What changed in this filing

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Item 1A. Risk Factors

2023-03-14 compared with 2022-03-25 · 346 added, 289 removed, 903 unchanged (41% of the section changed)

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We have incurred significant losses in each year of operation since our inception in 2016.

For the year ended December 31, 2021 we had net losses of $50.6 million and, as of December 31, 2021, had an accumulated deficit of $116.3 million and we expect to continue to incur significant expenses and net operating losses ("NOLs") for the foreseeable future.

For the years ended December 31, 2022 and 2021, we had net losses of $35.4 million and $50.6 million, respectively, and, as of December 31, 2022, we had an accumulated deficit of $151.6 million and we expect to continue to incur significant expenses and net operating losses ("NOLs") for the foreseeable future.

We have devoted substantially all of our financial resources and efforts to research and development, including non-clinical studies, our clinical development program, the development of manufacturing processes as well as the manufacture of initial lots of clinical trial material.

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maintain, expand and protect our intellectual property portfolio;

hire and retain additional personnel, such as clinical, manufacturing, quality control, regulatory, finance, and compliance personnel;

hire and retain additional personnel, such as clinical, manufacturing, quality control, regulatory and finance personnel.

build out our sales, marketing and distribution infrastructure, assuming CT-1601 is approved for marketing;

experience any delays or encounter issues with any of the above.

We currently have no sales, marketing.

medical affairs infrastructure and have no experience in the sales, marketing, or distribution of pharmaceutical products.

Assuming CTI-1601 ultimately is approved for marketing in the US and elsewhere, we will need to establish sales and marketing capabilities as well as customer service and support, logistics, and other related functions, or make arrangements with third parties to perform these services;

Net losses and negative cash flows have had, and will continue to have, an adverse effect on our liquidity and potentially the ability for us to raise capital due to our unfavorable operating results.

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To date, we have not generated any commercial revenue.

Our ability to generate revenue and become profitable depends upon our ability to obtain regulatory approval for, and successfully commercialize, CTI-1601 or other product candidates that we may develop, in-license or acquire in the future.

This will require success in a range of challenging activities, including completing numerous clinical trials of CTI-1601 or any future product candidates, obtaining marketing approval for CTI-1601 and any future product candidates, manufacturing, marketing and selling those products for which we, or any future collaborators or partners, may obtain marketing approval, satisfying any post-marketing requirements and obtaining reimbursement for our products from private insurance or government payors.

Our ability to generate revenue and become profitable depends upon our ability to obtain regulatory approval for, and to successfully commercialize, CTI-1601 or other product candidates that we may develop, in-license or acquire in the future.

Even if we are able to successfully achieve the above, we do not know what the reimbursement status of CTI-1601 or any other future product candidates will be or when any of these products will generate revenue for us, if at all.

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successfully complete development activities, including the remaining non-clinical studies and planned clinical trials for our product candidates;

complete and submit New Drug Applications ("NDAs") and Biologics License Applications ("BLAs") to the U.S.

Food and Drug Administration ("FDA") and Marketing Authorization Applications ("MAAs") to the European Medicines Agency ("EMA") and obtain regulatory approval for indications for which there is a commercial market;

complete and submit NDAs and BLAs to the FDA and MAAs to the EMA and obtain regulatory approval for indications for which there is a commercial market;

complete and submit applications to, and obtain regulatory approval from, other foreign regulatory authorities;

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We expect to continue to spend substantial and increasing amounts to conduct clinical trials of CTI-1601 and further research and development activities for CTI-1601, and for any additional product candidates that we may develop, in-license or acquire in the future.

In addition, raising funds in the current economic environment may present substantial challenges, and our expenses will increase as we expand, through development, in-license or acquisition,

our pipeline of product candidates.

In addition, raising funds in the current economic environment may present substantial challenges, and our expenses will increase as we expand, through development, in-license or acquisition, our pipeline of product candidates.

If we obtain marketing approval for any of our product candidates, we will likely incur significant commercialization expenses related to product sales, marketing, manufacturing and distribution to the extent that such sales, marketing, manufacturing and distribution are not the responsibility of a future collaborator.

Accordingly, we will need to obtain additional funding in connection with our continuing operations.

As of December 31, 2021, our existing cash and cash equivalents were $70.1 million, excluding restricted cash of $1.3 million.

This amount will not be sufficient to fund all of the efforts that we plan to undertake or to fund the completion of the development of CTI-1601.

As of December 31, 2022, our existing cash, cash equivalents and marketable securities were $118.4 million, excluding restricted cash of $1.3 million.

