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Item 1A. Risk Factors

2025-04-15 compared with 2024-03-18 · 279 added, 449 removed, 599 unchanged (55% of the section changed)

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RISKS RELATED TO OUR FINANCIAL POSITION AND NEED FOR ADDITIONAL CAPITAL

We might not be able to continue as a going concern, which would likely cause our stockholders to lose most or all of their investment.

Our audited financial statements for the year ended December 31, 2023 were prepared under the assumption that we would continue as a going concern.

However, we have concluded that there is substantial doubt about our ability to continue as a going concern, therefore our independent registered public accounting firm included a “going concern” explanatory paragraph in its report on our financial statements for the year ended December 31, 2023, indicating that, without additional sources of funding, our cash at December 31, 2023 is not sufficient for us to operate as a going concern for a period of at least one year from the date that the financial statements included in this Annual Report on Form 10-K are issued.

Management’s plans concerning these matters, including our need to raise additional capital, are described in Note 2 – Summary of Significant Accounting Policies – Liquidity and Going Concern of our financial statements included within this Annual Report on Form 10-K.

However, management cannot assure you that our plans to raise additional capital will be successful.

We will need to raise additional capital to remain a going concern, which may not be available on acceptable terms, or at all.

We require significant capital resources in order to continue to operate our business and conduct our exploration of strategic alternatives, and our limited liquidity could materially and adversely affect our business operations.

As of December 31, 2024, we had cash and cash equivalents of $2.1 million.

As of March 15, 2025, we owed $10.2 million in principal and accrued interest under the Loan and Security Agreement.

As of December 31, 2024, we had an accumulated deficit of approximately $195.3 million.

We expect to continue to incur cash outflows from operations for the near future.

These circumstances raise substantial doubt about our ability to continue as a going concern for at least one year from the date this Form 10-K was filed, and our independent registered public accounting firm included a “going concern” explanatory paragraph in its report on our financial statements for the year ended December 31, 2024, indicating that, without additional sources of funding, our cash at December 31, 2024 is not sufficient for us to operate as a going concern for a period of at least one year from the date that the financial statements included in this Annual Report on Form 10-K are issued.

Management’s plans concerning these matters, including our need to raise additional capital, are described in Note 2 - Summary of

Significant Accounting Policies - Liquidity and Going Concern of our financial statements included within this Annual Report on Form 10-K.

Implementation of our plans and our ability to continue as a going concern will depend on many factors, including our ability to successfully commercialize our products and services, competing technological and market developments, and the need to enter into collaborations with other companies.

Also, it is very difficult to project our current monthly cash burn rate given the transitional status of the Company and this estimate may prove inaccurate and we may expend our limited resources sooner.

The additional capital we require in order to remain a going concern may not be available on reasonable terms, if at all, due to a variety of factors, including uncertainty about the future direction of the Company, as well as broader conditions in the economy and capital markets, including recent volatility caused by inflation, questions about bank stability and other factors.

If we are unsuccessful in our operations to secure additional financing, or if any such incremental financing is not sufficient to fund our operations, we may be required to take additional measures to reduce costs in order to conserve our cash, pursue strategic transactions or file for bankruptcy.

If we cannot continue as a viable entity, our stockholders would likely lose most or all of their investment in us.

We will need to raise additional capital in order to continue developing our product candidates and to manufacture and commercialize them as well as Mydcombi and clobetasol propionate, currently our only FDA-approved commercial products.

Such funding might not be available on acceptable terms, or at all.

Failure to obtain this necessary capital may force us to delay, limit or terminate certain of our product development and commercialization efforts or to continue operations.

We require substantial additional funding to continue our research and development activities.

We also need substantial funding to advance manufacturing and commercialization, and fund our operating expenses and other activities into next year.

If additional capital is not available when needed, including because of general market conditions, we may need to significantly scale back or reprioritize our research and development activities, manufacturing and commercialization plans, and potentially even cease our operations.

We will require substantial funds to discover, develop, protect and conduct research and development for our product candidates, including preclinical testing for future product candidates and clinical trials of any of our product candidates, and to manufacture and market any products that are or may be approved for commercial sale.

Even if we are successful in raising additional capital, such funds may prove to be insufficient for these activities.

Our financing needs may change substantially because of research and development, manufacturing and commercialization-related costs, competition, clinical trials and costs arising from additional regulatory approvals.

We might not succeed in raising needed additional funds.

The timing of our need for additional funds will depend on a number of factors, which factors are difficult to predict or may be outside of our control, including:

● the resources, time and costs required to initiate and complete research and development, to initiate and complete preclinical studies and clinical trials and to obtain regulatory approvals for our product candidates;

● progress in our research and development programs;

● the timing, receipt and amount of milestone, royalty and other payments from any current or future collaborators, if any;

● costs necessary to protect our intellectual property.

If our estimates and predictions relating to any of these factors are incorrect, we may need to modify our operating plan.

Additional funds might not be available to us on acceptable terms, or at all, when needed.

Our ongoing exploration of alternative strategic paths may not result in entering into or completing transactions when necessary, and the process of reviewing alternative strategic paths or their conclusion could adversely affect our stock price.

We continue to evaluate strategic paths to provide the resources necessary to commercialize Mydcombi and maximize stockholder value.

Potential strategic paths may include partnerships, joint ventures, mergers, acquisitions or licensing transactions, a combination of these, or other strategic transactions.

There can be no assurance, however, that our evaluation will result in transactions or other alternatives, even when deemed necessary.

There is no set timetable for our strategic process and we do not intend to provide updates unless or until the Board of Directors approves a specific action or otherwise determines that disclosure is appropriate or necessary.

Any potential transaction would be dependent on a number of factors that may be beyond our control, including, among other things, market conditions, industry trends, the interest of third parties in a potential transaction with us, obtaining stockholder approval, where necessary, and the availability of financing to third parties in a potential transaction with us on reasonable terms.

The process of reviewing alternative strategic paths may be time consuming and may involve the dedication of significant resources and may require us to incur significant costs and expenses.

It could negatively impact our ability to attract, retain and motivate employees, and expose us to potential litigation in connection with this process or any resulting transaction.

If we are unable to effectively manage the process, our financial condition and results of operations could be adversely affected.

In addition, speculation regarding any developments related to the review of strategic alternatives and perceived uncertainties related to the future of our Company could cause our stock price to fluctuate significantly.

Further, any alternative strategic paths that may be pursued and completed ultimately may not deliver the anticipated benefits or enhance stockholder value.

There can be no guarantee that the process of evaluating alternative strategic paths will result in our Company entering into or completing potential transactions within the anticipated timing or at all.

Delisting could prevent us from maintaining an active, liquid and orderly trading market for our common stock and may materially and adversely impact our ability to consummate certain strategic transactions.

Our ability to publicly or privately sell equity securities and the liquidity of our common stock could be adversely affected if we are delisted from The Nasdaq Capital Market or if we are unable to transfer our listing to another stock market.

On September 18, 2024, we were notified by The Nasdaq Stock Market LLC, or Nasdaq, that we were in breach of Listing Rule 5550(a)(2), or the (“Minimum Bid Price Rule”), for continued listing on the Nasdaq Capital Market because the minimum bid price of our listed securities for 30 consecutive business days had been less than $1 per share.

On December 12, 2024, we received a letter from Nasdaq notifying us that, because the closing bid price for our common stock was below $0.10 per share for 10 consecutive trading days, we were in breach of Listing Rule 5810(c)(3)(A)(iii).

On January 31, 2025, we executed an 80-for-1 reverse stock split, following which we were notified by Nasdaq that we had regained compliance with the Minimum Bid Price Rule.

Nasdaq Listing Rule 5810(c)(3)(A)(iv) states that any listed company that fails to meet the Minimum Bid Price Rule and has effected a reverse stock split over the prior one-year period, or has effected one or more reverse stock splits over the prior two-year period with a cumulative ratio of 250 shares or more to one, will not be eligible for an automatic 180-day grace compliance period and the Nasdaq Listing Qualifications Department is obligated to immediately issue a delisting determination.

Therefore, if we were to fall out of compliance with the Minimum Bid Price requirement prior to January 31, 2026, we would not be able to effect a reverse stock split and would immediately be issued a delisting determination.

If our common stock is delisted by Nasdaq, it could lead to a number of negative implications, including an adverse effect on the price of our common stock, deterring broker-dealers from making a market in or otherwise seeking or generating interest in our

common stock, increased volatility in our common stock, reduced liquidity in our common stock, the loss of federal preemption of state securities laws and greater difficulty in obtaining financing.

Delisting could also cause a loss of confidence of our customers, collaborators, vendors, suppliers and employees, which could harm our business and future prospects.

If our common stock is delisted by Nasdaq, the price of our common stock may decline, and although our common stock may be eligible to trade on the OTC Bulletin Board, another over-the-counter quotation system, or on the pink sheets, an investor may find it more difficult to dispose of their common stock or obtain accurate quotations as to the market value of our common stock.

If our common stock is delisted from Nasdaq, trading in our securities may be subject to the SEC’s “penny stock” rules.

These “penny stock” rules will require brokers trading in our common stock to adhere to more stringent rules and possibly result in a reduced level of trading activity in the secondary trading market for our common stock.

The additional burdens imposed upon broker-dealers by these requirements may discourage broker-dealers from recommending transactions in our securities, which could severely limit the liquidity of our securities and consequently adversely affect the market price for our securities.

Furthermore, if our common stock is delisted, we would expect it to have an adverse impact on our ability to consummate certain strategic alternatives.

Further, if our common stock is delisted, we would incur additional costs under state blue sky laws in connection with any sales of our securities.

These requirements could severely limit the market liquidity of our common stock and the ability of our stockholders to sell our common stock in the secondary market.

Raising additional capital may cause dilution to our existing stockholders, restrict our operations or require us to relinquish rights to our technologies.

Until such time as we can generate substantial product revenues, as to which we can make no assurance, we intend to finance our cash needs through equity offerings, debt financings, government and/or other third-party grants or other third-party funding, marketing and distribution arrangements and other collaborations, strategic alliances and licensing arrangements.

To the extent that we raise additional capital through the sale of equity or convertible debt securities, our investors’ ownership interest will be diluted.

Debt financing, if available, may involve agreements that include covenants limiting or restricting our ability to take specific actions, such as incurring additional debt, making capital expenditures or declaring dividends.

If we are unable to obtain funding on a timely basis, we may be required to significantly curtail one or more clinical research or development programs or delay manufacturing and commercialization plans, which would adversely impact potential revenues, results of operations and our financial condition.

If we raise additional capital through future collaborations, strategic alliances or third-party licensing arrangements, we may have to relinquish valuable rights to our intellectual property, future revenue streams, research programs, Mydcombi, clobetasol propionate or product candidates, or grant licenses on terms that might not be favorable to us.

The terms of our Loan and Security Agreement with Avenue Capital Management II, L.P.

and the lenders listed therein require us to meet certain operating covenants and place restrictions on our operating and financial flexibility.

If we are unable to obtain funding on a timely basis, we may be required to significantly curtail or delay manufacturing and commercialization plans, which would adversely impact potential revenues, results of operations and our financial condition.

If we raise additional capital through future collaborations, strategic alliances or third-party licensing arrangements, we may have to relinquish valuable rights to our intellectual property, future revenue streams, Mydcombi, Optejet or clobetasol propionate, or grant licenses on terms that might not be favorable to us.

The terms of the Loan and Security Agreement require us to meet certain operating covenants and place restrictions on our operating and financial flexibility.

If we raise additional capital through debt financing, the terms of any new debt could further restrict our ability to operate our business.

On November 22, 2022, we entered into a Loan and Security Agreement with Avenue Capital Management II, L.P.

and related entities (together, “Avenue”) (the “Loan and Security Agreement”) that is secured by a lien on all of our assets.

On November 22, 2022, we entered into the Loan and Security Agreement with Avenue, which is secured by a lien on all of our assets.

The Loan and Security Agreement, as supplemented by the Supplement, provides for term loans in an aggregate principal amount of up to $15.0 million to be delivered in multiple tranches.

The Loan and Security Agreement contains customary affirmative and negative covenants and events of default.

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Any declaration by Avenue of an event of default could significantly harm our business and prospects and could cause the price of our common stock to decline.

We have entered into a loan modification agreement with Avenue and, based on our lack of financial liquidity, we cannot guarantee that we will be able to comply with the terms of this agreement, or continue obtaining forbearance if needed.

As of March 15, 2025, the Company owed $10.2 million in principal and accrued interest under the facility.

Amounts outstanding under the facility bear interest at an annual rate equal to the greater of (a) 7.0% and (b) the prime rate as reported in The

Wall Street Journal plus 4.45% (the “Interest Rate”).

The maturity date is November 1, 2025.

On November 22, 2024, the Company entered into the First Amendment, pursuant to which Avenue agreed to defer principal and interest payments on amounts outstanding until February 28, 2025.

On February 21, 2025, the Company entered into the Second Amendment, pursuant to which Avenue agreed to defer principal and interest payments on amounts outstanding until the end of September 2025.

Deferred interest will accrue on the outstanding principal amount at the interest rate as defined in the Second Amendment.

Under the Second Amendment, the Company has agreed to use a portion of the proceeds (net of fees and commissions payable to Chardan) received from sales under its Amended and Restated Sales Agreement (the “ATM Agreement”) with Chardan Capital Markets, LLC for its at-the-market offering program (the “ATM Proceeds”) to pay down the outstanding principal amount under the Loan and Security Agreement as follows:

a) until the Company raises $3 million of aggregate ATM Proceeds, 65% of the ATM Proceeds shall be remitted to Avenue as a payment in respect of the outstanding principal amount, and b) after the Company raises $3 million of aggregate ATM Proceeds, 75% of the ATM Proceeds shall be remitted to Avenue as a payment in respect of the outstanding principal amount.

Under the Second Amendment, at any time on or after April 1, 2025, Avenue will also have the right, in their discretion, but not the obligation, to convert an aggregate amount of up to $10 million of the aggregate principal amount under the Loan and Security Agreement into shares of the Company’s common stock, at a price equal to $1.68 per share.

It is possible that the Company may be unable to make payments against the loan when the forbearance period ends on September 30, 2025.

If the Company fails to obtain the requisite waivers or further extends the forbearance period, Avenue could declare the Company in default and require repayment of the outstanding balances on the relevant loans.

If that were to occur, the Company may not have sufficient funds to pay the applicable debt.

We currently do not have sufficient liquidity to repay all the outstanding debt to Avenue.

We have incurred operating losses since our inception.

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We expect to continue to incur substantial losses in future periods while we continue to test and prepare our product candidates for the market.

It could be a year or more, if ever, before we achieve profitability.

We may never achieve profitability.

The net losses we incur may fluctuate significantly from quarter to quarter and year to year.

We anticipate that our expenses will increase substantially if, and as, we:

● continue the ongoing development of our product candidates;

● seek marketing approvals for our current and future product candidates that successfully complete clinical trials;

● continue to develop a sales, marketing and distribution infrastructure to commercialize Mydcombi, clobetasol propionate and any other product candidate for which we may obtain marketing approval;

● continue to develop the Optejet® User Filled Device;

● develop, maintain, expand and protect our intellectual property portfolio;

● implement additional operational, financial and management systems

● attract, hire and retain additional administrative, clinical, regulatory and scientific personnel;

● initiate preclinical studies and clinical trials for any additional product candidates that we may pursue in the future.

Even if we are able to generate substantial revenues from the sale of our potential products, we might not become profitable and may need to obtain additional funding to continue operations.

Even if we are able to generate substantial revenues from the sale of our product, we might not become profitable and may need to obtain additional funding to continue operations.

If we fail to become profitable or are unable to sustain profitability on a continuing basis, then we may be unable to continue our operations at planned levels and be forced to reduce our operations.

Even if we do achieve profitability, we might not be able to sustain or increase profitability on a quarterly or annual basis.

