What changed in this filing

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Item 1A. Risk Factors

2024-03-12 compared with 2023-03-30 · 676 added, 898 removed, 431 unchanged (79% of the section changed)

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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.

net losses of approximately $29.7 million and $28.2 million for the years ended December 31, 2022 and 2021, respectively.

As of December

31, 2022, we had an accumulated deficit of approximately $275.4 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 commercialize DefenCath and develop 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

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.

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.

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

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

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

Such factors include, but

are not limited to:

the results of clinical testing and trial activities of our product candidates;

the ability to obtain regulatory

approval to market our products;

ability to manufacture successfully;

competition from products manufactured and sold or being developed

by other companies;

the price of, and demand for, our products;

our ability to negotiate favorable licensing or other manufacturing and

marketing agreements for our products;

and our ability to raise capital to support our operations.

date, our commercial operations have not generated sufficient revenues to enable profitability.

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

$46.3 million and $29.7 million for the years ended December 31, 2023 and 2022, respectively.

As of December 31, 2023, we had an accumulated

deficit of $275.4 million, and incurred net losses of $29.7 million for the year then ended.

Based on the current development and commercialization

plans for DefenCath in both the U.S.

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, 2022, after taking into consideration the

costs for resubmission of the NDA and initial preparations for the commercial launch for DefenCath, will be sufficient to fund operations

for at least twelve months from the issuance of this Annual Report on Form 10-K.

We will likely need additional funding to build out

our commercial infrastructure should we receive FDA approval and to continue our operations should we decide to market and sell DefenCath

Additional funding may also be required for the planned label expansion studies for DefenCath.

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 and commercialization 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 likely 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.

Unless and until we receive applicable

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

We have begun the process of winding down our operations

in the EU and discontinued Neutrolin sales in both the EU and the Middle East.

believe that our cash resources as of December 31, 2022, after taking into consideration the costs for resubmission of the NDA and

initial preparations for the commercial launch for DefenCath, will be sufficient to fund operations for at least twelve months from

the issuance of this Annual Report on Form 10-K.

Nevertheless, we will likely need to raise additional funds through financings or

strategic relationships if our costs exceed our expectations, as well as funds for our continued operations.

We can provide no

assurances that any financing or strategic relationships will be available to us on acceptable terms, or at all.

continue to use significant cash to fund our operations as we seek FDA approval of DefenCath in the U.S., commercialize DefenCath in

the U.S and other markets, if approved by the FDA, 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 collaboration

or licensing arrangement.

deficit of approximately $321.7 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 commercialize DefenCath and

develop 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.

We have not generated any significant

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

launching and marketing DefenCath in the US;

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

if sought, international regulatory agencies;

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

with third parties;

and raising sufficient funds to finance our activities if we are unable to generate sufficient revenue from the commercialization

of DefenCath in the U.S.

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.

may 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, may dilute our stockholders,

and may require us to relinquish valuable rights.

To date, our commercial operations have not generated

sufficient revenues to enable profitability.

We estimate that we have sufficient cash to fund (i) operations for at least twelve months

from the date of issuance of this Annual Report on Form 10-K and (ii) the commercial launch of DefenCath.

These estimates are based upon

the assumption of commercial launch in the second quarter of 2024, and other base case assumptions for market penetration, average selling

price, R&D expense and commercial infrastructure cost.

may need additional financing to the extent we are unable to generate sufficient revenue from the commercialization of DefenCath in the

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 commercialize DefenCath in the U.S, pursue development of

our other product candidates and other business development activities, and incur additional legal costs to defend our intellectual property.

To raise needed

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

The sale of additional equity or debt securities, if convertible, could result in dilution to our stockholders.

The incurrence of indebtedness would result in fixed obligations and could also result in covenants that would restrict our operations.

Raising additional funds through collaboration or licensing arrangements with third parties may require us to relinquish valuable rights

to our technologies, future revenue streams, research programs or product candidates, or to grant licenses on terms that may not be favorable

to us or our stockholders.

Related to the Development and Commercialization of Our Product Candidates

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 reduction of CRBSIs in patients with kidney failure receiving chronic 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.

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

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.

We cannot 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 likely need significant additional

funds to undertake a second trial, if required.

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 (“CRL”) that

it could not approve the NDA for DefenCath 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 despite an existing

in-process control to demonstrate fill volume within specifications.

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 chronic

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 21 st Century

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.

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

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

In February 2022, we resubmitted the NDA

after addressing the manufacturing concerns, but we received a second CRL, because the FDA issued a Warning Letter to our heparin API

supplier for manufacturing concerns for an unrelated product and identified deficiencies at our primary CMO during a pre-approval inspection.

Until the NDA is approved, if the FDA raises 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.

The incurrence

of indebtedness would result in fixed obligations and could also result in covenants that would restrict our operations.

Raising additional

funds through collaboration or licensing arrangements with third parties may require us to relinquish valuable rights to our technologies,

future revenue streams, research programs or product candidates, or to grant licenses on terms that may not be favorable to us or our

stockholders.

the extent we raise additional capital by issuing equity securities, our stockholders may experience substantial dilution.

we have in the past, sell common stock, convertible securities or other equity securities in one or more transactions at prices and in

a manner we determine from time to time.

If we sell common stock, convertible securities or other equity securities in more than one transaction,

investors may be further diluted by subsequent sales.

Such sales may also result in material dilution to our existing stockholders, and

new investors could gain rights superior to existing stockholders.

Related to the Commercialization of DefenCath

are highly dependent on the successful commercialization of our only approved product, DefenCath.

Our ability to generate operating

revenue will be severely limited until we successfully commercialize DefenCath in the U.S., and we may experience unforeseen events during

scale up and/or manufacturing.

DefenCath was approved by FDA on November 15, 2023, and is indicated to reduce the incidence of CRBSIs

in adult patients with kidney failure receiving chronic hemodialysis through a central venous catheter.

This drug is indicated for use

in a limited and specific population of patients.

The safety and effectiveness of DefenCath have not been established for use in populations

other than adult patients with kidney failure receiving chronic hemodialysis through a central venous catheter.

have not commercialized any other product candidates other than DefenCath.

Successful commercialization of DefenCath is subject to many

risks, including but not limited to:

● failure to maintain regulatory approvals;

● failure to receive TDAPA and post-TDAPA add-on adjustment payments;

of superior or equivalent products;

● inability to manufacture our product candidates on a commercial scale

on our own or in collaboration with third parties;

● failure to comply with a broad range of post-marketing requirements including those related to labeling,

promotion and advertising, manufacturing and quality, pharmacovigilance and adverse event reporting, commercial distribution and supply

chain requirements, and pediatric post-marketing study requirements;

to achieve market acceptance or significant adoption.

is no guarantee that our commercial launch of DefenCath or our future commercialization efforts will be successful, or that we will be

able to successfully launch and commercialize any other product candidates that receive regulatory approval.

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, such as Medicare, Medicaid

and/or private health insurers.

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 may expand its usage into oncology

and total parenteral nutrition patients requiring catheters if those indications can be secured from the FDA.

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 IPPS and ESRD PPS, including certain temporary or transitional add-on payment adjustments (e.g., NTAP, TDAPA);

however, payment

under these payment systems could later be modified or decreased under future regulations.

Further, 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

We anticipate that insurers may 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.

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 payers may increasingly demand that we demonstrate

the cost effectiveness of DefenCath as part of the reimbursement review and approval process, we have submitted posters and abstracts

to support our health economic analysis and continue to commission and develop health economic evaluations to support this review in the

context of the utilization of DefenCath in dialysis.

We are pursuing opportunities to work with healthcare systems to demonstrate the

clinical and economic effectiveness of DefenCath;

however, our studies might not be sufficient to support coverage or reimbursement at

levels that allow providers to use DefenCath.

The Company submitted to CMS an HCPCS application for a J-code on December

8, 2023, and a TDAPA application on January 26, 2024, in each case for DefenCath.

While CMS has advised it is working toward a July 1,

2024 implementation date for TDAPA, there is no guarantee that it will be approved or that implementation will take place on or before

July 1, 2024.

Any delay or failure in the approval of such applications would have an adverse impact on the commercial launch of DefenCath.

See Item 1 for additional detail regarding TDAPA and the implementation thereof.

expected outpatient demand for DefenCath is highly concentrated, with two large customers accounting for more than 70% of total outpatient dialysis treatments.

market for outpatient dialysis clinics is highly concentrated, with two large dialysis providers accounting for more than 70% of the

total outpatient dialysis treatments .

