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Item 1A. Risk Factors

2026-03-05 compared with 2025-03-25 · 734 added, 746 removed, 127 unchanged (92% of the section changed)

Risks Related to Our Financial Position and Need for Additional

We have a history of operating losses,

may incur additional operating losses in the future and may never achieve sustained 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 $17.9 million and $46.3 million for the years ended December 31, 2024 and 2023, respectively.

Risks Related to Our Financial Position

Although we achieved profitability in 2025,

we have a history of operating losses, may incur additional operating losses in the future, and may never achieve sustained 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 achieved net income of approximately

$163.1 million for the year ended December 31, 2025 and incurred a net loss of approximately $17.9 million for the year ended December

As of December 31, 2025, we had an accumulated deficit of approximately $176.6 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 lines.

As a result, we may experience negative cash flow at times

as we fund our operating expenses and capital expenditures.

Our ability to generate revenue and maintain profitability will depend on,

among other things, the following:

successfully continued marketing and selling DefenCath in the U.S.;

obtaining and/or maintaining reimbursement

for DefenCath in appropriate settings of care;

obtaining necessary regulatory approvals for our other products from the FDA and, if sought,

international regulatory agencies;

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

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 may not be able to sustain profitability

and could incur net operating losses in future periods as we expect to incur substantial additional operating expenses over the next several

years as our research, development, pre-clinical testing, clinical trials and commercialization activities increase as we commercialize

our Products and develop our other product lines.

As a result, we may experience negative cash flow at times as we fund our operating

expenses and capital expenditures.

Our ability to generate revenue and maintain profitability will depend on, among other things, the

continuing to successfully market and sell our Products in the U.S.;

obtaining and/or maintaining reimbursement for our Products

in appropriate settings of care;

obtaining necessary regulatory approvals for our other products from the FDA and, if sought, international

regulatory agencies;

establishing additional manufacturing, sales, and marketing arrangements, either alone or with third parties;

raising sufficient funds to finance our activities if revenues from the commercialization of our Products in the U.S.

are insufficient.

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.

We 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 on an annual basis.

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 ongoing commercial marketing,

sale and promotion of DefenCath.

These estimates are based upon the base case assumptions for market penetration, average selling price,

research and development (“R&D”) expense and commercial infrastructure cost.

We may need additional financing to the extent we are unable to generate

sufficient revenue from the commercialization of DefenCath in the U.S.

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 lines and other business development activities, and potentially 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 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 lines, or to grant licenses on terms that may not be favorable to us or our stockholders.

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

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

diluted by subsequent sales.

New investors could gain rights superior to existing stockholders.

Risks Related to the Commercialization

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

and results of operations may be materially adversely affected.

Risks Related to the Development and Commercialization

We are highly dependent on the continued

successful commercialization of our only approved product, DefenCath.

successful commercialization of our lead product, DefenCath.

Our ability to generate operating

revenue is dependent upon our continued successful commercialization of DefenCath in the U.S.

cash flow is dependent upon our continued successful commercialization of DefenCath.

DefenCath was approved by FDA on November

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been established for use in populations other than adult patients with kidney failure receiving chronic hemodialysis through a CVC.

We have not commercialized

any product lines other than DefenCath.

Continued successful commercialization of DefenCath is subject to many risks, including but not

Continued successful commercialization

of DefenCath is subject to many risks, including but not limited to:

ongoing maintenance of regulatory approvals;

of superior or equivalent products;

emergence of superior or equivalent products;

ongoing compliance with a broad range of post-marketing requirements

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commercial distribution and supply chain requirements, and pediatric post-marketing study requirements;

to achieve significant market acceptance adoption.

failure to achieve significant market adoption.

There is no guarantee that

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of DefenCath will depend on maintaining 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.

significant uncertainty exists as to the reimbursement status of newly approved health care products.

We currently sell DefenCath directly

to hospitals and outpatient 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.

For any new indication of use, all new potential customers are healthcare

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

the treatment setting of any new indication for use, we believe that DefenCath would be eligible for coverage under various reimbursement

programs, such as the IPPS, including certain temporary payment adjustments (e.g., NTAP);

however, payment under these payment systems

could later be modified or decreased by 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 treatments.

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.

Healthcare reform proposals and medical cost containment proposals designed to target rising healthcare costs

could be introduced in the U.S.

Any measures affecting the reimbursement programs of 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 price we may charge for DefenCath.

The failure to obtain or maintain reimbursement

coverage for DefenCath or any other products could materially harm our operations.

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 currently sell DefenCath directly to hospitals and outpatient dialysis center operators, and are undergoing clinical studies to pursue

an expanded use in total parenteral nutrition patients requiring catheters.

For any new indication of use, all new potential customers

are healthcare providers who depend upon reimbursement by government and commercial insurance payors.

Depending on the treatment setting

of any new indication for use, we believe that DefenCath would be eligible for coverage under various reimbursement programs, such as

the IPPS, including certain temporary payment adjustments (e.g., NTAP);

however, payment under these payment systems could later be modified

or decreased by 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 treatments.

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.

Healthcare reform proposals and medical cost containment proposals

designed to target rising healthcare costs could be introduced in the U.S.

Any measures affecting the reimbursement programs of 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 price we may charge for DefenCath.

failure to obtain or maintain reimbursement coverage for DefenCath could materially harm our operations.

In anticipation that payers

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to use DefenCath.

We have significant customer concentration,

with a limited number of customers accounting for a large portion of our revenues.

We derive a large portion

of our revenues from a few major customers.

Sales to one customer accounted for 86% of our total revenue for the year ended December

31, 2024, and we had two customers that accounted for 87% and 12% of our accounts receivable, respectively, for the year ended December

These customers have no purchase commitments and may cancel, change or delay purchases with little or no notice or penalty.

As a result of these customer concentrations, our revenue could fluctuate materially and could be materially and disproportionately impacted

by purchasing decisions of these customers or any other significant customer.

These customers may decide to purchase less DefenCath from

us than management anticipates, may alter purchasing patterns at any time with limited notice, or may decide not to continue to purchase

DefenCath at all, any of which could cause our revenue to decline materially and materially harm our financial condition and results

of operations.

If we are unable to diversify and grow our customer base, we will continue to be susceptible to risks associated with

customer concentration.

We have significant DefenCath customer

concentration, with a limited number of customers accounting for a large portion of our revenues.

We derive a large portion of our revenues from a few major customers.

Sales to our top three customers accounted for 79% of our total revenue for the year ended December 31, 2025, and we had three customers

that accounted for 41%, 23% and 20% of our accounts receivable, respectively, for the year ended December 31, 2025.

These customers have

no purchase commitments and may cancel, change or delay purchases with little or no notice or penalty.

As a result of this customer concentration,

our revenue could fluctuate materially and could be materially and disproportionately impacted by product pricing and purchasing decisions

of these customers or any other significant customer.

These customers may decide to purchase less DefenCath from us than management anticipates,

may alter purchasing patterns at any time with limited notice, or may decide not to continue to purchase DefenCath at all, any of which

could cause our revenue to decline materially and materially harm our business, financial condition and results of operations.

unable to diversify and grow our customer base, we will continue to be susceptible to risks associated with customer concentration.

Our revenue and profitability may be adversely

affected by DefenCath’s transition from TDAPA to the post-TDAPA add-on adjustment and broader reimbursement dynamics that could

have a material adverse impact on our results of operations and business.

While DefenCath has been approved for reimbursement in certain settings,

we cannot be sure that reimbursement will continue to be available for DefenCath on favorable terms or will be covered by other payers.