Our failure to become and remain profitable would decrease the value of our company and could impair our ability to raise capital, expand our business or continue our operations.

In addition, because of the numerous risks and uncertainties associated with product development, we are unable to predict the timing or amount of increased expenses, or when, or if, we will be able to achieve or maintain profitability.

Our relatively short operating history may make it difficult for investors to evaluate the success of our business to date and to assess our future viability.

We commenced active operations in 2014, and our operations to date have been primarily limited to organizing and staffing our company, business planning, raising capital and developing our product candidates.

We have entered into licensing agreements with Arctic Vision, for the development and commercialization of MicroPine, MicroLine and Mydcombi TM in Greater China and South Korea, and Senju, for the development and commercialization of MicroPine, MicroLine and Mydcombi in Asia (other than Greater China and South Korea).

Other than FDA approval of Mydcombi and clobetasol propionate, we have not yet demonstrated our ability to obtain marketing approval, manufacture a commercial scale product or arrange for a third party to do so on our behalf, or conduct sales and marketing activities necessary for successful product commercialization.

We will need to transition from a company with a product development focus to a company capable of supporting commercial and manufacturing activities in the near future.

We might not be successful in such a transition.

In addition, we may encounter unforeseen expenses, difficulties, complications, delays and other known and unknown factors during such transition.

Consequently, any predictions about our future success or viability might not be as accurate as they could be if we had a longer operating history.

Our failure to become and remain profitable would decrease the value of our company and could impair our ability to raise capital or continue our operations.

If we are unable to use carryforward tax losses or benefit from favorable tax legislation to reduce our taxes, our business, results of operations and financial condition may be adversely affected.

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If we are unable to use carryforward tax losses to reduce our future taxable basis for corporate tax purposes, our business, results of operations and financial condition may be adversely affected.

Net operating loss and tax credit carry-forwards are subject to review and possible adjustment by the Internal Revenue Service and state tax authorities and may become subject to an annual limitation in the event of certain cumulative changes in the ownership interest of significant stockholders over a three-year period in excess of 50%, as defined under Sections 382 and 383 of the Internal Revenue Code of 1986, as amended, as well as similar state provisions.

Revenue Code of 1986, as amended, as well as similar state provisions.

This could limit the amount of tax attributes that can be utilized annually to offset future taxable income or tax liabilities.

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Furthermore, if the United States government decides to eliminate, or reduce the scope or the rate of any tax benefit, either of which it could decide to do at any time, our results of operations could be adversely affected.

RISKS RELATED TO DEVELOPMENT AND COMMERCIALIZATION OF OUR PRODUCT AND PRODUCT CANDIDATES

RISKS RELATED TO THE PROPOSED BUSINESS COMBINATION BETWEEN EYENOVIA AND BETALIQ

The proposed business combination may not be consummated on the terms described in the non-binding Letter of Intent or at all.

On March 18, 2025, Eyenovia entered into the non-binding Letter of Intent with Betaliq, a privately-held company, relating to a proposed business combination between Eyenovia and Betaliq.

Although Eyenovia anticipates entering into and closing a definitive business combination agreement in the second quarter of 2025, no assurance can be given that Eyenovia will be able to do so within that timeframe or at all.

Execution of a definitive business combination agreement with Betaliq is subject to a number of conditions in the Letter of Intent, including satisfactory completion of due diligence by each party, which due diligence has not been completed as of the date of this report, as well as successful negotiation of the terms and conditions of the business combination agreement.

In addition, even if Eyenovia were to negotiate and enter into the definitive business combination agreement, there is no assurance that the proposed business combination would be consummated on the terms described in the Letter of Intent, or at all.

Failure to enter into a definitive business combination agreement or consummate the proposed business combination could negatively affect Eyenovia’s business, future business and financial results.

The terms of a definitive business combination agreement are subject to negotiation, and Eyenovia cannot guarantee that the parties will be able to reach acceptable terms.

Execution of the definitive business combination agreement is subject to various conditions in the Letter of Intent, including satisfactory completion of due diligence by each party.

In the event the parties are unable to negotiate a definitive business combination agreement or consummate the proposed business combination, it will have a material adverse effect on Eyenovia’s business, financial condition, and results of operations, including the following:

● Incurring costs related to the negotiation of the business combination agreement, such as legal, accounting, and financial advisory fees;

● Declines in the market price of Eyenovia Common Stock to the extent that such market price reflects an assumption that the business combination would be consummated;

● The diversion of management’s attention from day-to-day business operations and the potential disruption to each company’s employees and other personnel and business relationships during the period the definitive business combination agreement is being negotiated and stockholder approval is being solicited;

● The potential for litigation related to the proposed business combination.

Even if the parties are able to enter into a definitive business combination agreement, Eyenovia cannot guarantee that the terms will be as described in the Letter of Intent or that the closing conditions set forth in such business combination agreement, including obtaining the requisite stockholder approval and listing the combined company’s shares on Nasdaq, will be satisfied.

If Eyenovia is unable to satisfy its closing conditions, or if other mutual closing conditions are not satisfied, Betaliq will not be obligated to complete the business combination.

If the business combination is not completed, Eyenovia’s board of directors would need to evaluate other available strategic alternatives, which alternatives may not be as favorable to Eyenovia stockholders as the business combination or available at all and could include winding down its operations, which may result in a total loss of stockholders’ investment.

Eyenovia and Betaliq will be subject to various uncertainties while the proposed business combination is pending that could adversely affect the anticipated benefits of the business combination.

Uncertainty about the effect of the proposed business combination on counterparties to contracts, employees, consultants, and other parties may have an adverse effect on Eyenovia and Betaliq.

These uncertainties could cause contract counterparties and others who deal with Eyenovia or Betaliq to seek to change existing business relationships and may impair the ability of Eyenovia and Betaliq to attract, retain, and motivate key personnel until the business combination is completed and for a period of time thereafter.

Retention and recruitment of employees and consultants may be particularly challenging prior to the completion of the business combination.

Eyenovia employees and consultants, and the employees and consultants and prospective employees and consultants of Betaliq, may experience uncertainty about their future roles following the business combination.

The negotiations to enter into a definitive business combination agreement, pursuit of the business combination, and the preparation for the combination of the two companies may place a significant burden on management and internal resources.

Any significant diversion of management attention away from ongoing business and any difficulties encountered in the negotiations, transition, and integration process could affect each party’s business and limit them from pursuing attractive business opportunities and making other changes to their business prior to the entry into a definitive business combination agreement and/or completion of the business combination.

Eyenovia expects to incur substantial transaction costs in connection with the proposed business combination.

Eyenovia expects to incur a significant amount of non-recurring expenses in connection with the proposed business combination, including legal, accounting, financial advisory, consulting, printing, mailing, and other expenses.

In general, these expenses are payable by Eyenovia whether or not the business combination is completed.

Additional unanticipated costs may be incurred following consummation of the business combination.

RISKS RELATED TO COMMERCIALIZATION OF OUR PRODUCTS

Our ability to achieve profitability is highly dependent on the commercial success of Mydcombi and clobetasol propionate, and to the extent Mydcombi and clobetasol propionate are not successful, our business, financial condition and results of operations may be materially adversely affected and the price of our common stock may decline.

Mydcombi and clobetasol propionate are currently our only products that have been approved by FDA for commercial sale in the U.S.

For the year ended December 31, 2023, we recorded net sales of Mydcombi of $3,787.

Revenues from sales of Mydcombi have not been sufficient to fund our operations fully in prior periods and we cannot provide assurance that revenues from Mydcombi sales will be sufficient to fund our operations fully in the future.

We will need to generate substantially more product revenue from Mydcombi and/or clobetasol propionate generate other revenue such as through sales of future approved products to achieve and sustain profitability.

We may be unable to sustain or increase revenues generated from Mydcombi product sales for a number of reasons, including:

Mydcombi and clobetasol propionate are currently our only products that have been approved by FDA for commercial sale in the United States, and our prospects are substantially dependent on our and our licensees’ abilities to successfully commercialize Mydcombi.

For the year ended December 31, 2024, we recorded net sales of $57,336.

Revenues from sales of Mydcombi, clobetasol propionate and other products through our distribution and co-promotion agreements, have not been sufficient to fund our operations fully in prior periods and we cannot provide assurance that revenues from product sales will be sufficient to fund our operations fully in the future.

We will need to generate substantially more product revenue to achieve and sustain profitability.

We may be unable to sustain or increase revenues generated from product sales for a number of reasons, including:

● pricing, coverage and reimbursement policies of government and private payers such as Medicare, Medicaid, the U.S.

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● an unknown safety risk;

● the failure to enter into and maintain acceptable partnering arrangements for marketing and distribution of Mydcombi outside of the U.S.;

● changed or increased regulatory restrictions in the U.S., E.U.

and/or other foreign territories.

We are dependent on our ability to successfully commercialize our product Mydcombi and clobetasol propionate, and our ability to develop, obtain marketing approval for and successfully commercialize MicroPine, MicroLine, and any future product candidates.

If we are unable to develop, obtain marketing approval for and/or successfully commercialize our products and product candidates, either alone or through a collaboration, or experience significant delays in doing so, our business could be materially harmed.

Apart from Mydcombi and clobetasol propionate, we currently have no products approved for sale and have invested a significant portion of our efforts and financial resources in the development of MicroPine for pediatric progressive myopia and MicroLine for presbyopia.

Our prospects are substantially dependent on our and our licensees abilities to develop, obtain marketing approval for and successfully commercialize Mydcombi and clobetasol propionate and these product candidates.

The success of our product candidates will depend on, among other things, our ability to successfully complete clinical trials of each product candidate.

Although we have completed multiple Phase II and III studies for our product candidates, including the MIST-1 and MIST-2 Phase III trials for Mydcombi, and the VISION-1 and VISION-2 Phase III trials for MicroLine, the clinical trial process is uncertain, and failure of one or more clinical trials can occur at any stage of testing.

In addition to the successful completion of clinical trials, the success of our product candidates will also depend on several other factors, including the following:

● receipt of marketing approvals from the FDA or other applicable regulatory authorities;

● establishment of supply arrangements with third-party raw materials suppliers and manufacturers;

● establishment of arrangements with third-party manufacturers to obtain finished drug products that are appropriately packaged for sale;

● the performance of our future collaborators for one or more of our product candidates, if any;

● the extent of any required post-marketing approval commitments to applicable regulatory authorities;

● obtaining and maintaining patent, trade secret protection and regulatory exclusivity, both in the United States and internationally;

● protection of our rights in our intellectual property portfolio;

● launch of commercial sales if and when our product candidates are approved;

● a continued acceptable safety profile of our product candidates following any marketing approval;

● commercial acceptance, if and when approved, by patients, the medical community and third-party payors;

● establishing and maintaining pricing sufficient to realize a meaningful return on our investment;

● competition with other products.

● the failure to enter into and maintain acceptable partnering arrangements for marketing and distribution of Mydcombi outside of the United States;

● changed or increased regulatory restrictions in the United States, European Union and/or other foreign territories.

In addition, we require substantial additional funding to advance manufacturing and commercialization of Mydcombi and development of the Gen-2 Optejet.

If additional capital is not available when needed, including because of general market conditions, we may need to significantly scale back or reprioritize our manufacturing and commercialization plans, and potentially even cease our operations.

If we are unable to develop, obtain marketing approval for or successfully commercialize our MicroPine and MicroLine product candidates, either alone or through a collaboration, or experience significant delays in doing so, our business could be materially harmed.

Delays in the commencement or completion of clinical testing of product candidates we are developing or may develop in the future may occur and could result in significantly increased costs and longer timelines and could impact our ability to ever become profitable.

The tests and clinical trials of product candidates we develop may not commence, progress or be completed as expected, and delays could significantly impact our product development costs and timelines, as well as a product candidate’s market potential, if ultimately approved.

The timing of initiation, conduct and completion of clinical trials and other testing of our product candidates may vary dramatically due to factors within and outside of our control and is difficult to predict accurately.

We may make statements regarding anticipated timing for commencement, completion of enrollment, and/or availability of results from our clinical studies, but those statements are predictions based on a number of significant assumptions and the actual timing of achievement of development milestones may differ materially from our predictions for a variety of reasons.

Commencement of planned clinical studies may be delayed if we do not secure adequate capital.

In addition to lack of adequate capital, commencement and/or completion of these studies may be delayed, terminated or suspended as a result of the occurrence of any of a number of other factors, including the need to obtain authorizations from the FDA and the institutional review boards, or IRBs, of prospective clinical study sites, delayed or inadequate supply of our product candidates or other clinical trial material, slower than expected rates of patient recruitment or enrollment, other factors described below, and unforeseen events.

The commencement of clinical trials of our product candidates can be delayed for many reasons, including delays in:

● obtaining required funding;

● obtaining guidance or authorizations from the FDA or foreign regulatory authorities;

● finalizing the trial design as a result of discussions with the FDA, other regulatory authorities or prospective clinical trial investigators or sites;

● reaching agreement on acceptable terms with prospective contract research organizations, or CROs, and clinical trial sites;

● obtaining sufficient quantities of our product candidates and other clinical trial material;

● obtaining IRB approval to conduct a clinical trial at a prospective site.

In addition, once a clinical trial has begun, it may experience unanticipated delays or be suspended or terminated by us, an IRB, the FDA or other regulatory authorities due to several factors, all of which could impact our, or our licensees’, ability to complete clinical trials in a timely and cost-efficient manner, including:

● lack of adequate funding;

● failure to conduct the clinical trial in accordance with regulatory or IRB requirements;

● slower than expected rates of subject recruitment and enrollment;

● higher than anticipated participant drop-out rates;

● failure of clinical trial subjects to use the product as directed or to report data as per trial protocols;

● inspection of the clinical trial operations or clinical trial site by the FDA or other regulatory authorities resulting in the imposition of a clinical hold;

● failure to achieve certain efficacy and/or safety standards;

● subjects experiencing severe side effects or other adverse events related to the investigational treatment;

● delayed or insufficient supply of clinical trial material or inadequate quality of such materials;

● failure of our CROs or other third-party contractors to meet their contractual obligations to us in a timely manner, or at all;

● delays in quality control/quality assurance procedures necessary for study database lock and analysis of unblinded data.

Significant clinical trial delays also could jeopardize our ability to meet obligations under agreements under which we license our rights to our product candidates, allow other companies to bring competitive products to market before we do, shorten any period of market exclusivity we may otherwise have under our patent rights, and weaken our negotiating position in discussions with potential collaborators, any of which could impair our ability to successfully commercialize our product candidates, if ultimately approved.

Any significant delays in commencement or completion of clinical trials of our product candidates, or the suspension or termination of a clinical trial, could materially harm our business, financial condition and results of operations.

We or our licensees may experience delays or difficulties in the enrollment and/or retention of patients in clinical trials, which could delay or prevent our receipt of necessary regulatory approvals.

Successful and timely completion of clinical trials will require that we or our licensees sponsoring trials for our product candidates enroll a sufficient number of subjects.

Subject enrollment, which is an important factor in the timing of clinical trials, is affected by many factors, including the size and nature of the patient population and competition for patients eligible for our clinical trials with competitors which may have ongoing clinical trials for product candidates that are under development to treat the same indications as one or more of our product candidates, or approved products for the conditions for which we are developing our product candidates.

Trials may be subject to delays as a result of subject enrollment taking longer than anticipated or subject withdrawal.

We may not be able to initiate or continue clinical trials for our product candidates if we are unable to locate and enroll a sufficient number of eligible patients to participate in these trials as required by the FDA or comparable foreign regulatory authorities.

We cannot predict

how successful we or our licensees will be at enrolling subjects in future clinical trials.