This amount will not be sufficient to fund all of the efforts that we plan to

undertake or to fund the completion of the development of CTI-1601.

Accordingly, we will be required to obtain further funding through public or private equity offerings, debt financings, collaborations and licensing arrangements or other sources.

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If such additional financing is not available on satisfactory terms, or is not available in sufficient amounts, or we do not have sufficient authorized shares, we may be required to delay, limit, or eliminate the development of business opportunities and our ability to achieve our business objectives, our competitiveness, and our business, financial condition, and results of operations will be materially adversely affected.

We could also be required to seek funds through arrangements with collaborative partners or otherwise at an earlier stage than otherwise would be desirable and we may be required to relinquish rights to some of our technologies or product candidates or otherwise agree to terms unfavorable to us, any of which may have a material adverse effect on our business, operating results and prospects .

In addition, geopolitical unrest including the potential impact of the Russian invasion of Ukraine, the possibility that the conflict could expand beyond eastern Europe, and the impact of the COVID-19 pandemic or other health crisis on t he global financial markets may reduce our ability to access capital, which could negatively affect our liquidity.

If we are unable to obtain funding when needed and/or on acceptable terms, we may be required to significantly curtail, delay or discontinue one or more of its research and development programs, the manufacture of clinical and commercial supplies, product portfolio expansion or pre commercialization efforts, which could adversely affect our business prospects, or we may be unable to continue operations.

In addition, geopolitical unrest including, for example, the broader impact of the Russian invasion of Ukraine, the possibility that the conflict could expand beyond eastern Europe, and the impact of a possible resurgence of vaccine resistant, more deadly or more contagious variant of COVID-19 or other health crisis or recent liquidity constraints, failures and instability in U.S.

and international financial banking systems on the global financial markets may reduce our ability to access capital, which could negatively affect our liquidity.

If we are unable to obtain funding when needed and/or on acceptable terms, we may be required to significantly curtail, delay or discontinue one or more of our research and development programs, the manufacture of clinical and commercial supplies, product portfolio expansion or pre commercialization efforts, which could adversely affect our business prospects, or we may be unable to continue operations.

Raising additional capital may cause dilution to our existing stockholders, restrict our operations or require us to relinquish rights to our technologies, CTI-1601 or other product candidates that we may develop, in-license or acquire in the future.

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Our ability to use our NOLs and certain other tax attributes may be limited.

Under Section 382 of the Internal Revenue Code ("the Code") if a corporation undergoes an “ownership change,”

generally defined as a greater than 50% change (by value) in its equity ownership over a three-year period, the corporation’s ability to use its pre-change Net Operating Losses ("NOLs") and other pre-change tax attributes (such as capitalized research and development costs and research tax credits) to offset its post-change income may be limited.

We believe that as a result of our merger with Zafgen, Inc., our ability to utilize NOLs acquired in this

transaction is expected to be severely limited by Section 382 of the Code.

As of December 31, 2022 we had NOL carryforwards that expire for U.S.

federal income tax purposes of $167.4 million, a portion of which begin to expire in 2026.

Our net operating losses ("NOLs") could expire unused and be unavailable to offset future income tax liabilities because of their limited duration or because of restrictions under U.S.

NOLs generated in taxable years beginning before January 1, 2018 are permitted to be carried forward for 20 taxable years under applicable U.S.

federal income tax law.

Under current U.S.

federal income tax law, NOLs arising in tax years beginning after December 31, 2020 may not be carried back.

Moreover, NOLs generated in taxable years beginning after December 31, 2017 may be carried forward indefinitely.

As of December 31, 2022, the Company had federal net operating loss carryforwards that were generated after December 31, 2017 of $128.7 million that do not expire, however these carryforwards are limited to 80% of the taxable income in any one tax period.

In general, under Section 382 of the Internal Revenue Code (the "Code") if a corporation undergoes an “ownership change,”

generally defined as a greater than 50% change (by value) in its equity ownership over a three-year period, the corporation’s ability to use its pre-change NOLs and other pre-change tax attributes (such as

capitalized research and development costs and research tax credits) to offset its post-change income may be limited.

We believe that as a result of our merger with Zafgen, our ability to utilize NOLs acquired in the transaction and our other NOLs is expected to be severely limited by Section 382 of the Code.

Additionally, our July 2021 and September 2022 equity transactions could also limit our ability to utilize NOLs in the future.

We may also experience ownership changes in the future as a result of subsequent shifts in our stock ownership.