For example, on July 1, 2026, DefenCath’s TDAPA reimbursement will transition into a post-TDAPA add-on adjustment, the calculation

of which is determined by CMS.

As a result of the methodology utilized by CMS, the level of reimbursement provided to institutions treating

dialysis patients will significantly decline, and as a result, we anticipate there will be a corresponding reduction to the net pricing

for DefenCath for the third and fourth quarters of 2026.

The 2027 post-TDAPA add-on adjustment will be effective on January 1, 2027.

can be no assurance that the level of reimbursement determined by CMS in the post-TDAPA add-on period will improve.

Further changes in

these reimbursement rates could lead to significant fluctuations in our operating income and could have a negative impact on our revenues,

earnings and cash flows.

Reimbursement uncertainty applies to all of our Products as well as other product lines that we develop.

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

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

commercialize our Products or any other product lines that we develop.

Reimbursement levels are

also subject to periodic CMS rulemaking, sequestration or other across-the-board Medicare payment reductions, audit and overpayment recovery

activity, and evolving coverage policies, any of which could occur on short notice and may apply retroactively.

If CMS changes the underlying

methodologies, revises inputs or assumptions, or otherwise modifies TDAPA eligibility criteria or post-TDAPA add-on adjustments, our

realized revenue, earnings and cash flows could fluctuate materially from period to period.

Even if coverage remains in place, inadequate

payment may limit provider adoption, restrict formulary placement, or result in purchasing constraints by dialysis organizations.

Risks Related to the Development and Commercialization

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Successful development and commercialization

of new product lines is uncertain.

Our development and commercialization

of our product, and future product lines, 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;

of our Products and new product lines is uncertain.

The development and commercialization

of our Products, and future product lines, is subject to the risks of failure and delay inherent in the development of new pharmaceutical

products for the Company, our licensor and our partners, including but not limited to the following:

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

delays in product development, pre-clinical and clinical testing, or

manufacturing;

unplanned expenditures in product development, clinical testing, or

manufacturing;

challenges with securing the supply chain for raw materials;

● 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 lines 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.

uncertainties relating to, or changes in FDA view of, the appropriate

product approval pathway;

failure to obtain treatment of a drug or application under expedited

development and review programs or to obtain marketing exclusivities;

failure to receive or maintain regulatory approvals;

emergence of superior or equivalent products;

inability to manufacture our product lines on a commercial scale on

our own, or in collaboration with third parties;

● inability to obtain third-party payor coverage or adequate

reimbursement;

● 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 drug sample distribution requirements;

failure to achieve market acceptance.

Additionally, 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;

prevalence of the disease to be treated or prevented;

prevalence 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;

timing of market introduction of our drugs and competitive drugs;

effectiveness of marketing and distribution efforts by us and our licensees

and distributors, if any;

potential or perceived advantages or disadvantages over alternative

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

alternative treatments;

the effect of current and future healthcare laws and regulations on

our product lines, as well as post-marketing commitments imposed by regulatory authorities, such as patient registries.

Because 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 could be materially harmed.

Final approval by regulatory authorities

of our product lines for commercial use may be delayed, limited or denied, any of which could adversely affect our ability to generate

operating revenues.

The clinical development,

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

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

Failure to comply with applicable

regulatory requirements may, either before or after product approval, subject us to administrative or judicially imposed sanctions that

may negatively impact the approval of one or more of our product lines or otherwise negatively impact our business.

Compliance with such

regulations may consume substantial financial and management resources and expose us and our collaborators to the potential for other

adverse circumstances which could delay or prevent us from generating revenue from the commercialization of these drugs and cause us

to incur significant additional costs.

We are not permitted to market

a product line in the United States until the particular product line is approved for marketing by the FDA.

Specific pre-clinical data,

chemistry, manufacturing and controls data, a proposed clinical trial protocol and other information must be submitted to the FDA as

part of an investigational new drug (“IND”) application, and clinical trials may commence only after the IND application

becomes effective.

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

be supported by extensive clinical and pre-clinical data, as well as extensive information regarding chemistry, manufacturing and controls,

to demonstrate the safety and effectiveness of the product line, and the FDA will also assess whether the manufacturing processes and

facilities are suitable to support the application.

Approval of an NDA may be delayed due to delays in FDA’s review of the manufacturing

facility, which may require an onsite inspection.

Obtaining approval of an

NDA can be a lengthy, expensive and uncertain process.

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

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

Regulatory approval of an NDA is not guaranteed.

The number and types of pre-clinical studies and clinical trials that will be required

for FDA approval varies depending on the product line, the disease or condition that the product line is designed to target and the regulations

applicable to any particular product line.

Despite the time and expense exerted in pre-clinical and clinical studies, failure can occur

at any stage, and we could encounter problems that delay our product line development or that cause us to abandon clinical trials or

to repeat or perform additional pre-clinical studies and clinical trials.

The FDA can delay, limit or deny approval of a product line

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

to, the following:

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

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

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

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

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

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

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

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

information above what we currently have planned for;

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

controls data may differ significantly;

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

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

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

requirements, including those identified in other risk factors;

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

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

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

(“GMP”) controls in place to support approval;

FDA may change its approval policies or adopt new regulations.

Our pre-clinical and clinical

data, other information and procedures relating to a product line may not be sufficient to support approval by the FDA or any other U.S.

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

Failure to conduct required

post-approval studies, or confirm a clinical benefit, will allow the FDA to withdraw the drug from the market on an expedited basis.

Our business and reputation may be harmed by any failure or significant delay in receiving regulatory approval for the sale of any drugs

resulting from our product lines.

As a result, we cannot predict when or whether regulatory approval will be obtained for any drug we

Additionally, other factors

may serve to delay, limit or prevent the final approval by regulatory authorities of our product lines for commercial use, including,

but not limited to:

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

of these product lines before applications for marketing can be filed with the FDA, or with the regulatory authorities of other countries;

● development

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

of our product lines;

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

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

The successful development

of any product lines is uncertain and, accordingly, we may never commercialize any of these product lines or generate significant revenue.

Risks Related to Healthcare Regulatory

and Legal Compliance Matters

Our approved product, DefenCath, is, and

our other product lines (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

Current healthcare laws and regulations

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

healthcare system may affect our ability to commercialize DefenCath

and future marketed products profitably.

Federal and state governments

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.

It is 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.

development efforts and those of our licensor and our partners may not result in any future commercially viable products.

If a significant portion of

our development efforts and those of our licensor and partners 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 could be materially

Infective pathogens

might develop resistance to our Products or product candidates, which would decrease the efficacy and commercial viability of that product.

Infective pathogens, including

fungi and bacteria, develop resistance over time due to genetic mutation.

Many current and previous anti-infective therapies have suffered

reduced efficacy over time due to the development of resistance to such drugs.

It is probable that, over time, such pathogens will also

develop resistance to our Products and our drug candidates.

If resistance were to develop rapidly to our Products or our drug candidates,

this would reduce the commercial potential for our business.

Clinical trials and regulatory approval

for our product lines are expensive, time-consuming, and uncertain, and failure or delay in obtaining approval could materially harm

our business.

To market a new drug or device

product in the United States, we must demonstrate proof of safety and effectiveness in humans through “adequate and well-controlled”

clinical trials and obtain FDA approval.

The clinical trial and regulatory approval process is lengthy, expensive, and subject to numerous

risks and uncertainties at every stage.