The failure of one or both of these providers to utilize DefenCath could adversely

impact the commercial launch of DefenCath, and there can be no assurance that either or both of such providers will agree to utilize

DefenCath on favorable terms or at all.

To the extent we are successful in our efforts to enter into agreements with either or both of

these providers, any failure of these providers to meet purchase commitments, or any reduction or cessation in their purchasing or utilization

of DefenCath, could adversely impact the commercial launch of DefenCath and harm our business.

Related to the Development and Commercialization of our Other Products

development and commercialization of our product candidates is uncertain.

development and commercialization of our products, including 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;

in product development, pre-clinical and clinical testing, or manufacturing;

expenditures in product development, clinical testing, or manufacturing;

with securing the heparin supply chain;

● uncertainties

relating to, or changes in FDA view of, the appropriate product approval pathway;

to obtain treatment of a drug or application under expedited development and review programs

or to obtain marketing exclusivities;

to receive or maintain regulatory approvals;

of superior or equivalent products;

to manufacture our product candidates on a commercial scale on our own, or in collaboration

with third parties;

to comply with a broad range of post-marketing requirements including those related to labeling,

promotion and advertising, manufacturing and quality, pharmacovigilance and adverse event

reporting, commercial distribution and supply chain requirements, and drug sample distribution

requirements;

to achieve market acceptance.

of these risks, our development efforts may not result in any future commercially viable products.

If a significant portion of these

development efforts are not successfully completed, required regulatory approvals are not obtained or any approved products are 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 successfully commercialize DefenCath in the United States.

may experience unforeseen events during product development, scale up and/or manufacturing validation that may substantially delay or

prevent product approval.

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.

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

87 unchanged sentences

delay given the FDA’s current backlog of foreign inspections.

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.

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;

in product development, pre-clinical and clinical testing, or manufacturing;

expenditures in product development, clinical testing, or manufacturing;

with securing the heparin supply chain;

● uncertainties

relating to, or changes in FDA view of, the appropriate product approval pathway;

to obtain treatment of a drug or application under expedited development and review programs

or to obtain marketing exclusivities;

to receive or maintain regulatory approvals;

of superior or equivalent products;

to manufacture our product candidates on a commercial scale on our own, or in collaboration

with third parties;

to comply with a broad range of post-marketing requirements including those related to labeling,

promotion and advertising, manufacturing and quality, pharmacovigilance and adverse event

reporting, commercial distribution and supply chain requirements, and drug sample distribution

requirements;

to achieve market acceptance.

of these risks, our development efforts may not result in any commercially viable products.

If a significant portion of these development

efforts are not successfully completed, required regulatory approvals are not obtained or any approved products are not commercialized

successfully, our business, financial condition, and results of operations will be materially harmed.

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.

In addition, failure

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

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

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 once those indications can be

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 Inpatient Prospective Payment System (“IPPS”), 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.

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 may 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 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.

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 have submitted posters and abstracts to support our health economic analysis and continue to commission

and develop health economic evaluations to support this review in the context of the prospective use of DefenCath in dialysis.

Most importantly,

we are pursuing opportunities to work with healthcare systems pre and post-approval to baseline and continue to demonstrate the products

clinical and economic effectiveness.

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

allow providers to use DefenCath.

and patients may not accept and use our products.

if we receive FDA or other foreign regulatory approval for DefenCath/Neutrolin or other product candidates, healthcare institutions,

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 or prevented;

and severity of any side effects;

● cost-effectiveness

of our product relative to current standard of care;

● 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 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.

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.

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.

resurgence of COVID-19 pandemic, or other pandemic, epidemic or outbreak of an infectious disease may materially and adversely impact

our business, including our preclinical studies and clinical trials.

Global health concerns relating to the COVID-19 pandemic and related

government actions to reduce the spread of the virus have 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

In response to the COVID-19 outbreak, governmental authorities implementing numerous measures to try to contain the virus, including

travel bans and restrictions, quarantines, “shelter-in-place” orders, and business limitations and shutdowns 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.

A resurgence of the COVID-19 pandemic, or other

pandemic, may lead to the re-imposition by many nations and the U.S.

of quarantine requirements for travelers from other regions and may

lead to the re-imposition of “shelter-in-place” or other similar orders.

If an onsite inspection of the third-party manufacturing

facility of our contract manufacturer is required for the satisfactory resolution of issues required for approval of the DefenCath NDA,

the Company may encounter additional delays in obtaining FDA approval because the FDA is currently facing a backlog due to the lingering

effects of the COVID-19 pandemic.

As a result of the lingering effects of the COVID-19 pandemic, or similar

pandemics, we have and may in the future experience disruptions that could materially and adversely impact our clinical trials, business,

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.

Related to Healthcare Regulatory and Legal Compliance Matters

and our other product candidates (if approved), will be subject

to extensive post-approval regulation.

Once a product is approved, numerous post-approval requirements apply

in the United States.

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, required post-marketing studies, 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 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 approval.

Failure to complete a PREA post-marketing study can result in a PREA non-compliance letter, which is publicly posted

on FDA’s website, and could result in the product being considered misbranded and subject to additional enforcement.

healthcare laws and regulations in the U.S.

and future legislative or regulatory reforms to the U.S.

healthcare system may affect our

ability to commercialize DefenCath and future marketed products profitably.

and state governments in the U.S.

are considering legislative and regulatory proposals to change the U.S.

healthcare system in ways that

could affect our ability to commercialize DefenCath and future marketed products profitably.

Similarly, among payors and other third-parties,

there is significant interest in promoting such changes through legislation and regulation (in additional to through restrictions introduced

via contracting and other methods).

The life sciences industry and specifically the market for the sale, insurance coverage and distribution

of pharmaceuticals has been a particular focus of these efforts and would likely be significantly affected by any major legislative or

regulatory initiatives.

In addition, there have been, and may in the future be, initiatives at both the federal and state level that

could significantly modify the terms and scope of government-provided health insurance coverage, ranging from changes to some or all

of the provisions of existing law, to establishing a single-payer, national health insurance system, to more limited “buy-in”

options to existing public health insurance programs, any of which could have a significant impact on the healthcare industry.

possible that additional legislative, executive and judicial activities in the future could have a material adverse impact on our business,

financial condition and results of operations.

Potential disruptions include but are not limited to:

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

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 site

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, including a halt

in on-site inspections, 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.

In addition, the trading prices for our common stock and other biopharmaceutical

companies have been highly volatile as a result of the lingering effects 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.

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 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

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;

are subject to healthcare laws, regulations and enforcement;

our failure to comply with those laws could have a material adverse impact

on our business, financial condition and results of operations.

Should our compliance controls prove ineffective at preventing or mitigating

the risk and impact of improper business conduct or inaccurate reporting in connection with applicable federal and state healthcare laws

and regulations, we could be subject to enforcement actions and substantial penalties.

If our operations are found, or even alleged, to

be in violation of any of these laws and regulations, we, or our officers or employees, may be subject to significant penalties, including

administrative civil and criminal penalties, damages, fines, regulatory penalties, the curtailment or restructuring of our operations,

exclusion from participation in Medicare, Medicaid and other federal and state healthcare programs, imprisonment, reputational harm, additional

reporting requirements and oversight through a Corporate Integrity Agreement or other monitoring agreement, any of which would adversely

affect our ability to sell our products and operate our business and also adversely affect our financial results.

relating to data privacy could create additional liabilities for us.

are subject to data privacy and protection laws and regulations that apply to the collection, transmission, storage and use of personally-identifying

Failure to comply with applicable privacy and data security laws and regulations could result in enforcement actions against

us, including possible fines, imprisonment of company officials and public censure, claims for damages by affected individuals, damage

to our reputation and loss of goodwill, any of which could have a material adverse effect on our business, financial condition, results

of operations or prospects.

legislative and regulatory landscape for privacy and data protection continues to evolve in jurisdictions worldwide.

There are numerous

federal and state laws and regulations related to the privacy, data protection and security of personal information.

At the federal

level, regulations promulgated pursuant to HIPAA establish privacy and security standards for “covered entities” (group health

plans and most healthcare providers) that limit the use and disclosure of individually identifiable health information those entities

and their service providers receive or create (“protected health information”).

Although we generally are not subject to

the HIPAA privacy or security regulations, we do business with various entities (including clinical trial investigators) that are subject

those regulations, and we have to expend resources to understand their obligations, adjust contractual terms in light of those obligations,

or otherwise modify our business practices.