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federal taxable income may be subject to limitations, which could potentially result in increased future tax liability to us.

The Tax Cuts and Jobs Act of 2017 ("Tax Act") which significantly reformed the Code, also reduced the corporate income tax rate to 21%, from a prior rate of 35%.

This may cause a reduction in the economic benefit of our NOLs and other deferred tax assets available to us.

In addition, at the state level, there may be periods during which the use of NOLs is suspended or otherwise limited, which could accelerate or permanently increase state taxes owed and would adversely affect our business, financial condition and results of operations.

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Further, existing tax laws, statutes, rules, regulations or ordinances could be interpreted, changed, modified or applied adversely to us.

For example, the U.S.

government enacted significant tax reforms in the past, and certain provisions of any new laws may adversely affect us.

Changes in recent years include, but are not limited to, a federal corporate tax rate decrease to 21% for tax years beginning after December 31, 2017, a reduction to the maximum deduction allowed for net operating losses generated in tax years after December 31, 2017, eliminating carrybacks of net operating losses, and providing for indefinite carryforwards for losses generated in tax years after December 31, 2017.

The legislation is unclear in many respects and could be subject to potential amendments and technical corrections, and will be subject to interpretations and implementing regulations by the Treasury and Internal Revenue Service, any of which could mitigate or increase certain adverse effects of the legislation.

For example, under Section 174 of the code, in taxable years beginning after December 31, 2021, expenses that are incurred for research and development in the U.S.

are capitalized and amortized, which may have an adverse effect on our cash flow.

In addition, it is unclear how these U.S.

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Risks Related to Our Product Development and Regulatory Approvals

The FDA has placed a clinical hold on CTI-1601.

Our business may be adversely affected if the FDA does not lift the clinical hold in a timely manner or, if additional non-clinical or clinical studies are required.

This may cause significant delays or expense in developing CTI-1601.

On May 25, 2021 the FDA placed a clinical hold on the CTI-1601 investigational new drug application (IND) clinical program following our notification to the FDA of mortalities which occurred at the highest dose levels in an ongoing 26-week non-human primate (NHP) toxicology study, which is designed to support extended dosing of patients with CTI-1601.

In the clinical hold letter, the FDA stated it needed a full study report from the then ongoing NHP study and that we may not initiate additional clinical trials until we have submitted the report and received notification from the FDA that additional clinical trials may commence.

The FDA has placed a partial clinical hold on CTI-1601 and there is uncertainty as to when, or if, the FDA will lift the partial clinical hold on our CTI-1601 program, if it will allow additional cohorts of the dose exploration study or if it will ever allow further clinical development of CTI-1601.

In May 2021, the FDA placed a clinical hold on our CTI-1601 clinical program after we notified the agency of mortalities at the two highest dose levels of the 26-week NHP toxicology study that was designed to support extended dosing of patients with CTI-1601.

This NHP study included four dose groups in addition to vehicle and the mortalities were seen in the two highest dose groups.

At the time the hold was placed, we had no interventional clinical trials with patients enrolling or enrolled.

In July 2021, we completed dosing in the NHP toxicology study.

Data from the study were collected throughout the second half of 2021 and included in the complete response to the clinical hold submitted to the FDA in January 2022.

The study included four dose groups in addition to vehicle and the mortalities were seen in the two highest dose groups.

In February 2022, we received a response from the FDA following our submission of a complete response including a comprehensive study report from the 26-week NHP toxicology study.

The FDA stated that it was maintaining its clinical hold at this time and requested additional information.

We are evaluating how best to respond to their request.

We are reassessing the timing of the planned open label extension and the pediatric MAD studies.

We cannot be certain whether or when the FDA will lift the clinical hold and allow us to pursue further development of CTI-1601 in the United States.

If the FDA does not lift the clinical hold in a timely manner, or at all, our development timelines and our business may be adversely affected and our stock price may decline.

Further, even if the FDA lifts the clinical hold, or if the FDA or other regulatory agencies continue to express safety concerns after the hold is lifted, future CTI-1601 non-clinical or clinical studies may be required.

In such instances, our progress in

the development of CTI-1601 may be significantly slowed and the associated costs may be significantly increased, adversely affecting our business, which could impair our ability to ultimately obtain FDA approval for CTI-1601

Our success is currently dependent upon the success of our sole product candidate, CTI-1601,for which we have completed two Phase 1 clinical trials in patients with Friedreich’s ataxia.

Clinical development of CTI-1601 is currently under clinical hold.