Clinical trials may be delayed

or fail due to many factors, including:

inability to manufacture sufficient quantities of qualified materials under cGMP requirements;

slower than expected patient recruitment or insufficient enrollment;

modifications to trial protocols or changes in regulatory requirements;

lack of effectiveness or unforeseen safety issues;

suspension or termination by institutional review boards or the FDA;

and adverse medical

events in patients, which may or may not be related to our products.

Results from early trials are not necessarily indicative of later

trial outcomes, and clinical results are frequently susceptible to varying interpretations that may delay, limit, or prevent regulatory

Even after clinical trials

are completed, final FDA approval of an NDA, Premarket Approval Application (“PMA”), or De Novo application may be delayed,

limited, or denied for numerous reasons, including:

the FDA may not find pre-clinical and clinical data sufficient or may disagree with

our interpretation of such data;

the FDA may require additional studies or manufacturing information;

the FDA may not agree with our intended

indications, study design, or proposed labeling;

or manufacturing processes and facilities may be deemed to have insufficient GMP controls.

Regulatory approval policies may also change, and compliance with evolving requirements may consume substantial financial and management

Any failure or significant

delay in clinical trials or regulatory approval for our products would delay our ability to commercialize our product lines and generate

product revenues, and could cause us to abandon a product line entirely.

Such outcomes could materially harm our business, financial

condition, and results of operations.

Off-label marketing

or use of our Products or future product candidates may expose us to significant fines, penalties, sanctions, or product liability claims,

and our reputation could be harmed.

The FDA, United States Department

of Justice (the “DOJ”), and comparable foreign authorities strictly regulate the marketing and promotional claims that are

made about pharmaceutical products following approval.

In particular, a product may not be promoted for uses or indications that are

not approved by the FDA or comparable foreign authorities as reflected in the product’s approved labeling and Summary of Product

Characteristics.

However, physicians can prescribe drugs to their patients in a manner that is inconsistent with the approved label based

on the physician’s independent medical judgement.

The FDA and other governmental authorities, have also required that companies

enter into consent decrees or permanent injunctions under which specified promotional conduct is changed or curtailed in order to resolve

enforcement actions.

If we become the target of such an investigation or prosecution based on our marketing and promotional practices,

we could face large civil and criminal fines and be subject to prohibitions and restrictions, which would materially harm our business.

In addition, management’s attention could be diverted from our business operations, significant legal expenses could be incurred,

and our reputation could be damaged.

Risks Related to Regulatory and Legal Compliance

Our approved Products are, and our pipeline

product lines (if approved) will be, subject to extensive post-approval regulation.

Once a product is approved, numerous FDA-mandated 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 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 other relevant regulatory body to modify or withdraw product approval.

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 actions.

Healthcare policy changes, including reimbursement

policies for drugs and medical devices, may have an adverse effect on our business, financial condition and results of operations .

Our future revenues, profitability

and access to capital will be affected by the continuing efforts of governmental and private third-party payors to manage, contain or

reduce the costs of health care through various means, such as capping prices, limiting price increases, reducing reimbursement, and

requiring rebates.

Market acceptance and sales of DefenCath or any other product lines that we develop, will depend on reimbursement

policies and may be affected by health care reform measures in the U.S.

Government authorities and other third-party payors,

such as private health insurers, decide which drugs they will pay for and establish reimbursement levels.

While DefenCath has been approved

for reimbursement in certain settings, we cannot be sure that reimbursement will be available for DefenCath by other payers.

That uncertainty

applies for any other product lines that we develop.

Also, we 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 by certain payors or is available only at

limited levels, we may not be able to continue to successfully commercialize DefenCath or any other product lines that we develop.

there has been,

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ability to profit from our approved products.

government and other governments have shown significant interest in pursuing healthcare

Any 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.

In recent years, the U.S.

Congress has sought to repeal and has significantly amended the Affordable Care Act.

We expect that there will continue to be proposals

by legislators at both the federal and state levels, regulators and third-party payors to keep healthcare costs down while expanding

individual healthcare benefits.

Certain of these changes could impose limitations on the prices we will be able to charge for any products

that are approved or the amounts of reimbursement available for these products from governmental agencies or other third-party payors

or may increase the tax requirements for life sciences companies such as ours.

Any such changes could have an adverse effect on our business,

financial condition and results of operations.

There has been heightened

governmental scrutiny over the manner in which manufacturers set prices for their marketed products, which have resulted in several recent

congressional inquiries and proposed and enacted bills by Congress and the states designed to, among other things, bring more transparency

to product pricing, review the relationship between pricing and manufacturer patient programs, and reform government program reimbursement

methodologies for products.

Our future revenues, profitability and access to capital will be affected by the continuing

efforts of governmental and private third-party payors to manage, contain or reduce the costs of health care through various means, such

as capping prices, limiting price increases, reducing reimbursement, or requiring rebates.

Market acceptance and sales of our Products

or any other product lines that we develop, will depend on reimbursement policies and may be affected by health care reform measures in

Federal and state governments in the U.S.

have been, and may in the

future consider legislative and regulatory proposals to change the U.S.

healthcare system in ways that could affect our ability to commercialize

our Products and future marketed products profitably.

In addition, the U.S.

government, state legislatures, and foreign governments have shown significant interest

in implementing cost containment programs, including price-controls, restrictions on reimbursement and requirements for substitution

of generic products for branded prescription drugs to limit the growth of government paid health care costs.

For example, the U.S.

has passed legislation requiring pharmaceutical manufacturers to provide rebates and discounts to certain entities and governmental payors

to participate in federal healthcare programs.

government enacted the Inflation Reduction Act of 2022 (Inflation Reduction Act

The IRA brought 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 eliminates the Medicare Part D coverage gap, and reduces

a beneficiary’s out-of-pocket maximum to $2,000.

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.

Any reduction in reimbursement

rates under Medicare, Medicaid, or private insurers could negatively affect the pricing of our products.

government, state legislatures, and foreign governments have

shown significant interest in implementing cost containment programs as it relates to prescription drugs, including price-controls, restrictions

on reimbursement and requirements for substitution of generic products for branded prescription drugs to limit the growth of government

paid health care costs.

For example, the current administration has pursued and is pursuing policies to reduce regulations and expenditures

across government, including at the FDA, CMS, Health and Human Services (“HHS”) and related agencies.

Recent actions include

(i) directing HHS and other agencies to lower prescription drug costs through a variety of initiatives, including by establishing Most-Favored-Nation

pricing for pharmaceutical products;

(ii) imposing tariffs on imported pharmaceutical products;

and (iii) as part of the MAHA Commission’s

recent Strategy Report, working across government agencies to increase enforcement on direct-to-consumer pharmaceutical advertising.

actions and policies may significantly reduce U.S.

drug prices, potentially impacting pricing strategies and profitability, while increasing

operational costs and compliance risks.

government and other

governments have shown significant interest in pursuing healthcare reform.

Any such government-adopted reform measures may adversely affect

the pricing of healthcare products and services in the U.S.

and the amount of reimbursement available from governmental agencies or other

third-party payors.

Any such reduction in reimbursement 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.

Risks relating to data privacy could create

additional liabilities for us.

We are subject to data privacy

and protection laws and regulations that apply to the collection, transmission, storage and use of personally-identifying information.

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

Changes in funding for the FDA and other

government agencies or future government shutdowns or disruptions could cause delays in the submission and regulatory review of our product

lines, which could negatively impact our business or prospects .

The ability of the FDA to

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

and retain key personnel, 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.

Risks relating to cybersecurity and data

privacy could create additional liabilities for us.

