject us to administrative or judicially

imposed sanctions that may negatively impact the approval of one or more of our product candidates or otherwise negatively impact

our business.

Compliance with such regulations may consume substantial financial and management resources and expose us and our

collaborators to the potential for other adverse circumstances.

For example, a regulatory authority can place restrictions on the

sale or marketing of a drug in order to manage the risks identified during initial clinical trials or after the drug is on the

A regulatory authority can condition the approval for a drug on costly post-marketing follow-up studies.

Based on these

studies, if a regulatory authority does not believe that the drug demonstrates a clinical benefit to patients or an acceptable

safety profile, it could limit the indications for which a drug may be sold or revoke the drug’s marketing approval.

identification of certain side effects either during clinical trials or after a drug is on the market may result in reformulation

of a drug, additional pre-clinical and clinical trials, labeling changes, termination of ongoing clinical trials or withdrawal

Any of these events could delay or prevent us from generating revenue from the commercialization of these drugs and

cause us to incur significant additional costs.

Neither collaborators,

licensees nor we are permitted to market a product candidate in the United States until the particular product candidate is approved

for marketing by the FDA.

Specific pre-clinical data, chemistry, manufacturing and controls data, a proposed clinical trial protocol

and other information must be submitted to the FDA as part of an IND application, and clinical trials may commence only after the

IND application becomes effective.

To market a new drug in the United States, we must submit to the FDA and obtain FDA approval

An NDA must be supported by extensive clinical and pre-clinical data, as well as extensive information regarding chemistry,

manufacturing and controls, to demonstrate the safety and effectiveness of the product candidate, and the FDA will also assess

whether the manufacturing processes and facilities are suitable to support the application.

Approval of an NDA may be delayed due

to delays in FDA’s review of the manufacturing facility, which may require an onsite inspection.

Obtaining approval

of an NDA can be a lengthy, expensive and uncertain process.

Review time can be impacted by the quality of the information included

in the application, FDA’s internal resources such as the availability of reviewers, or requests from the FDA for additional

Regulatory approval of an NDA is not guaranteed.

The number and types of pre-clinical studies and clinical trials

that will be required for FDA approval varies depending on the product candidate, the disease or condition that the product candidate

is designed to target and the regulations applicable to any particular product candidate.

Despite the time and expense exerted

in pre-clinical and clinical studies, failure can occur at any stage, and we could encounter problems that delay our product candidate

development or that cause us to abandon clinical trials or to repeat or perform additional pre-clinical studies and clinical trials.

The FDA can delay, limit or deny approval of a product candidate for many reasons, and product candidate development programs

may be delayed or may not be successful for many reasons including but not limited to, the following:

The FDA or IRBs may not authorize us to commence, amend, or continue clinical studies;

we may not be able to enroll a sufficient number of qualified patients for clinical trials in a timely manner or at all, patients may drop out of our clinical trials or be lost to follow-up at a higher rate than we anticipate, patients may not follow the clinical trial procedures, or the number of patients required for clinical trials may be larger than we anticipate;

the FDA may not accept an NDA or other submission due to, among other reasons, the content or formatting of the submission;

a product candidate may not be deemed adequately safe or effective for an intended use;

the FDA may not find the data from pre-clinical studies and clinical trials sufficient;

the FDA may require that we conduct additional pre-clinical or clinical studies, change our manufacturing process, or gather additional manufacturing information above what we currently have planned for;

the FDA’s interpretation and our interpretation of data from pre-clinical studies and clinical trials or chemistry, manufacturing and controls data may differ significantly;

the FDA may not agree with our intended indications, the design of our clinical or pre-clinical studies, or there may be a flaw in the design that does not become apparent until the studies are well advanced;

we may not be able to establish agreements with contractors or collaborators or they or we may fail to comply with applicable FDA and other regulatory requirements, including those identified in other risk factors;

the FDA may not accept aspects of our proposed labeling, or may impose specific limitations in the labeling and require post-marking commitments or Phase 4 clinical trials before the labeling can be expanded;

the FDA may determine that the manufacturing processes and facilities for our product candidate do not have sufficient good manufacturing practice (GMP) controls in place to support approval;

the FDA may change its approval policies or adopt new regulations.

Our pre-clinical and

clinical data, other information and procedures relating to a product candidate may not be sufficient to support approval by the

FDA or any other U.S.

or foreign regulatory authority, or regulatory interpretation of these data and procedures may be unfavorable.

Failure to conduct required post-approval studies, or confirm a clinical benefit, will allow the FDA to withdraw the drug from

the market on an expedited basis.

Our business and reputation may be harmed by any failure or significant delay in receiving regulatory

approval for the sale of any drugs resulting from our product candidates.

As a result, we cannot predict when or whether regulatory

approval will be obtained for any drug we develop.

Additionally, other

factors may serve to delay, limit or prevent the final approval by regulatory authorities of our product candidates for commercial

use, including, but not limited to:

we or our licensees will need to conduct significant clinical testing and development work to demonstrate the quality, safety, and efficacy of these product candidates before applications for marketing can be filed with the FDA, or with the regulatory authorities of other countries;

development and testing of product formulation, including identification of suitable excipients, or chemical additives intended to facilitate delivery of our product candidates;

it may take us many years to complete the testing of our product candidates, and failure can occur at any stage of this process;

negative or inconclusive results or adverse medical events during a clinical trial could cause us to delay or terminate our development efforts.

The successful development

of any of these product candidates is uncertain and, accordingly, we may never commercialize any of these product candidates or

generate significant revenue.

development and commercialization of our products is uncertain.

Our development and commercialization of

current and future product candidates is subject to the risks of failure and delay inherent in the development of new pharmaceutical

products, including but not limited to the following:

development and commercialization of current and future product candidates is subject to the risks of failure and delay inherent

in the development of new pharmaceutical products, including but not limited to the following:

to produce positive data in pre-clinical and clinical trials;

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not commercialized successfully, our business, financial condition, and results of operations will be materially harmed.

approval by regulatory authorities of our product candidates for commercial use may be delayed, limited or prevented, any of which

would adversely affect our ability to generate operating revenues.

ability to generate operating revenue will be severely limited until we, a licensee, or a potential collaborator successfully

commercializes Neutrolin in the United States.

We may need to successfully complete additional clinical trials and obtain regulatory

approval before potential commercialization.

We may experience unforeseen events during product development that may substantially

delay or prevent product approval.

For example, were the FDA to require a second clinical trial for our product candidate Neutrolin,

in the course of our conduct of such a study, the FDA could order the temporary, or permanent, discontinuation of a clinical trial

at any time if it believes that the clinical trial either is not being conducted in accordance with FDA requirements or presents

an unacceptable risk to the clinical trial patients.

An Institutional Review Board (“IRB”) may also require the clinical

trial at the site to be halted, either temporarily or permanently, for failure to comply with the IRB’s requirements or

if the trial poses an unexpected serious harm to clinical trial patients.

The FDA or an IRB may also impose conditions on the

conduct of a clinical trial.

Clinical trial sponsors may also choose to discontinue clinical trials as a result of risks to clinical

trial patients, a lack of favorable results, or changing business priorities.

clinical development, manufacturing, labeling, packaging, storage, recordkeeping, export, marketing, promotion and distribution,

and other possible activities relating to our product candidates are subject to extensive regulation by the FDA and other regulatory

Failure to comply with applicable regulatory requirements may, either before or after product approval, subject us to

administrative or judicially imposed sanctions that may negatively impact the approval of one or more of our product candidates

or otherwise negatively impact our business.

Compliance with such regulations may consume substantial financial and management

resources and expose us and our collaborators to the potential for other adverse circumstances.

For example, a regulatory authority

can place restrictions on the sale or marketing of a drug in order to manage the risks identified during initial clinical trials

or after the drug is on the market.

A regulatory authority can condition the approval for a drug on costly post-marketing follow-up

Based on these studies, if a regulatory authority does not believe that the drug demonstrates a clinical benefit to patients

or an acceptable safety profile, it could limit the indications for which a drug may be sold or revoke the drug’s marketing

In addition, identification of certain side effects either during clinical trials or after a drug is on the market may

result in reformulation of a drug, additional pre-clinical and clinical trials, labeling changes, termination of ongoing clinical

trials or withdrawal of approval.

Any of these events could delay or prevent us from generating revenue from the commercialization

of these drugs and cause us to incur significant additional costs.

collaborators, licensees nor we are permitted to market a product candidate in the United States until the particular product

candidate is approved for marketing by the FDA.

Specific pre-clinical data, chemistry, manufacturing and controls data, a proposed

clinical trial protocol and other information must be submitted to the FDA as part of an IND application, and clinical trials

may commence only after the IND application becomes effective.

To market a new drug in the United States, we must submit to the

FDA and obtain FDA approval of an NDA.

An NDA must be supported by extensive clinical and pre-clinical data, as well as extensive

information regarding chemistry, manufacturing and controls, to demonstrate the safety and effectiveness of the product candidate,

and the FDA will also assess whether the manufacturing processes and facilities are suitable to support the application.

approval of an NDA can be a lengthy, expensive and uncertain process.

Despite our grants of Fast Track status, QIDP status, and

rolling review of the NDA, these do not provide a guarantee that our application will receive an expedited review.

can be impacted by the quality of the information included in the application, FDA’s internal resources such as the availability

of reviewers, or requests from the FDA for additional information.

Regulatory approval of an NDA is not guaranteed.

and types of pre-clinical studies and clinical trials that will be required for FDA approval varies depending on the product candidate,

the disease or condition that the product candidate is designed to target and the regulations applicable to any particular product

Despite the time and expense exerted in pre-clinical and clinical studies, failure can occur at any stage, and we could

encounter problems that delay our product candidate development or that cause us to abandon clinical trials or to repeat or perform

additional pre-clinical studies and clinical trials.