We cannot be certain that we will be successful with our clinical development or that we will be able to obtain regulatory approval for CTI-1601.

Clinical development of CTI-1601 is currently under clinical hold.

If our efforts to develop and commercialize CTI-1601 for the treatment of Friedreich’s ataxia are unsuccessful, or we experience significant delays in doing so, our business could also be substantially harmed.

Data from the study were collected throughout the second half of 2021 and included in the complete response submitted to the FDA

In February 2022, in response to our complete response to the clinical hold discussed above, the FDA stated that it was maintaining the clinical hold and that additional data were needed to resolve the clinical hold.

We subsequently submitted a request to the FDA for a Type C meeting, which was granted and was held in July 2022.

We submitted a complete response to the FDA incorporating additional information requested by the FDA at the meeting as well as information on a proposed dose exploration study in August 2022.

In September 2022, following the Type C meeting and the submission of our complete response, the FDA allowed the 25 mg cohort of a Phase 2, four-week, placebo-controlled, dose exploration trial of CTI-1601 in FA patients to proceed.

In connection with this decision, the FDA lifted its full clinical hold on the CTI-1601 clinical development program and imposed a partial hold.

We have since initiated the 25 mg cohort of the Phase 2 dose exploration trial.

Initiation of the second cohort and/or other clinical trials is contingent on the FDA’s agreement based on its review of the trial's 25 mg cohort data and on review by the trial’s independent data monitoring committee.

We anticipate that we will provide an update that will outline the next steps for the clinical trial in the second quarter of 2023 and anticipate reporting top-line data in the second half of 2023

Our business may be adversely affected if the FDA does not lift the partial clinical hold in a timely manner, if it places a full clinical hold on the development of CTI-1601, or, if additional non-clinical or clinical studies are required.

This may cause significant delays or expense in developing CTI-1601.

Our success is currently dependent upon the success of our lead product candidate, CTI-1601, for which we have completed two Phase 1 clinical trials in patients with FA and are currently conducting a Phase 2 dose exploration study.

We cannot be certain that data from the first cohort of our current dose exploration study will provide the FDA with adequate data to allow the CTI-1601 development program to proceed as planned in part or in full, or that we will ultimately be successful with our clinical development or that we will be ever able to obtain regulatory approval for CTI-1601.

We currently have no drug products for sale and our business is currently wholly dependent on our successful clinical development, regulatory approval and commercialization of CTI-1601, our lead product candidate and our only product candidate in clinical development, for which we have completed two Phase 1 clinical trials in patients with FA and are currently working to complete a Phase 2 dose exploration under an FDA partial clinical hold.

The study’s first cohort (25 mg ) is proceeding in line with our planned timeline with dosing completed.

Additional cohorts and/or other clinical trials are contingent on the review of the study’s 25 mg cohort data by the FDA and the data monitoring committee.

We expect to provide an update on the study in the second quarter of 2023 and anticipate reporting top-line data in the second half of 2023.

If our efforts to develop and commercialize CTI-1601 for the treatment of FA are unsuccessful, or we experience significant delays in doing so, our business could also be substantially harmed.

The success of CTI-1601 will depend on several factors, including the following:

maintaining our IND application with the FDA in order to continue to conduct clinical trials in the United States, if allowed to continue, including our ability to have the clinical hold lifted by the FDA on a timely basis, if at all;

maintaining our IND application with the FDA in order to continue to conduct clinical trials in the United States, including our ability to have the clinical hold lifted by the FDA on a timely basis, if at all;

successfully recruiting, enrolling and retaining patients in and completing any clinical trials, if allowed to continue, including trials in pediatric patients;

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managing the extent and cost of any required post-marketing approval commitments to applicable regulatory authorities;

establishing and maintaining arrangements with third-party manufacturers for CTI-1601, including developing, validating and maintaining a commercially viable manufacturing process that is compliant with current good manufacturing practice ("GMPs");

maintaining and growing an organization of scientists and business people who can develop our product candidates and technology;

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The process of obtaining regulatory approval is expensive and time consuming.

The FDA and foreign regulatory authorities may never approve CTI-1601 for sale and marketing, and even if CTI-1601 is ultimately approved, regulatory approval may be delayed or limited in the United States or in other jurisdictions.

The FDA and foreign regulatory authorities may never approve CTI-1601 for sale and marketing, and even if CTI-1601 is ultimately approved, regulatory approval may be delayed or

limited in the United States or in other jurisdictions.