We rely on the proper functioning

of information technology systems, networks, and cloud services across our operations, and any failure, interruption, or other incident

affecting the confidentiality, integrity or availability such systems or the data stored thereon, including incidents which may result

from a cyber-attack (e.g., ransomware, malware, phishing, denial-of-service, or vendor compromise), could disrupt our business, result

in loss or corruption of data, theft or misuse of confidential or personal information, and require significant remediation costs.

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 or class of individuals, or 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.

We also depend on third-party service providers (including cloud, SaaS,

Contract Research Organizations, CMOs, logistics and analytics vendors), and incidents at these third parties—or their subcontractors—can

compromise our data or disrupt operations even if our own systems are not implicated.

We maintain processes to assess, identify, and manage

material cybersecurity risks, which are integrated into our broader enterprise risk management program, including with respect to incident

response planning and employee training, and involve oversight of third-party risks.

However, no controls can eliminate all threats, and

our board and management oversee, but cannot guarantee the effectiveness of, these efforts.

For more information, please see “Item

1C (Cybersecurity).” A significant cyber incident—or a series of smaller incidents—could also interrupt manufacturing

and supply coordination with third parties, impair quality or safety reporting, delay clinical or commercial activities, increase insurance

and cybersecurity costs, and negatively affect our results of operations and reputation.

The legislative and regulatory

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

There are numerous U.S.

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.

Any amendments to HIPAA or other legislation amending or broadening the scope of HIPAA might require us to make

substantial expenditures and would likely create additional liability risks.

The Federal Trade Commission

(“FTC”) 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.

The FTC has considered codifying its

requirements in regulations, but has not done so;

as a result, the optimal means to mitigate the risk of such an action are uncertain.

In addition, many U.S.

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 California, Colorado, Connecticut, Delaware, Indiana, Iowa, Montana, New Hampshire, New Jersey, Oregon, Tennessee, Texas, Utah,

and Virginia, have recently adopted broadly applicable privacy laws, though these laws typically exempt personal health information or

entities that handle personal health information pursuant to laws like HIPAA.

Both Nevada and Washington State have enacted laws specifically

to protect the privacy of 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.

New legislation may be enacted

in other states.

The effects 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.

Clinical trials required for our product

lines, 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.

Certain 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 increases costs and complicates compliance efforts.

Clinical trials

required for our Products and any future product lines may be expensive, time consuming and their outcome is uncertain.

In order to obtain FDA approval

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and expensive process.

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

product line, and often can be several years or more per trial.

Delays associated with the development plans for our product lines 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;

to recruit a sufficient number of patients;

● modification

of clinical trial protocols;

in regulatory requirements for clinical trials;

of effectiveness during clinical trials;

of unforeseen safety issues;

suspension, or termination of clinical trials due to the IRB responsible for overseeing the study at a particular study site;

or regulatory delays or “clinical holds” requiring suspension or termination of the trials.

Further, the results

from early pre-clinical and clinical trials are not necessarily predictive of results to be obtained in later clinical trials.

even if we obtain positive results from early pre-clinical or clinical trials, we may not achieve the same success in later clinical

Moreover, comparisons of results across different studies should be viewed with caution as such comparisons are limited by a

number of factors, including differences in study designs and populations.

Such comparisons also will not provide a sufficient basis

for any comparative claims following product approval.

Clinical results are frequently susceptible to varying interpretations that may

delay, limit or prevent regulatory approvals or commercialization.

Negative or inconclusive results or adverse medical events during

a clinical trial could cause a clinical trial to be delayed, repeated or terminated, or a clinical program to be abandoned.

Our clinical trials may be

conducted in patients with serious or life-threatening diseases for whom conventional treatments have been unsuccessful or for whom no

conventional treatment exists, and in some cases, our product is expected to be used in combination with approved therapies that themselves

have significant adverse event profiles.

During the course of treatment, these patients could suffer adverse medical events or die for

reasons that may or may not be related to our products.

We cannot ensure that safety issues will not arise with respect to our products

in clinical development.

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

line, and often can be several years or more per trial.

Delays associated with the development plans for our product lines may cause us

to incur additional operating expenses.

The commencement and rate of completion of clinical trials may be delayed by many factors, including,

inability to manufacture sufficient quantities of qualified materials under the FDA’s cGMP requirements for use in clinical trials;

slower than expected rates of patient recruitment;

failure to recruit a sufficient number of patients;

modification of clinical trial protocols;

changes in regulatory requirements for clinical trials;

lack of effectiveness during clinical trials;

emergence of unforeseen safety issues;

delays, suspension, or termination of clinical trials due to the IRB responsible for overseeing the study at a particular study site;

government or regulatory delays or “clinical holds” requiring suspension or termination of the trials.

From time to time, we may publicly disclose interim, topline, or preliminary

data from clinical trials involving our Products, which is based on a preliminary analysis of then-available data, and the results and

related findings and conclusions are subject to change following a more comprehensive review of the data related to the particular study

or trial as well as the risk that one or more of the clinical outcomes may materially change as patient enrollment continues and more

patient data become available.

We also make assumptions, estimations, calculations, and conclusions as part of our analyses of data, and

we may not have received or had the opportunity to fully and carefully evaluate all data.

Preliminary or topline data also remain subject

to audit and verification procedures that may result in the final data being materially different from the preliminary data we previously

As a result, the interim, topline, or preliminary results that we report may differ from future results of the same studies,

or different conclusions or considerations may qualify such results, once additional data has been received and fully evaluated.

others, including regulatory authorities, may not accept or agree with our assumptions, estimates, calculations, conclusions, or analyses

or may interpret or weigh the importance of data differently, which could impact the value of the particular program, the approvability,

or commercialization of the particular product candidate or product and our company in general.

If the interim, topline, or preliminary

data that we report differ from actual results, or if others, including regulatory authorities, disagree with the conclusions reached,

our ability to obtain regulatory approval for, and commercialize, our product candidates and any future product candidates may be harmed,

which could harm our business, operating results, prospects, or financial condition.

Moreover, comparisons of results

across different studies should be viewed with caution as such comparisons are limited by a number of factors, including differences in

study designs and populations.

Such comparisons also will not provide a sufficient basis for any comparative claims following product

Clinical results are frequently susceptible to varying interpretations that may delay, limit or prevent regulatory approvals

or commercialization.

Negative or inconclusive results or adverse medical events during a clinical trial could cause a clinical trial

to be delayed, repeated or terminated, or a clinical program to be abandoned.

Clinical trials may not demonstrate

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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, or De Novo application, with the FDA and, ultimately,

our ability to commercialize our product lines and generate product revenues.

Any change in, or termination of, our clinical trials could

materially harm our business, financial condition, and results of operations.

Changes in funding for the FDA and other

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

applications, including supplements, which could negatively impact our business or prospects .

The ability of the FDA to

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

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

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

process, which is inherently fluid and unpredictable.

The impact of the new administration, changes in federal policy priorities as well

as 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.

trials would delay the filing of any NDA, any PMA, or De Novo application, with the FDA and, ultimately, our ability to commercialize

our product lines and generate product revenues.

Any change in, or termination of, our clinical trials could materially harm our business,

financial condition, and results of operations.

Our BARDA development contract requires

ongoing funding decisions by the U.S.

Any reduction or discontinuation of funding of this contract could cause our business,

financial condition, operating results and cash flows to suffer materially.

In July 2023, Melinta signed

a development contract with BARDA to advance two antibiotics currently FDA-approved for adults, BAXDELA® (delafloxacin) and VABOMERE®

(meropenem and vaborbactam), for use in pediatrics and to advance BAXDELA for use in biodefense indications.

The performance period for

our BARDA contract, including all optional funding, is estimated to be 12 years.