The FDA can delay, limit or deny approval of a product candidate for many

reasons, and product candidate development programs may be delayed or may not be successful for many reasons including but not

limited to, the following:

FDA or IRBs may not authorize us to commence, amend, or continue clinical studies;

may not be able to enroll a sufficient number of qualified patients for clinical trials in a timely manner or at all, patients

may drop out of our clinical trials or be lost to follow-up at a higher rate than we anticipate, patients may not follow the clinical

trial procedures, or the number of patients required for clinical trials may be larger than we anticipate;

FDA may not accept an NDA or other submission due to, among other reasons, the content or formatting of the submission;

product candidate may not be deemed adequately safe or effective for an intended use;

FDA may not find the data from pre-clinical studies and clinical trials sufficient;

FDA may require that we conduct additional pre-clinical or clinical studies, change our manufacturing process, or gather additional

manufacturing information above what we currently have planned for;

FDA’s interpretation and our interpretation of data from pre-clinical studies and clinical trials or chemistry, manufacturing

and controls data may differ significantly;

FDA may not agree with our intended indications, the design of our clinical or pre-clinical studies, or there may be a flaw in

the design that does not become apparent until the studies are well advanced;

may not be able to establish agreements with contractors or collaborators or they or we may fail to comply with applicable FDA

and other regulatory requirements, including those identified in other risk factors;

FDA may not accept aspects of our proposed labeling, or may impose specific limitations in the labeling and require post-marking

commitments or Phase 4 clinical trials before the labeling can be expanded;

FDA may determine that the manufacturing processes and facilities for our product candidate do not have sufficient good manufacturing

practice (GMP) controls in place to support approval;

FDA may change its approval policies or adopt new regulations.

pre-clinical and clinical data, other information and procedures relating to a product candidate may not be sufficient to support

approval by the FDA or any other U.S.

or foreign regulatory authority, or regulatory interpretation of these data and procedures

may be unfavorable.

Failure to conduct required post-approval studies, or confirm a clinical benefit, will allow the FDA to withdraw

the drug from the market on an expedited basis.

Our business and reputation may be harmed by any failure or significant delay

in receiving regulatory approval for the sale of any drugs resulting from our product candidates.

As a result, we cannot predict

when or whether regulatory approval will be obtained for any drug we develop.

Additionally,

other factors may serve to delay, limit or prevent the final approval by regulatory authorities of our product candidates for

commercial use, including, but not limited to:

or our licensees will need to conduct significant clinical testing and development work to demonstrate the quality, safety, and

efficacy of these product candidates before applications for marketing can be filed with the FDA, or with the regulatory authorities

of other countries;

● development

and testing of product formulation, including identification of suitable excipients, or chemical additives intended to facilitate

delivery of our product candidates;

may take us many years to complete the testing of our product candidates, and failure can occur at any stage of this process;

or inconclusive results or adverse medical events during a clinical trial could cause us to delay or terminate our development

successful development of any of these product candidates is uncertain and, accordingly, we may never commercialize any of these

product candidates or generate significant revenue.

Changes in funding for the FDA and other government agencies

or future government shutdowns or disruptions could cause delays in the submission and regulatory review of marketing applications,

which could negatively impact our business or prospects.

The ability of the FDA to review and approve

new products can be affected by a variety of factors, including government budget and funding levels, ability to hire and retain

key personnel and accept submission, applications, and the payment of user fees, and statutory, regulatory, and policy changes.

In addition, government funding of other government agencies that fund research and development activities is subject to the political

process, which is inherently fluid and unpredictable.

The impact of global events, including terrorism, natural disasters and pandemics

or other health emergencies, may also cause disruptions in the normal functioning of the FDA or other government agencies.

Disruptions at the FDA and other agencies

may also slow the time necessary for new drugs to be reviewed and/or approved by necessary government agencies, which would adversely

affect our business.

For example, over the last several years, including for 35 days beginning on December 22, 2018, the U.S.

has shut down several times and certain regulatory agencies, such as the FDA, had to furlough critical FDA employees and stop critical

In addition, in March 2020, the FDA announced the postponement of most foreign inspections due to the global impact

If a prolonged government shutdown or other disruption to the normal functioning of government agencies occurs, it

could significantly impact the ability of the FDA to timely review and process our regulatory submissions, which could have a material

adverse effect on our business or prospects.

If 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 harm our business.

From time to time and

in the future, our operations may involve the use of hazardous and flammable materials, including chemicals and biological materials,

and may also produce hazardous waste.

Even if we contract with third parties for the disposal of these materials and waste, we

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

In the event of contamination or

injury resulting from the use or disposal of our 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

for failure to comply with such laws and regulations.

In addition, we may

incur substantial costs in order to comply with current or future environmental, health and safety laws and regulations.

or future environmental laws and regulations may impair our research, development or production efforts.

In addition, failure to

comply with these laws and regulations may result in substantial fines, penalties or other sanctions.

The successful commercialization

of DefenCath will depend on obtaining coverage and reimbursement for use of DefenCath from third-party payors.

Sales of pharmaceutical

products largely depend on the reimbursement of patients’ medical expenses by government health care programs and/or private

health insurers, both in the U.S.

Further, significant uncertainty exists as to the reimbursement status of newly approved

health care products.

We initially expect to sell DefenCath directly to hospitals and key dialysis center operators, but also plan

to expand its usage into oncology and total parenteral nutrition patients requiring catheters.

All of these potential customers

are healthcare providers who depend upon reimbursement by government and commercial insurance payors for dialysis and other treatments.

Depending on the treatment setting, we believe that DefenCath would be eligible for coverage under various reimbursement programs,

such as the End Stage Renal Disease (“ESRD”) Prospective Payment System and ESRD Quality Incentive Program;

coverage by any of these reimbursement programs is not assured, and even if coverage is granted, it could later be revoked or modified

under future regulations.

Further, the U.S.

Centers for Medicare & Medicaid Services (“CMS”), which administers

Medicare, and works with states to administer Medicaid, has adopted and will continue to adopt and/or amend rules governing reimbursement

for specific treatments.

We anticipate that CMS and private insurers will increasingly demand that manufacturers demonstrate the

cost effectiveness of their products as part of the reimbursement review and approval process.

Rising healthcare costs have also

led many European and other foreign countries to adopt healthcare reform proposals and medical cost containment measures.

legislation could be introduced in the U.S.

Any measures affecting the reimbursement programs of these governmental and private

insurance payors, including any uncertainty in the medical community regarding their nature and effect on reimbursement programs,

could have an adverse effect on purchasing decisions regarding DefenCath, as well as limit the prices we may charge for DefenCath.

The failure to obtain or maintain reimbursement coverage for DefenCath or any other products could materially harm our operations.

In anticipation that

the CMS and private payers will demand that we demonstrate the cost effectiveness of DefenCath as part of the reimbursement review

and approval process, we will incorporate health economic evaluations into our clinical studies to support this review in the context

of the prospective use of DefenCath in dialysis, oncology and total parenteral nutrition settings.

However, our studies might not

be sufficient to support coverage or reimbursement at levels that allow providers to use DefenCath.

Physicians and patients may not accept and use

our products.

Even with the CE Mark

approval of Neutrolin, and even if we receive FDA or other foreign regulatory approval for DefenCath/Neutrolin or other product

candidates, physicians and patients may not accept and use our products.

Acceptance and use of our products will depend upon a

number of factors including the following:

perceptions by members of the health care community, including physicians, about the safety and effectiveness of our drug or device product;

prevalence of the disease to be treated;

prevalence and severity of any side effects;

cost-effectiveness of our product relative to competing products;

availability of coverage and reimbursement from government and other third-party payers;

timing of market introduction of our drugs and competitive drugs;

effectiveness of marketing and distribution efforts by us and our licensees and distributors, if any;

potential or perceived advantages or disadvantages over alternative treatments;

potential post-marketing commitments imposed by regulatory authorities, such as patient registries;

price of our future products, both in absolute terms and relative to alternative treatments;

the effect of current and future healthcare laws and regulations on our product candidates.

Because we expect sales

of DefenCath to generate substantially all of our product revenues for the foreseeable future, the failure of DefenCath to find

market acceptance would harm our business and would require us to seek additional financing.

in funding for the FDA and other government agencies or future government shutdowns or disruptions could cause delays in the submission

and regulatory review of marketing applications, which could negatively impact our business or prospects.

ability of the FDA to review and approve new products can be affected by a variety of factors, including government budget and

funding levels, ability to hire and retain key personnel and accept submission, applications, and the payment of user fees, and

statutory, regulatory, and policy changes.

In addition, government funding of other government agencies that fund research and

development activities is subject to the political process, which is inherently fluid and unpredictable.

The impact of global

events, including terrorism, natural disasters and pandemics, including the ongoing COVID-19 pandemic or other health emergencies,

may also cause disruptions in the normal functioning of the FDA or other government agencies.

Disruptions at the

FDA and other agencies may also slow the time necessary for new drugs to be reviewed and/or approved by necessary government agencies,

which would adversely affect our business.

For example, over the last several years, including for 35 days beginning on December

22, 2018, the U.S.

government has shut down several times and certain regulatory agencies, such as the FDA, had to furlough critical

FDA employees and stop critical activities.

In addition, in March 2020, the FDA announced the postponement of most foreign inspections

due to the global impact of COVID-19, which has continued for more than a year.