Even if we are authorized to sell and market CTI-1601 in one or more markets, there is no assurance that we will be able to successfully market CTI-1601 or that CTI-1601 will achieve market acceptance sufficient to generate profits.

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For the foregoing reasons, we cannot be certain that our ongoing and planned non-clinical studies and clinical trials will be successful.

If non-clinical or clinical trials for CT1-1601 or any future product candidates or indications fail to demonstrate safety or efficacy to the satisfaction of the FDA or the equivalent regulatory authorities in other countries, the FDA or equivalent regulatory authority will not approve our product candidates in those and other indications, which could have a material adverse effect on our business, financial condition results of operations and prospects.

If non-clinical studies or clinical trials for CTI-1601 or any future product candidates or indications fail to demonstrate safety or efficacy to the satisfaction of the FDA or the equivalent regulatory authorities in other countries, the FDA or equivalent regulatory authority will not approve our product candidates in those and other indications, which could have a material adverse effect on our business, financial condition results of operations and prospects.

We do not know whether any ongoing or future clinical trials for CTI-1601 will be completed on schedule, if at all, as the commencement and completion of clinical trials can be delayed, prevented or terminated for a number of reasons, including as a result of safety concerns, or ambiguous or negative interim results.

In addition, a clinical trial may be suspended or terminated by us, the FDA, other regulatory authorities, the institutional review boards

("IRBs") or ethics committees, a data monitoring committee, or safety review committee, overseeing the clinical trial at issue or other regulatory authorities due to a number of factors, including, among others:

In addition, a clinical trial may be suspended or terminated by us, the FDA, other regulatory authorities, institutional review boards (IRBs") or ethics committees, an independent data monitoring committee, or safety review committee, overseeing the clinical trial at issue or other regulatory authorities due to a number of factors, including, among others:

failure to conduct the clinical trial in accordance with regulatory requirements or our clinical protocols;

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lack of adequate funding to continue the clinical trial;

challenges in recruiting and enrolling patients to participate in clinical trials, including the size and nature of the patient population, such as pediatric patients, the proximity of patients to clinical trial sites, eligibility criteria for the clinical trial, the nature of the clinical trial protocol, the availability of approved effective treatments for the relevant disease and competition from other clinical trial programs for similar indications, and the ongoing effects of COVID-19 and the efforts to mitigate those effects;

challenges in recruiting and enrolling patients to participate in clinical trials, including the size and nature of the patient population, such as pediatric patients, the proximity of patients to clinical trial sites, eligibility criteria for the clinical trial, the nature of the clinical trial protocol, the availability of approved effective treatments for the relevant disease and competition from FDA-approved therapeutics for FA, other clinical trial programs for similar indications, and the resurgence of vaccine resistant, more deadly or more contagious variants of COVID-19 and the efforts to mitigate those effects;

difficulties in retaining or recruiting clinical investigators in our ongoing or future clinical trials;

difficulties retaining patients who have enrolled in a clinical trial but may be prone to withdraw due to rigors of the clinical trial, perceived lack of efficacy, side effects, screening and monitoring measures, personal issues or loss of interest;

severe or unexpected drug-related adverse events experienced by patients in clinical trials;

severe, serious or unexpected drug-related adverse events experienced by patients in clinical trials;

the FDA, the EMA, or other applicable regulatory authorities may disagree with our clinical trial designs, our interpretation of data from clinical trials, or may change the requirements for approval even after it has reviewed and commented on the design for our clinical trials;

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Failures or delays in the completion of our clinical trials could result in increased costs and could delay, prevent or limit our ability to generate revenue and continue our business.

For our lead product candidate CTI-1601, we have completed two Phase 1 clinical trials in patients with Friedreich’s ataxia but clinical development is currently subject to a clinical hold issued by the FDA.

To receive approval of CTI-1601 in other countries we will also have to satisfy their regulatory requirements.

Satisfaction of these requirements will entail substantial time, effort and financial resources.

We may never satisfy these requirements.

For our lead product candidate CTI-1601, we have completed two Phase 1 clinical trials in patients with FA and are currently conducting the first cohort of a Phase 2, four-week, placebo-controlled, dose exploration trial of CTI-1601 in FA patients.

Additional cohorts and/or the initiation of other clinical trials are contingent on agreement by the FDA based on its review of the data from the 25 mg cohort and on review by the study's independent data monitoring committee.

We expect to provide an update that will outline the next steps for the study in the second quarter of 2023 and anticipate reporting top-line data in the second half of 2023.