Under this contract, BARDA has committed funding of $47.5

million to date, with the potential of additional funding of $97.1 million, amounting to total funding up to $144.6 million if all options

are exercised.

The primary source of funds

for these development programs is provided by the U.S.

government and is subject to Congressional appropriations, which are generally

made on a fiscal year basis, even for programs designed to continue for several years.

These appropriations can be subject to a number

of uncertainties, including political considerations, changes in priorities due to global pandemics, the results of elections and stringent

budgetary constraints.

If levels of government expenditures and authorizations for public health countermeasure preparedness decrease

or shift to programs in areas where we do not offer products or are not developing product candidates, or if the federal government otherwise

declines to exercise its options under this contract or our other existing contracts, there could be a material adverse impact to our

results of operations, financial condition, and our business.

Risks Related to Our Business and Industry

Healthcare institutions, physicians and

patients may not accept and use our products.

Even 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 lines.

Because we expect sales of

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

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

We may not successfully manage the growth

of our Products.

Our success may depend upon

the expansion of our operations to continue to commercialize our Products and the effective management of any growth, which could place

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

To manage this growth, we may need

to augment our operational, financial and management systems and hire and train additional qualified personnel.

Additionally, if market

demand exceeds our third-party manufacturer’s ability to produce our Products, we may not be able to fulfill our customers’

orders in a timely manner or at all, which may have an adverse impact on our results of operations and reputation.

If we are unable to

manage our growth effectively, our business may be materially harmed.

We have pursued and may continue to pursue acquisitions.

could be difficult to integrate, divert the attention of key personnel, disrupt our business, dilute stockholder value and impair our

financial results.

As part of our business strategy, we have pursued

and may continue to pursue acquisitions of complementary businesses, products, services, technologies or strategic transactions that we

believe could accelerate our ability to compete in our existing markets or allow us to enter new markets.

Any of these transactions could

be material to our financial condition and results of operations.

The failure to successfully evaluate, execute and integrate acquisitions

or otherwise adequately address these risks, we may not achieve the anticipated benefits of any such acquisition, we may incur costs in

excess of what we anticipate, which could have a material adverse impact on our business and financial results.

Any potential acquisition or strategic collaboration

may entail numerous risks, including but not limited to:

assimilation of operations, intellectual property and drugs of an acquired company,

including challenges associated with integrating new personnel;

the diversion of our management’s attention;

retention of key employees

and uncertainties in our ability to maintain key business relationships;

risks and uncertainties associated with the other party to such

a transaction, including the prospects of that party and their existing drugs or drug candidates and regulatory approvals;

and our inability

to generate revenue from acquired technology and drugs sufficient to meet our objectives in undertaking the acquisition or even to offset

the associated acquisition and maintenance costs.

If we fail to properly evaluate

acquisitions or investments, we may not achieve the anticipated benefits of any such acquisitions, and we may incur costs in excess of

what we anticipate.

The failure to successfully evaluate, execute and integrate acquisitions or investments or otherwise adequately address

these risks could materially harm our business and financial results.

Competition and technological change may

make DefenCath, as well as our other product lines or indications, less attractive or obsolete .

make our Products, product lines or indications, less attractive or obsolete .

We compete with established

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

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 DefenCath or our other product lines if any of such other product lines receive marketing

If we lose key management or scientific

personnel, cannot recruit qualified employees, directors, officers, or other personnel or experience increases in compensation costs,

our business may materially suffer .

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 our Products or our product lines if any of such other product lines receive marketing approval.

If we lose key management, cannot recruit

qualified employees, directors, officers, or other personnel or experience increases in compensation costs, our business may materially

We are highly dependent on

the principal members of our management and scientific staff, specifically, Joseph Todisco, our Chief Executive Officer, Dr.

David, our Executive Vice President and Chief Financial Officer, Beth Zelnick Kaufman, our Executive Vice President, Chief Legal and

Compliance 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.

We may not successfully manage our growth.

Our success will depend upon

the expansion of our operations to continue to commercialize DefenCath and the effective management of any growth, which could place

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

To manage this growth, we may need

to expand our facilities, augment our operational, financial and management systems and hire and train additional qualified personnel.

Additionally, if market demand exceeds our third-party manufacturer’s ability to produce DefenCath, we may not be able to fulfill

our customers orders in a timely manner or at all, which may have an adverse impact on our results of operations and reputation.

are unable to manage our growth effectively, our business may be materially harmed.

If we are unable to effectively recruit,

train, retain and equip our sales force, our ability to continue successfully commercialize DefenCath will be harmed.

None of the newly hired members of our sales force has promoted DefenCath

before, and we are required to, and will continue to be required to, expend significant time and effort to train the sales force to be

credible, persuasive, and compliant with applicable laws in marketing DefenCath for its approved indication.

We must train the 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 the 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 continue to successfully commercialize DefenCath may be challenged.

the principal members of our management.

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.

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

We face the risk of product liability claims

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drugs or devices harms people, we may be subject to costly and damaging product liability claims brought against us by clinical trial

participants, consumers, health care providers, pharmaceutical companies or others selling our products.

participants, consumers, health care providers, pharmaceutical companies or others selling or utilizing our Products.

We currently carry product

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coverage we hold may not be adequate to cover all liabilities we might incur.

Our insurance covers bodily injury and property damage

arising from our clinical trials, subject to industry-standard terms, conditions and exclusions.

Our coverage also includes the sale

of commercial products.

If we are unable to obtain

insurance at an acceptable cost or otherwise protect against potential product liability claims, we may be exposed to significant liabilities,

which may materially and adversely affect our business and financial position.

If we are sued for any injury allegedly caused by our

or our collaborators’ products and do not have sufficient insurance coverage, our liability could exceed our total assets and our

ability to pay the liability.

A successful product liability claim or series of claims brought against us would decrease our cash and

could cause the value of our capital stock to decrease.

We may be exposed to liability claims associated

with the use of hazardous materials and chemicals.

Our research, development

and manufacturing activities and/or those of our third-party contractors may involve the controlled use of hazardous materials and chemicals.

Although we believe that our safety procedures for using, storing, handling and disposing of these materials comply with federal, state

and local, as well as foreign, laws and regulations, we cannot completely eliminate the risk of accidental injury or contamination from

these materials.

In the event of such an accident, we and the third-party could be held liable for any resulting damages and any liability

could materially adversely affect our business, financial condition and results of operations.

In addition, the federal, state and local,

as well as foreign, laws and regulations governing the use, manufacture, storage, handling and disposal of hazardous or radioactive materials

and waste products may require us to incur substantial compliance costs that could materially adversely affect our business, financial

condition and results of operations.

Our insurance covers bodily injury and property damage arising

from our clinical trials, subject to industry-standard terms, conditions and exclusions.

Our coverage also includes the sale of commercial

If we are unable to protect

against potential product liability claims, we may be exposed to significant liabilities, which may materially and adversely affect our

business and financial position.

If we are sued for any injury allegedly caused by our or our collaborators’ products and do not

have sufficient insurance coverage, our liability could exceed our total assets and our ability to pay the liability.

A successful product

liability claim or series of claims brought against us would decrease our cash and could cause the value of our capital stock to decrease.

Risks Related to Our Intellectual Property

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any patents that we currently have or will obtain against third-party challenges.