If a prolonged government shutdown or other disruption

to the normal functioning of government agencies occurs, it could significantly impact the ability of the FDA to timely review

and process our regulatory submissions, which could have a material adverse effect on our business or prospects.

At this time,

there is a backlog at FDA in conducting pre-approval inspections of manufacturing facilities, because of travel restrictions imposed

Such backlog has prevented the FDA from inspecting the facilities of our CMO for the manufacturing of DefenCath, which

is located outside the United States.

If FDA deems a pre-approval inspection to be necessary for approval of the DefenCath NDA,

there will be a delay until FDA inspectors can resume travel.

outbreak of the novel coronavirus disease, COVID-19, or other pandemic, epidemic or outbreak of an infectious disease may materially

and adversely impact our business, including our preclinical studies and clinical trials.

In December 2019, the

novel coronavirus disease, COVID-19, was identified in Wuhan, China.

This virus has been declared a pandemic and has spread to

multiple global regions.

The outbreak and government measures taken in response have also had a significant impact, both direct

and indirect, on businesses and commerce, as worker shortages have occurred;

supply chains have been disrupted;

facilities and

production have been suspended;

and demand for certain goods and services, such as medical services and supplies, has spiked, while

demand for other goods and services, such as travel, has fallen.

In response to the COVID-19 outbreak, “shelter in place”

orders and other public health guidance measures have been implemented across much of the United States, Europe and Asia, including

in the locations of our offices, clinical trial sites, key vendors and partners.

Such “shelter in place” orders were

previously lifted, at least partially, in many locations.

However, an increase in the spread of COVID-19 and variants, which may

reflect the spread of one or more successive waves of the virus, has led to the re-imposition by many states of quarantine requirements

for out-of-state travelers and may lead to the re-imposition of “shelter-in-place” or other similar orders.

several vaccines for prevention or mitigation of the severity of the virus have been granted Emergency Use Authorization by the

FDA and foreign regulatory authorities, the timely distribution and public acceptance thereof in reducing the pandemic remain uncertain.

Our clinical development program timelines may be negatively affected by COVID-19, which could materially and adversely affect

our business, financial condition and results of operations.

Further, due to “shelter in place” orders and other public

health guidance measures, we have implemented a work-from-home policy for all staff members excluding those necessary to maintain

minimum basic operations.

Our increased reliance on personnel working from home may negatively impact productivity, or disrupt,

delay or otherwise adversely impact our business.

a result of the COVID-19 outbreak, or similar pandemics, and related travel restrictions and “shelter in place” orders

and other public health guidance measures, we have and may in the future experience disruptions that could materially and adversely

impact our clinical trials, business, financial condition and results of operations.

Potential disruptions include but are not

or difficulties at our third-party vendors on whom we are dependent for manufacturing

or difficulties in enrolling patients in our clinical trials;

or difficulties in initiating or expanding clinical trials, including delays or difficulties

with clinical site initiation and recruiting clinical site investigators and clinical

rates of patients withdrawing from our clinical trials following enrollment as a result

of contracting COVID-19 or other health conditions or being forced to quarantine;

of healthcare resources away from the conduct of clinical trials, including the diversion

of hospitals serving as our clinical trial sites and hospital staff supporting the conduct

of our clinical trials;

● interruption

of key clinical trial activities, such as clinical trial site data monitoring, due to

limitations on travel imposed or recommended by federal or state governments, employers

and others or interruption of clinical trial subject visits and study procedures, which

may impact the integrity of subject data and clinical study endpoints;

● interruption

or delays in the operations of the FDA or other regulatory authorities, which may impact

review and approval timelines for our NDA;

or disruptions in preclinical experiments and investigational new drug application-enabling

studies due to restrictions of on-site staff and unforeseen circumstances at contract

research organizations and vendors;

● interruption

of, or delays in receiving supplies of our product candidates from our contract manufacturing

organizations due to staffing shortages, production slowdowns or stoppages and disruptions

in delivery systems;

● limitations

on our ability to recruit and hire key personnel due to our inability to meet with candidates

because of travel restrictions and “shelter in place” orders;

● limitations

on employee resources that would otherwise be focused on the conduct of our preclinical

studies and clinical trials, including because of sickness of employees or their families

or the desire of employees to avoid contact with large groups of people;

● interruption

or delays to our sourced discovery and clinical activities.

COVID-19 pandemic continues to rapidly evolve.

The extent to which the outbreak impacts our business, preclinical studies and

clinical trials will depend on future developments, which are highly uncertain and cannot be predicted with confidence, such as

the ultimate geographic spread of the disease, the duration of the pandemic, travel restrictions and social distancing in the

United States and other countries, business closures or business disruptions and the effectiveness of actions taken in the United

States and other countries to contain and treat the disease.

If we or any of the third parties with whom we engage were to experience

shutdowns or other business disruptions, our ability to conduct our business in the manner and on the timelines presently planned

could be materially and negatively impacted.

addition, the trading prices for our common stock and other biopharmaceutical companies have been highly volatile as a result

of the COVID-19 pandemic.

As a result, we may face difficulties raising capital through sales of our common stock or such sales

may be on unfavorable terms.

trials required for our product candidates may be expensive and time-consuming, and their outcome is uncertain.

In order to obtain FDA or foreign approval

to market a new drug or device product, we must demonstrate proof of safety and effectiveness in humans.

Foreign regulations and

requirements are similar to those of the FDA.

To meet FDA requirements, we must conduct “adequate and well-controlled”

clinical trials.

order to obtain FDA or foreign approval to market a new drug or device product, we must demonstrate proof of safety and effectiveness

Foreign regulations and requirements are similar to those of the FDA.

To meet FDA requirements, we must conduct “adequate

and well-controlled” clinical trials.

Conducting clinical trials is a lengthy, time-consuming, and expensive process.

The length of time may vary substantially

according to the type, complexity, novelty, and intended use of the product candidate, and often can be several years or more

Delays associated with the Neutrolin development program or the development plans for any other product candidates

may cause us to incur additional operating expenses.

The commencement and rate of completion of clinical trials may be delayed

by many factors, including, for example:

to manufacture sufficient quantities of qualified materials under the FDA’s cGMP

length of time may vary substantially according to the type, complexity, novelty, and intended use of the product candidate, and

often can be several years or more per trial.

Delays associated with the DefenCath development program or the development plans

for any other product candidates may cause us to incur additional operating expenses.

The commencement and rate of completion

of clinical trials may be delayed by many factors, including, for example:

to manufacture sufficient quantities of qualified materials under the FDA’s cGMP

requirements for use in clinical trials;

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the study at a particular study site;

or regulatory delays or “clinical holds”

requiring suspension or termination

or regulatory delays or “clinical holds” requiring suspension or termination

of the trials.

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of operations.

we fail to comply with international regulatory requirements, we could be subject to regulatory delays, fines

or other penalties.

Regulatory requirements in foreign countries

for international sales of medical devices often vary from country to country.

The occurrence and related impact of the following

factors would harm our business:

we fail to comply with international regulatory requirements, we could be subject to regulatory delays, fines or other penalties.

requirements in foreign countries for international sales of medical devices often vary from country to country.

The occurrence

and related impact of the following factors would harm our business:

in receipt of, or failure to receive, foreign regulatory approvals or clearances;

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require products to bear CE Marking.

To market in Europe, a product must first obtain the certifications necessary to affix

To market in Europe, a product must first obtain the certifications necessary to affix the

The CE Mark is an international symbol of adherence to the Medical Device Regulations, previously the Medical Device

Directives, and the manufacturer’s declaration that the product complies with essential requirements.

Compliance with these

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In order to obtain and to

maintain a CE Mark, a product must be in compliance with the applicable quality assurance provisions of the aforementioned

ISO and obtain certification of its quality assurance systems by a recognized European Union notified body.

We received CE Mark

approval for Neutrolin on July 5, 2013.

However, certain individual countries within the European Union require further approval

by their national regulatory agencies.

Additionally, implementation of the new European Union Medical Device Regulations may pose

challenges in demonstrating continued conformity to the new medical device regulatory paradigm.

Failure to receive or maintain

these other requisite approvals could prohibit us from marketing and selling Neutrolin in the entire European Economic

Area or elsewhere.

maintain a CE Mark, a product must be in compliance with the applicable quality assurance provisions of the aforementioned ISO

and obtain certification of its quality assurance systems by a recognized European Union notified body.

We received CE Mark approval

for Neutrolin on July 5, 2013.

However, certain individual countries within the European Union require further approval by their

national regulatory agencies.

Additionally, implementation of the new European Union Medical Device Regulations may pose challenges

in demonstrating continued conformity to the new medical device regulatory paradigm.

Failure to receive or maintain these other

requisite approvals could prohibit us from marketing and selling Neutrolin in the entire European Economic Area or elsewhere.

do not have, and may never obtain, the regulatory approvals we need to market our product candidates outside of the European Union.

1 unchanged sentence

further approval by their national regulatory agencies.

Failure to receive or maintain these other requisite approvals could

prohibit us from marketing and selling Neutrolin in the entire European Economic Area.

In addition, we will need regulatory

approval to market and sell Neutrolin in foreign countries outside of Europe.

the United States, we have not received the regulatory approvals required for the commercial sale of any of our product candidates.

We are preparing an NDA for Neutrolin in hemodialysis catheters based on our recently completed Phase 3 trial, LOCK-IT-100.

will be required to conduct a second Phase 3 trial, if required by FDA to secure marketing authorization.

However, we might not

obtain any financing necessary to complete the development of Neutrolin for use in hemodialysis catheters.

Failure to receive or maintain these other requisite approvals could prohibit

us from marketing and selling Neutrolin in the entire European Economic Area.