Congress is currently considering adopting legislation to regulate the collection, use, and

disclosure of personal health information more broadly than the HIPAA privacy and security regulations.

Such legislation might require

us to make substantial expenditures and would likely create additional liability risks.

Federal Trade Commission (“FTC”) Act, while not focused on data privacy or security, has proven to be a significant federal

enforcement tool with respect to protection of personal information, and recently, personal health information in particular.

has used its authority under Section 5 of the FTC Act, which prohibits unfair and deceptive practices affecting consumers, to bring numerous

cases against companies for failing to protect the privacy or security of personal information in a manner that is reasonable and fully

consistent with stated privacy policies, notices, or other representations.

Particularly because the FTC has taken these actions based

on theories that are not codified in regulations, the optimal means to mitigate the risk of such an action are uncertain.

addition, many U.S.

states in which we operate have laws that protect the privacy and security of personal information.

Certain state

laws may be more stringent or broader in scope, or offer greater individual rights, with respect to personal information than federal,

international or other state laws, and such laws may differ from each other, which complicates compliance efforts.

For example, the California

Confidentiality of Medical Information Act (the “CMIA”) imposes stringent data privacy and security requirements and obligations

with respect to the personal health information of California residents.

The CMIA authorizes administrative fines and civil penalties

of up to $25,000 for willful violations and up to $250,000 if the violation is for purposes of financial gain, as well as criminal fines.

Other states, including Colorado, Connecticut, Delaware, Indiana, Iowa, Montana, New Hampshire, New Jersey, Oregon, Tennessee, Texas,

Utah, and Virginia, have recently adopted broadly applicable privacy laws, and both Nevada and Washington State have enacted laws specifically

to protect the privacy of personal health information.

Violations of the Washington State law can result in civil penalties of up to

$7,500 per violation, up to $25,000 in treble damages at the sole discretion of the court, and injunctive relief.

Consumers also may

bring their own actions to recover (i) actual damages, (ii) treble damages;

and (iii) attorney’s fees.

Violations of the Nevada

law can result in up to $10,000 civil penalties per violation and injunctive relief.

legislation anticipated to be enacted in various other states will continue to shape the data privacy environment nationally.

on our business of this growing body of privacy and data protection laws are potentially significant, and may require us to modify our

data processing practices and policies and to incur substantial costs and expenses in an effort to comply.

If we or our third-party service providers are unable to properly protect

the privacy and security of personal information, or other confidential data we process in our business, we could be found to have breached

our contracts.

Further, if we fail to comply with applicable privacy laws, we could face civil and criminal penalties.

Enforcement activity

by regulatory authorities in relation to privacy and cybersecurity matters can result in financial liability and reputational harm, and

responses to such enforcement activity can consume significant internal resources.

The threat of class action lawsuits based on data security

breaches or alleged unfair practices further increases the risk to our business.

We cannot be sure how these privacy laws and regulations

will be interpreted, enforced or applied to our operations.

In addition to the risks associated with enforcement activities and potential

contractual liabilities, our ongoing efforts to comply with evolving laws and regulations at the federal and state level may be costly

and require ongoing modifications to our policies, procedures and systems.

trials required for our product candidates, including, but not limited to, new uses or formulations of DefenCath and the required DefenCath

PREA study, 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

To meet FDA requirements, we are obligated to conduct “adequate and well-controlled” clinical trials.

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 per trial.

Delays associated with

the development plans for our 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;

than expected rates of patient recruitment;

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Any delay in, or termination of, our clinical trials would delay the filing of any NDA or any Premarket Approval Application,

or PMA, with the FDA and, ultimately, our ability to commercialize our product candidates and generate product revenues.

Any change in,

or termination of, our clinical trials could materially harm our business, financial condition, and results of operations.

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.

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 approval.

or PMA, or De Novo application, with the FDA and, ultimately, our ability to commercialize our product candidates and generate product

Any change in, or termination of, our clinical trials could materially harm our business, financial condition, and results

of operations.

we are unable to effectively recruit, train, retain and equip our sales force, our ability to successfully commercialize DefenCath

will be harmed.

of the members of our sales force has promoted DefenCath prior to its launch, and we are required to, and will continue to be required

to, expend significant time and effort to recruit and train our sales force to be credible, persuasive, and compliant with applicable

laws in marketing DefenCath for its approved indication.

We must train our sales force to ensure that a consistent and appropriate message

about DefenCath is being delivered to our customers.

If we are unable to successfully train our sales force and provide them with appropriate

materials, including medical and sales literature to help them educate and inform customers about the benefits and risks of DefenCath,

our efforts to successfully commercialize DefenCath may be challenged and it may present risk to our ability to generate product revenue.

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

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,

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

though we have received FDA approval for DefenCath, healthcare institutions, 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 or prevented;

and severity of any side effects;

● cost-effectiveness

of our product relative to current standard of care;

● 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 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.

and technological change may make DefenCath, as well as our other product candidates or indications, less attractive or obsolete .

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, may develop 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 develop competing technology internally, or acquire competing technology

through acquisitions of other companies, or from universities and other research institutions.

As these competitors 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

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.

Even if our products are successfully developed and approved for use by all governing regulatory

bodies, there can be no assurance that physicians and patients will accept any of our products as a treatment of choice.

the pharmaceutical and medical device industry is diverse, complex, and rapidly changing.

By its nature, the business risks associated

with the industry are numerous and significant.

The effects of competition, intellectual property disputes, market acceptance, and FDA

or other regulatory agency regulations preclude us from forecasting regulatory approval, product acceptance, revenues or income with

certainty or even confidence.

in a decrease in the revenue we would be able to derive from the sale of DefenCath or our other product candidates if any of such other

product candidates receive marketing approval.

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

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and other third-party payors, such as private health insurers, decide which drugs they will pay for and establish reimbursement levels.

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

Also, we cannot

be sure that the amount of reimbursement available, if any, will not reduce the demand for, or the price of, our products.

While we have some indication that Medicare will provide reimbursement in certain settings and benefits, we cannot be sure that reimbursement

will be available for DefenCath by other payers.

That uncertainty applies for any other product candidates that we develop.

cannot be sure that the amount of reimbursement that is available will not reduce the demand for, or the price of, our products.

If reimbursement

is not available or is available only at limited levels, we may not be able to successfully commercialize DefenCath or any other product

candidates that we develop.

both the U.S.

and certain foreign jurisdictions, there have been and we expect there will continue to be a number of legislative and

regulatory changes to the health care system that could affect our ability to sell our approved products profitably.

and other governments have shown significant interest in pursuing healthcare reform.

In particular, the Medicare Modernization Act of

2003 revised the payment methodology for many products under the Medicare program in the United States.

This has resulted in lower rates

of reimbursement.

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 the way healthcare

is financed by both governmental and private insurers.

Such government-adopted reform measures may adversely affect the pricing of healthcare

products and services in the U.S.

or internationally and the amount of reimbursement available from governmental agencies or other third-party

is not available by certain payors or is available only at limited levels, we may not be able to successfully commercialize DefenCath

or any other product candidates that we develop.

there has been, and we expect there will continue to be, a number of legislative and regulatory changes to the health care system

that could affect our ability to profit from our approved products.

government and other governments have shown significant

interest in pursuing healthcare reform.

In particular, the Medicare Modernization Act of 2003 revised the payment methodology for many

products under the Medicare program in the United States.

This has resulted in lower rates of reimbursement.

In 2010, the Patient Protection

and Affordable Care Act, as amended by the Health Care and Education Reconciliation Act (collectively, the “Affordable Care Act”),

The Affordable Care Act substantially changed the way healthcare is financed by both governmental and private insurers.

Such government-adopted reform measures may adversely affect the pricing of healthcare products and services in the U.S.

or internationally

and the amount of reimbursement available from governmental agencies or other third-party payors.

recent years, the U.S.

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and governmental payors to participate in federal healthcare programs.

Further, Congress 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 of drugs.

The current administration’s Blueprint contains certain

measures that the U.S.

Department of Health and Human Services is already working to implement.

Individual states in the United States

have also been increasingly passing legislation and implementing regulations designed to control pharmaceutical product pricing, including

price or patient reimbursement constraints, discounts, restrictions on certain product access and marketing cost disclosure and transparency

measures, and, in some cases, designed to encourage importation from other countries and bulk purchasing.

reduction in reimbursement rates under Medicare or private insurers or foreign health care programs could negatively affect the pricing

of our products.