We do not know if, or when, the FDA will lift the partial clinical hold on our CTI-1601 program, if it will allow additional cohorts of this dose exploration study or if it will ever allow further clinical development of CTI-1601.

Clinical trials may also be delayed or terminated as a result of safety issues in non-clinical or clinical trials, ambiguous or negative interim results or events outside of our control.

Because Friedreich’s ataxia is a rare disease, there are a limited number of patients in close proximity to clinical trial sites and clinical trial patients must travel from throughout the United States to the clinical trial sites to participate if clinical development is allowed to continue.

The travel advisories and risk of infection related to COVID-19 may present increased risks to patients traveling to our clinical trial sites for dosing, if clinical trials are allowed to continue.

The evolution of COVID-19 variants could be resistant to current vaccines which, if the clinical hold is lifted, may preclude us from conducting

clinical studies unless or until an effective new or modified vaccine is available.

If future clinical trials of CTI-1601 fail or further delays occur, we may not be able to develop and commercialize CTI-1601 and could fail to realize the potential advantages of doing so, and it could materially adversely affect our business, financial condition and results of operations.

In addition, disruptions caused by the COVID-19 pandemic may increase the likelihood that we encounter such difficulties or delays in initiating, enrolling, conducting or completing our planned and ongoing clinical trials.

If future clinical trials of CTI-1601 fail or further delays occur in the United States and or other countries, we may not be able to develop and commercialize CTI-1601 and could fail to realize the potential advantages of doing so, and it could materially adversely affect our business, financial condition and results of operations.

In addition, disruptions caused by health crises, such as the recent COVID-19 pandemic may increase the likelihood that we encounter such difficulties or delays in initiating, enrolling, conducting or completing our planned and ongoing clinical trials.

Further, FA is a rare disease, there are a limited number of patients in close proximity to clinical trial sites and clinical trial patients may need to travel from other countries to the clinical trial sites in order to participate.

In addition, given the limited number of FA patients, the recent approval of a competing therapy for the treatment of FA may make patients less likely to enroll in our clinical trials or less likely to be eligible for our clinical trials.

Any inability to successfully initiate or complete clinical trials could result in additional costs to us or impair our ability to generate revenue from product sales.

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We may not be successful in our efforts to identify, discover or acquire additional product candidates.

We currently only have one product candidate CTI-1601.

We currently only have one product candidate CTI-1601 in clinical development, although we have other product candidates in pre-clinical development.

Therefore, the success of our business largely depends upon our ability to identify, develop, in-license or acquire and commercialize products targeting rare diseases.

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We have no experience in later stage clinical development, and related regulatory requirements or the commercialization of products.

As a result, we have not yet demonstrated our ability to independently and repeatedly conduct clinical development after Phase 1, which has not yet been successfully completed, successfully conduct an international multi-center clinical trial, conduct a pivotal clinical trial, obtain regulatory approval, manufacture drug product on a commercial scale or arrange for a third party to do so on our behalf, and commercialize therapeutic products.

As a result, we have not yet demonstrated our ability to independently and repeatedly conduct clinical development after Phase 1, successfully conduct an international multi-center clinical trial, conduct a pivotal clinical trial, obtain regulatory approval, manufacture drug product on a commercial scale or arrange for a third party to do so on our behalf, and commercialize therapeutic products.

We will need to develop such abilities if we are to execute on our business strategy to develop and independently commercialize product candidates for orphan and niche indications.

To execute on our business plan for the development of independent programs, we will need to successfully:

have the FDA clinical hold on CTI-1601 lifted;

obtain the FDA's permission to continue with the clinical development of CTI-1601;

execute our clinical development plans for product candidates;

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build and maintain appropriate sales, distribution and marketing capabilities;

gain market acceptance for our future products, if any;

gain market acceptance, including reimbursement, for our future products, if any;

manage our spending as costs and expenses increase due to clinical trials, regulatory approvals and commercialization activities.

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We submitted our IND and it was accepted, permitting the conduct of clinical trials.

We completed two Phase 1 clinical trials but, as a result of certain mortalities in a non-clinical study of non-human primates, the FDA issued a clinical hold.

We completed two Phase 1 clinical trials but, as a result of certain mortalities in a non-clinical study of NHPs, the FDA issued a clinical hold.

We responded to the clinical hold in January 2022.

Following review of our response, the FDA maintained the clinical hold.

We are working to address the issues raised by the FDA.

Clinical development of CTI-1601 cannot continue until the clinical hold is lifted.

In connection with this decision, the FDA lifted its full clinical hold on the CTI-1601 clinical development program and imposed a partial hold.