In addition, we will need regulatory approval to

market and sell Neutrolin in foreign countries outside of Europe.

In the United States,

we have not received the regulatory approvals required for the commercial sale of any of our product candidates.

The NDA for DefenCath

could not be approved by FDA in its present form and resolution of deficiencies at our third-party manufacturing facility is required.

Additionally, the FDA is requiring a manual extraction study to demonstrate that the labeled volume can be consistently withdrawn

from the vials despite an existing in-process control to demonstrate fill volume within specifications.

We plan to meet with the

FDA to discuss proposed resolutions to the deficiencies, but we may not be able to obtain regulatory approval for commercial distribution.

also are pursuing development of taurolidine-based devices for several indications, including wound closure, surgical meshes,

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As a result, we will be required to submit a premarket approval application for marketing authorization for these indications.

In the event that the NDA for Neutrolin is approved by the FDA, the regulatory pathway for these devices can be revisited with

Although there will presumably still be no appropriate predicate, de novo Class II designation

can be proposed, based on a risk assessment and a reasonable assurance of safety and effectiveness.

is possible that Neutrolin will not receive any further approval or that any of our other product candidates will be approved

In the event that the NDA for DefenCath is approved by the FDA, the regulatory pathway for these devices can be revisited with

Although there will presumably still be no appropriate predicate, de novo Class II designation can be proposed,

based on a risk assessment and a reasonable assurance of safety and effectiveness.

is possible that DefenCath will not receive any further approval or that any of our other product candidates will be approved

for marketing.

Failure to obtain regulatory approvals, or delays in obtaining regulatory approvals, would adversely affect the

successful commercialization of Neutrolin or any other drugs or products that we or our partners develop, impose additional costs

successful commercialization of DefenCath or any other drugs or products that we or our partners develop, impose additional costs

on us or our collaborators, diminish any competitive advantages that we or our partners may attain, and/or adversely affect our

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if approved, our products will be subject to extensive post-approval regulation.

Once a product is approved, numerous post-approval

requirements apply in the United States and abroad.

These include, among other things, requirements related to pharmacovigilance

and adverse event and other reporting, supply chain security requirements, suspect and illegitimate product investigations and

notifications, limitations on product advertising and promotion and on the distribution of product samples, and ongoing adherence

to cGMPs, as well as the need to submit appropriate new or supplemental applications and obtain FDA approval for certain changes

to the approved product, product labeling, or manufacturing process.

Establishing and maintaining systems and procedures for compliance

with these requirements, and for training and monitoring personnel relative to their compliance, is expensive, time consuming,

and an ongoing effort.

Depending on the circumstances, failure to meet these post-approval requirements can result in criminal

prosecution, fines, injunctions, recall or seizure of products, total or partial suspension of production, denial or withdrawal

of pre-marketing product approvals, or refusal to allow us to enter into supply contracts, including government contracts.

addition, even if we comply with FDA, foreign and other requirements, new information regarding the safety or effectiveness of

a product could lead the FDA or a foreign regulatory body to modify or withdraw product approval.

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 harm our business.

time to time and in the future, our operations may involve the use of hazardous and flammable materials, including chemicals and

biological materials, and may also produce hazardous waste.

Even if we contract with third parties for the disposal of these materials

and waste, we cannot completely eliminate the risk of contamination or injury resulting from these materials.

In the event of

contamination or injury resulting from the use or disposal of our 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 for failure to comply with such laws and regulations.

addition, we may incur substantial costs in order to comply with current or future environmental, health and safety laws and regulations.

Current or future environmental laws and regulations may impair our research, development or production efforts.

failure to comply with these laws and regulations may result in substantial fines, penalties or other sanctions.

successful commercialization of Neutrolin will depend on obtaining coverage and reimbursement for use of Neutrolin from third-party

of pharmaceutical products largely depend on the reimbursement of patients’

medical expenses by government health care programs

and/or private health insurers, both in the U.S.

Further, significant uncertainty exists as to the reimbursement status

of newly approved health care products.

We initially expect to sell Neutrolin directly to hospitals and key dialysis center

operators, but also plan to expand its usage into intensive care, oncology and total parenteral nutrition patients needing catheters.

All of these potential customers are healthcare providers who depend upon reimbursement by government and commercial insurance

payors for dialysis and other treatments.

Depending on the treatment setting, we believe that Neutrolin would be eligible for

coverage under various reimbursement programs, such as the End Stage Renal Disease (“ESRD”) Prospective Payment System

and ESRD Quality Incentive Program;

however, coverage by any of these reimbursement programs is not assured, and even if coverage

is granted, it could later be revoked or modified under future regulations.

Further, the U.S.

Centers for Medicare & Medicaid

Services (“CMS”), which administers Medicare, and works with states to administer Medicaid, has adopted and will continue

to adopt and/or amend rules governing reimbursement for specific treatments.

We anticipate that CMS and private insurers will

increasingly demand that manufacturers demonstrate the cost effectiveness of their products as part of the reimbursement review

and approval process.

Rising healthcare costs have also led many European and other foreign countries to adopt healthcare reform

proposals and medical cost containment measures.

Similar legislation could be introduced in the U.S.

Any measures affecting the

reimbursement programs of these governmental and private insurance payors, including any uncertainty in the medical community

regarding their nature and effect on reimbursement programs, could have an adverse effect on purchasing decisions regarding Neutrolin,

as well as limit the prices we may charge for Neutrolin.

The failure to obtain or maintain reimbursement coverage for Neutrolin

or any other products could materially harm our operations.

anticipation that the CMS and private payers will demand that we demonstrate the cost effectiveness of Neutrolin as part of the

reimbursement review and approval process, we will incorporate health economic evaluations into our clinical studies to support

this review in the context of the prospective use of Neutrolin in dialysis, the intensive care unit (“ICU”) and oncology

However, our studies might not be sufficient to support coverage or reimbursement at levels that allow providers

to use Neutrolin.

and patients may not accept and use our products.

Even with the CE Mark approval of Neutrolin,

and even if we receive FDA or other foreign regulatory approval for Neutrolin or other product candidates, physicians and patients

may not accept and use our products.

Acceptance and use of our products will depend upon a number of factors including the following:

● perceptions

by members of the health care community, including physicians, about the safety and effectiveness

of our drug or device product;

of the disease to be treated;

and severity of any side effects;

● cost-effectiveness

of our product relative to competing products;

● availability

of coverage and reimbursement from government and other third-party payers;

of market introduction of our drugs and competitive drugs;

● effectiveness

of marketing and distribution efforts by us and our licensees and distributors, if any;

or perceived advantages or disadvantages over alternative treatments;

post-marketing commitments imposed by regulatory authorities, such as patient registries;

of our future products, both in absolute terms and relative to alternative treatments;

effect of current and future healthcare laws and regulations on our product candidates.

we expect sales of Neutrolin to generate substantially all of our product revenues for the foreseeable future, the failure of

Neutrolin to find market acceptance would harm our business and would require us to seek additional financing.

a product is approved, numerous post-approval requirements apply in the United States and abroad.

These include, among other things,

requirements related to pharmacovigilance and adverse event and other reporting, supply chain security requirements, suspect and

illegitimate product investigations and notifications, limitations on product advertising and promotion and on the distribution

of product samples, and ongoing adherence to cGMPs, as well as the need to submit appropriate new or supplemental applications

and obtain FDA approval for certain changes to the approved product, product labeling, or manufacturing process.

and maintaining systems and procedures for compliance with these requirements, and for training and monitoring personnel relative

to their compliance, is expensive, time consuming, and an ongoing effort.

Depending on the circumstances, failure to meet these

post-approval requirements can result in criminal prosecution, fines, injunctions, recall or seizure of products, total or partial

suspension of production, denial or withdrawal of pre-marketing product approvals, or refusal to allow us to enter into supply

contracts, including government contracts.

In addition, even if we comply with FDA, foreign and other requirements, new information

regarding the safety or effectiveness of a product could lead the FDA or a foreign regulatory body to modify or withdraw product

Related to Our Business and Industry

and technological change may make our product candidates and technologies less attractive or obsolete.

We compete with established pharmaceutical

and medical device companies that are pursuing other forms of prevention or treatment for the same or similar indications we are

pursuing and that have greater financial and other resources.

Other companies may succeed in developing products earlier than

we do, obtaining FDA or any other regulatory agency approval for products more rapidly, or developing products that are more effective

than our product candidates.

Research and development by others may render our technology or product candidates obsolete or noncompetitive,

or result in processes, treatments or cures superior to any therapy we develop.

We face competition from companies that internally

develop competing technology or acquire competing technology from universities and other research institutions.

As these companies

develop their technologies, they may develop competitive positions that may prevent, make futile, or limit our product commercialization

efforts, which would result in a decrease in the revenue we would be able to derive from the sale of any products.

can be no assurance that Neutrolin or any other product candidate will be accepted by the marketplace as readily as these or other

compete with established pharmaceutical and medical device companies that are pursuing other forms of prevention or treatment

for the same or similar indications we are pursuing and that have greater financial and other resources.

Other companies may succeed

in developing products earlier than we do, obtaining FDA or any other regulatory agency approval for products more rapidly, or

developing products that are more effective than our product candidates.

Research and development by others may render our technology

or product candidates obsolete or noncompetitive, or result in processes, treatments or cures superior to any therapy we develop.

We face competition from companies that internally develop competing technology or acquire competing technology from universities

and other research institutions.

As these companies develop their technologies, they may develop competitive positions that may

prevent, make futile, or limit our product commercialization efforts, which would result in a decrease in the revenue we would

be able to derive from the sale of any products.

can be no assurance that DefenCath or any other product candidate will be accepted by the marketplace as readily as these or other

competing treatments.

