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Item 1A. Risk Factors

2022-08-08 compared with 2022-05-09 · 77 added, 68 removed, 60 unchanged (71% of the section changed)

1 unchanged sentence

Risk Factors”

in the Company’s Annual Report filed on Form 10-K for the year ended December 31, 2021, filed with the SEC on March 9, 2022, and

the risk factors discussed in Item 1A of this Form 10-Q, which could materially affect our business, financial condition or future results.

The risks described in the aforementioned report are not the only risks facing the Company.

Additional risks and uncertainties not currently

known to the Company or that it currently deems to be not material also may materially adversely affect the Company’s business,

financial condition and or operating results.

in the Company’s Annual Report filed on Form 10-K for the year ended December 31, 2021 filed with the SEC on March 9, 2022, risk

factors discussed in Item 1A of the Form 10-Q for the quarter ended March 31, 2022 filed with the SEC on May 9, 2022 and the risk factors

discussed in Item 1A of this Form 10-Q, which could materially affect our business, financial condition or future results.

described in the aforementioned report are not the only risks facing the Company.

Additional risks and uncertainties not currently known

to the Company or that it currently deems to be not material also may materially adversely affect the Company’s business, financial

condition and or operating results.

following are the risk factors that have materially changed from our risk factors included in our Form 10-K for the year ended December

31, 2021, filed with the SEC on March 9, 2022:

31, 2021 filed with the SEC on March 9, 2022 and from our risk factors included in our Form 10-Q for the quarter ended March 31, 2022

filed with the SEC on May 9, 2022:

Relating to Our Business and Industry

will need to grow our Company, and we may encounter difficulties in managing this growth, which could disrupt our operations.

of March 31, 2022, we had 13 employees.

of June 30, 2022, we had 15 employees.

To manage our anticipated future growth, we must continue to implement and improve our managerial,

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value of our warrants outstanding from the November 2019 Offering is subject to potentially material increases and decreases based on

fluctuations in the price of our common stock.

fluctuations in the price of our common stock, among other factors.

November 2019, we completed a public offering of common stock and warrants to purchase common stock (the “November 2019 Offering”).

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income (expense) in the Company’s statements of operations for each reporting period.

On March 31, 2022, the aggregate fair value

of the warrant liability included in the Company’s consolidated balance sheet was $1.2 million.

We use the Black-Scholes option

pricing model to determine the fair value of the warrants.

As a result, the option-pricing model requires the input of several assumptions,

including the stock price volatility, share price and risk-free interest rate.

Changes in these assumptions can materially affect the

fair value estimate.

While the liability may only result from a change of control at that point in time, we ultimately may incur amounts

significantly different than the carrying value.

As of June 30, 2022, the aggregate fair value

of the warrant liability included in the Company’s consolidated balance sheet was $590,000.

We use the Black-Scholes option pricing

model to determine the fair value of the warrants.

As a result, the option-pricing model requires the input of several assumptions, including

the stock price volatility, share price and risk-free interest rate.

Changes in these assumptions can materially affect the fair value

While the liability may only result from a change of control at that point in time, we ultimately may incur amounts significantly

different than the carrying value.

management and directors will be able to exert influence over our affairs.

of March 31, 2022, our executive officers and directors beneficially owned approximately 4.7% of our common stock.

of June 30, 2022, our executive officers and directors beneficially owned approximately 4.9% of our common stock.

These stockholders,

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market price and trading volume of our common stock has been volatile over the past year and it may continue to be volatile.

past year, our common stock has traded as low as $0.89 and as high as $1.85 per share.

We cannot predict the price at which our common

stock will trade in the future and it may decline.

The price at which our common stock trades may fluctuate significantly and may be

influenced by many factors, including our financial results;

the past year, our common stock has traded as low as $0.73 and as high as $1.85 per share.

We cannot predict the price at which our

common stock will trade in the future and it may decline.

The price at which our common stock trades may fluctuate significantly and

may be influenced by many factors, including our financial results;

developments generally affecting our industry;

general economic, industry

and market conditions;

general economic,

industry and market conditions;

the depth and liquidity of the market for our common stock;

investor perceptions of our business;

reports by industry

announcements by other market participants, including, among others, investors, our competitors, and our customers;

action affecting our business;

and the impact of other “Risk Factors” discussed in our Annual Report.

In addition, changes

in the trading price of our common stock may be inconsistent with our operating results and outlook.

The volatility of the market price

of our common stock may adversely affect investors’ ability to purchase or sell shares of our common stock.

reports by industry analysts;

announcements by other market participants, including, among others, investors, our competitors, and

our customers;

regulatory action affecting our business;

and the impact of other “Risk Factors” discussed herein and in

our Annual Report.

In addition, changes in the trading price of our common stock may be inconsistent with our operating results and

The volatility of the market price of our common stock may adversely affect investors’ ability to purchase or sell

shares of our common stock.

may delist our securities from its exchange, which could harm our business and limit our stockholders ’ liquidity.

common stock is currently listed on the Nasdaq Capital Market (“Nasdaq”), which has qualitative and quantitative listing

However, we cannot assure you that our common stock will continue to be listed on Nasdaq in the future.