If we are not able to charge a sufficient amount for our products, then our margins and our profitability will be adversely

government enacted the Inflation Reduction Act of 2022

(Inflation Reduction Act or IRA), the implementation and scope of which is subject to change through ongoing and future regulatory processes

and rulemaking.

The IRA brings sweeping changes to Medicare coverage and reimbursement for prescription drugs that could negatively impact

us and other pharmaceutical manufacturers.

Of note, beginning January 1, 2025 the IRA alters the current structure of the Medicare Part

D standard benefit by eliminating the coverage gap.

The IRA reduces a beneficiary’s out-of-pocket maximum to $2,000 beginning in

The existing coverage gap discount program for pharmaceutical manufacturers will be replaced by a new manufacturer discount program

effective in 2025.

Under the new program, manufacturers will provide a 10 percent discount off the negotiated price for applicable drugs

(branded drugs and biologics manufactured by companies that have Part D discount agreements) after the deductible is satisfied through

the catastrophic phase of the benefit.

In the catastrophic phase, manufacturers will provide a 20 percent discount off negotiated price.

addition to restructuring the Medicare Part D benefit, under the IRA the CMS will negotiate directly with manufacturers the price that

Medicare will pay for certain high-cost drugs via establishment of the Drug Price Negotiation Program (or the Program).

The Program will

apply to drugs administered or dispensed under both Medicare Parts B and D, although for the first two years of the Program, only Medicare

Part D qualifying drugs will be impacted.

The Program officially began in 2023 with CMS selecting 10 drugs for direct price negotiation

from a list of drugs representing the highest Medicare Part D spend.

The newly negotiated prices for the first tranche of Part D drugs

will not be applicable until 2026.

If a manufacturer of a selected drug does not negotiate a Maximum Fair Price (MFP) with the CMS, the

manufacturer must pay an excise tax of 65 to 95 percent of Medicare utilization based on the prior year.

Manufacturers that agree on

an MFP, but do not honor it, will be subject to civil monetary penalties equal to 10 times the amount of the product dispensed or administered

that year, as well as the difference between the reimbursed price and the MFP.

Even if a manufacturer’s drug is not selected for

negotiation under the Program, its Medicare coverage could be impacted as a drug with a MFP automatically receives placement on Part

D plan formularies and could usurp coverage of another therapeutic alternative in the same class of drugs as the general rule is that

Medicare Part D plan formularies have at least 2 drugs per each therapeutic class outside of the 6 protected classes.

While none of our

drug products have currently been selected for negotiation, we continue to monitor the process for potential impact to our business.

The Program and resulting excise tax have been challenged as unconstitutional in various lawsuits.

In the event that the Program and

resulting excise tax are struck down as unconstitutional, the Medicare Part D marketplace could be disturbed by insurers exiting the

Medicare Part D market and premiums increasing.

If this occurs, it could negatively impact reimbursement and coverage for our self-administered

the IRA imposed additional rebates on manufacturers including CorMedix to the extent certain drug pricing metrics are rising faster than

These new inflation rebates are similar to those imposed on manufacturers under Medicaid and could result in additional rebates

due from us on Medicare utilization of our products.

Inflation rebates are accruing on Medicare Part D utilization from October 1, 2022

and on Medicare Part B utilization from January 1, 2023 forward, though the CMS has deferred collection of such rebates until 2025.

reduction in reimbursement rates under Medicare, Medicaid, or private insurers or foreign health care programs could negatively affect

the pricing of our products.

If we are not able to charge a sufficient amount for our products, then our margins and our profitability

will be adversely affected.

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 .

are highly dependent on the principal members of our management and scientific staff, specifically, Joseph Todisco, our Chief Executive

Matthew David, our Chief Financial Officer, Dr.

Phoebe Mounts, our Executive Vice President and General Counsel, Elizabeth

Hurlburt, our Executive Vice President and Head of Clinical Operations and Erin Mistry, our Chief Commercial Officer.

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.

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.

We are highly dependent on the principal members of our management

and scientific staff, specifically, Joseph Todisco, our Chief Executive Officer, Dr.

Matthew David, our Executive Vice President and Chief

Financial Officer, Beth Zelnick Kaufman, our Executive Vice President, Chief Legal Officer and Corporate Secretary, Elizabeth Hurlburt,

our Executive Vice President and Chief Clinical Strategy & Operations Officer and Erin Mistry, our Executive Vice President and Chief

Commercial Officer.

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.

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.

In addition, we have only limited ability

to prevent former employees from competing with us.

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

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

time, we expect to hire additional qualified personnel with expertise in government regulation, formulation and manufacturing, and sales

and marketing, among others.

We compete for qualified individuals with numerous pharmaceutical companies, universities and other research

institutions.

Competition for such individuals is intense, and we cannot be certain that our search for such personnel will be successful.

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

have established field based commercial and medical teams to support the launch of DefenCath.

We compete for qualified individuals with

numerous pharmaceutical companies, universities and other research institutions.

Competition for such individuals is intense, and we

cannot be certain that our search for such personnel will be successful.

Attracting and retaining such qualified personnel will be critical

to our success.

may not successfully manage our growth.

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affect our business, financial condition and results of operations.

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

costs that could 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.

In addition, failure

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

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

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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.

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.

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Related to Our Intellectual Property

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.

commercial success will depend in part on the maintenance of our license agreements.

Each of our license agreements provides the licensor

with a right to terminate the license agreement for our material breach or default under the agreement, including the failure to make

any required milestone or other payments.

Should the licensor under any of our license agreements exercise such a termination right,

we would lose our right to the intellectual property under the respective license agreement, which loss may materially harm our business.

we materially breach or default under the ND License Agreement, NDP will have the right to terminate the ND License Agreement, which

termination may materially harm our business.

commercial success will depend in part on the maintenance of the ND License Agreement.

The ND License Agreement provides NDP with a right

to terminate the license agreement for our uncured material breach or default under the agreement, including the failure to make any

required milestone or other payments.

Should NDP exercise such a termination right following an uncured material breach by us, we would

lose our right to the intellectual property under the ND License Agreement, which loss would materially harm our business.

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

4 unchanged sentences

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 catheters;

8,541,393 (expiring November 2, 2024);

9,339,036 (expiring November 2, 2024);

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

are currently seeking further patent protection for our compounds and methods of treating diseases.

However, the patent process is subject

to numerous risks and uncertainties, and there can be no assurance that we will be successful in protecting our products by obtaining

and defending patents.

11,738,120 (expiring April 15, 2042).

may seek further patent protection for our compounds and methods of treating diseases.

However, the patent process is subject to numerous

risks and uncertainties, and there can be no assurance that we will be successful in protecting our products by obtaining and defending

These risks and uncertainties include the following:

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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 to cover

only the specific innovations exemplified in the patent application, thereby limiting the scope of protection against competitive challenges.

In addition, the USPTO and patent offices in other jurisdictions have

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

to cover only the specific innovations exemplified in the patent application, thereby limiting the scope of protection against competitive

Thus, even if we or our licensors are able to obtain patents, the patents may be substantially narrower than anticipated.

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not successfully challenge our patents or circumvent our patent position in the U.S.

above-mentioned patents are exclusively licensed to us.

above-mentioned patents are exclusively licensed to or owned by us.

To support our patent strategy, we have engaged in a review of patentability

33 unchanged sentences

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 intellectual

property rights.

biotechnology and pharmaceutical industries have been characterized by extensive litigation regarding patents and other intellectual

property rights, and companies have employed intellectual property litigation to gain a competitive advantage.

We may initiate or become

subject to infringement claims or litigation arising out of patents and pending applications of our competitors, or we may become subject

to proceedings initiated by our competitors or other third parties or the PTO or applicable foreign bodies to reexamine the patentability

of our licensed or owned patents.

In addition, litigation may be necessary to enforce our issued patents, to protect our trade secrets

and know-how, or to determine the enforceability, scope, and validity of the proprietary rights of others.

If we are required to defend

patent infringement actions brought by third parties, or if we sue to protect our own patent rights, we may be required to pay substantial

litigation costs and managerial attention may be diverted from business operations even if the outcome is not adverse to us.

any legal action that seeks damages or an injunction to stop us from carrying on our commercial activities relating to the affected technologies

could subject us to monetary liability and require us or any third party licensors to obtain a license to continue to use the affected

technologies.

We cannot predict whether we would prevail in any of these types of actions or that any required license would be made

available on commercially acceptable terms or at all.