Furthermore, if our competitors’

products are approved before ours, it could be more difficult for

Furthermore, if our competitors’ products are approved before ours, it could be more difficult for

us to obtain approval from the FDA or any other regulatory agency.

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reducing reimbursement, and requiring rebates.

Market acceptance and sales of Neutrolin or any other product candidates that we

Market acceptance and sales of DefenCath or any other product candidates that we

develop will depend on reimbursement policies and may be affected by health care reform measures in the U.S.

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reimbursement levels.

We cannot be sure that reimbursement will be available for Neutrolin or any other product candidates that

We cannot be sure that reimbursement will be available for DefenCath or any other product candidates that

Also, we cannot be sure that the amount of reimbursement available, if any, will not reduce the demand for, or the

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

commercialize Neutrolin or any other product candidates that we develop.

commercialize DefenCath or any other product candidates that we develop.

both the U.S.

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In 2010, the Patient Protection and Affordable Care Act, as amended by the Health Care and Education

Reconciliation Act (collectively, the “Affordable Care Act”), was enacted.

The Affordable Care Act substantially changed

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and the current administration have each indicated that it will continue to seek new legislative and/or administrative measures

to control drug costs, and the current administration recently released a “Blueprint”, or plan, to reduce the cost

The current administration’s Blueprint contains certain measures that the U.S.

to control drug costs, and the current administration recently released a “Blueprint”, or plan, to reduce the cost

The current administration’s Blueprint contains certain measures that the U.S.

Department of Health and Human

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experience increases in compensation costs, our business may materially suffer.

We are highly dependent on the principal

members of our management and scientific staff, specifically, Khoso Baluch, a director and our Chief Executive Officer, Phoebe

Mounts, our Executive Vice President and General Counsel, Paul Chew, our Acting Chief Medical Officer, Elizabeth Masson-Hurlburt,

our Executive Vice President and Head of Clinical Operations, and John Armstrong, our Executive Vice President for Technical Operations.

Our future success will depend in part on our ability to identify, hire, and retain current and additional personnel.

We experience

intense competition for qualified personnel and may be unable to attract and retain the personnel necessary for the development

of our business.

Moreover, our work force is located in the New York metropolitan area, where competition for personnel with the

scientific and technical skills that we seek is extremely high and is likely to remain high.

Because of this competition, our

compensation costs may increase significantly.

In addition, we have only limited ability to prevent former employees from competing

are highly dependent on the principal members of our management and scientific staff, specifically, Khoso Baluch, a director and

our Chief Executive Officer, Dr.

Matthew David, our Executive Vice President and Chief Financial Officer, Phoebe Mounts, our Executive

Vice President and General Counsel, Paul Chew, our Acting Chief Medical Officer, Elizabeth Masson-Hurlburt, our Executive Vice

President and Head of Clinical Operations, and John Armstrong, our Executive Vice President for Technical Operations.

success will depend in part on our ability to identify, hire, and retain current and additional personnel.

We experience intense

competition for qualified personnel and may be unable to attract and retain the personnel necessary for the development of our

Moreover, our work force is located in the New York metropolitan area, where competition for personnel with the scientific

and technical skills that we seek is extremely high and is likely to remain high.

Because of this competition, our compensation

costs may increase significantly.

In addition, we have only limited ability to prevent former employees from competing with us.

we are unable to hire additional qualified personnel, our ability to grow our business may be harmed.

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personnel will be successful.

We are currently in the process of hiring a Chief Financial Officer.

Attracting and retaining such

qualified personnel will be critical to our success.

Attracting and retaining such qualified personnel will be critical to our success.

may not successfully manage our growth.

success will depend upon the expansion of our operations to commercialize Neutrolin and the effective management of any growth,

success will depend upon the expansion of our operations to commercialize DefenCath and the effective management of any growth,

which could place a significant strain on our management and our administrative, operational and financial resources.

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If the use of one or

more of our or our collaborators’

drugs or devices harms people, we may be subject to costly and damaging product liability

more of our or our collaborators’ drugs or devices harms people, we may be subject to costly and damaging product liability

claims brought against us by clinical trial participants, consumers, health care providers, pharmaceutical companies or others

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be exposed to significant liabilities, which may materially and adversely affect our business and financial position.

sued for any injury allegedly caused by our or our collaborators’

products and do not have sufficient insurance coverage,

sued for any injury allegedly caused by our or our collaborators’ products and do not have sufficient insurance coverage,

our liability could exceed our total assets and our ability to pay the liability.

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or collaborators.

Negative conditions in the U.S.

economy, including financial markets, may adversely affect our business and the business of current and prospective vendors, licensees

and collaborators, and others with whom we do or may conduct business.

or global economy may experience disruptions as

the result of international hostilities, natural disasters, pandemics, other international health emergencies, or weather-related

or similar events (such as fires, hurricanes, earthquakes, floods, landslides and other natural conditions including the effects

of climate change), political instability, labor strikes or turmoil, or terrorist attacks.

In particular, countries around the

world have experienced the spread of the COVID-19 pandemic, resulting in quarantines, supply chain disruptions, reduction in travel,

increased demand for medical services and a general decline in economic activity and market confidence.

Similar potential disruptions

may occur in the future in any of the locations in which we or our collaborators do business.

We continue to assess the potential

impact on our counterparties and customers of such events, and what impact, if any, these events could have on our business.

The duration and severity of these conditions

is uncertain.

If negative economic conditions occur, we may be unable to secure funding on terms satisfactory to us to sustain

our operations or to find suitable collaborators to advance our internal programs, even if we achieve positive results from our

drug development programs.

conditions in the U.S.

or global economy, including financial markets, may adversely affect our business and the business of current

and prospective vendors, licensees and collaborators, and others with whom we do or may conduct business.

or global economy

may experience disruptions as the result of international hostilities, natural disasters, pandemics, other international health

emergencies, or weather-related or similar events (such as fires, hurricanes, earthquakes, floods, landslides and other natural

conditions including the effects of climate change), political instability, labor strikes or turmoil, or terrorist attacks.

particular, countries around the world have experienced the spread of the COVID-19 pandemic, resulting in quarantines, supply

chain disruptions, reduction in travel, increased demand for medical services and a general decline in economic activity and market

Similar potential disruptions may occur in the future in any of the locations in which we or our collaborators do

We continue to assess the potential impact on our counterparties and customers of such events, and what impact, if any,

these events could have on our business.

duration and severity of these conditions is uncertain.

If negative economic conditions occur, we may be unable to secure funding

on terms satisfactory to us to sustain our operations or to find suitable collaborators to advance our internal programs, even

if we achieve positive results from our drug development programs.

Related to Our Intellectual Property

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we currently believe are most material to our business are as follows:

8,541,393 (expiring November 2, 2024) (the “Prosl Patent”) - use

of Neutrolin for preventing infection and maintenance of catheter patency in hemodialysis

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7,696,182 (expiring May 16, 2025);

European Patent EP 1

814 562 B1 (expiring October 12, 2025) (the “Prosl European Patent”) - a low heparin catheter lock solution for

maintaining and preventing infection in a hemodialysis catheter.

The European Patent Office has found the Prosl European

Patent to be invalid and has revoked it.

Patent EP 1 814 562 B1 (expiring October 12, 2025) (the “Prosl European Patent”)

- a low heparin catheter lock solution for maintaining and preventing infection in a

hemodialysis catheter.

The European Patent Office has found the Prosl European Patent

to be invalid and has revoked it.

An appeal to that decision is pending.

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to create, develop, and market competing products.

addition, the United States Patent and Trademark Office (“PTO”), and patent offices in other jurisdictions have often

required that patent applications concerning pharmaceutical and/or biotechnology-related inventions be limited or narrowed substantially

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our patents, limit the scope of our future patent claims or adversely affect our ability to market our product candidates.

Additionally, it is also possible that prior art of which we are aware, but which we do not believe affects the validity or enforceability

of a claim, may, nonetheless, ultimately be found by a court of law or an administration panel to affect the validity or enforceability

Additionally,

it is also possible that prior art of which we are aware, but which we do not believe affects the validity or enforceability of

a claim, may, nonetheless, ultimately be found by a court of law or an administration panel to affect the validity or enforceability

If a third party were to prevail on a legal assertion of invalidity and/or unenforceability, we would lose at least

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adverse impact on our business.

Additionally, since patent applications in the United States are maintained in secrecy until

published or issued and as publication of discoveries in the scientific or patent literature often lag behind the actual discoveries,

we cannot be certain that we were the first to make the inventions covered by the pending patent applications or issued patents

referred to above or that we were the first to file patent applications for such inventions.

Additionally, since patent applications in the United States are maintained in secrecy until published

or issued and as publication of discoveries in the scientific or patent literature often lag behind the actual discoveries, we

cannot be certain that we were the first to make the inventions covered by the pending patent applications or issued patents referred

to above or that we were the first to file patent applications for such inventions.

addition to patents, we also rely on trade secrets and proprietary know-how.

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for our trade secrets or proprietary know-how, the value of our intellectual property may be greatly reduced.

if we are successful in prosecuting or defending against such claims, litigation could result in substantial costs and be a distraction

to our senior management and scientific personnel.

Even if we are successful

in prosecuting or defending against such claims, litigation could result in substantial costs and be a distraction to our senior

management and scientific personnel.

and future intellectual property disputes could require us to spend time and money to address such disputes and could limit our

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Furthermore, the necessary licenses may not be available on satisfactory terms or at all.