Subject enrollment is affected by other factors including:

● the severity and difficulty of diagnosing the disease under investigation;

● the eligibility and exclusion criteria for the trial in question;

● the size of the patient population and process for identifying patients;

● our ability to recruit clinical trial investigators with the appropriate competencies and experience;

● the design of the trial protocol;

● the perceived risks and benefits of the product candidate in the trial in relation to other available therapies, including any new products that may be approved for the indications we are investigating;

● the availability of competing commercially available therapies and other competing therapeutic candidates’ clinical trials for the disease or condition under investigation;

● the willingness of patients to be enrolled in our clinical trials;

● the risk that subjects enrolled in clinical trials will drop out of our trials before completion;

● our ability to obtain and maintain clinical trial subject informed consents

● the efforts to facilitate timely enrollment in clinical trials;

● potential disruptions caused by geopolitical events such as the ongoing war between Russia and Ukraine or between Israel and Hamas;

● the patient referral practices of physicians;

● the ability to monitor subjects adequately during and after treatment;

● the proximity and availability of clinical trial sites for prospective subjects.

Inability to enroll a sufficient number of subjects for clinical trials would result in significant delays and could require us to abandon one or more clinical trials altogether.

Enrollment delays in these clinical trials may result in increased development costs for our product candidates, which would cause the value of our company to decline and limit our ability to obtain additional financing.

Furthermore, we rely on CROs and clinical trial sites to ensure the proper and timely conduct of our clinical trials and we have limited influence over their performance.

Interim “top-line” and preliminary results from our clinical trials that we announce or publish from time to time may change as more patient data become available and are subject to audit and verification procedures that could result in material changes in the final data.

From time to time, we may publish interim top-line or preliminary results from our clinical trials.

Interim results from clinical trials that we may complete are subject to 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 evaluate all data.

Preliminary or top-line results also remain subject to audit and verification procedures that may result in the final data being materially different from the preliminary data we previously published.

As a result, interim and preliminary data that we report may differ from future results of the same trials, or different conclusions or considerations may qualify such results, once additional data have been received and fully evaluated, and should

be viewed with caution until the final data are available.

Differences between preliminary or interim data and final data could be material and could significantly harm our business prospects and may cause the trading price of our common stock to fluctuate significantly.

Furthermore, others, including regulatory agencies, 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 therapeutic product, if any, and us in general.

The information we choose to publicly disclose regarding a particular nonclinical study or clinical trial is based on what is typically extensive information, and you or others may not agree with what we determine is the material or otherwise appropriate information to include in our disclosure, and any information we determine not to disclose may ultimately be deemed significant with respect to future decisions, conclusions, views, activities or otherwise regarding a particular therapeutic product, if any, product candidate or our business.

If the preliminary, interim and topline data that we report differ from actual results, or if others, including regulatory authorities, disagree with the conclusions reached, our ability to obtain approval for, and commercialize, our product candidates may be harmed, which could harm our business, operating results, prospects or financial condition.

The FDA or comparable foreign regulatory authorities may disagree with our regulatory plans and we may fail to obtain regulatory approval of our product candidates.

Our clinical trial results may not support regulatory approval of our product candidates.

The results of nonclinical studies and clinical trials may not be predictive of the results of later-stage clinical trials, and product candidates in later stages of clinical trials may fail to show the desired safety and efficacy despite having progressed through nonclinical studies and initial clinical trials.

In addition, our product candidates could fail to receive regulatory approval for many reasons, including the following:

● the FDA or comparable foreign regulatory authorities may disagree with the design or implementation of our clinical trials;

● the population studied in the clinical program may not be sufficiently broad or representative to assure safety in the full population for which we seek approval;

● we may be unable to demonstrate that our product candidates’ risk-benefit ratios for their proposed indications are acceptable;

● the results of clinical trials may not meet the level of statistical significance required by the FDA or comparable foreign regulatory authorities for approval;

● the FDA or comparable foreign regulatory authorities may disagree with our interpretation of data from nonclinical studies or clinical trials;

● the data collected from clinical trials of our product candidates may not be sufficient to the satisfaction of the FDA or comparable foreign regulatory authorities to support the submission of an application for marketing authorization to FDA or comparable foreign regulatory authorities;

● the FDA or comparable foreign regulatory authorities may fail to approve the manufacturing processes, our own manufacturing facilities, or a third-party manufacturer’s facilities with which we contract for clinical and commercial supplies;

● the approval policies or regulations of the FDA or comparable foreign regulatory authorities may significantly change in a manner rendering our clinical data insufficient for approval.

Failure to obtain regulatory approval to market any of our product candidates would significantly harm our business, results of operations, and prospects.

Our product candidates may cause undesirable side effects or have other properties that could delay or prevent their regulatory approval and limit the commercial profile of an approved label, and such side effects or other properties could result in significant negative consequences following any marketing approval of any of our product candidates.

Undesirable side effects caused by any of our product candidates could cause us, our licensing partners, if any, or regulatory authorities to interrupt, delay or halt clinical trials and could result in a more restrictive label or the delay or denial of regulatory approval by the FDA or other comparable foreign regulatory authority.

Results of the clinical trials could reveal a high and unacceptable severity and prevalence of side effects or risks associated with a product candidate’s use.

In such an event, our trials could be suspended or terminated and the regulatory authorities could order us to cease further development of or deny approval of our product candidates for any or all targeted indications.

The drug-related side effects could affect patient recruitment or the ability of enrolled subjects to complete the trial or result in potential product liability claims.

Any of these occurrences may harm our business, financial condition and prospects significantly.

Additionally, if undesirable side effects of our products are identified following marketing approval, a number of potentially significant negative consequences could result, including:

Our products may cause undesirable side effects, which could result in significant negative consequences.

If undesirable side effects of our products are identified, a number of potentially significant negative consequences could result, including:

● marketing of such product may be suspended;

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● the requirement to conduct additional post-market studies;

● being sued and held liable for harm caused to subjects or patients.

● being sued and held liable for harm caused to patients.

Consequently, our reputation and business operations may suffer.

In addition, adverse side effects caused by any therapeutics that may be similar in nature to our product candidates could delay or prevent regulatory approval of our product candidates, limit the commercial profile of an approved label for our product candidates, or result in significant negative consequences for our product candidates following marketing approval.

Any of these events could prevent the achievement or maintaining of market acceptance of the particular product or product candidate, if approved, and could significantly harm our business, results of operations and prospects.

We might not be able to develop any additional marketable products utilizing our technology and we might not be able to identify and successfully implement an alternative product development strategy.

The approach we have adopted to discover and develop product candidates is new and may never lead to marketable products other than Mydcombi and clobetasol propionate.

We have concentrated our efforts on developing therapeutic product candidates utilizing new advanced technology for drug delivery.

To our knowledge, no person or company has developed any therapeutic product utilizing the same technology and no such ophthalmic micro-therapeutic product other than Mydcombi and clobetasol propionate has been approved for marketing to date.

We are leading a new field of ophthalmic micro-therapeutic research and development and the scientific discoveries that form the basis for our efforts to develop products are relatively new.

The scientific evidence to support the feasibility of developing such products and treatments based on these discoveries is limited.

Our focus solely on developing products utilizing our proprietary technology, as opposed to more traditional technology, increases the risks associated with investing in our stock.

If we are unsuccessful in developing product candidates utilizing our technology or finding additional applications for our technology, we may be required to change the scope and direction of our product development activities.

If we are not able to identify and successfully implement an alternative product development strategy, our business may fail.

If the market opportunities for Mydcombi and clobetasol propionate and our product candidates are smaller than we believe they are, our product revenues may be adversely affected and our business may suffer.

We are currently focusing efforts on commercializing our Mydcombi and clobetasol propionate products, and we have licensed commercialization rights to Mydcombi as well as MicroPine and MicroLine in Greater China (mainland China, Hong Kong, Macau and Taiwan) and South Korea to Arctic Vision (with Senju retaining such licensed rights in the rest of Asia).

Our understanding of both the number of people who have needs for our products, as well as the subset of people who have the potential to benefit from our product and product candidates in varying countries, are based on estimates in published literature.

While we believe these estimates are reasonable, they may prove to be incorrect and new studies may reduce the estimated incidence or prevalence of mydriasis, progressive myopia and presbyopia.

The number of patients in the United States and elsewhere may turn out to be lower than expected or these patients might not be otherwise amenable to our product or product candidates or may become increasingly difficult to identify and access, all of which would adversely affect our business, financial condition, results of operations and prospects.

The commercial success of Mydcombi and clobetasol propionate and our product candidates will depend in large part on the degree of market acceptance among ophthalmologists and optometrists, patients, patient advocacy groups, third-party payors and the medical community.

There can be no assurance that Mydcombi and clobetasol propionate will achieve commercial success or market acceptance and, even if we receive regulatory approval to market our product candidates, our product candidates might not gain market acceptance upon their commercial introduction, both of which could prevent us from becoming profitable.

We may have difficulties convincing the medical community, third-party payors and consumers to accept and use Mydcombi, clobetasol propionate and any of our product candidates that may be approved for commercialization in the future.

Other factors that we believe will affect market acceptance of Mydcombi, clobetasol propionate and our product candidates, if approved, include:

In addition, adverse side effects caused by any therapeutics that may be similar in nature to our products could result in significant negative consequences for our products.

Any of these events could prevent the achievement or maintaining of market acceptance of the particular product and could significantly harm our business, results of operations and prospects.

If the market opportunities for Mydcombi and clobetasol propionate are smaller than we believe they are, our product revenues may be adversely affected and our business may suffer.

We are currently focusing efforts on commercializing our Mydcombi and clobetasol propionate products, and we have licensed commercialization rights to Mydcombi in Greater China (mainland China, Hong Kong, Macau and Taiwan) and South Korea to Arctic Vision (with Senju retaining such licensed rights in the rest of Asia).

Our understanding of both the number of people who have needs for our products, as well as the subset of people who have the potential to benefit from our product in varying countries, are based on estimates in published literature.

While we believe these estimates are reasonable, they may prove to be incorrect and new studies may reduce the estimated incidence or prevalence of mydriasis.

The number of patients in the United States and elsewhere may turn out to be lower than expected or these patients might not be otherwise amenable to our products or may become increasingly difficult to identify and access, all of which would adversely affect our business, financial condition, results of operations and prospects.

The commercial success of Mydcombi and clobetasol propionate will depend in large part on the degree of market acceptance among ophthalmologists and optometrists, patients, patient advocacy groups, third-party payors and the medical community.

There can be no assurance that Mydcombi and clobetasol propionate will achieve commercial success or market acceptance, which could prevent us from becoming profitable.

We may have difficulties convincing the medical community, third-party payors and consumers to accept and use Mydcombi or clobetasol propionate.

Other factors that we believe will affect market acceptance of Mydcombi or clobetasol propionate include:

● the timing of our receipt of any marketing approvals, the terms of any approvals and the countries in which approvals are obtained;

● safety, efficacy and ease of administration of Mydcombi, clobetasol propionate or our product candidates;

● safety, efficacy and ease of administration of Mydcombi or clobetasol propionate;

● the success of physician education programs;

● the availability of any government and third-party payor reimbursement;

● the pricing of Mydcombi, clobetasol propionate or our product candidates, particularly as compared to alternative treatment methods and medications;

● the extent to which alternative treatment methods and medications are more readily available as compared to the availability of Mydcombi, clobetasol propionate or any product candidates that we may develop in the future;

● the pricing of Mydcombi or clobetasol propionate, particularly as compared to alternative treatment methods and medications;

● the extent to which alternative treatment methods and medications are more readily available as compared to the availability of Mydcombi or clobetasol propionate future;

● the prevalence and severity of any adverse effects.

Our licensing partners may fail to use commercially reasonable efforts to commercialize certain of our products.

Our licensing partners are contractually obligated to use commercially reasonable efforts in the commercialization of the products for which they have negotiated a license.

Uncovering that one or more of our partners is not using commercially reasonable efforts could take time to discover and time to remedy, during which the sales of our products candidates could be lower than we expect.

We face competition in an environment of rapid technological change and the possibility that our competitors may achieve regulatory approval before us or develop therapies that are more advanced or effective than ours, may adversely affect our financial condition and our, or our licensees’, ability to successfully market or commercialize our product candidates.

We face competition in an environment of rapid technological change and the possibility that our competitors may develop therapies that are more advanced or effective than ours, may adversely affect our financial condition and our, or our licensees’, ability to successfully market or commercialize our products.

The specialty pharma market is highly competitive.

If we or our licensees are unable to compete effectively with any existing products, new treatment methods and new technologies, we may be unable to commercialize our current or any future therapeutic products.

If we or our licensees are unable to compete effectively with any existing products, new treatment methods and new technologies, we may be unable to commercialize our products.

The specialty pharma market is subject to rapid technological change and is significantly affected by existing rival products and medical procedures, new product introductions and the market activities of other participants.

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We may also face competition from products which have already been approved and accepted by the medical community for the treatment of these same indications.

As a result of any of the foregoing factors, our competitors may develop or commercialize products with significant advantages over any therapeutic products that we may develop.

As a result of any of the foregoing factors, our competitors may develop or commercialize products with significant advantages over our products.

If our competitors are more successful in commercializing their products than we are, their success could adversely affect our competitive position and harm our business prospects.

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We have limited resources for the manufacturing, sales, marketing and distribution of drug products.

To achieve commercial success for Mydcombi, clobetasol propionate and the product candidates for which we may in the future obtain marketing approval, we will need to establish and maintain an adequate sales force, and additional manufacturing, marketing and distribution capabilities, either ourselves or through collaborations or other arrangements with third parties.

We received FDA approval for our primary Mydcombi manufacturing facility in February 2024, which we believe will allow us to expand and continue to build our manufacturing operations.

However, we may encounter delays in the manufacturing process for Mydcombi that could delay the process of commercialization of the product, which could have a material negative effect on our revenues.

In addition, failure to secure contracts with manufacturers, wholesalers, retailers, or specialty pharmacies could negatively impact the production and distribution of our potential products, and failure to coordinate financial systems could negatively impact our ability to accurately report product revenue.

If we are unable to effectively establish and manage the manufacturing and distribution process, the commercial launch and sales of our potential products may be delayed or severely compromised and our results of operations may be harmed.

To achieve commercial success for Mydcombi and clobetasol propionate, we will need to establish and maintain an adequate sales force additional manufacturing, marketing and distribution capabilities, either ourselves or through collaborations or other arrangements with third parties.

We may encounter delays in the manufacturing process for Mydcombi that could delay the process of commercialization of the product, which could have a material negative effect on our revenues.

In addition, failure to secure contracts with manufacturers, wholesalers, retailers, or specialty pharmacies could negatively impact the production and distribution of our products, and failure to coordinate financial systems could negatively impact our ability to accurately report product revenue.

If we are unable to effectively establish and manage the manufacturing and distribution process, the commercial sales of our products may be severely compromised and our results of operations may be harmed.

We are exposed to the risk of claims seeking monetary damages by individuals and the risk of investigations by regulatory authorities, which could cause us to incur substantial liabilities and to limit commercialization of any products that we develop.

We are exposed to the risk of claims seeking monetary damages being filed against us for loss or harm suffered by participants of our clinical trials or for loss or harm suffered by users of Mydcombi, clobetasol propionate or any of our drug products that may receive approval for commercialization in the future.

In either event, the FDA or the regulatory authorities of other countries or regions may commence investigations of the safety and effectiveness of any such clinical trial or commercialized drug, the manufacturing processes and facilities or marketing programs utilized in respect of any such clinical trial or drug.

Such investigations may result in mandatory or voluntary recalls of any commercialized drug or other significant enforcement action such as limiting the indications for which any such drug may be used, or suspension or withdrawal of approval for any such drug.

Investigations by the FDA or any other regulatory authority in other countries or regions also could delay or prevent the completion of any of our other clinical development programs.

We are exposed to the risk of claims seeking monetary damages being filed against us for loss or harm suffered by participants of our prior clinical trials or for loss or harm suffered by users of Mydcombi or clobetasol propionate.

In either event, the FDA or the regulatory authorities of other countries or regions may commence investigations of the safety and effectiveness of any such commercialized drug, the manufacturing processes and facilities or marketing programs utilized in respect of any such drug.