Furthermore, to the extent that we or our consultants or research collaborators

use intellectual property owned by others in work performed for us, disputes may also arise as to the rights in such intellectual property

or in resulting know-how and inventions.

An adverse claim could subject us to significant liabilities to such other parties and/or require

disputed rights to be licensed from such other parties.

initiated court proceedings in Germany for patent infringement and unfair use of our proprietary information related to Neutrolin (as

described below).

We also have had opposition proceedings brought against the European Patent and the German utility model patent which

are the basis of our infringement proceedings (as described below).

The defense and prosecution of these ongoing and any future intellectual

property suits, PTO or foreign proceedings, and related legal and administrative proceedings are costly and time-consuming to pursue,

and their outcome is uncertain.

An adverse determination in litigation or PTO or foreign proceedings to which we may become a party could

subject us to significant liabilities, including damages, require us to obtain licenses from third parties, restrict or prevent us from

selling our products in certain markets, or invalidate or render unenforceable our licensed or owned patents.

Although patent and intellectual

property disputes might be settled through licensing or similar arrangements, the costs associated with such arrangements may be substantial

and could include our paying large fixed payments and ongoing royalties.

Furthermore, the necessary licenses may not be available on

satisfactory terms or at all.

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, referred to as the Defendants claiming infringement of ND Partners, LLC.'s European Patent EP

1 814 562 B1, for which we have an exclusive license, and which was granted by the EPO on January 8, 2014 (the “Prosl European

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 offering, putting on

the market, using, importing and possessing for the aforementioned purposes, as well as by offering to supply and supplying catheter

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

We are seeking injunctive relief and raising

claims for information, rendering of accounts, calling back, destruction and determination of damages.

Separately, TauroPharm has filed

an opposition with the EPO against the Prosl European Patent alleging that it lacks novelty and inventive step and that it is not patentable

but relates to methods for treatment of the human body.

the same complaint against the same Defendants, we also alleged an infringement (requesting the same remedies, plus damages for costs

of a warning letter) of ND Partners, LLC’s utility model DE 20 2005 022 124 U1, for which CorMedix, Inc.

has an exclusive license,

and which is referred to as 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 (docket number 7 O 118/14)

and the Utility Model (docket number 7 O 2/15) claims were tried separately.

TauroPharm GmbH has filed a cancellation

action against the Utility Model before the German Patent and Trademark Office (the “German PTO”) based on essentially the

similar arguments as those in the opposition against the Prosl European Patent.

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

In its decisions, the Court found that the

TauroLock catheter lock solutions TauroLockHep100 and TauroLockHep500 infringe both certain claims of the Prosl European Patent and the

Utility Model and further that there is no prior use right that would allow the Defendants to continue to make, offer, 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

by TauroPharm and the other Defendants, based upon its finding that there is a sufficient likelihood that the EPO, in the case of the

Prosl European Patent, or the German PTO, in the case of the Utility Model, may find that such patent or utility model is invalid.

Specifically,

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

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 made a final decision on the underlying validity of the Prosl European Patent and the Utility Model.

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, had 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 its

preliminary finding that the Utility Model was invalid based upon prior publication of a reference to the benefits that may be associated

with adding heparin to a taurolidine based solution.

We filed an appeal against the ruling on September 7, 2016.

An oral hearing was

held on September 17, 2019 in which the German Federal Patent Court affirmed the first instance decision that the Utility Model was invalid.

The decision has only a declaratory effect, as the Utility Model had expired in November 2015.

On April 28, 2020, we filed a withdrawal

of the complaint on the German utility model, thereby waiving our claims on these proceedings and the proceedings were closed.

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.

In a hearing on October 27, 2022 before the

EPO Board of Appeals, the Board held that the patent claims of the Prosl European Patent on file were not inventive over prior art presented

by TauroPharm.

We thus withdrew our appeal against the first instance decision.

This means that the invalidation of the patent has become

final and that, as a consequence, the infringement proceedings, which are formally still ongoing, will also be closed because there is

no underlying patent anymore.

In view of the invalidation of the Prosl European Patent, on November 9, 2022, the Defendants requested

the infringement proceedings (docket number 7 O 118/14) to be resumed and to dismiss our infringement action.

to avoid a dismissal, on January 12, 2023, we withdrew the infringement action with prejudice.

The Defendants consented to the withdrawal

on February 2, 2023 and requested that we, as plaintiff, bear the costs of the proceedings.

Given that pursuant to statutory law, a plaintiff

that withdraws an action, has to bear the costs of the proceedings, we put the decision on who has to bear the costs in the District

Court of Mannheim's discretion.

Due to the withdrawal, there will be no decision on the merits, however, the District Court of Mannheim

will issue a decision that we have to bear the cost of the proceedings.

Given that the court fees have already been paid by us, the cost

of the proceedings are the costs that will have to be reimbursed to the Defendants, i.e.

mainly statutory attorney's fees and expenses.

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 our proprietary

information obtained in confidence by TauroPharm.

We allege that TauroPharm is improperly and unfairly using our 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 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.

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 the 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 CorMedix and TauroPharm concerning the allegations

of unfair competition.

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 have submitted further writs in this matter and the

Court had scheduled a further hearing for May 8, 2018.

After having been rescheduled several times, the hearing took place on November

A decision was rendered by the Court on December 11, 2018, dismissing the complaint in its entirety.

We have appealed this

decision in January 2019 and filed our grounds of appeal in March 2019.

An oral hearing was held on September 6, 2019 in which our legal

counsel brought forward further arguments for the fact that the manufacturing process of the respective catheter locking solution is

indeed protectable as a trade secret.

In view of these new arguments, the Court issued an evidentiary order on September 27, 2019 ordering

an expert opinion.

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.

In an oral hearing held on June 18, 2021, the Court only heard from the expert, and the Court,

as well as both parties, asked further questions to the expert around his expert opinion.

At the end of the hearing and internal deliberation

among the panel of judges, the Court indicated that it would dismiss our complaint, if we did not withdraw the appeal.

As there were

no advantages to further pursuing the matter in view of the Court’s statements, we withdrew the appeal and the proceedings are

therefore now closed.

TauroPharm requested an increase of the value in dispute determined by the Court in order to receive a higher reimbursement

of costs (as this is based on the value in dispute under German law) but the request was rejected in view of arguments brought forward

against it by our legal counsel.

We reimbursed costs in the amount of approximately $41,000 plus interest to TauroPharm.

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

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:

US 7,696,182;

US 8,541,393;

US 9,339,036;

US 17/176,718;

and EP 14150248.4.

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

The biotechnology and pharmaceutical industries have been characterized

by extensive litigation regarding patents and other intellectual property rights, and companies have employed intellectual property litigation

to gain a competitive advantage.

We may initiate or become subject to infringement claims or litigation arising out of patents and pending

applications of our competitors, or we may become subject to proceedings initiated by our competitors or other third parties or the PTO

or applicable foreign bodies to reexamine the patentability of our licensed or owned patents.

In addition, litigation may be necessary

to enforce our issued patents, to protect our trade secrets and know-how, or to determine the enforceability, scope, and validity of the

proprietary rights of others.

If we are required to defend patent infringement actions brought by third parties, or if we sue to protect

our own patent rights, we may be required to pay substantial litigation costs and managerial attention may be diverted from business operations

even if the outcome is not adverse to us.

In addition, any legal action that seeks damages or an injunction to stop us from carrying on

our commercial activities relating to the affected technologies could subject us to monetary liability and require us or any third party

licensors to obtain a license to continue to use the affected technologies.

We cannot predict whether we would prevail in any of these

types of actions or that any required license would be made available on commercially acceptable terms or at all.

Furthermore, to the

extent that we or our consultants or research collaborators use intellectual property owned by others in work performed for us, disputes

may also arise as to the rights in such intellectual property or in resulting know-how and inventions.

An adverse claim could subject

us to significant liabilities to such other parties and/or require disputed rights to be licensed from such other parties.

6, Commitments and Contingencies , of this Annual Report on Form 10-K for additional detail on the Company’s legal proceedings.

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

If our products, methods, processes and

other technologies infringe the proprietary rights of other parties, we could incur substantial costs and we may have to do one or more

of the following:

our products, methods, processes and other technologies infringe the proprietary rights of other parties, we could incur substantial

costs and we may have to do one or more of the following:

licenses, which may not be available on commercially reasonable terms, if at all;

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Related to Dependence on Third Parties

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.

Commercialization

of DefenCath and any other product candidate require access to, or development of, facilities to manufacture sufficient supplies.