On September 9, 2014, we filed in the District

Court of Mannheim, Germany a patent infringement action against TauroPharm GmbH and Tauro-Implant GmbH as well as their respective

CEOs (the “Defendants”) claiming infringement of our European Patent EP 1 814 562 B1, which was granted by the European

Patent Office (the “EPO”) on January 8, 2014 (the “Prosl European Patent”).

The Prosl European Patent

covers a low dose heparin catheter lock solution for maintaining patency and preventing infection in a hemodialysis catheter.

this action, we claim that the Defendants infringe on the Prosl European Patent by manufacturing and distributing catheter locking

solutions to the extent they are covered by the claims of the Prosl European Patent.

We believe that our patent is

sound and are seeking injunctive relief and raising claims for information, rendering of accounts, calling back, destruction and

Separately, TauroPharm has filed an opposition with the EPO against the Prosl European Patent alleging that it lacks

novelty and inventive step.

We cannot predict what other defenses the Defendants may raise, or the ultimate outcome

of either of these related matters.

At present, the EPO has revoked the Prosl European Patent as invalid, and we have filed an

appeal, which is currently pending.

the same complaint against the same Defendants, we also alleged an infringement (requesting the same remedies) of NDP’s

utility model DE 20 2005 022 124 U1 (the “Utility Model”), which we believe is fundamentally identical to the Prosl

September 9, 2014, we filed in the District Court of Mannheim, Germany a patent infringement action against TauroPharm GmbH and

Tauro-Implant GmbH as well as their respective CEOs (the “Defendants”) claiming infringement of our European Patent

EP 1 814 562 B1, which was granted by the European Patent Office (the “EPO”) on January 8, 2014 (the “Prosl

European Patent”).

The Prosl European Patent covers a low dose heparin catheter lock solution for maintaining patency and

preventing infection in a hemodialysis catheter.

In this action, we claim that the Defendants infringe on the Prosl European Patent

by manufacturing and distributing catheter locking solutions to the extent they are covered by the claims of the Prosl European

We believe that our patent is sound and are seeking injunctive relief and raising claims for information, rendering of

accounts, calling back, destruction and damages.

Separately, TauroPharm has filed an opposition with the EPO against the Prosl

European Patent alleging that it lacks novelty and inventive step.

We cannot predict the ultimate outcome of either of these related

At present, the EPO has revoked the Prosl European Patent as invalid, and we have filed an appeal, which is currently

the same complaint against the same Defendants, we also alleged an infringement (requesting the same remedies) of NDP’s

utility model DE 20 2005 022 124 U1 (the “Utility Model”), which we believe is fundamentally identical to the Prosl

European Patent in its main aspects and claims.

The Court separated the two proceedings and the Prosl European Patent and the

Utility Model claims are now being tried separately.

TauroPharm has filed a cancellation action against the Utility

Model before the German Patent and Trademark Office (the “German PTO”) based on the similar arguments as those in

the opposition against the Prosl European Patent.

March 27, 2015, the District Court held a hearing to evaluate whether the Utility Model has been infringed by TauroPharm in connection

with the manufacture, sale and distribution of its TauroLock-HEP100TM and TauroLock-HEP500TM products.

A hearing before the same

court was held on January 30, 2015 on the separate, but related, question of infringement of the Prosl European Patent by TauroPharm.

Utility Model were being tried separately.

TauroPharm has filed a cancellation action against the Utility Model before the German

Patent and Trademark Office (the “German PTO”) based on the similar arguments as those in the opposition against the

Prosl European Patent.

Court issued its decisions on May 8, 2015 staying both proceedings.

In its decisions, the Court found that the commercialization

by TauroPharm in Germany of its TauroLock catheter lock solutions Hep100 and Hep500 infringes both the Prosl European Patent

and the Utility Model and further that there is no prior use right that would allow TauroPharm to continue to make, use or sell

its product in Germany.

by TauroPharm in Germany of its TauroLock catheter lock solutions Hep100 and Hep500 infringes both the Prosl European Patent and

the Utility Model and further that there is no prior use right that would allow TauroPharm to continue to make, use or sell its

product in Germany.

However, the Court declined to issue an injunction in favor of us that would preclude the continued commercialization

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Court noted the possible publication of certain instructions for product use that may be deemed to constitute prior art.

As such, the District Court determined that it will defer any consideration of the request by us for injunctive and other relief

until such time as the EPO or the German PTO has ruled on the underlying validity of the Prosl European Patent and the Utility

It is safe to assume that the complaint regarding the infringement of the Utility Model will be dismissed now that the

German PTO has voided the Utility Model (see below).

This does not, however, have a direct effect on the infringement proceedings

concerning the Prosl European Patent.

the District Court determined that it will defer any consideration of the request by us for injunctive and other relief until

such time as the EPO or the German PTO has ruled on the underlying validity of the Prosl European Patent and the Utility Model.

opposition proceeding against the Prosl European Patent before the EPO is ongoing.

In its preliminary consideration of the matter,

the EPO (and the German PTO) regarded the patent as not inventive or novel due to publication of prior art.

Oral proceedings

before the Opposition Division at the EPO were held on November 25, 2015, at which the three-judge patent examiner panel considered

arguments related to the validity of the Prosl European Patent.

The hearing was adjourned due to the fact that the panel was of

the view that Claus Herdeis, one of the managing directors of TauroPharm, has to be heard as a witness in a further hearing in

order to close some gaps in the documentation presented by TauroPharm as regards the publication of prior art.

Oral proceedings before the Opposition Division

at the EPO were held on November 25, 2015, at which the three-judge patent examiner panel considered arguments related to the

validity of the Prosl European Patent.

The hearing was adjourned due to the fact that the panel was of the view that Claus Herdeis,

one of the managing directors of TauroPharm, has to be heard as a witness in a further hearing in order to close some gaps in

the documentation presented by TauroPharm as regards the publication of prior art.

German PTO held a hearing in the validity proceedings relating to the Utility Model on June 29, 2016, at which the panel affirmed

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The decision has only a declaratory effect, as the Utility Model had expired in November 2015.

October 2016, TauroPharm submitted a further writ to the EPO requesting a date for the hearing and bringing forward further arguments,

in particular in view of the June 2016 decision of the German PTO on the invalidity of the utility model.

On November 22, 2017,

the EPO in Munich, Germany held a further oral hearing in this matter.

At the hearing, the panel held that the Prosl European

Patent would be invalidated because it did not meet the requirements of novelty based on a technical aspect of the European intellectual

property law.

We disagree with this decision and, after the written opinion was issued by the Opposition Division in September

2018, have appealed the decision.

We continue to believe that the Prosl European Patent is indeed novel and that its validity

should be maintained.

There can be no assurance that we will prevail in this matter.

In addition, the ongoing Unfair Competition

litigation against TauroPharm is not affected and will continue.

On January 16, 2015, we filed a complaint

against TauroPharm GmbH and its managing directors in the District Court of Cologne, Germany.

In the complaint, we allege violation

of the German Unfair Competition Act by TauroPharm for the unauthorized use of its proprietary information obtained in confidence

by TauroPharm.

We allege that TauroPharm is improperly and unfairly using its proprietary information relating to the composition

and manufacture of Neutrolin, in the manufacture and sale of TauroPharm’s products TauroLockTM, TauroLock-HEP100 and TauroLock-HEP500.

We seek a cease and desist order against TauroPharm from continuing to manufacture and sell any product containing taurolidine

(the active pharmaceutical ingredient (“API”) of Neutrolin) and citric acid in addition to possible other components,

damages for any sales in the past and the removal of all such products from the market.

An initial hearing in the District Court

of Cologne, Germany was held on November 19, 2015 to consider our claims.

The judge made no decision on the merits of our complaint.

On January 14, 2016, the court issued an interim decision in the form of a court order outlining several issues of concern that

relate primarily to court’s interest in clarifying the facts and reviewing any and all available documentation, in particular

with regard to the question which specific know-how was provided to TauroPharm by whom and when.

We have prepared the requested

reply and produced the respective documentation.

TauroPharm has also filed another writ within the same deadline and both parties

have filed further writs at the end of April setting out their respective argumentation in more detail.

A further oral hearing

in this matter was held on November 15, 2016.

In this hearing, the court heard arguments from us and TauroPharm concerning the

allegations of unfair competition.

The court made no rulings from the bench and indicated that it is prepared to further examine

the underlying facts of our allegations.

On March 7, 2017, the court issued another interim decision in the form of a court order

outlining again several issues relating to the argumentation of both sides in the proceedings.

In particular the court requested

us to further specify our requests and to further substantiate in even more detail which know-how was provided by Biolink to TauroPharm

by whom and when.

The court also raised the question whether the know-how provided at the time to TauroPharm could still be considered

to be secret know-how or may have become public in the meantime.

The court granted both sides the opportunity to reply to this

court order and provide additional facts and evidence until May 15, 2017.

Both parties submitted further writs in this matter

and the court scheduled a further hearing for May 8, 2018.

After having been rescheduled several times, the hearing took place

on November 20, 2018.

On April 28, 2020, we filed a withdrawal of the complaint on the German utility model, thereby waiving our claims on these proceedings.

November 22, 2017, the EPO in Munich, Germany held a further oral hearing in this matter.

At the hearing, the panel held that

the Prosl European Patent would be invalidated because it did not meet the requirements of novelty based on a technical aspect

of the European intellectual property law.

We disagree with this decision and have appealed the decision.

We continue to believe

that the Prosl European Patent is indeed novel and that its validity should be maintained.

There can be no assurance that we will

prevail in this matter.

In addition, the ongoing Unfair Competition litigation against TauroPharm is not affected and will continue.