Such investigations may result in mandatory or voluntary recalls of any such commercialized drug or other significant enforcement action such as limiting the indications for which any such drug may be used, or suspension or withdrawal of approval for any such drug.

Product liability lawsuits against us could divert our resources and could cause us to incur substantial liabilities and to limit commercialization of any products that we develop.

We face an inherent risk of product liability exposure related to the use of Mydcombi, clobetasol propionate and our product candidates that we develop in human clinical trials.

If we cannot successfully defend ourselves against claims that our product candidates or products caused injuries, we will incur substantial liabilities.

We face an inherent risk of product liability exposure related to the use of Mydcombi or clobetasol propionate.

If we cannot successfully defend ourselves against claims that our products caused injuries, we will incur substantial liabilities.

Regardless of merit or eventual outcome, liability claims may result in:

● decreased demand for Mydcombi, clobetasol propionate or any product candidates or products that we develop;

● decreased demand for Mydcombi or clobetasol propionate;

● injury to our reputation and significant negative media attention;

● withdrawal of clinical trial participants;

● significant costs to defend the related litigation;

● substantial monetary awards to clinical trial participants or patients;

● substantial monetary awards to patients;

● loss of revenue;

● reduced time and attention of our management to pursue our business strategy.

● the inability to commercialize any future products that we develop.

Our insurance policies might not fully cover the risk of loss associated with our operations.

We may need to increase our insurance coverage as we commercialize Mydcombi and clobetasol propionate and expand or undertake new our clinical trials for existing and future product candidates.

We may need to increase our insurance coverage as we commercialize Mydcombi and clobetasol propionate.

Insurance coverage is increasingly expensive.

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In the event that we are required to pay damages for any such claim, we may be forced to seek bankruptcy or to liquidate because our asset and revenue base may be insufficient to satisfy the payment of damages and any insurance that we have obtained or may obtain for product or clinical trial liability might not provide sufficient coverage against potential liabilities.

We may not be able to successfully commercialize Mydcombi, clobetasol propionate and our product candidates, if approved, due to unfavorable pricing regulations or third-party coverage and reimbursement policies, which could make it difficult for us to sell Mydcombi, clobetasol propionate or our product candidates profitably.

We may not be able to successfully commercialize Mydcombi or clobetasol propionate due to unfavorable pricing regulations or third-party coverage and reimbursement policies, which could make it difficult for us to sell Mydcombi or clobetasol propionate profitably.

Obtaining coverage and reimbursement approval for a product from a government or other third-party payor is a time-consuming and costly process, with uncertain results, that could require us to provide supporting scientific, clinical and cost effectiveness data for the use of our products to the payor.

There may be significant delays in obtaining such coverage and reimbursement for newly approved products, and coverage may not be available, or may be more limited than the purposes for which the product is approved by the FDA or other comparable foreign regulatory authorities.

There may be significant delays in obtaining such coverage and reimbursement for products, and coverage may not be available, or may be more limited than the purposes for which the product is approved by the FDA or other comparable foreign regulatory authorities.

Moreover, eligibility for coverage and reimbursement does not imply that a product will be paid for in all cases or at a rate that covers our costs, including research, development, intellectual property, manufacture, sale and distribution expenses.

Interim reimbursement levels for new products, if applicable, may also not be sufficient to cover our costs and may not be made permanent.

Reimbursement rates may vary according to the use of the product and the clinical setting in which it is used, may be based on reimbursement levels already set for lower cost products and may be incorporated into existing payments for other services.

Net prices for products may be reduced by mandatory discounts or rebates required by government healthcare programs or private payors, by any future laws limiting drug prices and by any future relaxation of laws that presently restrict imports of product from countries where they may be sold at lower prices than in the United States.

There is significant uncertainty related to the insurance coverage and reimbursement of newly approved products.

In the United States, there is no uniform policy among third-party payors for coverage and reimbursement.

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● neither experimental nor investigational.

We cannot be sure that reimbursement will be available for Mydcombi, clobetasol propionate or any product that we may commercialize in the future and, if coverage and reimbursement are available, what the level of reimbursement will be.

Our inability to promptly obtain coverage and adequate reimbursement rates from both government-funded and private payors for any approved products that we develop could have a material adverse effect on our operating results, our ability to raise capital needed to commercialize products and our overall financial condition.

Reimbursement may impact the demand for, and the price of, any product for which we obtain marketing approval.

We cannot be sure that reimbursement will be available for Mydcombi or clobetasol propionate and, if coverage and reimbursement are available, what the level of reimbursement will be.

Our inability to promptly obtain coverage and adequate reimbursement rates from both government-funded and private payors for our products could have a material adverse effect on our operating results, our ability to raise capital needed to commercialize products and our overall financial condition.

Reimbursement may impact the demand for, and the price of, our products.

Even if we obtain coverage for a given product by a third-party payor, the resulting reimbursement payment rates may not be adequate or may require co-payments that patients find unacceptably high.

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Patients are unlikely to use our products unless coverage is provided and reimbursement is adequate to cover all or a significant portion of the cost of our products.

Therefore, coverage and adequate reimbursement are critical to a new product’s acceptance.

Coverage decisions may depend upon clinical and economic standards that disfavor new products when more established or lower cost therapeutic alternatives are already available or subsequently become available.

Therefore, coverage and adequate reimbursement are critical to a product’s acceptance.

Coverage decisions may depend upon clinical and economic standards that disfavor products when more established or lower cost therapeutic alternatives are already available or subsequently become available.

For products administered by or under the supervision of a physician, obtaining coverage and adequate reimbursement may be particularly difficult because of the higher prices often associated with such drugs.

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Further, from time to time, the Centers for Medicare & Medicaid Services, or CMS, the federal agency responsible for administering the Medicare program, revises the reimbursement amounts paid to health care providers, including the Medicare Physician Fee Schedule and Hospital Outpatient Prospective Payment System, which may result in reduced Medicare payments.

We expect to experience pricing pressures in connection with the sale of any of our product candidates due to the trend toward managed healthcare, the increasing influence of health maintenance organizations, and additional legislative changes.

We expect to experience pricing pressures in connection with the sale of our products due to the trend toward managed healthcare, the increasing influence of health maintenance organizations, and additional legislative changes.

The downward pressure on healthcare costs in general, particularly prescription medicines, medical devices and surgical procedures and other treatments, has become very intense.

As a result, increasingly high barriers are being erected to the successful commercialization of new products.

Further, the adoption and implementation of any future governmental cost containment or other health reform initiative may result in additional downward pressure on the price that we may receive for any approved product.

We cannot predict the likelihood, nature or extent of government regulation that may arise from future legislation or administrative action in the United States or any other jurisdiction.

If we, or any third parties we may engage are slow or unable to adapt to changes in existing requirements or the adoption of new requirements or policies, or if we or such third parties are not able to maintain regulatory compliance, our product candidates may lose any regulatory approval that may have been obtained and we may not achieve or sustain profitability.

If we, or any third parties we may engage are slow or unable to adapt to changes in existing requirements or the adoption of new requirements or policies, or if we or such third parties are not able to maintain regulatory compliance, our products may lose any regulatory approval that has been obtained and we may not achieve or sustain profitability.

If the regulatory authorities in such jurisdictions set prices or make reimbursement criteria that are not commercially attractive for us or our collaborators, our revenues and the potential profitability of our products in those countries would be negatively affected.

RISKS RELATED TO REGULATORY APPROVAL OF OUR PRODUCT CANDIDATES AND OTHER LEGAL COMPLIANCE MATTERS

The regulatory approval processes of the FDA and comparable foreign authorities are lengthy, time-consuming and inherently unpredictable.

If we are not able to obtain required regulatory approval for any of our current or future product candidates, our business may be materially and adversely affected.

The time required to obtain approval or other marketing authorizations by the FDA and comparable foreign authorities is unpredictable, and it typically takes many years following the commencement of clinical trials and depends upon numerous factors, including the substantial discretion of the regulatory authorities.

In addition, approval policies, regulations, and the type and amount of clinical data necessary to gain approval may change during the course of a product candidate’s clinical development and may vary among jurisdictions.

We have not obtained regulatory approval for any product candidate, and it is possible that we may never obtain regulatory approval for any product candidates we may seek to develop in the future.

Neither we nor any current or future collaborator is permitted to market any drug or drug-led combination product candidate in the United States until FDA approval of an NDA is obtained, and we cannot market such a product candidate in any other country until we obtain regulatory authorization as required under the laws of such country.

Prior to obtaining approval to commercialize any biologic product candidate in the United States or abroad, we must demonstrate with substantial evidence from well-controlled clinical trials, and to the satisfaction of the FDA or other foreign regulatory agencies, that such product candidates are safe and effective for their intended uses.

Results from nonclinical or preclinical studies and clinical trials may be interpreted differently by different regulatory agencies.

Even if we believe the nonclinical or clinical data for MicroPine and MicroLine are promising, such data may be insufficient to support approval by the FDA and other regulatory authorities.

The FDA may also require us to conduct additional nonclinical studies or clinical trials for our products either prior to or after approval, or it may object to elements of our clinical development programs.

This could result in substantial additional costs or delays in the development of our product candidates.

Our product candidates could fail to receive regulatory approval for many reasons, including the following:

● the FDA or comparable foreign regulatory authorities may disagree with the design or implementation of our clinical trials;

● we may be unable to demonstrate to the satisfaction of the FDA or comparable foreign regulatory authorities that a product candidate is safe and effective for its proposed indication;

● the results of our clinical trials may not meet the level of statistical significance required by the FDA or comparable foreign regulatory authorities for approval;

● the FDA or comparable foreign regulatory authorities may disagree with our interpretation of data from nonclinical studies or clinical trials;

● we may be unable to demonstrate that a product candidate’s clinical and other benefits outweigh its safety risks;

● the FDA or comparable foreign regulatory authorities may fail to approve our manufacturing processes or facilities of third-party suppliers with which we contract for clinical and commercial supplies of our product candidates;

● the approval policies or regulations of the FDA or comparable foreign authorities may significantly change in a manner rendering our clinical data insufficient for approval.

Of the large number of product candidates developed by pharmaceutical manufacturers, only a small percentage successfully complete the FDA or foreign regulatory approval processes and are commercialized.

The lengthy approval and marketing authorization process as well as the unpredictability of future clinical trial results may result in our failing to obtain regulatory approval and marketing authorization to market MicroPine, MicroLine, or any of our future product candidates, which would significantly harm our business, financial condition, results of operations and prospects.

We have invested a significant portion of our time and financial resources in the development of our product candidates.

Our business is dependent on our ability to successfully complete nonclinical and clinical development of, obtain regulatory approval for, and, if approved, successfully commercialize such product candidates in a timely manner.

Even if we receive approval of an NDA or foreign marketing application for MicroPine, MicroLine or any future product candidates, the FDA or the applicable foreign regulatory agency may grant approval or other marketing authorization contingent on the performance of costly additional clinical trials, including post-marketing clinical trials.

The FDA or the applicable foreign regulatory agency also may approve or authorize for marketing a product candidate for a more limited indication or patient population than we originally request or may not approve or authorize the labeling that we believe is necessary or desirable for the successful commercialization of a product candidate.

Any delay in obtaining, or inability to obtain, applicable regulatory approval or other marketing authorization would delay or prevent commercialization of that product candidate and would materially adversely impact our business and prospects.

In addition, the FDA and other regulatory authorities may change their policies, issue additional regulations or revise existing regulations, or take other actions, which may prevent or delay approval of our future product candidates on a timely basis.

Such policy or regulatory changes could impose additional requirements upon us that could delay our ability to obtain approvals, increase the costs of compliance or restrict our ability to maintain any marketing authorizations we may have obtained.

MicroPine and MicroLine may be considered drug/device combinations and the process for obtaining regulatory approval in the United States will require compliance with complex procedures because concordance between two centers of the FDA (CDRH and CDER) is necessary for approval of combination products.

We anticipate that our product candidates in development, MicroPine and MicroLine, will be considered drug/device combination products because, like Mydcombi, they are also pre-filled or co-packaged ophthalmic drug dispenser products intended for use only with the Optejet dispenser.

In October 2021, we received a CRL from the FDA, which in part informed us that pre-filled or co-packaged ophthalmic drug dispenser products like Mydcombi have been reclassified as drug-device combination products.

If MicroPine or MicroLine are not also designated as drug-device combination products, or if either CDER or CDRH were to institute additional requirements for the approval of MicroPine or MicroLine, we could be required to complete clinical studies with more patients and over longer periods of time than is currently anticipated.

This would significantly increase the anticipated cost and timeline to completion of MicroPine or MicroLine’s development and require us to raise additional funds.

The FDA may determine that the results of our completed clinical trials are not sufficiently robust or convincing and require additional clinical and/or nonclinical studies prior to approval of MicroPine or MicroLine.

The impact of either a change in the lead FDA review center or the imposition of additional, currently unanticipated requirements for approval could be significant to us and have a material adverse effect on the prospects for developing MicroPine or MicroLine, as well as on our business and our financial condition.

If we receive regulatory approval for any of our current or future product candidates, we will be subject to ongoing regulatory obligations and continued regulatory review, which may result in significant additional expense.

Additionally, our product candidates, if approved, could be subject to post-market study requirements, marketing and labeling restrictions, and even recall or market withdrawal if unanticipated safety issues are discovered following approval.

RISKS RELATED TO REGULATORY APPROVAL OF OUR PRODUCTS AND OTHER LEGAL COMPLIANCE MATTERS

We are subject to ongoing regulatory obligations and continued regulatory review of our products, which may result in significant additional expense.

Additionally, our products could be subject to post-market study requirements, marketing and labeling restrictions, and even recall or market withdrawal if unanticipated safety issues are discovered.

In addition, we may be subject to penalties or other enforcement action if we fail to comply with regulatory requirements.

If the FDA or a comparable foreign regulatory authority approves any of our current or future product candidates, the manufacturing processes, labeling, packaging, distribution, storage, advertising, promotion, import, export, recordkeeping, monitoring, and reporting of our product will be subject to extensive and ongoing regulatory requirements.

The manufacturing processes, labeling, packaging, distribution, storage, advertising, promotion, import, export, recordkeeping, monitoring, and reporting of our products is subject to extensive and ongoing regulatory requirements.

These requirements include submissions of safety and other post-marketing information and reports, establishment registration and listing, as well as continued compliance with cGMPs and GCP requirements for any clinical trials that we conduct post-approval.

Any regulatory approvals that we receive for our product candidates may also be subject to limitations on the approved indicated uses for which the product may be marketed or to the conditions of approval, or contain requirements for potentially costly post-marketing studies, including Phase IV clinical trials, and surveillance to monitor the safety and efficacy of the product.

The FDA may require a REMS in order to approve our product candidates, which could entail requirements for a medication guide, physician communication plans or additional elements to ensure safe use, such as restricted distribution methods, patient registries and other risk minimization tools.

Later discovery of previously unknown problems with a product, including adverse events of

unanticipated severity or frequency, or with our third - party manufacturers or manufacturing processes, or failure to comply with regulatory requirements, may result in, among other things:

Later discovery of previously unknown problems with a product, including adverse events of unanticipated severity or frequency, or with our third-party manufacturers or manufacturing processes, or failure to comply with regulatory requirements, may result in, among other things:

● restrictions on the marketing or manufacturing of the product, withdrawal of the product from the market, or voluntary or mandatory product recalls;

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● suspension, limitation, or withdrawal of marketing approvals;

● suspension of any of our ongoing clinical trials;

● product seizure or detention, or refusal to permit the import or export of products;

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Any government investigation of alleged violations of law would be expected to require us to expend significant time and resources in response and could generate adverse publicity.

Any failure to comply with ongoing regulatory requirements may significantly and adversely affect our ability to develop and commercialize our products and our value and operating results would be adversely affected.