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.

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

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.

The manufacture of drugs for clinical and commercial purposes must comply with cGMP and applicable

regulatory requirements.

The cGMP requirements govern quality control and documentation policies and procedures.

Complying with

cGMP and non-U.S.

regulatory requirements would require that we expend time, money, and effort in production, recordkeeping, and quality

control to assure that the product meets applicable specifications and other requirements.

We would also have to pass a pre-approval

inspection prior to FDA or non-U.S.

regulatory agency approval.

Failure to pass a pre-approval inspection may significantly delay regulatory

approval of our products.

If we fail to comply with these requirements, we would be subject to possible regulatory action and may be

limited in the jurisdictions in which we are permitted to sell our products.

As a result, our business, financial condition, and results

of operations could be materially adversely affected.

depend on third party suppliers and contract manufacturers for the supply and manufacture of DefenCath and our product candidates, as

well as our APIs, which subjects us to potential cost increases and manufacturing delays that are not within our control.

We do not manufacture DefenCath or any of its raw materials or components

ourselves, and we rely on third parties for our drug supplies both for clinical trials and for commercial quantities.

All of our manufacturing

processes currently are, and we expect them to continue to be, outsourced to third parties, some of which are single-source suppliers.

We have made the strategic decision not to manufacture APIs for DefenCath or our other product candidates, as these can be more economically

supplied by third parties with particular expertise in this area.

We have engaged contract facilities that are registered with the FDA,

have a track record of large-scale API manufacture, and have already invested in capital and equipment.

We currently have one FDA approved source for each of our two key APIs

for DefenCath, taurolidine and heparin sodium, respectively.

With regards to taurolidine, we have a DMF filed with the FDA.

master commercial supply agreement between a third-party manufacturer and us in place from August 2018.

We are currently in the process

of identifying and qualifying an alternate third-party manufacturer for taurolidine under our existing DMF.

With respect to heparin sodium

API, we have identified an alternate third party supplier and intend to qualify such supplier under the DefenCath NDA over the next twelve

We received FDA approval of DefenCath

with finished dosage production from our European based CMO Rovi Pharma Industrial Services.

We believe this CMO has adequate capacity

to produce the volumes needed to meet near term projected demand for the commercial launch of DefenCath.

We previously announced commercial arrangements with additional finished

dosage CMOs, Alcami Corporation and Siegfried Hameln, that provide for the manufacture of commercial sterile parenteral drug products.

The Company anticipates the submission to the FDA of a supplement adding Siegfreid Hameln as an alternate manufacturing site in the second

fiscal quarter of 2024.

The Company will also discontinue its relationship with Alcami as a potential alternate manufacturing site for

have no direct control over the manufacturing of DefenCath or our product candidates.

If the contract manufacturers are unable to produce

sufficient quantities of DefenCath or our product candidates, as a result of a lack of available materials or otherwise, then we would

need to identify and contract with additional or replacement third-party manufacturers.

If we are unable to identify suitable additional

or replacement third-party manufacturers, or are only able to do so on unfavorable terms, our ability to commercialize DefenCath and

our future profitability would be adversely affected.

addition, we have no direct control over manufacturing costs of DefenCath or our product candidates.

If the cost of manufacturing increases,

or if the cost of the materials used increases, these costs will be passed on to us, making the cost of clinical trials and commercializing

DefenCath and our product candidates more expensive.

Increases in manufacturing costs could adversely affect our future profitability

if we are unable to pass all of the increased costs along to our customers.

continuing reliance on third parties for manufacturing entails a number of additional risks, including reliance on third parties for

legal and regulatory compliance and quality assurance, the possible breach of the manufacturing or supply agreement by such third parties,

and the possible termination or nonrenewal of the agreement by such third parties at a time that is costly or inconvenient for the Company.

Further, we, along with our contract manufacturers, are required to comply with FDA requirements for cGMPs, related to product testing,

quality assurance, manufacturing and documentation.

Our contract manufacturers may fail to comply with the applicable FDA regulatory

requirements, which could result in delays to our product development programs, result in adverse regulatory actions against them or

us, and prevent us from ultimately receiving product marketing approval.

They also generally must pass an FDA preapproval inspection

for conformity with cGMPs before we can obtain approval to manufacture our product candidates and will be subject to ongoing, periodic,

unannounced inspection by the FDA and corresponding state agencies to ensure strict compliance with cGMP and other applicable government

regulations and corresponding foreign standards.

Not complying with FDA requirements could result in a product recall or prevent commercialization

of our product candidates and delay our business development activities.

In addition, such failure could be the basis for the FDA to

issue a warning or untitled letter or take other regulatory or legal enforcement action, including recall or seizure, total or partial

suspension of production, suspension of ongoing clinical trials, refusal to approve pending applications or supplemental applications,

and potentially civil and/or criminal penalties depending on the matter.

Similarly, we, along with our contract manufacturers, are required

to comply with all applicable healthcare laws and regulations, such as, without limitation, the federal AKS, the civil False Claims Act,

and civil monetary penalty laws, as well as similar state laws.

Violation of any such laws by a contract manufacturer could materially

impact our operations.

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

4 unchanged sentences

Some of our existing collaborations,

such as our licensing agreements, are, and future collaborations may be, terminable at the sole discretion of the collaborator in certain

such as the ND License Agreement, are, and future collaborations may be, terminable at the sole discretion of the collaborator in certain

circumstances.

Replacement collaborators might not be available on attractive terms, or at all.

In addition, the activities of any collaborator

will not be within our control and may not be within our power to influence.

There can be no assurance that any collaborator will perform

its obligations to our satisfaction or at all, that we will derive any revenue or profits from such collaborations, or that any collaborator

will not compete with us.

If any collaboration is not pursued, we may require substantially greater capital to undertake on our own the

development and marketing of our product candidates and may not be able to develop and market such products successfully, if at all.

In addition, a lack of development and marketing collaborations may lead to significant delays in introducing product candidates into

certain markets and/or reduced sales of products in such markets.

addition, the activities of any collaborator will not be within our control and may not be within our power to influence.

no assurance that any collaborator will perform its obligations to our satisfaction or at all, that we will derive any revenue or profits

from such collaborations, or that any collaborator will not compete with us.

If any collaboration is not pursued, we may require substantially

greater capital to undertake on our own the development and marketing of our product candidates and may not be able to develop and market

such products successfully, if at all.

In addition, a lack of development and marketing collaborations may lead to significant delays

in introducing product candidates into certain markets and/or reduced sales of products in such markets.

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

7 unchanged sentences

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

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 of the trials, including

finding and enrolling subjects for testing and administering the trials.

Although we rely on these third parties to conduct our pre-clinical

and clinical trials, we are responsible for ensuring that each of our trials is conducted in accordance with its investigational plan

and protocol and that the integrity of the studies and resulting data is protected.

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 informed of the potential risks of participating in clinical trials.

on third parties does not relieve us of these responsibilities and requirements.

These third parties may not be available when we need

them or, if they are available, may not comply with all regulatory and contractual requirements or may not otherwise perform their services

in a timely or acceptable manner, and we may need to enter into new arrangements with alternative third parties and our clinical trials

may be extended, delayed or terminated.

These independent third parties may also have relationships with other commercial entities, some

of which may compete with us.

In addition, if such third parties fail to perform their obligations in compliance with our protocols or

the applicable regulatory requirements, our trials may not meet regulatory requirements or may need to be repeated, we may not receive

marketing approvals, or we or such third parties may face regulatory enforcement.

As a result of our dependence on third parties, we

may face delays, failures or cost increases outside of our direct control.

These risks also apply to the development activities of collaborators,

and we do not control their research and development, clinical trial or regulatory activities.

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.

do not intend to manufacture our product candidates ourselves, and we will rely on third parties for our drug supplies both for clinical

trials and for commercial quantities in the future.

We have taken the strategic decision not to manufacture API for our product candidates,

as these can be more economically supplied by third parties with particular expertise in this area.

We have identified contract facilities

that are registered with the FDA, have a track record of large-scale API manufacture, and have already invested in capital and equipment.

We have no direct control over the manufacturing of our product candidates, or the cost thereof.

If the contract manufacturers are unable

to produce sufficient quantities of our product candidates, as a result of a lack of available materials or otherwise, our ability to

complete product candidate development and our future profitability would be adversely affected.