January 16, 2015, we filed a complaint against TauroPharm GmbH and its managing directors in the District Court of Cologne, Germany.

In the complaint, we allege violation of the German Unfair Competition Act by TauroPharm for the unauthorized use of its proprietary

information obtained in confidence by TauroPharm.

We allege that TauroPharm is improperly and unfairly using its proprietary information

relating to the composition and manufacture of Neutrolin, in the manufacture and sale of TauroPharm’s products TauroLockTM,

TauroLock-HEP100 and TauroLock-HEP500.

We seek a cease and desist order against TauroPharm from continuing to manufacture and

sell any product containing taurolidine (the active pharmaceutical ingredient (“API”) of Neutrolin) and citric acid

in addition to possible other components, damages for any sales in the past and the removal of all such products from the market.

An initial hearing in the District Court of Cologne, Germany was held on November 19, 2015 to consider our claims.

14, 2016, the court issued an interim decision in the form of a court order outlining several issues of concern that relate primarily

to court’s interest in clarifying the facts and reviewing any and all available documentation, in particular with regard

to the question which specific know-how was provided to TauroPharm by whom and when.

A further oral hearing in this matter was

held on November 15, 2016.

In this hearing, the court heard arguments from us and TauroPharm concerning the allegations of unfair

On March 7, 2017, the court issued another interim decision in the form of a court order outlining again several

issues relating to the argumentation of both sides in the proceedings.

Both parties submitted further writs in this matter and

the court scheduled a further hearing for May 8, 2018.

After having been rescheduled several times, the hearing took place on

November 20, 2018.

A decision was rendered by the court on December 11, 2018, dismissing the complaint in its entirety.

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an expert opinion.

Next steps will be taken after the receipt of the expert opinion.

The decisions by the European and German patent offices

may affect patent rights in other jurisdictions.

The prior art on the basis of which

the Prosl European Patent and the German Utility Model have been found to be invalid may be used to challenge the validity of

issued United States and/or other foreign patents that are directed to the same or similar subject matter, in a court action

or in an administrative proceeding before the USPTO.

Pending United States and/or foreign patent applications may be denied

on that basis of that prior art as well.

The expert opinion was not in our favor, but we have filed a response to the expert opinion in reaction to

which the Court asked the expert to supplement his opinion to address the issues brought forward in our submission.

In the supplementary

expert opinion, the expert confirmed his view.

We have filed another response and an oral hearing has been scheduled for February

5, 2021 but was postponed to June 18, 2021 due to the COVID-19 situation in Germany.

decisions by the European and German patent offices may affect patent rights in other jurisdictions.

prior art on the basis of which the Prosl European Patent and the German Utility Model have been found to be invalid may be

used to challenge the validity of issued United States and/or other foreign patents that are directed to the same or similar

subject matter, in a court action or in an administrative proceeding before the USPTO.

Pending United States and/or foreign

patent applications may be denied on that basis of that prior art as well.

Such patents and patent applications include:

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We may seek a sales partner in the U.S.

if Neutrolin receives FDA

approval or we may undertake marketing and sales of Neutrolin in the U.S.

if DefenCath receives FDA

approval or we may undertake marketing and sales of DefenCath in the U.S.

If we are unable to enter into or maintain

agreements with third parties to market and sell Neutrolin or any other product after approval or are unable to find a sales partner

agreements with third parties to market and sell DefenCath or any other product after approval or are unable to find a sales partner

or establish our own marketing and sales capabilities, we may not be able to generate significant or any product revenues.

currently have no sales, marketing, or distribution infrastructure.

Our business strategy for Neutrolin relies on collaborating

with larger firms with experience in marketing and selling medical devices and pharmaceutical products;

for other products we

may also rely on such marketing collaborations or out-licensing of our product candidates.

Specifically, for Neutrolin, we have

a distributor agreement with each of a Saudi Arabian, an Emirati, and a South Korean company for sales and marketing (upon receipt

of approval to market in South Korea).

In April 2017, we announced a commercial collaboration with Hemotech SAS covering France

and certain overseas territories.

Assuming we receive applicable regulatory approval for other markets, we plan to enter into

distribution agreements with one or more third parties for the sale of Neutrolin in various European, Middle East and other markets.

We will be dependent on the firms and individuals with whom we contract for the success of sales in the countries in which they

However, there can be no assurance that we will be able to successfully maintain those relationships or establish and

maintain additional marketing, sales, or distribution relationships, nor can there be assurance that such relationships will be

successful, or that we will be successful in gaining market acceptance for our products.

If these firms or individuals do not

perform for whatever reason, our business, prospects and results of operations may be materially adversely affected.

new or replacement organization for sales and marketing could be difficult, which would further harm our business, prospects and

results of operations.

To the extent that we enter into any marketing, sales, or distribution arrangements with third parties,

our product revenues will be lower than if we marketed and sold our products directly, and any revenues we receive will depend

upon the efforts of such third parties.

We currently have

no sales, marketing, or distribution infrastructure in the EU and have only started to build necessary functions in the U.S.

business strategy for Neutrolin relies on collaborating with larger firms with experience in marketing and selling medical devices

and pharmaceutical products;

for other products we may also rely on such marketing collaborations or out-licensing of our product

Specifically, for Neutrolin, we have a distributor agreement with each of an Emirati, and a South Korean company for

sales and marketing (upon receipt of approval to market in the U.S., which is required for approval to market in South Korea).

We have a commercial collaboration with Hemotech SAS covering France and certain overseas territories.

Assuming we receive applicable

regulatory approval for other markets, we plan to enter into distribution agreements with one or more third parties for the sale

of Neutrolin in various European, Middle East and other markets.

We will be dependent on the firms and individuals with whom we

contract for the success of sales in the countries in which they operate.

However, there can be no assurance that we will be able

to successfully maintain those relationships or establish and maintain additional marketing, sales, or distribution relationships,

nor can there be assurance that such relationships will be successful, or that we will be successful in gaining market acceptance

for our products.

If these firms or individuals do not perform for whatever reason, our business, prospects and results of operations

may be materially adversely affected.

Finding a new or replacement organization for sales and marketing could be difficult, which

would further harm our business, prospects and results of operations.

To the extent that we enter into any marketing, sales, or

distribution arrangements with third parties, our product revenues will be lower than if we marketed and sold our products directly,

and any revenues we receive will depend upon the efforts of such third parties.

we are unable to establish and maintain such third-party sales and marketing relationships, or choose not to do so, we will have

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for a manufacturing facility, we may be unable to meet demand for our products and we may lose potential revenues.

of our clinical trials and commercialization of Neutrolin and any other product candidate require access to, or development of,

facilities to manufacture sufficient supplies.

All of our manufacturing processes currently are, and we expect them to continue

to be, outsourced to third parties.

Specifically, we will rely on one or more manufacturers to supply us and/or our distribution

partners with commercial quantities of Neutrolin.

If, for any reason, we become unable to rely on our current sources for the

manufacture of Neutrolin or any other product candidates or for active pharmaceutical ingredient (“API”), either for

clinical trials or for commercial quantities, then we would need to identify and contract with additional or replacement third-party

manufacturers to manufacture compounds for pre-clinical, clinical, and commercial purposes.

We may not be successful in identifying

such additional or replacement third-party manufacturers, or in negotiating acceptable terms with any that we do identify.

third-party manufacturers must receive FDA or applicable foreign approval before they can produce clinical material or commercial

product, and any that are identified may not receive such approval or may fail to maintain such approval.

In addition, we may

be in competition with other companies for access to these manufacturers’

facilities and may be subject to delays in manufacturing

if the manufacturers give other clients higher priority than they give to us.

If we are unable to secure and maintain third-party

manufacturing capacity, the development and sales of our products and our financial performance may be materially affected.

we could begin to commercially manufacture Neutrolin or any other product candidate on our own, we must obtain regulatory approval

Completion of our

clinical trials and commercialization of DefenCath and any other product candidate require access to, or development of, facilities

to manufacture sufficient supplies.

All of our manufacturing processes currently are, and we expect them to continue to be, outsourced

to third parties.

Specifically, we will rely on one or more manufacturers to supply us and/or our distribution partners with commercial

quantities of DefenCath.

If, for any reason, we become unable to rely on our current sources for the manufacture of DefenCath

or any other product candidates or for active pharmaceutical ingredient (“API”), either for clinical trials or for

commercial quantities, then we would need to identify and contract with additional or replacement third-party manufacturers to

manufacture compounds for pre-clinical, clinical, and commercial purposes.

We may not be successful in identifying such additional

or replacement third-party manufacturers, or in negotiating acceptable terms with any that we do identify.

Such third-party manufacturers

must receive FDA or applicable foreign approval before they can produce clinical material or commercial product, and any that

are identified may not receive such approval or may fail to maintain such approval.

We were recently informed by FDA that the

DefenCath NDA cannot be approved in its present form, because of concerns at the third-party manufacturing facility, which must

be resolved to FDA’s satisfaction before the NDA can be approved.

In addition, we may be in competition with other companies

for access to these manufacturers’ facilities and may be subject to delays in manufacturing if the manufacturers give other

clients higher priority than they give to us.

If we are unable to secure and maintain third-party manufacturing capacity, the

development and sales of our products and our financial performance may be materially adversely affected.

we could begin to commercially manufacture DefenCath or any other product candidate on our own, we must obtain regulatory approval

of the manufacturing facility and process.

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the course of our pre-clinical testing and clinical trials, we rely on third parties, including laboratories, investigators, clinical

contract research organizations (“CROs”), and manufacturers, to perform critical services for us.

For example, we

rely on third parties to conduct our clinical trials and many of our pre-clinical studies, which are required to be conducted

consistent with regulations on Good Laboratory Practice (“GLP”).