In addition, the FDA’s and other comparable foreign regulatory authorities’ policies may change and additional government regulations may be enacted that could prevent, limit or delay regulatory approval of our product candidates.

Any failure to comply with ongoing regulatory requirements may significantly and adversely affect our ability to commercialize our products and our value and operating results would be adversely affected.

If we are slow or unable to adapt to changes in existing requirements or the adoption of new requirements or policies, or if we are not able to maintain regulatory compliance, we may lose any marketing approval that we may have obtained, which would adversely affect our business, prospects and ability to achieve or sustain profitability.

If we obtain FDA approval for any of our current or future product candidates in the United States, and although we have obtained FDA approval for Mydcombi and clobetasol propionate in the United States, we may never obtain approval for or commercialize Mydcombi, clobetasol propionate or any of our current or future product candidates in any other jurisdiction, which would limit our ability to realize their full market potential.

Although we have obtained FDA approval for Mydcombi in the United States, we may never obtain approval for or commercialize Mydcombi or any of our current or future product candidates in any other jurisdiction, which would limit our ability to realize their full market potential.

In order to market any products in any particular jurisdiction, we must establish and comply with numerous and varying regulatory requirements on a country-by-country basis regarding safety and efficacy.

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Other than Mydcombi and clobetasol propionate in the United States, we do not have any product candidates approved for sale in any jurisdiction, including in international markets, and we do not have experience in obtaining regulatory approval in international markets.

If we fail to comply with regulatory requirements in international markets or to obtain and maintain required approvals, or if regulatory approvals in international markets are delayed, our target market will be reduced and our ability to realize the full market potential of any product we develop will be unrealized.

If we fail to comply with regulatory requirements in international markets or to obtain and maintain required

approvals, or if regulatory approvals in international markets are delayed, our target market will be reduced and our ability to realize the full market potential of any product we develop will be unrealized.

Regulatory approval by the FDA or comparable foreign regulatory authorities is limited to those specific indications and conditions for which approval has been granted, and we may be subject to substantial fines, criminal penalties, injunctions, or other enforcement actions if we are determined to be promoting the use of our products for unapproved or “off-label” uses, or in a manner inconsistent with the approved labeling, resulting in damage to our reputation and business.

We must comply with requirements concerning advertising and promotion for Mydcombi, clobetasol propionate and any product candidates for which we obtain marketing approval in the future.

We must comply with requirements concerning advertising and promotion for Mydcombi and clobetasol propionate.

Promotional communications with respect to therapeutics are subject to a variety of legal and regulatory restrictions and continuing review by the FDA or comparable foreign regulatory and governmental authorities, Department of Justice, Office of Inspector General for the U.S.

Department of Health and Human Services, state attorneys general, members of Congress, and the public.

When the FDA or comparable foreign regulatory authorities grant regulatory approval for a product candidate, the regulatory approval is limited to those specific uses and indications for which a product is approved.

If we are not able to obtain FDA or comparable foreign regulatory authority approval for desired uses or indications for our current product candidates and any future product candidates, we may not market or promote them for those indications and uses, referred to as off-label uses, and our business, financial condition, results of operations, stock price and prospects will be materially harmed.

When the FDA or comparable foreign regulatory authorities grant regulatory approval for a product, the regulatory approval is limited to those specific uses and indications for which the product is approved.

If we are not able to obtain FDA or comparable foreign regulatory authority approval for desired uses or indications for our products, we may not market or promote them for those indications and uses, referred to as off-label uses, and our business, financial condition, results of operations, stock price and prospects will be materially harmed.

We also must sufficiently substantiate any claims that we make for our products, including claims comparing our products to other companies’ products, which may require additional nonclinical studies or clinical trials, and must abide by the FDA or a comparable foreign regulatory or governmental authority’s strict requirements regarding the content of promotion and advertising.

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Regulatory authorities do, however, restrict communications by pharmaceutical companies concerning off-label use.

If we are found to have impermissibly promoted Mydcombi, clobetasol propionate or any of our current product candidates and any future product candidates, we may become subject to significant liability and government sanctions or enforcement actions.

If we are found to have impermissibly promoted Mydcombi or clobetasol propionate, we may become subject to significant liability and government sanctions or enforcement actions.

The FDA and other agencies actively enforce the laws and regulations regarding product promotion, particularly those prohibiting the promotion of off-label uses, and a company that is found to have improperly promoted a product may be subject to significant sanctions.

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The FDA has also requested that companies enter into consent decrees or permanent injunctions under which specified promotional conduct is changed or curtailed.

In the United States, engaging in the impermissible promotion of Mydcombi or clobetasol propionate or, for our product candidates, following approval, for off-label uses can also subject us to false claims and other litigation under federal and state statutes.

In the United States, engaging in the impermissible promotion of Mydcombi or clobetasol propionate for off-label uses can also subject us to false claims and other litigation under federal and state statutes.

These include fraud and abuse and consumer protection laws, which can lead to civil and criminal penalties and fines, agreements with governmental authorities that materially restrict the manner in which we promote or distribute therapeutic products and conduct our business.

These restrictions could include corporate integrity agreements, suspension or exclusion from participation in federal and state healthcare programs, and suspension and debarment from government contracts and refusal of orders under existing government contracts.

These False Claims Act lawsuits against manufacturers of drugs and biologics have increased significantly in volume and breadth, leading to several substantial civil and criminal settlements pertaining to certain sales practices and promoting products for off-

In addition, False Claims Act lawsuits may expose manufacturers to follow-on claims by private payors based on fraudulent marketing practices.

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Similarly, industry codes in foreign jurisdictions may prohibit companies from engaging in certain promotional activities and regulatory agencies in various countries may enforce violations of such codes with civil penalties.

If we become subject to regulatory and enforcement actions our business, financial condition, results of operations, stock price and prospects will be materially harmed.

If we become subject

to regulatory and enforcement actions our business, financial condition, results of operations, stock price and prospects will be materially harmed.

Furthermore, the use of our products for indications other than those approved by the FDA or comparable foreign regulatory authorities may not effectively treat such conditions.

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Our relationships with customers, health care providers, physicians, prescribers, purchasers, third-party payors, charitable organizations and patients are subject to applicable anti-kickback, fraud and abuse and other health care laws and regulations, which expose us to potential criminal sanctions, civil penalties, contractual damages, reputational harm and diminished profits and future earnings.

As a result of our commercialization of Mydcombi, we are (and upon commercialization of our product candidates, will continue to be) subject to additional health care statutory and regulatory requirements and oversight by federal and state governments in the United States as well as foreign governments in the jurisdictions in which we conduct our business.

We are subject to certain health care statutory and regulatory requirements and oversight by federal and state governments in the United States as well as foreign governments in the jurisdictions in which we conduct our business.

Health care providers, physicians and third-party payors in the United States and elsewhere play a primary role in the recommendation and prescription of biopharmaceutical products.

Arrangements with third-party payors and customers can expose biopharmaceutical manufacturers to broadly applicable fraud and abuse and other health care laws and regulations, including, without limitation, the federal Anti-Kickback Statute, or the AKS, and the FCA, which may constrain the business or financial arrangements and relationships through which such companies sell, market and distribute biopharmaceutical products.

Arrangements with third-party payors and customers can expose biopharmaceutical manufacturers to broadly applicable fraud and abuse and other health care laws and regulations, including, without limitation, the federal Anti-Kickback Statute and the False Claims Act, which may constrain the business or financial arrangements and relationships through which such companies sell, market and distribute biopharmaceutical products.

In particular, the research of our product candidates, as well as the promotion, sales and marketing of health care items and services, as well as certain business arrangements in the health care industry, are subject to extensive laws designed to prevent fraud, kickbacks, self-dealing and other abusive practices.

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The health care laws that may affect us include:

the federal fraud and abuse laws, including the AKS;

the federal fraud and abuse laws, including the federal Anti-Kickback Statute;

false claims and civil monetary penalties laws, including the False Claims Act and Civil Monetary Penalties Law;

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Any action for violation of these laws, even if successfully defended, could cause a biopharmaceutical manufacturer to incur significant legal expenses and divert management’s attention from the operation of the business.

Therefore, even if we are successful in defending against any such actions that may be brought against us, our business may be impaired.

Therefore, even if we are successful in defending against any such actions that may be brought against us, our business may

Prohibitions or restrictions on sales or withdrawal of future marketed products could materially affect business in an adverse way.

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In the United States, there have been and continue to be a number of legislative initiatives to contain healthcare costs.

For example, in March 2010, the Patient Protection and Affordable Care Act, or the ACA, was passed.

For example, in March 2010, the Patient Protection and Affordable Care Act (the “ACA”), was passed.

The ACA was a sweeping law intended to broaden access to health insurance, reduce or constrain the growth of health care spending, enhance remedies against fraud and abuse, add new transparency requirements for health care and health insurance industries, impose new taxes and fees on the health industry and impose additional health policy reforms.

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Accordingly, there remains a large amount of uncertainty regarding the federal government’s approach to making pharmaceutical treatment costs more affordable for patients.

In August 2022, President Biden signed into the law the Inflation Reduction Act of 2022, or the IRA.

In August 2022, President Biden signed into the law the Inflation Reduction Act of 2022 (the “IRA”).

Among other things, the IRA has multiple provisions that may impact the prices of drug products that are both sold into the Medicare program and throughout the United States.

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At the state level, legislatures have increasingly passed legislation and implemented regulations designed to control pharmaceutical and biological product pricing, including price or patient reimbursement constraints, discounts, restrictions on certain product access and marketing cost disclosure and transparency measures, and, in some cases, designed to encourage importation from other countries and bulk purchasing.

For example, California requires pharmaceutical manufacturers to notify certain purchasers, including health insurers and government health plans at least 60 days before any scheduled increase in the wholesale acquisition cost, or WAC, of their product if the increase exceeds 16%, and further requires pharmaceutical manufacturers to explain whether a change or improvement in the product necessitates such an increase.

Similarly, Vermont requires pharmaceutical manufacturers to disclose price information on certain prescription drugs, and to provide notification to the state if introducing a new drug with a WAC in excess of the Medicare Part D specialty drug threshold.

For example, California requires pharmaceutical manufacturers to notify certain purchasers, including health insurers and government health plans at least 60 days before any scheduled increase in the wholesale acquisition cost (“WAC”), of their product if the increase exceeds 16%, and further requires pharmaceutical manufacturers to explain whether a change or improvement in the product necessitates such an increase.

Similarly, Vermont requires pharmaceutical manufacturers to disclose

price information on certain prescription drugs, and to provide notification to the state if introducing a new drug with a WAC in excess of the Medicare Part D specialty drug threshold.

In December 2020, the U.S.

Supreme Court also held unanimously that federal law does not preempt the states’ ability to regulate pharmaceutical benefit managers, or PBMs, and other members of the healthcare and pharmaceutical supply chain, an important decision that may lead to further and more aggressive efforts by states in this area.

Supreme Court also held unanimously that federal law does not preempt the states’ ability to regulate pharmaceutical benefit managers (“PBMs”), and other members of the healthcare and pharmaceutical supply chain, an important decision that may lead to further and more aggressive efforts by states in this area.

The Federal Trade Commission in mid-2022 also launched sweeping investigations into the practices of the PBM industry that could lead to additional federal and state legislative or regulatory proposals targeting such entities’ operations, pharmacy networks, or financial arrangements.

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If we fail to comply with these laws, we could be subject to civil or criminal penalties, other remedial measures and legal expenses, be precluded from developing manufacturing and selling products outside the United States or be required to develop and implement costly compliance programs, which could adversely affect our business, results of operations and financial condition.

Our operations are subject to anti-corruption laws, including the United States Foreign Corrupt Practices Act, or FCPA, and the United Kingdom Bribery Act 2010, or Bribery Act, which apply wherever we do business around the world.

We may also become subject to local anti-corruption laws in countries where we may do business in the future, such as Canada’s Corruption of Foreign Public Officials Act, the Criminal Law and Anti-unfair Competition Law of the People’s Republic of China, the Hong Kong Prevention of Bribery Ordinance, and the Act on Preventing Bribery of Foreign Public Officials in International Business Transactions, or OECD Anti-Bribery Convention, enacted by the Organisation for Economic Co-operation and Development, and adopted by South Korea along with more than 40 other countries, and which is designed to criminalize bribery of public officials in connection with international

business transactions.

Our operations are subject to anti-corruption laws, including the United States Foreign Corrupt Practices Act (“FCPA”), and the United Kingdom Bribery Act 2010 (“Bribery Act”), which apply wherever we do business around the world.

The Bribery Act, FCPA, the OECD Anti-Bribery Convention, and similar international treaties and various countries’ local anti-corruption laws, referred to as Anti-Corruption Laws, generally prohibit us, our officers, and our employees and intermediaries from bribing, being bribed or making other prohibited payments to government officials or other persons to obtain or retain business or gain some other business advantage.

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In addition, various laws, regulations and executive orders also restrict the use and dissemination outside of the United States, or the sharing with certain non-United States nationals, of information classified for national security purposes, as well as certain products and technical data relating to those products.

If we expand our presence outside of the United States, it will require us to dedicate additional resources to comply with these laws, and these laws may preclude us from developing, manufacturing, or selling certain products and product candidates outside of the United States, which could limit our growth potential and increase our development costs.

If we expand our presence outside

of the United States, it will require us to dedicate additional resources to comply with these laws, and these laws may preclude us from developing, manufacturing, or selling certain products and product candidates outside of the United States, which could limit our growth potential and increase our development costs.

We might not be completely effective in ensuring our compliance with all applicable Anti-Corruption Laws or other legal requirements, including Trade Control laws.

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The SEC also may suspend or bar issuers from trading securities on United States exchanges for violations of the FCPA’s accounting provisions.

Any investigation of any potential violations of Anti-Corruption Laws or Trade Control laws by U.K., U.S.

or other authorities could also have an adverse impact on our reputation, our business, results of operations and financial condition.

Any investigation of any potential violations of Anti-Corruption Laws or Trade Control laws by U.K., United States or other authorities could also have an adverse impact on our reputation, our business, results of operations and financial condition.

Inadequate funding for the FDA, the SEC and other government agencies could hinder their ability to hire and retain key leadership and other personnel, prevent new products and services from being developed or commercialized in a timely manner or otherwise prevent those agencies from performing normal business functions on which the operation of our business may rely, which could negatively impact our business.

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The loss of the services of any of these persons could impede the achievement of our research, development and commercialization objectives.

In addition, we are dependent on our continued ability to attract, retain and motivate highly qualified additional management, clinical, scientific, and sales personnel.

If we are not able to retain our management and to attract, on acceptable terms, additional qualified personnel necessary for the continued development of our business and commercialization of our product candidates, we might not be able to sustain our operations or grow.

We might not be able to attract or retain qualified personnel in the future due to the intense competition for qualified personnel among biotechnology, pharmaceutical and other businesses.

In addition, we are dependent on our continued ability to retain and motivate highly qualified additional personnel.

If we are not able to retain our management and to retain personnel necessary for the commercialization of our products, we might not be able to sustain our operations or grow.

We might not be able to retain qualified personnel in the future due to the intense competition for qualified personnel among biotechnology, pharmaceutical and other businesses.

Many of the other medical technology companies that we compete against for qualified personnel and consultants have greater financial and other resources, different risk profiles and a longer history in the industry than we do.

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Some of these characteristics may be more appealing to high-quality candidates and consultants than what we have to offer.

If we are unable to continue to attract, retain and motivate high-quality personnel and consultants to accomplish our business objectives, the rate and success at which we can discover and develop drug candidates and our business will be limited and we may experience constraints on our development objectives.

Our future performance will also depend, in part, on our ability to successfully integrate newly hired executive officers into our management team and our ability to develop an effective working relationship among senior management.

We have limited corporate infrastructure and may experience difficulties in managing growth.

As of March 15, 2024, we had only 57 full time employees and we rely on third-party contractors for the provision of professional and other services.

As our development and commercialization plans and strategies develop, we expect to need additional managerial, operational, sales, marketing, financial, legal and other resources.