The patents which we currently believe are most material

to our business are as follows:

We may seek further patent

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uncertainties include the following:

that may be issued or licensed may be challenged, invalidated, or circumvented, or otherwise may not provide any competitive advantage;

competitors, many of which have substantially greater resources than we have and many of which have made significant investments in competing

technologies, may seek, or may already have obtained, patents that will limit, interfere with, or eliminate our ability to make, use,

and sell our potential products either in the United States or in international markets;

may be significant pressure on the United States government and other international governmental bodies to limit the scope of patent

protection both inside and outside the United States for treatments that prove successful as a matter of public policy regarding worldwide

health concerns;

other than the United States may have less restrictive patent laws than those upheld by United States courts, allowing foreign competitors

the ability to exploit these laws to create, develop, and market competing products.

patents that may be issued or licensed may be challenged, invalidated, or circumvented, or otherwise may not provide any competitive advantage;

our competitors, many of which have substantially greater resources than we have and many of which have made significant investments in competing technologies, may seek, or may already have obtained, patents that will limit, interfere with, or eliminate our ability to make, use, and sell our potential products either in the United States or in international markets;

there may be significant pressure on the United States government and other international governmental bodies to limit the scope of patent protection both inside and outside the United States for treatments that prove successful as a matter of public policy regarding worldwide health concerns;

countries other than the United States may have less restrictive patent laws than those upheld by United States courts, allowing foreign competitors the ability to exploit these laws to create, develop, and market competing products.

In addition, the USPTO and

patent offices in other jurisdictions have often required that patent applications concerning pharmaceutical and/or biotechnology-related

patent offices in other jurisdictions have often required that patent applications concerning pharmaceutical and biotechnology-related

inventions be limited or narrowed substantially to cover only the specific innovations exemplified in the patent application, thereby

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may be substantially narrower than anticipated.

Additionally, the breadth of claims allowed in biotechnology and pharmaceutical

patents or their enforceability cannot be predicted.

We cannot be sure that, should any patents issue, we will be provided with adequate

protection against potentially competitive products.

Furthermore, we cannot be sure that should patents issue, they will be of commercial

value to us, or that private parties, including competitors, will not successfully challenge our patents or circumvent our patent position

The above-mentioned patents

are exclusively licensed to or owned by us.

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

freedom to operate issues, including performing certain searches.

However, patentability and certain freedom to operate issues are inherently

complex, and we cannot provide assurances that a relevant patent office and/or relevant court will agree with our conclusions regarding

patentability issues or with our conclusions regarding freedom to operate issues, which can involve subtle issues of claim interpretation

and/or claim liability.

Furthermore, we may not be aware of all patents, published applications or published literature that may affect

our business either by blocking our ability to commercialize our product lines, preventing the patentability of our product lines to

us or our licensors, or covering the same or similar technologies that may invalidate our patents, limit the scope of our future patent

claims or adversely affect our ability to market our product lines.

Additionally, it is also possible that prior art of which we

are aware, but which we do not believe affects the validity or enforceability of a claim, may, nonetheless, ultimately be found by a

court of law or an administration panel to affect the validity or enforceability of a claim.

If a third-party were to prevail on a legal

assertion of invalidity and/or unenforceability, we would lose at least part, and perhaps all, of the patent protection on our product

Additionally, the breadth of claims allowed in biotechnology and pharmaceutical patents

or their enforceability cannot be predicted.

We cannot be sure that, should any patents be issued, we will be provided with adequate protection

against potentially competitive products.

Furthermore, we cannot be sure that should patents issue, they will be of commercial value to

us, or that private parties, including competitors, will not successfully challenge our patents or circumvent our patent position in the

To support our patent strategy,

we have engaged in a review of patentability and certain freedom to operate issues, including performing certain searches.

However, patentability

and certain freedom to operate issues are inherently complex, and we cannot provide assurances that a relevant patent office or court

would agree with our conclusions regarding patentability issues or with our conclusions regarding freedom to operate issues, which can

involve subtle issues of claim interpretation and claim liability.

Furthermore, we may not be aware of all patents, published applications

or published literature that may affect our business either by blocking our ability to commercialize our product lines, preventing the

patentability of our product lines to us or our licensors, or covering the same or similar technologies that may invalidate our patents,

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

Additionally, it is also

possible that prior art of which we are aware, but which we do not believe affects the validity or enforceability of a claim, may, nonetheless,

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

If a third-party

were to prevail on a legal assertion of invalidity or unenforceability, we would lose at least part, and perhaps all, of the patent protection

on the applicable product lines.

Such loss of patent protection could have a material adverse impact on our business.

Additionally, since patent applications

in the United States are maintained in secrecy until published or issued and as publication of discoveries in the scientific or patent

literature often lag behind the actual discoveries, we cannot be certain that we were the first to make the inventions covered by the

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

Additionally,

since patent applications in the United States are maintained in secrecy until published or issued and as publication of discoveries in

the scientific or patent literature often lag behind the actual discoveries, we cannot be certain that we were the first to make the inventions

covered by the pending patent applications or issued patents or that we were the first to file patent applications for such inventions.

In addition to patents, we

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in substantial costs and be a distraction to our senior management and scientific personnel.

Intellectual property disputes could require

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

Intellectual property disputes require us

to spend time and money to address such disputes could limit our intellectual property rights and if generic entrants of our Products

are approved, it could have a material adverse impact on our results of operations and financial condition.

The biotechnology and pharmaceutical

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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.

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.

See Note 7, Commitments and Contingencies , of this Annual Report on Form 10-K for additional

detail on the Company’s legal proceedings.

In addition to our pending litigation discussed below, we may

initiate or become subject to infringement claims or litigation arising out of our patents and pending applications and those 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.

For example, generic manufacturers

have sought, and may continue to seek, FDA approval to market generic versions of our Products through an abbreviated new drug application (“ANDA”).

ANDA litigation and related settlement and license agreements, in some cases, may result in a loss of exclusivity for our patents prior

to their expiration.

The entry of generic versions of our Products may lead to market share and price erosion, which could have a material

adverse impact on our results of operations and revenue.

As discussed below, we are currently party to patent litigation for Minocin (minocycline)

for Injection against Nexus Pharmaceuticals and Gland Pharma in which an adverse outcome could allow generic entry, which could materially

harm our business, results of operations and stock price.

Introduction of a generic minocycline for injection product, or a generic of

any of our commercialized products, could result in increased competition, decreased sales and could have a material adverse impact on

our revenue and results of operations.

Please refer to “ Note 9, Commitments and Contingencies ” for a discussion of

our ongoing litigation.

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.

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.

“ Note 9, Commitments and Contingencies ” for additional detail on the Company’s legal proceedings.

Our business, financial condition, and results

of operations could be materially and adversely affected by an adverse outcome in the ongoing litigation.

We are regularly involved

in pending and threatened litigation, investigations, and other legal proceedings, including intellectual property, commercial, employment,

securities, regulatory, and product-related claims.

Litigation is inherently uncertain, can be costly and time-consuming, may divert management

attention, and could result in injunctions, damages, settlements, fines, penalties, or other remedies.

Insurance coverage may be unavailable

or insufficient to cover losses.

Any of these outcomes, or the announcement of allegations alone, could adversely affect our reputation,

cash flows, financial condition, and results of operations.

Please refer to “ Note 9, Commitments and Contingencies ”

for a discussion of our ongoing litigation.

Risks Related to Dependence on Third Parties

We depend on third-party suppliers and

contract manufacturers for the supply and manufacture of DefenCath and our product lines, as well as our APIs, which subjects us to potential

Our ability to pursue the development and

commercialization of certain of our Products depends upon the continuation of certain licenses and actions taken by our licensors.

We rely on certain licenses

to certain patent rights and proprietary technology from third parties that are important or necessary to the development of our technology

and Products.

We have an exclusive license to develop and sell REZZAYO in the United States.