The dose exploration trial is designed to further characterize CTI-1601’s safety and PD and PK profiles to provide information about the preferred long-term dose and dose regimen.

We have since initiated the 25 mg cohort of the Phase 2 dose exploration trial.

Initiation of the second cohort and/or

other clinical trials is contingent on the FDA’s agreement based on its review of the trial's 25 mg cohort data and on review by the trial’s independent data monitoring committee.

We anticipate that we will provide an update that will outline the next steps for the clinical trial in the second quarter of 2023 and anticipate reporting top-line data in the second half of 2023.

We do not know if, or when, the FDA will lift the partial clinical hold on our CTI-1601 program, if it will allow additional cohorts of the dose exploration study or if it will ever allow further clinical development of CTI-1601.

If the FDA does not lift the clinical hold in a timely manner, or at all, our development timelines and our business may be adversely affected and our stock price may decline.

Further, even if the FDA lifts the partial clinical hold, or if the FDA or other regulatory agencies continue to express safety concerns after the partial clinical hold is lifted, future CTI-1601 non-clinical or clinical studies may be required.

In such instances, our progress in the development of CTI-1601 may be significantly slowed and the associated costs may be significantly increased, adversely affecting our business, which could impair our ability to ultimately obtain FDA or other regulatory approval for CTI-1601.

In clinical development of any product candidate, the outcome of toxicology studies and early clinical trials may not be positive and may not be predictive of the success of later non-clinical studies or clinical trials.

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These uncertainties are enhanced where the diseases under study lack established clinical endpoints, validated measures of efficacy, as is often the case with orphan diseases for which no drugs have been developed previously and where the product candidates target novel mechanisms.

For example, to our knowledge, CTI-1601 is the only protein replacement therapy being developed for the treatment of Friedreich’s ataxia and therefore non-clinical studies may not be adequate to predict efficacy in a clinical trial due to our novel protein replacement therapy platform.

For example, to our knowledge, CTI-1601 is the only protein replacement therapy being developed for the treatment of FA and therefore non-clinical studies may not be adequate to predict efficacy in a clinical trial due to our novel protein replacement therapy platform.

In some instances, there can be significant variability in safety or efficacy results between different clinical trials of the same product candidate due to numerous factors, including changes in trial procedures set forth in protocols, differences in the size and type of the patient populations, such as pediatric patients, variability of the disease being studied, changes in and adherence to the dosing regimen and other clinical trial protocols and the rate of dropout among clinical trial participants.

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Furthermore, any of these regulatory authorities may also approve CTI-1601 or any future product candidates for a narrower indication than we may request or may grant approval contingent on the performance of costly post-marketing clinical trials.

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

We may experience difficulties identifying and enrolling patients in our clinical trials given the limited number of patients who have the disease for which CTI-1601 is being studied or for any other product candidate we may study in the future.

Difficulty in enrolling patients could delay or prevent clinical trials of CTI-1601 or any future product candidate.

There are competing studies that may limit the availability of prospective participants in CTI-1601 clinical trials.

There are also competing FA therapeutics, other competing studies and potentially other FA therapeutics that could be approved that may also limit the availability of prospective participants in CTI-1601 clinical trials.

Identifying and qualifying patients to participate in clinical trials of CTI-1601 is critical to our success.

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Accordingly, there are limited patient pools from which to draw for clinical trials.

We are investigating our product candidate in Friedreich’s ataxia, a rare disease.

Arranging for investigative sites and recruiting patients for clinical trials in this disease may be very difficult.

In addition, if other companies are studying their investigational products in Friedreich’s ataxia, it may be more difficult to enroll eligible patients into our clinical trials.

The recent FDA approval of a product for the treatment of FA may impact our ability to enroll patients in our clinical trials as patients using other FA treatments may be excluded from participation in our CTI-1601 studies or may be less likely to participate in our CTI-1601 clinical trials due to the availability of another FA therapy.

If other companies are studying their investigational products in Friedreich’s ataxia and/or if other companies have their products approved for the treatment of FA, it may be more difficult to enroll eligible patients into our clinical trials.

Competing priorities at sites and participation of subjects in other studies may limit our ability to execute clinical trials in a timely fashion, if at all.

In addition to the rarity of Friedreich’s ataxia and other diseases that we are studying, the eligibility criteria of our clinical trials will further limit the pool of available study participants as it will require patients to have specific characteristics that we can measure to assure their disease is either severe enough or not too advanced to include them in a clinical trial.