Our management may need to divert a disproportionate amount of its attention away from our day-to-day operations and devote a substantial amount of time to managing these growth activities.

We might not be able to effectively manage the expansion of our operations, which may result in weaknesses in our infrastructure, operational inefficiencies, loss of business opportunities, loss of employees and reduced productivity among remaining employees.

Our expected growth could require significant capital expenditures and may divert financial resources from other projects, such as the development of our current and potential future drug candidates.

If our management is unable to effectively manage our growth, our expenses may increase more than expected, our ability to generate and grow revenue could be reduced and we might not be able to implement our business strategy.

Our future financial performance, our ability to successfully commercialize Mydcombi, clobetasol propionate and our drug candidates, develop a scalable infrastructure and compete effectively will depend, in part, on our ability to effectively manage any future growth.

If we are unable to continue to retain and motivate high-quality personnel and consultants to accomplish our business objectives, our business will be limited.

We have limited corporate infrastructure.

As of March 15, 2025, we had 14 total employees.

Thirteen are full-time employees and one is part-time and we rely on third-party contractors for the provision of professional and other services.

Our management may need to divert a disproportionate amount of its attention away from our day-to-day operations and devote a substantial amount of time to managing the exploration of our strategic alternatives.

We might not be able to effectively manage our day-to-day operations, which may result in weaknesses in our infrastructure, operational inefficiencies, loss of business opportunities, loss of employees and reduced productivity among remaining employees.

Our financial performance, our ability to successfully commercialize Mydcombi and clobetasol propionate, and our ability to find a suitable strategic transaction will depend, in part, on our ability to effectively utilize our corporate infrastructure.

We rely upon information technology and any failure, inadequacy, interruption or security lapse of that technology, including any cyber security incidents, could harm our ability to operate our business effectively.

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The secure processing, storage, maintenance, and transmission of this critical information is vital to our operations and business strategy, and we devote significant resources to protecting such information.

Although we take measures to protect sensitive information from unauthorized access or disclosure, our information technology and infrastructure may be vulnerable to attacks by hackers or viruses, breaches, interruptions due to employee error, malfeasance, faulty password management, lapses in compliance with privacy and

security mandates, or other disruptions.

The risk of a security breach or disruption, particularly through cyber-attack or cyber intrusion, including by computer hackers, foreign governments and cyber terrorists, has generally increased as the number, intensity and sophistication of attempted attacks and intrusions from around the world have increased.

Our IT networks and related systems are essential to the operation of our business and our ability to perform day-to-day operations.

For example, the loss of clinical trial data from completed or ongoing or planned clinical trials could result in delays in our regulatory approval efforts and significantly increase our costs to recover or reproduce the data.

To the extent that any disruption or security breach were to result in a loss of or damage to our data or applications, or inappropriate disclosure of confidential or proprietary information, we could incur liability and further development of our product candidates could be delayed.

Although we make efforts to maintain the security and integrity of these types of IT networks and related systems, and we have implemented various measures to manage the risk of a security breach or disruption, there can be no assurance that our security efforts and measures will be effective or that attempted security breaches or disruptions would not be successful or damaging.

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The successful assertion of one or more large claims against us that exceed available insurance coverage, the occurrence of changes in our insurance policies, including premium increases or the imposition of large deductible or co-insurance requirements, or denials of coverage, could have a material adverse effect on our business, including our financial condition, results of operations and reputation.

Our employees, principal investigators, consultants and commercial partners may engage in misconduct or other improper activities, including non-compliance with regulatory standards and requirements and insider trading.

We are exposed to the risk of fraud or other misconduct by our employees, principal investigators, consultants and commercial partners.

Our employees, consultants and commercial partners may engage in misconduct or other improper activities, including non-compliance with regulatory standards and requirements and insider trading.

We are exposed to the risk of fraud or other misconduct by our employees, consultants and commercial partners.

Misconduct by these parties could include intentional failures to comply with the regulations of the FDA and other comparable foreign regulatory authorities, provide accurate information to the FDA and other comparable foreign regulatory authorities, comply with healthcare fraud and abuse laws and regulations in the United States and in other jurisdictions, report financial information or data accurately or disclose unauthorized activities to us.

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RISKS RELATED TO OUR DEPENDENCE ON THIRD PARTIES

We rely on third parties to conduct, supervise, and monitor our clinical trials and perform some of our research and preclinical studies.

If these third parties do not satisfactorily carry out their contractual duties or fail to meet expected deadlines, our development programs may be delayed or subject to increased costs, each of which may have an adverse effect on our business and prospects.

We do not have the ability to conduct all aspects of our preclinical testing or clinical trials ourselves.

As a result, we are and expect to remain dependent on third parties to conduct our current and future preclinical studies and clinical trials.

CROs that manage our preclinical studies and clinical trials as well as clinical investigators, including in investigator-initiated clinical trials, and consultants play a significant role in the conduct of our preclinical studies and clinical trials and the subsequent collection and analysis of data.

The timing of the initiation and completion of these studies and trials will therefore be partially controlled by such third parties and may result in delays to our development programs.

Nevertheless, we are responsible for ensuring that each of our preclinical studies and clinical trials is conducted in accordance with the applicable protocol, legal requirements, and scientific standards, and our reliance on the CROs and other third parties does not relieve us of our regulatory responsibilities.

We and our CROs are required to comply with GLP and GCP requirements, which are regulations and guidelines enforced by the FDA and comparable foreign regulatory authorities for all of our product candidates in clinical development.

Regulatory authorities enforce these GLP and GCP requirements through periodic inspections of preclinical study sites, trial sponsors, clinical trial investigators and clinical trial sites.

If we or any of our CROs or clinical trial sites, including clinical trial sites in investigator-initiated clinical trials, fail to comply with applicable GLP or GCP requirements, the data generated in our preclinical studies and clinical trials may be deemed unreliable, and the FDA or comparable foreign regulatory authorities may require us to perform additional preclinical or clinical trials before approving our marketing applications.

In addition, our clinical trials must be conducted with product produced under cGMP regulations.

Our failure to comply with these regulations may require us to stop and/or repeat clinical trials, which would delay the marketing approval process.

We also are required to register ongoing clinical trials and post the results of completed clinical trials on a government-sponsored database, clinicaltrials.gov, within specified timeframes.

Failure to do so can result in fines, adverse publicity and civil and criminal sanctions.

There is no guarantee that any such CROs, clinical trial investigators or other third parties on which we rely will devote adequate time and resources to our development activities or perform as contractually required.

If any of these third parties fails to meet expected deadlines, adhere to our clinical protocols or comply with applicable regulatory requirements, otherwise performs in a substandard manner, or terminates its engagement with us, the timelines for our development programs may be extended or delayed or our development activities may be suspended or terminated.

If any of our clinical trial sites terminates for any reason, we may experience the loss of follow-up information on subjects enrolled in such clinical trials unless we are able to transfer those subjects to another qualified clinical trial site, which may be difficult or impossible.

In addition, clinical trial investigators for our clinical trials or investigator-initiated clinical trials may serve as scientific advisors or consultants to us from time to time and may receive cash or equity compensation in connection with such services.

If these relationships and any related compensation result in perceived or actual conflicts

of interest, or the FDA or any comparable foreign regulatory authority concludes that the financial relationship may have affected the interpretation of the trial, the integrity of the data generated at the applicable clinical trial site may be questioned and the utility of the clinical trial itself may be jeopardized, which could result in the delay or rejection of any marketing application we submit by the FDA or any comparable foreign regulatory authority.

Any such delay or rejection could prevent us from commercializing our product candidates.

If any of our relationships with these third parties terminate, we may not be able to enter into arrangements with alternative third parties on commercially reasonable terms, or at all.

Further, under certain circumstances, these third parties may terminate their agreements with us upon prior written notice.

Entering into arrangements with alternative CROs, clinical trial investigators or other third parties involves additional cost and requires management focus and time, in addition to requiring a transition period when a new CRO, clinical trial investigator or other third party begins work.

If third parties do not successfully carry out their contractual duties or obligations or meet expected deadlines, if they need to be replaced or if the quality or accuracy of the clinical data they obtain are compromised due to the failure to adhere to our clinical protocols, regulatory requirements or for other reasons, any clinical trials such third parties are associated with may be extended, delayed or terminated, and we may not be able to obtain marketing approval for or successfully commercialize our product candidates.

As a result, we believe that our financial results and the commercial prospects for our product candidates in the subject indication would be harmed, our costs could increase and our ability to generate revenue could be delayed.

Furthermore, any CROs we contract with or clinical investigators that conduct investigator-initiated studies involving our product candidates may also have relationships with other entities, some of which may be our competitors.

If these third parties do not successfully carry out their contractual duties, meet expected deadlines or conduct the clinical trials in accordance with regulatory requirements or the corresponding protocols, as applicable, we will not be able to obtain, or may be delayed in obtaining, marketing approvals for our product candidates and will not be able to, or may be delayed in our efforts to, successfully commercialize our products.

We may encounter delays in the manufacturing of the second generation Optejet device, including as a result of our reliance on third parties for manufacturing activities, and this may cause delays in the commercialization of our products and our product candidatess.

Any such delays would increase the risk that we will not have sufficient quantities of our product candidates or such quantities at an acceptable cost, which could delay, prevent or impair our development and commercialization efforts.

Any such delays would increase the risk that we will not have sufficient quantities of our products or such quantities at an acceptable cost, which could delay, prevent or impair our commercialization efforts.

We do not currently operate and might not be able to timely implement adequate internal manufacturing facilities for all of the components necessary for commercial production of Mydcombi.

If we are unable to establish adequate manufacturing processes internally or to reach and maintain agreements with third parties to help us with manufacturing, our commercialization activities would be delayed.

Reliance on third-party providers may expose us to more risk than if we were to manufacture our product candidates ourselves.

We do not control the manufacturing processes of the third-party suppliers we contract with and are dependent on those third parties for the production of components of our product candidates in accordance with relevant applicable regulations, such as cGMP, which includes, among other things, quality control, quality assurance and the maintenance of records and documentation.

Reliance on third-party providers may expose us to more risk than if we were to manufacture our products ourselves.

We do not control the manufacturing processes of the third-party suppliers we contract with and are dependent on those third parties for the production of components of our products in accordance with relevant applicable regulations, such as cGMP, which includes, among other things, quality control, quality assurance and the maintenance of records and documentation.

In complying with the manufacturing regulations of the FDA and other comparable foreign regulatory authorities, we and our third-party suppliers must spend significant time, money and effort in the areas of design and development, testing, production, record-keeping and quality control to assure that the products meet applicable specifications and other regulatory requirements.

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We do not currently have any agreements with third-party suppliers for the long-term commercial supply of components for Mydcombi.

We may be unable to conclude agreements for commercial supply with a sufficient number of suppliers or may be unable to do so on acceptable terms.

We may be unable to conclude agreements for commercial supply with a sufficient number of suppliers or may be unable

to do so on acceptable terms.

If we are unable to reach acceptable agreements with a sufficient number of suppliers of materials, our commercialization activities will be delayed and our ability to implement our business plan will be compromised.

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If we were unable to acquire the necessary amount of deliverables to meet market demand, our ability to commercialize could be delayed substantially.

Additionally, we do not currently operate and might not be able to timely implement adequate internal manufacturing facilities for all of the components necessary for clinical or commercial production of our product candidates.

In addition, we rely on, and expect to continue to rely on, a number of third parties for the supply of parts, formulations, active pharmaceutical ingredients, and other materials required for our research and development activities.

If we are unable to establish adequate manufacturing processes internally

or to reach and maintain agreements with third parties to help us, our research and development, manufacturing, and commercialization activities would be delayed.

We rely on third parties to provide the materials required for our research and development activities.

Reliance on third-party providers may expose us to more risk than if we were to manufacture our product candidates ourselves.

If either we or our third-party suppliers fail to comply with these requirements, we may be subject to regulatory enforcement action, including the seizure of products and shutting down of production.

We do not currently have any agreements with third-party suppliers for the long-term commercial supply of components for our product candidates.

We may be unable to conclude agreements for commercial supply with a sufficient number of suppliers or may be unable to do so on acceptable terms.

If we are unable to reach acceptable agreements with a sufficient number of suppliers of materials, our research and development activities will be delayed and our ability to implement our business plan will be compromised.

Our manufacturing process is complicated and expensive and it requires months of advance planning.

We rely on a limited number of manufacturers for our current supply of product candidates and may need to rely on them extensively for adequate supply of our products during commercialization.

If we were unable to acquire the necessary amount of deliverables to complete our clinical trials and ultimately commercialize our products, our progress could be delayed substantially.

Even if we are able to establish and maintain agreements with third-party manufacturers, reliance on third-party manufacturers entails additional risks, including:

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● the possible termination or nonrenewal of the agreement by the third party at a time that is costly or inconvenient for us.

We or our third-party suppliers may encounter shortages in the raw materials or active pharmaceutical ingredients necessary to produce Mydcombi in sufficient quantities for commercialization or to meet an increase in demand, or, for our unapproved clinical products, our clinical trials, as a result of capacity constraints or delays or disruptions in the market for the raw materials or active pharmaceutical ingredients, including shortages caused by the purchase of such raw materials or active pharmaceutical ingredients by our competitors or others.

The failure by us or our third-party suppliers to obtain the raw materials or active pharmaceutical ingredients necessary to manufacture sufficient quantities of Mydcombi and our product candidates may have a material adverse effect on our business.

We or our third-party suppliers may encounter shortages in the raw materials or active pharmaceutical ingredients necessary to produce Mydcombi in sufficient quantities for commercialization as a result of capacity constraints or delays or disruptions in the market for the raw materials or active pharmaceutical ingredients, including shortages caused by the purchase of such raw materials or active pharmaceutical ingredients by our competitors or others.

The failure by us or our third-party suppliers to obtain the raw materials or active pharmaceutical ingredients necessary to manufacture sufficient quantities of Mydcombi may have a material adverse effect on our business.

Our third-party suppliers may be subject to inspection and approval by regulatory authorities.

Our third-party suppliers may not be able to comply with cGMP regulations or similar regulatory requirements outside of the United States.

Our failure, or the failure of our third-party suppliers, to comply with applicable regulations could result in regulatory actions, such as the issuance of FDA Form 483 notices of observations, warning letters or sanctions being imposed on us, including clinical holds, fines, injunctions, civil penalties, delays, suspension or withdrawal of approvals, license revocation, seizures or recalls of Mydcombi and product candidates or drugs, operating restrictions and criminal prosecutions, any of which could significantly and adversely affect supplies of our products.

If any of our third-party suppliers fails to comply with cGMP or other applicable manufacturing regulations, our ability to develop and commercialize Mydcombi and our product candidates could suffer significant interruptions.

Our failure, or the failure of our third-party suppliers, to comply with applicable regulations could result in regulatory actions, such as the issuance of FDA Form 483 notices of observations, warning letters or sanctions being imposed on us, including clinical holds, fines, injunctions, civil penalties, delays, suspension or withdrawal of approvals, license revocation, seizures or recalls of Mydcombi, operating restrictions and criminal prosecutions, any of which could significantly and adversely affect supplies of our products.

If any of our third-party suppliers fails to comply with cGMP or other applicable manufacturing regulations, our ability to develop and commercialize Mydcombi could suffer significant interruptions.

Any disruption, such as a fire, natural hazards or vandalism at our third-party suppliers could significantly interrupt our manufacturing capability.

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If this occurs, we will be unable to satisfy manufacturing needs on a timely basis, if at all.

If changes to third-party suppliers occur, then there also may be changes to manufacturing processes inherent in the setup of new operations for our product candidates and any products that may obtain approval in the future.

Any such changes could require the conduct of bridging studies before we can use any materials produced at new facilities or under new processes in clinical trials or, for any products reaching approval, in our commercial supply.

If changes to third-party suppliers occur, then there also may be changes to manufacturing processes inherent in the setup of new operations for our products.