Our license agreement also grants us nonexclusive

rights to manufacture REZZAYO anywhere in the world.

We are required to make payments upon reaching specified regulatory and sales milestones

and to pay royalties based on net sales of products containing REZZAYO or the other compounds in a valid patent licensed under the license

We are obligated to use commercially reasonable efforts to maintain regulatory approval for REZZAYO in the United States and

to commercialize REZZAYO in the United States within the timeframes required by the license agreement.

If we do not use commercially reasonable

efforts to achieve the development and commercialization milestones for REZZAYO within the timeframes, or if we are unable to make any

of the required payments, the licensor may terminate the license agreement if not cured within 60 days (or 30 days with respect to any

payment breach).

If our license agreement is terminated, we would lose our rights to develop and commercialize REZZAYO.

Loss of our license

agreement would materially and adversely affect our business, results of operations and future prospects.

If disputes over intellectual

property that we have licensed prevent or impair our ability to maintain our current licensing arrangements on acceptable terms, we may

be unable to successfully develop and commercialize the affected product candidates.

Licenses or similar arrangements

involving our research programs or any product candidates currently pose, and will continue to pose, numerous risks to us, such as our

third party partners (i) have significant discretion in determining the efforts and resources that they will apply to these arrangements;

(ii) may delay programs, preclinical studies or clinical trials, provide insufficient funding for programs, preclinical studies or clinical

trials, stop a preclinical study or clinical trial or abandon a product candidate, repeat or conduct new clinical trials or require a

new formulation of a product candidate for clinical testing;

and (iii) may not pursue development and commercialization of our product

candidates or may elect not to continue or renew development or commercialization programs based on clinical trial results, changes in

such third party’s strategic focus or available funding or external factors such as an acquisition that diverts resources or creates

competing priorities.

In addition, the agreements

under which we currently license intellectual property or technology from third parties are complex, and certain provisions in such agreements

may be susceptible to multiple interpretations.

The resolution of any contract interpretation disagreement that may arise could narrow

what we believe to be the scope of our rights to the relevant intellectual property or technology, or increase what we believe to be our

financial or other obligation under the relevant agreement, either of which could have a material adverse effect on our business, financial

condition, results of operations and prospects.

We depend on third-party

suppliers and contract manufacturers for the supply and manufacture of our product lines, 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 lines, 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 the Company in place from August 2018.

In addition, we are working

with our existing manufacture to source sufficient quantities of taurolidine API to cover at least 24 months of potential future demand.

With respect to heparin sodium API, we have identified an alternate third-party supplier and may qualify such supplier under the DefenCath

NDA over the next twelve months.

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 have also received FDA approval for finished dosage manufacturing

of DefenCath from Siegfried Hameln.

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

If the contract manufacturers are unable to produce

sufficient quantities of DefenCath or our product lines, as a result of a lack of available materials, supply chain delays or otherwise,

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

Additionally, if the manufacturers

are not able to quickly scale production to algin with rapid changes in demand, our results of operations may be negatively impacted.

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.

In addition, we have no direct

control over manufacturing costs of DefenCath or our product lines.

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

do not manufacture our product lines or any of their 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 our product lines, as these can be more economically supplied by third parties with particular expertise in this

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.

have no direct control over the manufacturing of our product lines.

If the contract manufacturers are unable to produce sufficient quantities

of our Products, as a result of a lack of available materials, supply chain delays or otherwise, then we would need to identify and contract

with additional or replacement third-party manufacturers.

Additionally, if the manufacturers are not able to quickly scale production

to align with rapid changes in demand, our results of operations may be negatively impacted.

If we are unable to identify suitable additional

or replacement third-party manufacturers on favorable terms or at all, our ability to commercialize our Products, our profitability and

results of operations may be adversely affected.

Our reliance on foreign suppliers poses risks due to possible shipping delays, import

restrictions, trade policies and tariffs as well as foreign regulatory regimes.

are subject to the risks associated with technology transfers, which are often required when moving manufacturing processes to new facilities

or contract manufacturers.

These include the potential for delays, loss of process knowledge, difficulties in replicating processes

at a new site, and challenges in meeting regulatory requirements, all of which could disrupt supply or impact product quality.

addition, we have no direct control over manufacturing costs of our product lines.

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 our product

lines more expensive.

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the increased costs along to our customers.

Our 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 lines 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

Not complying with FDA requirements could result in a product recall or prevent commercialization of our product lines 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.

We rely on third parties to conduct our clinical trials and

pre-clinical studies.

If those parties do not successfully carry out their contractual duties or meet expected deadlines, our product

lines may not advance in a timely manner or at all.

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 lines 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 lines

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 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 Anti-Kickback Statute , 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.

We rely on third parties to conduct our

clinical trials and pre-clinical studies.

If those parties do not successfully carry out their contractual duties or meet expected deadlines,

our product lines may not advance in a timely manner or at all.

In the course of our pre-clinical

and clinical trials, we may rely on third parties, including laboratories, investigators, and manufacturers, to perform critical services

for us, many of which are required to be conducted consistent with regulations on Good Laboratory Practice (“GLP”).

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.

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 such trials.

Our reliance 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

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.

and clinical trials, we may rely on third parties, including contract research organizations, laboratories, investigators, and manufacturers,

to perform critical services for us, many of which are required to be conducted consistent with regulations on Good Laboratory Practice

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.

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 such trials.

Our reliance 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.

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.

The timing of the milestone and royalty

payments we are required to make to third parties is uncertain and could adversely affect our cash flows and results of operations.

We are party to various agreements

pursuant to which we are obligated to make milestone payments or pay royalties in connection with the development and commercialization

of our product candidates or sales of our marketed products.

The timing of our achievement of these milestones and the corresponding milestone

payments, or the amount of our royalty payments, is subject to factors which are difficult to predict and of which many are beyond our

We may become obligated to make a milestone or other payment at a time when we do not have sufficient funds to make such payment,

or at a time that would otherwise require us to use funds needed to continue to operate our business, which could delay our clinical trials,

curtail our operations, necessitate a scaling back of our sales and marketing efforts or cause us to seek funds to meet these obligations

on terms unfavorable to us.

If we are unable to make any payment when due or if we fail to use commercially reasonable efforts to achieve

certain development and commercialization milestones within the timeframes required by certain of these agreements, the other party may

have the right to terminate the agreement and all of our rights to develop and commercialize product candidates using the applicable technology.

Risks Related to our Common Stock

Our executive officers and directors may

exercise stock options and sell shares of their stock, and these events could adversely affect our stock price.

Sales of our common stock

and exercise of stock options by our executive officers and directors, or the perception that such events may occur, could adversely

affect the market price of our common stock.

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 Exchange Act.

Our common stock price has fluctuated considerably

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December 31, 2025, the high and low sales prices for our common stock were $17.43 and $5.60, respectively.

The 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

The 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.

In addition, the stock markets

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that have often been unrelated or disproportionate to the operating performance of these companies.

In addition, changes in economic

conditions in the U.S., the European Union or globally, particularly in the context of current global events, could impact upon our ability

to grow profitably.

Adverse economic changes are outside our control and may result in material adverse impacts on our business or our

results of operations.

Broad market and industry factors may negatively affect the market price of our common stock, regardless of our

actual operating performance.

In the past, following periods of volatility in the market price of a company’s securities, securities

class-action litigation has often been instituted against that company.

Such litigation, if instituted against us, could cause us to

incur substantial costs and divert management’s attention and resources.

For these reasons and others,

an investment in our securities is risky and you should invest only if you can withstand wide fluctuations in and a significant or complete

loss of the value of your investment.