CROs and study sites are responsible for many aspects

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Moreover, the FDA and foreign regulatory authorities require us to comply with regulations and standards, commonly referred to

as Good Clinical Practices (“GCPs”), for conducting, monitoring, recording, and reporting the results of clinical

trials to ensure that the data and results are scientifically credible and accurate, and that the trial subjects are adequately

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will need additional financing to fund our activities in the future, which likely will dilute our stockholders.

To date, our commercial operations have not

generated sufficient revenues to enable profitability.

As of December 31, 2019, we had an accumulated deficit of $195.4 million,

and incurred net losses of $16.4 million for the year then ended.

Based on the current development plans for Neutrolin in both

and foreign markets (including the preparation of an NDA for Neutrolin in hemodialysis catheters) and our other operating

requirements, management believes that the existing cash at December 31, 2019 plus funding raised through March 12, 2020, will

be sufficient to fund operations into the second quarter of 2021.

Further, we will need additional funding for Neutrolin’s

commercial launch.

We anticipate that we will incur operating losses for the foreseeable future.

Additionally, we will require

substantial funds in the future to support our operations.

Accordingly, we will need to obtain additional financing, including

through issuances of equity securities.

commercial operations have not generated sufficient revenues to enable profitability.

As of December 31, 2020, we had an

accumulated deficit of $217.4 million, and incurred net losses of $22.0 million for the year then ended.

Based on the current

development plans for DefenCath/Neutrolin in both the U.S.

and foreign markets (including the preparation of an NDA for

DefenCath in hemodialysis catheters) and our other operating requirements, management believes that the existing cash at

December 31, 2020, will be sufficient to fund operations at least into the second half of 2022, after taking into

consideration the $41.5 million of net proceeds received in January and February 2021 from the at-the-market program.

Further, we will need additional funding for DefenCath’s commercial launch.

We anticipate that we will incur operating

losses for the foreseeable future.

Additionally, we will require substantial funds in the future to support our operations.

Accordingly, we will need to obtain additional financing, including through issuances of equity securities.

the extent we raise additional capital by issuing equity securities, our stockholders may experience substantial dilution.

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Our executive officers and directors may sell stock in the future, either as part, or outside,

of trading plans under Rule 10b5-1 under the Securities Exchange Act of 1934, as amended (the “Exchange Act”).

common stock price has fluctuated considerably and is likely to remain volatile, in part due to the limited market for our common

stock and you could lose all or a part of your investment.

the period from the completion of our initial public offering (“IPO”), on March 30, 2010 through December 31, 2019,

the period from the completion of our initial public offering (“IPO”), on March 30, 2010 through December 31, 2020,

the high and low sales prices for our common stock were $52.00 and $0.75, respectively.

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are beyond our control, including the following:

receipt of or failure to obtain additional regulatory approvals for Neutrolin, including

receipt of or failure to obtain additional regulatory approvals for DefenCath, including

FDA approval in the U.S.;

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need for additional capital;

of clinical trials of our product candidates, including any other Phase 3 trial for Neutrolin

of clinical trials of our product candidates, including any other Phase 3 trial for DefenCath

in the U.S., if required, or those of our competitors;

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conditions in the pharmaceutical and medical device sectors and issuance of new or changed

securities analysts’

reports or recommendations;

securities analysts’ reports or recommendations;

● instability

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or disputes concerning patents or other proprietary rights;

other factors described in this “Risk Factors”

other factors described in this “Risk Factors” section.

addition, the stock markets in general, and the stock of pharmaceutical and medical device companies in particular, have experienced

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In the past, following periods of

volatility in the market price of a company’s securities, securities class-action litigation has often been instituted against

that company.

Such litigation, if instituted against us, could cause us to incur substantial costs and divert management’s

attention and resources.

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exercise price of $8.99 per share;

to purchase an aggregate of 1,106,984 shares of our common stock issued to our officers,

directors and non-employee consultants under our 2019 Stock Plan, with a weighted average

exercise price of $5.11 per share;

shares of Series C-3 Preferred Stock, which are convertible into 104,000 shares of common

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price of $4.96 per share.

shares of common stock issuable upon vesting of restricted stock units with a weighted

average grant date fair value of $8.49 per share.

Additionally, there are 3,562,196 shares

of common stock available for grants under the 2019 Stock Plan (adopted on November 26, 2019).

Additionally, there

are 2,490,903 shares of common stock available for grants under the 2019 Stock Plan (adopted on November 26, 2019).

possibility of the issuance of these shares, as well as the actual sale of such shares, could substantially reduce the market

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● authorizing

the issuance of “blank check”

preferred stock, the terms of which may be

the issuance of “blank check” preferred stock, the terms of which may be

established and shares of which may be issued without stockholder approval;

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price that some investors are willing to pay for our common stock.

we fail to comply with the continued listing standards of the NYSE American, it may result in a delisting of our common stock

from the exchange.

common stock is currently listed for trading on the NYSE American, and the continued listing of our common stock on the NYSE American

is subject to our compliance with a number of listing standards.

These listing standards include the requirement for avoiding

sustained losses and maintaining a minimum level of stockholders’

In June 2018, we received a notice

from the NYSE American that we did not meet continued listing standards of the NYSE American as set forth in Part 10 of the Company

Specifically, we were not in compliance with Section 1003(a)(i) (requiring stockholders’

equity of $2.0

million or more if the issuer has reported losses from continuing operations and/or net losses in two of its three most recent

fiscal years), Section 1003(a)(ii) (requiring stockholders’

equity of $4.0 million or more if the issuer has reported losses

from continuing operations and/or net losses in three of its four most recent fiscal years);

and Section 1003(a)(iii) (requiring

stockholders’

equity of $6.0 million or more if the issuer has reported losses from continuing operations and/or net losses

in its five most recent fiscal years).

As a result, we became subject to the procedures and requirements of Section 1009 of the

Company Guide.

We submitted a plan of compliance to the NYSE American to address regaining compliance with Section 1003(a)(i),

Section 1003(a)(ii) or Section 1003(a)(iii) of the Company Guide.

The plan was accepted by the NYSE American and we subsequently

regained compliance.

However, if, in the future, we fail to maintain compliance with the requirements of the Company Guide, we

may be required to take further actions to regain compliance and, if such actions are unsuccessful, our common stock could be

our common stock were no longer listed on the NYSE American, investors might only be able to trade on one of the over-the-counter

markets, including the OTC Bulletin Board ®

or in the Pink Sheets ®

we fail to comply with the continued listing standards of the Nasdaq Global Market, it may result in a delisting of our common

stock from the exchange.

Our common stock

is currently listed for trading on the Nasdaq Global Market under the symbol “CRMD”, and the continued listing of

our common stock on the Nasdaq Global Market is subject to our compliance with a number of listing standards.

If we fail to satisfy

the continued listing requirements of The Nasdaq Capital Market such as the corporate governance requirements, the stockholder’s

equity requirement or the minimum closing bid price requirement, The Nasdaq Capital Market may take steps to de-list our common

Such a de-listing or even notification of failure to comply with such requirements would likely have a negative effect

on the price of our common stock and would impair your ability to sell or purchase our common stock when you wish to do so.

addition, the delisting of our common stock could materially adversely impact our ability to raise capital on acceptable terms

Delisting from Nasdaq could also have other negative results, including the potential loss of confidence by our current

or prospective third-party providers and collaboration partners, the loss of institutional investor interest, and fewer licensing

and partnering.

In the event of a de-listing, we would take actions to restore our compliance with The Nasdaq Capital Market’s

listing requirements, but we can provide no assurance that any such action taken by us would allow our common stock to become

listed again, stabilize the market price or improve the liquidity of our common stock.

our common stock were no longer listed on the Nasdaq Global Market, investors might only be able to trade on one of the over-the-counter

markets, including the OTC Bulletin Board ®

or in the Pink Sheets ®

(a quotation medium operated

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rules and regulations relating to public companies may be costly and impact our ability to attract and retain directors and executive

and regulations affecting public companies, including rules adopted by the Securities and Exchange Commission (“SEC”)

and by the NYSE American, may result in increased costs to us.

and regulations affecting public companies, including rules adopted by the Securities and Exchange Commission (“SEC”)

and by the Nasdaq Global Market, may result in increased costs to us.

These laws, rules and regulations could make it more difficult

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assurance regarding the reliability of our financial reporting and the preparation of financial statements for external purposes

in accordance with accounting principles generally accepted in the United States of America (“U.S.

GAAP”).

in accordance with accounting principles generally accepted in the United States of America (“U.S.

that we have adequate internal financial and accounting controls and procedures in place to produce accurate financial statements

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control system, no matter how well designed and operated, can provide only reasonable, not absolute, assurance that the control

system’s objectives will be satisfied.

Internal control over financial reporting and disclosure controls and procedures

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protection laws.

In addition to existing laws, since May 25, 2018, the General Data Protection Regulation (“GDPR”)

has imposed new obligations with respect to European Union data and substantial fines for breaches of the data protection rules.

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Additionally,

California recently enacted legislation that has been dubbed the first “GDPR-like”

law in the United States.

as the California Consumer Privacy Act (“CCPA”), it creates new individual privacy rights for consumers (as that word

California recently enacted legislation that has been dubbed the first “GDPR-like” law in the United States.

as the California Consumer Privacy Act (“CCPA”), it creates new individual privacy rights for consumers (as that word

is broadly defined in the law) and places increased privacy and security obligations on entities handling personal data of consumers

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Any return to holders of our common stock will be limited to the value of their common stock.

Unresolved Staff Comments

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