Any such changes could require the conduct of bridging studies before we can use any materials produced at new facilities in our commercial supply.

Further, business interruption insurance may not adequately compensate us for any losses that may occur and we would have to bear the additional cost of any disruption, such as loss of potential sales of Mydcombi.

For these reasons, a significant disruptive event of any third-party suppliers could have drastic consequences, including placing our financial stability at risk.

Mydcombi, clobetasol propionate and our product candidates and any drugs that we may develop may compete with other product candidates and drugs for access to manufacturing facilities.

Mydcombi and clobetasol propionate may compete with other product candidates and drugs for access to manufacturing facilities.

There are no assurances we would be able to enter into similar commercial arrangements with other manufacturers that operate under cGMP regulations and other applicable regulatory requirements and that might be capable of manufacturing for us.

Any performance failure on the part of our existing or future suppliers could delay clinical development or marketing approval.

If we were to experience an unexpected loss of supply of or if any supplier were unable to meet our clinical or commercial demand for Mydcombi, clobetasol propionate or any of our product candidates, we could experience delays in our planned clinical studies or commercialization.

For example, the COVID-19 pandemic may impact our ability to procure sufficient supplies for the development of our current and future product candidates, and the extent of such impacts will depend on the severity and duration of the spread of the virus and the actions undertaken to contain COVID-19 or treat its effects.

If we were to experience an unexpected loss of supply of or if any supplier were unable to meet our clinical or commercial demand for Mydcombi or clobetasol propionate, we could experience delays in commercialization.

We could be unable to find alternative suppliers of acceptable quality and experience that can produce and supply appropriate volumes at an acceptable cost or on favorable terms.

Moreover, our suppliers are often subject to strict manufacturing requirements and rigorous testing requirements, which could limit or delay production.

The long transition periods necessary to switch manufacturers and suppliers, if necessary, would significantly delay commercialization of Mydcombi, clobetasol propionate and any other product candidates that reach approval, and our clinical trials, which would materially adversely affect our business, financial condition and results of operation.

The long transition periods necessary to switch manufacturers and suppliers, if necessary, would significantly delay commercialization of Mydcombi and clobetasol propionate, which would materially adversely affect our business, financial condition and results of operation.

If we, our service providers or our third-party manufacturers fail to comply with environmental, health and safety laws and regulations, we could become subject to fines or penalties or incur costs that could harm our business.

If we, our service providers, or any third-party manufacturers fail to comply with laws regulating the protection of the environment and health and human safety, we could be subject to enforcement actions and our business prospects could be adversely affected.

Our commercialization and research and development activities, and the research and development activities of our service providers and third-party manufacturers, may involve the use of hazardous materials and chemicals or the maintenance of various flammable and toxic chemicals.

Our commercialization activities may involve the use of hazardous materials and chemicals or the maintenance of various flammable and toxic chemicals.

Failure to adequately handle and dispose of these materials could lead to liabilities for resulting damages, which could be substantial.

We also may be subject to numerous environmental, health and workplace safety laws and regulations, including those governing laboratory procedures, exposure to blood-home pathogens and the handling of bio-hazardous materials.

If we, our service providers, or any third-party manufacturers fail to comply with applicable federal, state or foreign laws or regulations, we could be subject to enforcement actions, which could adversely affect our ability to develop, market and sell our product candidates successfully and could harm our reputation and lead to reduced acceptance of our product candidates.

If we, our service providers, or any third-party manufacturers fail to comply with applicable federal, state or foreign laws or regulations, we could be subject to enforcement actions, which could adversely affect our ability to develop, market and sell our products successfully and could harm our reputation and lead to reduced acceptance of our products.

These enforcement actions may include:

● restrictions on, or prohibitions against, marketing our products or our product candidates;

● restrictions on importation of our products or our product candidates;

● suspension of review or refusal to approve new or pending applications;

● restrictions on, or prohibitions against, marketing our products;

● restrictions on importation of our products;

● suspension or withdrawal of product approvals;

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Our success depends on our ability to protect our intellectual property and proprietary technology.

Our success depends in large part on our ability to obtain and maintain patent, trade secret and other intellectual property protection in the United States and other countries with respect to our proprietary product candidates.

If we do not adequately protect our intellectual property rights, competitors may be able to erode, negate or preempt any competitive advantage we may have, which could harm our business and ability to achieve profitability.

To protect our proprietary position, we file patent applications in the United States and abroad related to our novel product candidates that are important to our business.

The patent application and approval process is expensive and time-consuming and we might not be able to file and prosecute all necessary or desirable patent applications at a reasonable cost or in a timely manner.

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The degree of patent protection we require to successfully compete in the marketplace may be unavailable or severely limited in some cases and might not adequately protect our rights or permit us to gain or keep any competitive advantage.

Although we enter into non-disclosure and confidentiality agreements with parties who have access to confidential or patentable aspects of our research and development output, such as our employees, contractors and other third parties, any of these parties may breach the agreements and disclose such output before a patent application is filed, thereby jeopardizing our ability to seek patent protection.

Although we enter into non-disclosure and confidentiality agreements with parties who have or have had access to confidential or patentable aspects of our research and development output, such as our employees, contractors and other third parties, any of these parties may breach the agreements and disclose such output before a patent application is filed, thereby jeopardizing our ability to seek patent protection.

In addition, publications of discoveries in the scientific literature often lag behind the actual discoveries, and patent applications in the United States and other jurisdictions are typically not published until 18 months after filing, or in some cases not at all.

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In addition, changes in either the patent laws or interpretation of the patent laws in the United States and other countries may diminish the value of our patents or narrow the scope of our patent protection.

In addition, the laws of foreign countries might not protect our rights to the same extent or in the same manner as the laws of the United States.

the laws of foreign countries might not protect our rights to the same extent or in the same manner as the laws of the United States.

For example, patent laws in various jurisdictions, including significant commercial markets such as Europe, restrict the patentability of methods of treatment of the human body more than United States law does.

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Such challenges may result in loss of patent rights, loss of exclusivity, or in patent claims being narrowed, invalidated, or held unenforceable, which could limit our ability to stop others from using or commercializing similar or identical technology and products, or limit the duration of the patent protection of our technology and product candidates.

Such proceedings also may result in substantial cost and require significant time from our scientists and management, even if the eventual outcome is favorable to us.

Such proceedings also may result in substantial cost and require significant time from our management, even if the eventual outcome is favorable to us.

In addition, our competitors and other third parties may be able to circumvent our patents by developing similar or alternative technologies or products in a non-infringing manner.

For example, a third party may develop a competitive therapy that provides benefits similar to our product candidates but that uses a technology that falls outside the scope of our patent protection.

For example, a third party may develop a competitive therapy that provides benefits similar to our products but that uses a technology that falls outside the scope of our patent protection.

Our competitors may also seek approval to market generic versions of any approved products and in connection with seeking such approval may claim that our patents are invalid, unenforceable or not infringed.

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Thus, even if we have valid and enforceable patents, these patents still might not provide protection against competing products or processes sufficient to achieve our business objectives.

If the patent protection provided by the patents and patent applications we hold or pursue with respect to our product candidates is not sufficiently broad to impede such competition, our ability to successfully commercialize our product candidates could be negatively affected, which could have a material adverse effect on our business, financial condition, results of operations, and prospects.

If the patent protection provided by the patents and patent applications we hold or pursue with respect to our product candidates is not sufficiently broad to impede such competition, our ability to successfully commercialize our products could be negatively affected, which could have a material adverse effect on our business, financial condition, results of operations, and prospects.

We cannot be sure that we were the first to make the technologies claimed in our patents or patent applications or that we were the first to file for patent protection.

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● patents that may be issued or in-licensed may be challenged, invalidated, modified, revoked, circumvented, narrowed, found to be unenforceable or otherwise might not provide any competitive advantage;

● our competitors, many of whom have substantially greater resources and many of whom have made significant investments in competing technologies, may seek or may have already obtained patents that will limit, interfere with or eliminate our ability to make, use, and sell our potential product candidates;

● there may be significant pressure on the U.S.

government and international governmental bodies to limit the scope of patent protection both inside and outside the United States for disease treatments that prove successful, as a matter of public policy regarding worldwide health concerns;

● countries other than the United States may have patent laws less favorable to patentees than those upheld by United States courts, allowing foreign competitors a better opportunity to create, develop and market competing product candidates.

Any of the foregoing events could have a material adverse effect on our business, financial condition, results of operations, and prospects.

It is difficult and costly to protect our intellectual property and our proprietary technologies, and we might not be able to ensure their protection.

Our commercial success will depend in part on obtaining and maintaining patent protection and trade secret protection for the composition, use and structure of our products and product candidates, the methods used to manufacture them, the related therapeutic targets and associated methods of treatment as well as on successfully defending these patents against potential third-party challenges.

Our ability to protect our products and product candidates from unauthorized making, using, selling, offering to sell or importing by third parties is dependent on the extent to which we have rights under valid and enforceable patents that cover these activities.

Our commercial success will depend in part on obtaining and maintaining patent protection and trade secret protection for the composition, use and structure of our products, the methods used to manufacture them, the related therapeutic targets and associated methods of treatment as well as on successfully defending these patents against potential third-party challenges.

Our ability to protect our products from unauthorized making, using, selling, offering to sell or importing by third parties is dependent on the extent to which we have rights under valid and enforceable patents that cover these activities.

The ultimate determination by the USPTO or by a court or other trier of fact in the United States, or corresponding foreign national patent offices or courts, on whether a claim meets all requirements of patentability cannot be assured.

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We cannot provide assurances that any of our patent applications will be found to be patentable, including over our own prior art patents, or will issue as patents.

Neither can we make assurances as to the scope of any claims that may issue from our pending and

future patent applications nor to the outcome of any proceedings by any potential third parties that could challenge the patentability, validity or enforceability of our patents and patent applications in the United States or foreign jurisdictions.

Any such challenge, if successful, could limit patent protection for our products and product candidates and/or materially harm our business.

Neither can we make assurances as to the scope of any claims that may issue from our pending and future patent applications nor to the outcome of any proceedings by any potential third parties that could challenge the patentability, validity or enforceability of our patents and patent applications in the United States or foreign jurisdictions.

Any such challenge, if successful, could limit patent protection for our products and/or materially harm our business.

The degree of future protection for our proprietary rights is uncertain because legal means afford only limited protection and might not adequately protect our rights or permit us to gain or keep our competitive advantage.

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● if issued, the patents under which we hold rights might not be valid or enforceable.

In addition, to the extent that we are unable to obtain and maintain patent protection for one of our products or product candidates or in the event that such patent protection expires, it may no longer be cost-effective to extend our portfolio by pursuing additional development of a product or product candidate for follow-on indications.

Any of the foregoing could have a material adverse effect on our business, financial condition, results of operations, and prospects.

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Patent terms may be inadequate to protect our competitive position on our products for an adequate amount of time and if we do not obtain protection under the Hatch-Waxman Amendments and similar non-U.S.

legislation for extending the term of patents covering each of our product candidates, our business may be materially harmed.

legislation for extending the term of patents covering our products, our business may be materially harmed.

Patents have a limited lifespan.

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Various extensions may be available, however, the life of a patent, and the protection it affords, is limited.

Given the amount of time required for the development, testing and regulatory review of new product candidates, patents protecting such candidates might expire

before or shortly after such candidates are commercialized.

As a result, our patent portfolio might not provide us with adequate and continuing patent protection sufficient to exclude others from commercializing products similar to our product candidates.

Depending upon the timing, duration and conditions of FDA marketing approval of our product candidates, one or more of our U.S.

patents may be eligible for limited patent term extension under the Drug Price Competition and Patent Term Restoration Act of 1984, referred to as the Hatch-Waxman Amendments, and similar legislation in the European Union.

The Hatch-Waxman Amendments permit a patent term extension of up to five years for a patent covering an approved product as compensation for effective patent term lost during product development and the FDA regulatory review process.

A patent term extension cannot extend the remaining term of a patent beyond a total of 14 years from the date of product approval, only one patent may be extended and only those claims covering the approved drug, a method for using it, or a method for manufacturing it may be extended.

However, we might not receive an extension if we fail to apply within applicable deadlines, fail to apply prior to expiration of relevant patents or otherwise fail to satisfy applicable requirements.

Moreover, the length of the extension could be less than we request.

If we are unable to obtain patent term extension or the term of any such extension is less than we request, the period during which we can enforce our patent rights for that product will be shortened and our competitors may obtain approval to market competing products sooner.

As a result, our revenue from applicable products could be reduced and could have a material adverse effect on our business, financial condition, results of operations, and prospects.

As a result, our patent portfolio might not provide us with adequate and continuing patent protection sufficient to exclude others from commercializing products similar to our products.

Changes to the patent law in the United States or other jurisdictions could diminish the value of patents in general, thereby impairing our ability to protect our products.

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courts, the USPTO and the relevant law-making bodies in other countries, the laws and regulations governing patents could change in unpredictable ways that would weaken our ability to obtain new patents or to enforce our existing patents and patents that we might obtain in the future.

Any changes to patent law in the United States or other jurisdictions that impairs our ability to protect our product candidates could have a material adverse effect on our business, financial condition, results of operations, and prospects.

Any changes to patent law in the United States or other jurisdictions that impairs our ability to protect our products could have a material adverse effect on our business, financial condition, results of operations, and prospects.

We might not be able to enforce our intellectual property rights throughout the world.

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We might not prevail in any lawsuits that we initiate and the damages or other remedies awarded, if any, might not be commercially meaningful.

Furthermore, while we intend to protect our intellectual property rights in major markets for our products, we cannot ensure that we will be able to initiate or maintain similar efforts in all jurisdictions in which we may wish to market our products.

Accordingly, our efforts to protect our intellectual property rights in such countries may be inadequate.

Any of the foregoing could have a material adverse effect on our business, financial condition, results of operations, and prospects.

If we are sued for infringing, misappropriating, or otherwise violating intellectual property rights of third parties, such litigation could be costly and time consuming and could prevent or delay us from developing or commercializing our product candidates.

Our commercial success depends, in part, on our ability to develop, manufacture, market and sell our product candidates without infringing, misappropriating, or otherwise violating the intellectual property and other proprietary rights of third parties.

Our commercial success depends, in part, on our ability to develop, manufacture, market and sell our products without infringing, misappropriating, or otherwise violating the intellectual property and other proprietary rights of third parties.

Third parties may have U.S.

issued patents and pending patent applications relating to compounds, methods of manufacturing compounds and/or methods of use for the treatment of the disease indications for which we are developing our product candidates that may cover our product candidates or approach to complement inhibition.

If any third-party patents or patent applications are found to cover our product candidates or their methods of use or manufacture, or our approach to complement inhibition, we might not be free to manufacture or market our product candidates as planned without obtaining a license, which might not be available on commercially reasonable terms, or at all.

There is a substantial amount of intellectual property litigation in the biotechnology and pharmaceutical industries, and we may become party to, or threatened with, litigation or other adversarial proceedings regarding intellectual property rights with respect to our product candidates, including interference and post-grant proceedings before the USPTO.

There may be third-party patents or patent applications with claims to materials, formulations, methods of manufacture or methods for treatment related to the composition, use or manufacture of our product candidates.

We cannot guarantee that any of our patent searches or analyses including, but not limited to, the identification of relevant patents, the scope of patent claims or the expiration of relevant patents are complete or thorough, nor can we be certain that we have identified each and every patent and pending application in the United States and abroad that is relevant to or necessary for the commercialization of our product candidates in any jurisdiction.

Because patent applications can take many years to issue, there may be currently pending patent applications which may later result in issued patents that our product candidates may be accused of infringing.

issued patents and pending patent applications relating to compounds, methods of manufacturing compounds and/or methods of use for the treatment of the disease indications that may cover our products.

If any third-party patents or patent applications are found to cover our products or their methods of use or manufacture, or our approach to complement inhibition, we might not be free to manufacture or market our products as planned without obtaining a license, which might not be available on commercially reasonable terms, or at all.