If the cost of manufacturing increases,

or if the cost of the materials used increases, these costs will be passed on to us, making the cost of conducting clinical trials more

For example, there could be issues securing the API heparin for our product as a result of the outbreak of African swine fever

in China in 2019, which threatened the global heparin supply.

The United States is largely dependent on China for its heparin, because

almost half of the global pig supply, the main animal source for heparin, is in China.

Increases in manufacturing costs could adversely

affect our future profitability if we are unable to pass all of the increased costs along to our customers.

we, along with our contract manufacturers, are required to comply with FDA requirements for cGMPs, related to product testing, quality

assurance, manufacturing and documentation.

Our contract manufacturers may not be able to comply with the applicable FDA regulatory requirements,

which could result in delays to our product development programs, could result in adverse regulatory actions against them or us, and

could prevent us from ultimately receiving product marketing approval.

They also generally must pass an FDA preapproval inspection for

conformity with cGMPs before we can obtain approval to manufacture our product candidates and will be subject to ongoing, periodic, unannounced

inspection by the FDA and corresponding state agencies to ensure strict compliance with cGMP, and other applicable government regulations

and corresponding foreign standards.

For example, one of our API suppliers received a Warning Letter from the FDA related to inspectional

observations for unrelated product that has blocked the resubmission of our NDA for DefenCath until the compliance issues are resolved

to the satisfaction of the FDA.

If we and our contract manufacturers fail to achieve and maintain high manufacturing standards in compliance

with cGMP, we may experience manufacturing errors resulting in defective products that could be harmful to patients, product recalls

or withdrawals, delays or interruptions of production or failures in product testing or delivery, delay or prevention of filing or approval

of marketing applications for our products, cost overruns or other problems that could seriously harm our business.

Not complying with

FDA requirements could result in a product recall or prevent commercialization of our product candidates and delay our business development

In addition, such failure could be the basis for the FDA to issue a warning or untitled letter or take other regulatory or

legal enforcement action, including recall or seizure, total or partial suspension of production, suspension of ongoing clinical trials,

refusal to approve pending applications or supplemental applications, and potentially civil and/or criminal penalties depending on the

the course of our pre-clinical and clinical trials, we may rely on third parties, including laboratories, investigators, clinical contract

research organizations (“CROs”), and manufacturers, to perform critical services for us, many of which are required to be

conducted consistent with regulations on Good Laboratory Practice (“GLP”).

CROs and study sites are responsible for many

aspects of the trials, including finding and enrolling subjects for testing and administering the trials.

Although we may rely on these

third parties to conduct our pre-clinical and clinical trials, we are responsible for ensuring that each of our trials is conducted in

accordance with its investigational plan and protocol and that the integrity of the studies and resulting data is protected.

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 informed of the potential risks

of participating in such trials.

Our reliance on third parties does not relieve us of these responsibilities and requirements.

third parties may not be available when we need them or, if they are available, may not comply with all regulatory and contractual requirements

or may not otherwise perform their services in a timely or acceptable manner, and we may need to enter into new arrangements with alternative

third parties and our clinical trials may be extended, delayed or terminated.

These independent third parties may also have relationships

with other commercial entities, some of which may compete with us.

In addition, if such third parties fail to perform their obligations

in compliance with our protocols or the applicable regulatory requirements, our trials may not meet regulatory requirements or may need

to be repeated, we may not receive marketing approvals, or we or such third parties may face regulatory enforcement.

As a result of our

dependence on third parties, we may face delays, failures or cost increases outside of our direct control.

These risks also apply to

the development activities of collaborators, and we do not control their research and development, clinical trial or regulatory activities.

Related to our Common Stock

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

date, our commercial operations have not generated sufficient revenues to enable profitability.

As of December 31, 2022, we had an accumulated

deficit of $275.4 million, and incurred net losses of $29.7 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 resubmission of an NDA for DefenCath in hemodialysis catheters)

and our other operating requirements, management believes that the existing cash at December 31, 2022, will be sufficient to fund operations

for at least twelve months from the issuance of this Annual Report on Form 10-K, after taking into consideration the costs for resubmission

of the NDA and initial preparations for the commercial launch for DefenCath.

Further, we will likely 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 likely need to obtain additional financing, including through issuances

of equity securities.

To the extent we raise additional capital

by issuing equity securities, our stockholders may experience substantial dilution.

We may, as we have in the past, sell common stock,

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

If we sell common stock, convertible securities or other equity securities in more than one transaction, investors may be further diluted

by subsequent sales.

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

superior to existing stockholders.

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

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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”).

plans under Rule 10b5-1 under 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.

During the period from the completion

of our initial public offering (“IPO”), on March 30, 2010 through December 31, 2022, the high and low sales prices for our

common stock were $52.00 and $0.75, respectively.

There is a limited public market for our common stock and we cannot provide assurances

that an active trading market will develop or continue.

As a result of low trading volume in our common stock, the purchase or sale of

a relatively small number of shares could result in significant share price fluctuations.

Additionally,

the market price of our common stock may continue to fluctuate significantly in response to a number of factors, some of which are beyond

our control, including the following:

receipt of or failure to obtain additional regulatory approvals for DefenCath, including

FDA approval in the U.S.;

December 31, 2022, through December 31, 2023, the high and low sales prices for our common stock were $6.09 and $2.57, respectively.

market price of our common stock has fluctuated considerably and may continue to fluctuate significantly in response to a number of factors,

some of which are beyond our control, including the following:

need for additional capital;

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;

of clinical trials of our product candidates;

entry into or the loss of a significant collaboration, or expiration or termination of licenses;

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sales or anticipated sales of our securities by us or our stockholders;

● announcements

by our competitors of significant developments, technological innovations, strategic partnerships,

joint ventures or capital commitments;

in key personnel;

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of December 31, 2023, we had outstanding the following securities that are convertible into or exercisable for shares of our common stock:

● options to purchase an aggregate of 997,910 shares of our common stock

issued to our officers, directors and non-employee consultants under our 2013 Stock Incentive Plan, with a weighted average exercise price

of $9.51 per share;

● options to purchase an aggregate of 3,456,459 shares of our common

stock issued to our officers, directors and non-employee consultants under our 2019 Omnibus Stock Incentive Plan (the “2019 Plan”),

with a weighted average exercise price of $5.26 per share;

to purchase an aggregate of 930,490 shares of our common stock issued to our officers, directors

and non-employee consultants under our 2013 Stock Plan, with a weighted average exercise

price of $9.87 per share;

to purchase an aggregate of 5,281,018 shares of our common stock issued to our officers,

directors and non-employee consultants under our 2019 Stock Plan and Amended and Restated

2019 Stock Plan, with a weighted average exercise price of $4.66 per share;

shares of restricted stock units issuable into 153,735 shares of common stock;

warrants to purchase an aggregate of 2,500,625 shares of common stock at an exercise price

of $0.001 per share;

shares of Series C-3 Preferred Stock, which are convertible into 4,000 shares of common stock;

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shares of common stock issuable for payment of deferred board compensation.

Additionally, there are 195,109 and 4,800,000 shares of common stock

available for grants under the 2019 Plan (adopted on November 26, 2019) and Amended and Restated 2019 Omnibus Stock Incentive Plan (the

“A&R 2019 Plan”, adopted on October 13, 2022), respectively.

Additionally,

there are 3,108,929 shares of common stock available for grants under the Amended and Restated 2019 Omnibus Stock Plan (adopted on October

possibility of the issuance of these shares, as well as the actual sale of such shares, could substantially reduce the market price for

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more difficult.

Provisions in our Amended and Restated

Certificate of Incorporation, as amended, and our Amended and Restated Bylaws, as well as provisions of the General Corporation Law of

the State of Delaware, or DGCL, may discourage, delay or prevent a merger, acquisition or other change in control of our company, even

if such a change in control would be beneficial to our stockholders.

in our Amended and Restated Certificate of Incorporation, as amended, and our Amended and Restated Bylaws, as well as provisions of the

General Corporation Law of the State of Delaware, or DGCL, may discourage, delay or prevent a merger, acquisition or other change in

control of our company, even if such a change in control would be beneficial to our stockholders.

These provisions include the following:

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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 stock.

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.

In addition, the delisting

of our common stock could materially adversely impact our ability to raise capital on acceptable terms or at all.

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 by Pink

This would impair the liquidity of our common stock not only in the number of shares that could be bought and sold at a

given price, which might be depressed by the relative illiquidity, but also through delays in the timing of transactions and reduction

in media coverage.

the continued listing requirements of the Nasdaq Global Market such as the corporate governance requirements, the stockholder’s

equity requirement or the minimum closing bid price requirement, the Nasdaq Global Market may take steps to delist our common stock.