In order to continue

listing our common stock on Nasdaq, we must maintain certain financial, distribution and stock price levels.

Generally, we must maintain

a minimum amount in stockholders’ equity, a minimum number of holders of our common stock and a minimum bid price.

June 7, 2022, we received a letter from Nasdaq’s Listing Qualifications Department notifying us that we were not in compliance

with Nasdaq Listing Rule 5550(a)(2), as the minimum bid price for our listed securities was less than $1 for the previous 30 consecutive

business days.

We have a period of 180 calendar days, or until December 5, 2022, to regain compliance with the rule referred to in this

To regain compliance, the bid price of our common stock must close at $1 or more for a minimum of ten consecutive business

The notice has no present impact on the listing of our securities on Nasdaq.

the event that we do not regain compliance with the Nasdaq Listing Rules prior to the expiration of the compliance period, we will receive

written notification that our securities are subject to delisting.

At that time, we may appeal the delisting determination to a hearings

panel pursuant to the procedures set forth in the applicable Nasdaq Listing Rules.

We intend to actively monitor our bid price and will

consider available options to resolve the deficiency and regain compliance with the Nasdaq Listing Rules, including considering whether

to conduct a reverse stock split.

Nasdaq delists our common stock from trading on its exchange and we are not able to list our securities on another national securities

exchange, we expect our securities could be quoted on an over-the-counter market.

If this were to occur, we could face significant material

adverse consequences, including:

limited availability of market quotations for our securities;

liquidity for our securities;

determination that our common stock is a “penny stock” which 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 securities;

limited amount of news and analyst coverage;

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

National Securities Markets Improvement Act of 1996, which is a federal statute, prevents or preempts the states from regulating the

sale of certain securities, which are referred to as “covered securities.” If our common stock continues to be listed on

NASDAQ, our common stock will be a covered security.

Although the states are preempted from regulating the sale of our securities, the

federal statute does allow the states to investigate companies if there is a suspicion of fraud, and, if there is a finding of fraudulent

activity, then the states can regulate or bar the sale of covered securities in a particular case.

Relating to Our Financial Position and Capital Requirements

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We have incurred losses in most years since our inception.

As of March 31, 2022, we had an accumulated deficit of $176.2

As of June 30, 2022, we had an accumulated deficit of $178.8

Substantially all of our operating losses resulted from costs incurred in connection with our research and development programs

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We expect our research and development

expenses to significantly increase in connection with clinical trials associated with LPCN 1148, LPCN 1111, LPCN 1144, LPCN 1107, and

expenses to significantly increase in connection with clinical trials associated with LPCN 1148, LPCM 1111, LPCM 1144, LPCN 1107 and

NAS, if initiated.

As a result, we expect to continue to incur significant operating losses for the foreseeable future as we evaluate

further clinical development of LPCN 1148, LPCN 1111, LPCN 1144, LPCN 1107, NAS and our other programs and continued research efforts.

Because of the numerous risks and uncertainties associated with developing pharmaceutical products, we are unable to predict the extent

of any future losses or when we will become profitable, if at all.

have limited shares available for issuance to raise capital to fund our operations and grant stock-based incentive awards to employees,

directors, and consultants.

If we are unable to increase the number of shares of common stock available for issuance, our business will

be adversely affected.

we have 100,000,000 authorized shares of common stock.

As of March 31, 2022, we had 88,498,924 shares of common stock outstanding.

taking into account the 6,164,105 shares reserved for issuance upon the exercise of outstanding options and shares reserved for exercise

of outstanding warrants as of March 31, 2022, we have a limited number of shares available for issuance.

We expect, from time to time,

to raise capital to fund the development of our pipeline and advance product candidates to stages that allow for approval and commercialization,

including out licensing.

Without sufficient shares available for issuance, our ability to raise capital through sales of equity is limited.

If we are not able to increase the number of shares of common stock available for issuance, we will have limited shares available for

issuance to raise capital to fund our operations, make grants of stock-based incentive awards, or take such other actions requiring available

capital stock needed to operate our business.

While we are seeking shareholder approval of an amendment to our Amended and Restated Certificate

of Incorporation of the Company to increase the number of authorized shares of common stock, there is no guarantee that we will obtain

such approval.

An increase in the number of authorized shares is key to execute our long-term strategy as we expect, from time to time,

to raise capital to fund the advancement of our product candidates to stages that allow for out licensing, allow us to remain independent

and maintain business flexibility, and create value for our shareholders If we are unable to obtain shareholder approval of the proposed

amendment, our ability to raise capital will be adversely affected.

Further delays in securing, or the failure to secure, shareholder

approval of an increase in authorized shares will prevent us from executing a capital raising transaction, which may have a material

adverse effect on our liquidity and ability to operate our business.

If we are unable to effectively raise capital, including the sale

of capital stock or other equity securities, our business and financial condition will be adversely affected.

Because of the numerous risks and uncertainties associated with developing pharmaceutical products, we are unable

to predict the extent of any future losses or when we will become profitable, if at all.

SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

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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-Q

Item 1A. Risk Factors