There is a substantial amount of intellectual property litigation in the biotechnology and pharmaceutical industries, and we may become party to, or threatened with, litigation or other adversarial proceedings regarding intellectual property rights with respect to our products, including interference and post-grant proceedings before the USPTO.

Because patent applications can take many years to issue, there may be currently pending patent applications which may later result in issued patents that our products may be accused of infringing.

In addition, third parties may obtain patents in the future and claim that use of our technologies infringes upon these patents.

Accordingly, third parties may assert infringement claims against us based on intellectual property rights that exist now

or arise in the future.

Accordingly, third parties may assert infringement claims against us based on intellectual property rights that exist now or arise in the future.

The outcome of intellectual property litigation is subject to uncertainties that cannot be adequately quantified in advance.

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The scope of protection afforded by a patent is subject to interpretation by the courts, and the interpretation is not always uniform.

If we are sued for patent infringement, we would need to demonstrate that our product candidates, products or methods either do not infringe the patent claims of the relevant patent or that the patent claims are invalid or unenforceable, and we might not be able to do this.

If we are sued for patent infringement, we would need to demonstrate that our products or methods either do not infringe the patent claims of the relevant patent or that the patent claims are invalid or unenforceable, and we might not be able to do this.

Proving invalidity is difficult.

For example, in the United States, proving invalidity requires a showing of clear and convincing evidence to overcome the presumption of validity enjoyed by issued patents.

Even if we are successful in these proceedings, we may incur substantial costs and the time and attention of our management and scientific personnel could be diverted in pursuing these proceedings, which could significantly harm our business and operating results.

Even if we are successful in these proceedings, we may incur substantial costs and the time and attention of our management could be diverted in pursuing these proceedings, which could significantly harm our business and operating results.

In addition, we might not have sufficient resources to bring these actions to a successful conclusion.

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This is especially true in intellectual property cases that may turn on the testimony of experts as to technical facts upon which experts may reasonably disagree.

If we are found to infringe, misappropriate, or otherwise violate a third party’s intellectual property rights, we could be forced, including by court order, to cease developing, manufacturing or commercializing the infringing product candidate or product.

Alternatively, we may be required to obtain a license from such third party in order to use the infringing technology and continue developing, manufacturing or marketing the infringing product candidate or product.

If we are found to infringe, misappropriate, or otherwise violate a third party’s intellectual property rights, we could be forced, including by court order, to cease manufacturing or commercializing the infringing product.

Alternatively, we may be required to obtain a license from such third party in order to use the infringing technology and continue manufacturing or marketing the infringing product.

However, we might not be able to obtain any required license on commercially reasonable terms or at all.

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In addition, we could be found liable for monetary damages, including treble damages and attorneys’ fees if we are found to have willfully infringed a patent.

A finding of infringement could prevent us from commercializing our product candidates or force us to cease some of our business operations, which could harm our business.

A finding of infringement could prevent us from commercializing our products or force us to cease some of our business operations, which could harm our business.

Claims that we have misappropriated the confidential information or trade secrets of third parties could have a similar negative impact on our business.

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Many of our current and former employees and our licensors’ current and former employees, including our senior management, were previously employed at universities or at other biotechnology or pharmaceutical companies, including some which may be competitors or potential competitors.

Although we try to ensure that our employees do not use the proprietary information or know-how of others in their work for us, we may be subject to claims that we or these employees have used or disclosed intellectual property, including trade secrets or other proprietary information, of any such third party.

including trade secrets or other proprietary information, of any such third party.

Litigation may be necessary to defend against such claims.

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If we fail in prosecuting or defending any such claims, in addition to paying monetary damages, we may lose valuable intellectual property rights.

Even if we are successful in prosecuting or defending against such claims, litigation could result in substantial costs and be a distraction to our senior management and scientific personnel.

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

Any of the foregoing could have a material adverse effect on our business, financial condition, results of operations, and prospects.

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If we fail to comply with our obligations under our existing and any future intellectual property licenses with third parties, we could lose license rights that are important to our business.

We may be reliant upon licenses to certain patent rights and proprietary technology form third parties that are important or necessary to the development of our product candidates.

These and other licenses might not provide exclusive rights to use such intellectual property and technology in all relevant fields of use and in all territories in which we may wish to develop or commercialize our technology and products in the future.

We may be reliant upon licenses to certain patent rights and proprietary technology form third parties that are important or necessary to the commercialization of our product candidates.

These and other licenses might not provide exclusive rights to use such intellectual property and technology in all relevant fields of use and in all territories in which we may wish to commercialize our technology and products in the future.

As a result, we might not be able to prevent competitors from developing and commercializing competitive products in territories included in all of our licenses.

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Further, the agreements under which we currently license intellectual property or technology to or 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 obligations under the relevant agreement, either of which could have a material adverse effect on our business, financial conditions, results of operations, and prospects.

Moreover, if disputes over intellectual property that we license prevent or impair our ability to maintain our licensing arrangements on commercially acceptable terms, we may be unable to successfully develop and commercialize the affected product candidates, which could have a material adverse effect on our business, financial conditions, results of operations, and prospects.

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 obligations under the relevant agreement, either of which could have a material adverse effect on our business, financial conditions, results of operations, and prospects.

Moreover, if disputes over intellectual property that we license prevent or impair our ability to maintain our licensing arrangements on commercially acceptable terms, we may be unable to successfully commercialize the affected products, which could have a material adverse effect on our business, financial conditions, results of operations, and prospects.

Disputes may arise regarding intellectual property subject to a licensing agreement, including:

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● the extent to which our technology and processes infringe on intellectual property of the licensor that is not subject to the licensing agreement;

● the sublicensing of patent and other rights under current and any future collaborative development relationships;

● the sublicensing of patent and other rights under current and any future collaborative relationships;

● our diligence obligations under any license agreement and what activities satisfy such obligations;

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● the priority of invention of patented technology.

In spite of our efforts, our license counterparties might conclude that we have materially breached our license agreements and might therefore terminate the license agreements, which may remove our ability to develop and commercialize the product candidates and technology covered by these license agreements.

In spite of our efforts, our license counterparties might conclude that we have materially breached our license agreements and might therefore terminate the license agreements, which may remove our ability to and commercialize the products and technology covered by these license agreements.

If any in-licenses are terminated, competitors would have the freedom to seek regulatory approval of, and to market, products identical to ours.

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In that event, we may be required to expend significant time and resources to redesign our product candidates, technology, or the methods for manufacturing them or to develop or license replacement technology, all of which might not be feasible on a technical or commercial basis.

If we are unable to do so, we may be unable to develop or commercialize the affected product candidates, which could harm our business, financial condition, results of operations, and prospects significantly.

If we are unable to do so, we may be unable to commercialize the affected products, which could harm our business, financial condition, results of operations, and prospects significantly.

Any of these events could have a material adverse effect on our competitive position, business, financial conditions, results of operations, and prospects.

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Additionally, if the steps taken to maintain our trade secrets are deemed inadequate, we may have insufficient recourse against third parties for misappropriating the trade secret.

Further, if any of our trade secrets were to be lawfully obtained or independently developed by a competitor, we would have no right to prevent such third party, or those to whom they communicate such technology or information, from using that technology or information to compete with us.

Further, if any of our trade secrets were to be

lawfully obtained or independently developed by a competitor, we would have no right to prevent such third party, or those to whom they communicate such technology or information, from using that technology or information to compete with us.

If any of our trade secrets were to be disclosed to or independently developed by a competitor, it could have a material adverse effect on our business, financial condition, results of operations, and prospects.

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We rely on both registration and common law protection for our trademarks.

be able to protect our rights to these trademarks and trade names or may be forced to stop using these names, which we need for name recognition by potential partners or customers in our markets of interest.

We might not be able to protect our rights to these trademarks and trade names or may be forced to stop using these names, which we need for name recognition by potential partners or customers in our markets of interest.

During trademark registration proceedings, we may receive rejections.

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These sales, or the perception in the market that holders of a large number of shares intend to sell shares, could reduce the market price of our common stock.

As of March 15, 2024, we had 47,386,349 shares of common stock outstanding, 10,926,554 shares of common stock issuable upon exercise of warrants, 6,154,595 shares of our common stock issuable upon exercise of options, 2,327,747 of shares issuable upon the conversion of convertible debt, 241,764 shares of common stock issuable upon the vesting and/or delivery of restricted stock units and $3.0 million in shares of common stock issuable to Bausch Health Companies Inc.

upon achievement of certain regulatory milestones.

As of March 31, 2025, we had 300,000,000 shares of common stock authorized and 2,830,546 shares of common stock outstanding, 1,363,135 shares of common stock issuable upon exercise of warrants, 56,318 shares of our common stock issuable upon exercise of options, 5,952,380 of shares issuable upon the conversion of convertible debt and 247,623 shares of common stock issuable upon the vesting and/or delivery of restricted stock units.

The price of our common stock has been, and may continue to be, volatile and may fluctuate substantially, which could result in substantial losses for purchasers of our common stock.

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As a result of this volatility, you might not be able to sell your common stock at or above the price at which you purchase it.

From our IPO in January 2018 through March 15, 2024, the per share trading price of our common stock has been as high as $10.74 and as low as $1.05.

From January 1, 2020 through March 15, 2025 the per share trading price of our common stock has been as high as $617.60 and as low as $1.43.

The per share trading price of our common stock might continue to fluctuate significantly in response to various factors, some of which are beyond our control.

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● our ability to successfully manufacture and commercialize Mydcombi and clobetasol propionate;

● our ability to successfully conduct clinical trials, submit NDAs and gain marketing approval for our product candidates;

● results of clinical trials of our product candidates or those of our competitors;

● the success of competitive products or technologies;

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● the recruitment or departure of key personnel;

● the level of expenses related to any of our product candidates or clinical development programs;

● the results of our efforts to discover, develop, acquire or in-license additional product candidates;

● actual or anticipated changes in estimates as to financial results, development timelines or recommendations by securities analysts;

● our inability to obtain or delays in obtaining adequate product supply for any approved product or inability to do so at acceptable prices;

● disputes or other developments relating to proprietary rights, including patents, litigation matters and our ability to obtain patent protection for our technologies;

● significant lawsuits, including patent or stockholder litigation;

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● market conditions in the pharmaceutical and biotechnology sectors;

● amount of our debt servicing;

● the progress and outcome of our search for strategic alternatives;

● the other factors described in this “Risk Factors” section.

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Pending their use, we may invest our cash, including the net proceeds from our financings, in a manner that does not produce income or that loses value.

Our business is subject to changing regulations regarding corporate governance, disclosure controls, internal control over financial reporting, and other compliance areas that will increase both our costs and the risk of noncompliance.

As a public company, we are subject to the reporting requirements of the Exchange Act, the Sarbanes-Oxley Act of 2002, or the Sarbanes-Oxley Act, the Dodd-Frank Act, and the rules and regulations of our stock exchange.

The requirements of these rules and regulations will increase our legal, accounting, and financial compliance costs, will make some activities more difficult, time-consuming, and costly, and may also place undue strain on our personnel, systems, and resources.

The Sarbanes-Oxley Act requires, among other things, that we maintain effective disclosure controls and procedures and internal control over financial reporting.

Commencing with our fiscal year ending December 31, 2018, we performed system and process evaluation and testing of our internal control over financial reporting so that management could report on the effectiveness of our internal control over financial reporting, as required by Section 404 of the Sarbanes-Oxley Act.

Our compliance with Section 404 of the Sarbanes-Oxley Act requires that we incur substantial accounting expense and expend significant management efforts.

Prior to our IPO, we had never been required to test our internal controls within a specified period.

We are required to disclose changes made to our internal control and procedures on a quarterly basis.

However, our independent registered public accounting firm will not be required to formally attest to the effectiveness of our internal control over financial reporting pursuant to Section 404 of the Sarbanes-Oxley Act until we are no longer a “smaller reporting company” as defined in the rules of the SEC.

If we are not able to comply with the requirements of Section 404 of the Sarbanes-Oxley Act in a timely manner, the market price of our stock could decline and we could be subject to sanctions or investigations by the stock exchange on which our common stock is listed, the SEC, or other regulatory authorities, which would require additional financial and management resources.

We may be adversely affected by the effects of inflation.

Inflation has the potential to adversely affect our liquidity, business, financial condition and results of operations by increasing our overall cost structure.

The existence of inflation in the economy has resulted in, and may continue to result in, higher interest rates

and capital costs, shipping costs, supply shortages, increased costs of labor, weakening exchange rates and other similar effects.

The existence of inflation in the economy has resulted in, and may continue to result in, higher interest rates and capital costs, shipping costs, supply shortages, increased costs of labor, weakening exchange rates and other similar effects.

Recently, inflation has increased throughout the U.S.

Inflation can adversely affect us by increasing the costs of clinical trials and research, the development of our product candidates, administration and other costs of doing business.

We may experience increases in the prices of labor and other costs of doing business.

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If this happens, we may need to raise additional capital to fund our operations, which may not be available in sufficient amounts or on reasonable terms, if at all, sooner than expected.

As a public company, we need to have effective internal controls and disclosure controls, which is costly and time consuming.

Failure to develop and maintain adequate financial controls could cause us to have material weaknesses, which could adversely affect our operations and financial position.

We are required to disclose changes made to our internal control and procedures on a quarterly basis.

An internal control system, no matter how well-designed, cannot provide absolute assurance that misstatements due to error or fraud will not occur or that all control issues and instances of fraud will be detected.

If we are not able to comply with the requirements of Section 404 of the Sarbanes-Oxley Act in a timely manner, or if we are unable to maintain proper and effective internal controls, we might not be able to produce timely and accurate financial statements.

If that were to happen, the market price of our stock could decline and we could be subject to sanctions or investigations by the stock exchange on which our common stock is listed, the SEC, or other regulatory authorities.

If that were to happen, the market price of our stock could decline

and we could be subject to sanctions or investigations by the stock exchange on which our common stock is listed, the SEC, or other regulatory authorities.

Any failure to develop or maintain effective controls, or any difficulties encountered in their implementation or improvement, could harm our operating results or cause us to fail to meet our reporting obligations.

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These provisions also could limit the price that investors might be willing to pay in the future for shares of our common stock, thereby depressing the market price of our common stock.

our current management by making it more difficult for stockholders to replace members of our Board.

In addition, because our Board of Directors is responsible for appointing the members of our management team, these provisions may frustrate or prevent any attempts by our stockholders to replace or remove our current management by making it more difficult for stockholders to replace members of our Board.

Among other things, these provisions:

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If one or more of these analysts cease to cover our stock, we could lose visibility in the market for our stock, which in turn could cause our stock price to decline.

The accuracy of our financial reporting depends on the effectiveness of our internal control over financial reporting.

We have identified material weaknesses in our internal control over financial reporting, which may raise questions regarding the accuracy and reliability of our financial statements and our ability to report accurately in the future.

A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of our annual or interim consolidated financial statements will not be prevented or detected on a timely basis.

During the process of preparing the financial statements as of and for the year ended December 31, 2024, we determined that we had material weaknesses related to the incorrect valuation of the Company’s accounting for shares of common stock that were issued for licensing agreements and debt modification and the impairment of a right-of-use asset.

Due to the existence of these material weaknesses, our management has concluded that as of December 31, 2024, our internal control over financial reporting was not effective.

We are taking steps to remediate these material weaknesses.

However, we cannot provide any assurance that the measures we have taken to date and that we intend to implement will be sufficient to remediate the material weaknesses that we have identified, or to avoid additional material weaknesses from occurring in the future.

These material weaknesses, or those that may occur in the future, could have an adverse effect on our ability to meet our reporting obligations, which could cause our investors to lose confidence in our publicly reported information, cause the market price of our stock to decline, harm our reputation, business and financial results, and expose us to litigation or investigations by the SEC or other regulatory authorities.

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