Such a delisting 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 our stockholders ability to sell or purchase our common stock when they wish to do so.

the delisting of our common stock could materially adversely impact our ability to raise capital on acceptable terms or at all.

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 opportunities.

In the event of a delisting, we would take actions to restore our compliance with the Nasdaq Global 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 the over-the-counter markets,

including the OTC Bulletin Board ® or in the Pink Sheets ® (a quotation medium operated by Pink Sheets

This would impair the liquidity of our common stock not only in the number of shares that could be bought and sold at a given price,

which might be depressed by the relative illiquidity, but also through delays in the timing of transactions and reduction in media coverage.

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 Nasdaq Global Market, may result in increased costs to us.

These laws, rules and regulations could make it more difficult or costly

for us to obtain certain types of insurance, including director and officer liability insurance, and we may be forced to accept reduced

policy limits and coverage or incur substantially higher costs to obtain the same or similar coverage.

The impact of these events could

also make it more difficult for us to attract and retain qualified persons to serve on our board of directors, on our board committees

or as executive officers.

We cannot estimate accurately the amount or timing of additional costs we may incur to respond to these laws,

rules and regulations.

and regulations affecting public companies, including rules adopted by the SEC and by the Nasdaq Global Market, may result in increased

These laws, rules and regulations could make it more difficult or costly for us to obtain certain types of insurance, including

director and officer liability insurance, and we may be forced to accept reduced policy limits and coverage or incur substantially higher

costs to obtain the same or similar coverage.

The impact of these events could make it more difficult for us to attract and retain qualified

persons to serve on our board of directors, on our board committees or as executive officers.

internal control over financial reporting and our disclosure controls and procedures may not prevent all possible errors that could occur.

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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.

Ensuring that we have adequate

internal financial and accounting controls and procedures in place to produce accurate financial statements on a timely basis is a costly

and time-consuming effort that needs to be re-evaluated frequently.

Failure on our part to have effective internal financial and accounting

controls would cause our financial reporting to be unreliable, could have a material adverse effect on our business, operating results,

and financial condition, and could cause the trading price of our common stock to fall dramatically.

Failure on our part to have effective internal financial and accounting controls would cause our financial reporting to be

unreliable, could have a material adverse effect on our business, operating results, and financial condition, and could cause the trading

price of our common stock to fall dramatically.

control system, no matter how well designed and operated, can provide only reasonable, not absolute, assurance that the control system’s

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occurring, and we have a process to identify and mitigate threats, the development and maintenance of these systems, controls and processes

is costly and requires ongoing monitoring and updating as technologies change and efforts to overcome security measures become more sophisticated,

and such systems, controls and processes may not be successful in preventing a breach.

Any such breach could compromise our networks

and the information stored there could be accessed, publicly disclosed, lost or stolen.

We could be required to expend significant amounts

of money and other resources to repair or replace information systems or networks.

In addition, our liability insurance may not be sufficient

in type or amount to cover us against claims related to security breaches, cyberattacks and other related breaches.

legislative and regulatory landscape for privacy and data protection continues to evolve, and there has been an increasing amount of

focus on privacy and data protection issues with the potential to affect our business, including compliance with the Health Insurance

Portability and Accountability Act of 1996 and recently enacted laws in a majority of states requiring security breach notification.

The collection and use of personal health data of individuals in the European Union is also governed by strict data 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.

It will increase our responsibility

and potential liability in relation to personal data that we process, and we will be required to put in place additional mechanisms ensuring

compliance with the new European Union data protection rules.

There is significant uncertainty related to the manner in which data protection

authorities will seek to enforce compliance with GDPR.

For example, it is not clear if the authorities will conduct random audits of

companies doing business in the European Union, or if the authorities will wait for complaints to be filed by individuals who claim their

rights have been violated.

Enforcement uncertainty and the costs associated with ensuring GDPR compliance may be onerous and adversely

affect our business, operating results, prospects and financial condition.

Additionally, California enacted legislation that has been dubbed the

first “GDPR-like” law in the United States.

Known 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 or households.

The CCPA, which went into effect on January 1, 2020, requires covered companies

to provide new disclosures to California consumers, provide such consumers new ways to opt-out of certain sales of personal information,

and allow for a new cause of action for data breaches.

The CCPA, and similar legislation being enacted by other states may significantly

impact our business activities and require substantial compliance costs that adversely affect business, operating results, prospects and

financial condition.

is costly and requires ongoing monitoring and updating particularly because technologies and techniques used to overcome security measures

are increasingly sophisticated and constantly evolving, and such systems, controls and processes may not be successful in preventing

For example, as artificial intelligence continues to evolve, cyber-attackers could also use artificial intelligence to develop

malicious code and sophisticated phishing attempts.

Any such breach could compromise our networks and the information stored there could

be accessed, publicly disclosed, lost or stolen.

We could be required to expend significant amounts of money and other resources to repair

or replace information systems or networks.

We maintain cyber liability insurance, but we cannot be certain that our coverage will be

adequate for liabilities actually incurred or that insurance will continue to be available to us on economically reasonable terms, or

Part I, Item 1C, Cybersecurity , in this Annual Report on Form 10-K for more information regarding our cybersecurity risk management,

strategy, and governance.

state has adopted legislation requiring notification of a breach in the security of certain personal information.

Such breaches

trigger requirements for notification not only to affected individuals, but also state authorities and sometimes the media.

they often prompt class action litigation and can have serious reputational consequences.

For breaches involving personal data subject

to the EU or UK GDPR, there can be substantial fines.

Guarding against such breaches requires us to put in place and consistently monitor

the effectiveness of data security controls, including technical mechanisms, physical safeguards, and administrative standards.

increase our responsibility and potential liability in relation to personal data that we process, and we will be required to put in place

additional mechanisms ensuring compliance with the new European Union data protection rules.

There is significant uncertainty related

to the manner in which data protection authorities will seek to enforce compliance with GDPR.

For example, it is not clear if the authorities

will conduct random audits of companies doing business in the European Union, or if the authorities will wait for complaints to be filed

by individuals who claim their rights have been violated.

Enforcement uncertainty and the costs associated with ensuring GDPR compliance

may be onerous and adversely affect our business, operating results, prospects and financial condition.

access, disclosure or other loss of information, including our data being breached at our partners or third-party providers, could result

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damage our reputation, which could adversely affect our business.

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.

have never declared dividends on our common stock, and currently do not plan to declare dividends on shares of our common stock in the

foreseeable future.

Pursuant to the terms of our Series C-3, E and G Convertible Preferred Stock, we may not declare or pay any dividends

or make any distributions on any of our shares or other equity securities as long as any of those preferred shares remain outstanding.

We currently expect to retain future earnings, if any, for use in the operation and expansion of our business.

The payment of cash dividends

in the future, if any, will be at the discretion of our Board of Directors and will depend upon such factors as earnings levels, capital

requirements, our overall financial condition and any other factors deemed relevant by our Board of Directors.

Any return to holders

of our common stock will be limited to the value of their common stock.

Unresolved Staff Comments

We do not currently pay dividends on our

common stock so any returns on our common stock may be limited to the value of our common stock.

We have never declared dividends on our common stock, and currently

do not plan to declare dividends on shares of our common stock in the foreseeable future.

We currently expect to retain future earnings,

if any, for use in the operation and expansion of our business.

The payment of cash dividends in the future, if any, will be at the discretion

of our Board of Directors and will depend upon such factors as earnings levels, capital requirements, our overall financial condition

and any other factors deemed relevant by our Board of Directors.

Any return to holders of our common stock will be limited to the value

of their common stock.

are a “smaller reporting company” and we cannot be certain if the reduced reporting requirements applicable to such companies

could make our common stock less attractive to investors.

are a “smaller reporting company”, as defined in the Exchange Act.

For as long as we continue to be a smaller reporting company,

we may take advantage of exemptions from various reporting requirements, including exemption from compliance with the auditor attestation

requirements of Section 404 of the Sarbanes-Oxley Act of 2002 (Sarbanes-Oxley Act), only being required to provide two years of audited

financial statements in annual reports and reduced disclosure obligations regarding executive compensation in periodic reports and proxy

cannot predict if investors will find our common stock less attractive because we may rely on these exemptions.

If some investors find

our common stock less attractive as a result, there may be a less active trading market for our common stock and our stock price may

be more volatile.

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