A significant number of additional shares

of our common stock may be issued at a later date, and their sale could depress the market price of our common stock.

As of December 31, 2024,

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

to purchase an aggregate of 257,138 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 $8.39 per share;

● options to purchase an aggregate of 6,025,255 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 $4.29 per share;

shares of restricted stock units issuable into 291,494 shares of common stock;

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

shares of Series E Preferred Stock, which are convertible into 391,953 shares of common stock;

shares of Series G Preferred Stock, which are convertible into 2,502,064 shares of common stock;

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

Additionally, there are 4,756,909

shares of common stock available for grants under the Amended and Restated 2019 Omnibus Stock Plan (adopted on October 13, 2022 and amended

on November 21, 2024).

The possibility of the issuance

of these shares, as well as the actual sale of such shares, could substantially reduce the market price for our common stock and impede

our ability to obtain future financing.

In addition, changes in economic conditions

in the U.S., the European Union or globally, particularly in the context of current global events, could impact upon our ability to grow

Adverse economic changes are outside our control and may result in material adverse impacts on our business and our results

of operations.

Broad market and industry factors may negatively affect the market price of our common stock, regardless of our actual

operating performance.

In the past, following periods of volatility in the market price of a company’s securities, securities class-action

litigation has often been instituted against that company.

We have been, and currently are subject to securities class-actions.

Such litigation,

has caused, and if instituted against us in the future could cause, us to incur substantial costs and divert management’s attention

and resources.

For these reasons and others, an investment in our securities is risky and you should invest only if you can withstand

wide fluctuations in and a significant or complete loss of the value of your investment.

General Risk Factors

Our business may be adversely affected by

tariffs, trade sanctions or similar government actions.

The imposition and ongoing

discussions regarding certain trade restrictions, sanctions and tariffs on goods exported from the U.S.

or imported into the U.S., as

well as retaliatory measures enacted in response to such actions and related market volatility, could have a material adverse impact on

our business, financial condition, results of operations and cash flows.

In light of these events, there continues to exist significant

uncertainty about the future relationship between the U.S.

and other countries with respect to such trade policies.

These developments,

or the perception that any of them could occur, may have a material adverse effect on global economic conditions and the stability of

global financial markets, and may significantly reduce global trade and, in particular, trade between the impacted nations and the U.S.

Any of these factors could depress economic activity, lower product demand and restrict our access to potential partners, suppliers or

other third parties we seek to do business with and, in turn, have a material adverse effect on the business and financial condition of

such third parties, which in turn would negatively impact us.

We have identified a material weakness in

our internal control over financial reporting, which could, if not effectively remediated, result in material misstatements in our financial

statements, and a failure to meet our reporting and financial obligations.

Effective internal control

over financial reporting is necessary for us to provide reliable financial reports, prevent fraud and errors in our financial statements

and operate successfully as a public company.

As discussed in “Item 9A.

Controls and Procedures,” our management has concluded

that we did not maintain effective internal control over financial reporting as of December 31, 2025.

We are actively engaged in remediating

the underlying material weakness as promptly as possible.

However, we cannot be certain that the current material weakness in internal

control will be remediated and our internal control over financial reporting will be considered effective going forward.

Because of its

inherent limitations, our system of internal control over financial reporting may not prevent or detect every misstatement.

If we are unable to remediate the existing material

weakness in our internal controls over financial reporting and achieve effective internal control, or if we identify additional material

weaknesses in our internal control over financial reporting, we may be unable to accurately report our financial results, or report them

within the timeframes required by the SEC.

If this occurs, we also could become subject to sanctions or investigations by the SEC or other

regulatory authorities.

In addition, if we are unable to conclude that we have effective internal control over financial reporting, or

if our independent registered public accounting firm is unable to provide us with an unqualified report regarding the effectiveness of

our internal control over financial reporting for the year ending December 31, 2026 or annual periods thereafter, investors could lose

confidence in the reliability of our consolidated financial statements.

This could result in a decrease in the value of our common stock.

We also face risks associated with the cost of

establishing effective internal control over financial reporting, insofar as we expect to continue to incur increased costs related to

our internal control over financial reporting to remediate the above-described material weaknesses and improve further our internal control

Our internal control over financial reporting

and our disclosure controls and procedures may not prevent all possible errors that could occur.

Our management is responsible

for establishing and maintaining adequate internal control over financial reporting to provide reasonable assurance regarding the reliability

of our financial reporting and the preparation of financial statements for external purposes in accordance with GAAP.

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.

A control system, no matter

how well designed and operated, can provide only reasonable, not absolute, assurance that the control system’s objectives will

be satisfied.

Internal control over financial reporting and disclosure controls and procedures are designed to give a reasonable assurance

that they are effective to achieve their objectives.

We cannot provide absolute assurance that all of our possible future control issues

will be detected.

These inherent limitations include the possibility that judgments in our decision making can be faulty, and that isolated

breakdowns can occur because of simple human error or mistake.

The design of our system of controls is based in part upon assumptions

about the likelihood of future events, and there can be no assurance that any design will succeed absolutely in achieving our stated

goals under all potential future or unforeseeable conditions.

Because of the inherent limitations in a cost-effective control system,

misstatements due to error could occur and not be detected.

This and any future failures could cause investors to lose confidence in

our reported financial information, which could have a negative impact on our financial condition and stock price.

In future periods, if the

process required by Section 404 of the Sarbanes-Oxley Act reveals any material weaknesses or significant deficiencies, the correction

of any such material weaknesses or significant deficiencies could require remedial measures which could be costly and time-consuming.

In addition, in such a case, we may be unable to produce accurate financial statements on a timely basis.

Any associated accounting restatement

could create a significant strain on our internal resources and cause delays in our release of quarterly or annual financial results

and the filing of related reports, increase our costs and cause management distraction.

Any of the foregoing could cause investors to

lose confidence in the reliability of our financial statements, which could cause the market price of our common stock to decline and

make it more difficult for us to finance our operations and growth.

We 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.

We 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 statements.

We 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.

Failure on our part to have

effective internal financial and accounting controls could cause our financial reporting to be unreliable, could have a material adverse

effect on our business, operating results, and financial condition, and could have a material adverse impact on the trading price of our

common stock.

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

control system’s objectives will be satisfied.

Internal control over financial reporting and disclosure controls and procedures

are designed to give a reasonable assurance that they are effective to achieve their objectives.

We cannot provide absolute assurance

that all of our possible future control issues will be detected.

These inherent limitations include the possibility that judgments in

our decision making can be faulty, and that isolated breakdowns can occur because of simple human error or mistake.

The design of our

system of controls is based in part upon assumptions about the likelihood of future events, and there can be no assurance that any design

will succeed absolutely in achieving our stated goals under all potential future or unforeseeable conditions.

Because of the inherent

limitations in a cost-effective control system, misstatements due to error could occur and not be detected.

This and any future failures

could cause investors to lose confidence in our reported financial information, which could have a negative impact on our financial condition

and stock price.

In future periods, if any

material weaknesses or significant deficiencies are identified, the correction could require remedial measures, which could be costly

and time-consuming.

In addition, we may be unable to produce accurate financial statements on a timely basis.

Any associated accounting

restatement could create a significant strain on our internal resources and cause delays in our release of quarterly or annual financial

results and the filing of related reports, increase our costs and cause management distraction.

Any of the foregoing could cause investors

to lose confidence in the reliability of our financial statements, which could cause the trading price of our common stock to decline

and make it more difficult for us to finance our operations and growth.

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