In addition to the rarity of FA and other diseases that we are studying, the eligibility criteria of our clinical trials will further limit the pool of available study participants as it will require patients to have specific characteristics that we can measure to assure their disease is either severe enough or not too advanced to include them in a clinical trial.

The process of finding and diagnosing patients may prove costly, especially since the diseases we are studying are rare.

We also may not be able to identify, recruit, and enroll a sufficient number of appropriate patients to complete our clinical trials because of demographic criteria for prospective patients, the perceived risks and benefits of the product candidate under study, the proximity and availability of clinical trial sites for prospective patients, and the patient referral practices of physicians.

The availability and efficacy of competing therapies and clinical trials can also adversely impact enrollment.

The availability and efficacy of approved and competing therapies and clinical trials can also adversely impact enrollment.

Furthermore, our inability to enroll a sufficient number of patients for our clinical trials, including pediatric clinical trials, could result in significant delays or may require us to abandon one or more clinical trials altogether.

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

Friedreich’s ataxia has no FDA-approved treatments, and clinical endpoints required to obtain approval are not well defined.

There are currently no therapies approved to treat Friedreich’s ataxia;

however, Reata Pharmaceuticals Inc.

announced that it had initiated a rolling submission of an NDA to the FDA for omaveloxolone for the treatment of patients with Friedreich’s ataxia.

We have concentrated our research and development efforts on developing a novel therapeutic for the treatment of Friedreich’s ataxia, and our future success depends on the success of this therapeutic approach.

FA has no FDA-approved therapies that address frataxin deficiency, which is the underlying cause of the disease, and clinical endpoints required to obtain approval are not well defined.

There are currently no FDA-approved products to treat FA that are designed to increase frataxin levels.

We have concentrated our research and development efforts on developing a novel, FA therapy designed to address frataxin deficiency, which is the underlying cause of the disease, and our future success depends on the success of this therapeutic approach.

The clinical trial requirements of the FDA and other comparable regulatory agencies and the criteria these regulators use to determine the safety and efficacy of any product candidate vary substantially according to the type, complexity, novelty and intended use and market of the potential product.

Given the nature of Friedreich’s ataxia, we may have to devise novel clinical endpoints to be tested in our clinical trials, which can lead to some subjectivity in interpreting trial results and could result in regulatory agencies not agreeing with the validity of our endpoints, or our interpretation of the clinical data, and therefore denying approval, which would materially adversely affect our business, financial condition and results of operations.

As a result, the design and conduct of clinical trials for a therapeutic product candidate such as CTI-1601 that is intended to deliver human frataxin ("FXN") through a subcutaneously administered, recombinant fusion protein in Friedreich’s ataxia patients are subject to unknown

risks, and we may experience setbacks with our planned clinical trials of CTI-1601 in Friedreich’s ataxia because of the limited clinical experience with our mechanism of action in these patients.

In particular, regulatory authorities in the United States and the European Union have not issued definitive guidance as to how to measure and achieve efficacy in treatments for Friedreich’s ataxia.

As a result, the design and conduct of clinical trials of CTI-1601 may take longer, be more costly or be less effective as part of the novelty of development in Friedreich’s ataxia.

Given the nature of FA, we may have to devise novel clinical endpoints to be tested in our clinical trials, which can lead to some subjectivity in interpreting trial results and could result in regulatory agencies not agreeing with the validity of our endpoints, or our interpretation of the clinical data, and therefore denying approval, which would materially adversely affect our business, financial condition and results of operations.

As a result, the design and conduct of clinical trials for a therapeutic product candidate such as CTI-1601 that is intended to deliver FXN through a subcutaneously administered, recombinant fusion protein in FA patients are subject to unknown risks, and we may

experience setbacks with our planned clinical trials of CTI-1601 in FA because of the limited clinical experience with our mechanism of action in these patients.

In particular, regulatory authorities in the United States and the European Union have not issued definitive guidance as to how to measure and achieve efficacy in treatments for FA.

As a result, the design and conduct of clinical trials of CTI-1601 may take longer, be more costly or be less effective as part of the novelty of development in FA.

We may use new or novel endpoints or methodologies, and the FDA or other regulatory authorities may not consider the endpoints of our clinical trials to provide clinically meaningful results.

Even if applicable regulatory authorities do not object to our proposed endpoints in an earlier stage clinical trial, such regulatory authorities may require evaluation of additional or different clinical endpoints in later-stage clinical trials.

CTI-1601 may cause adverse events or undesirable side effects in non-clinical or clinical trials that could delay or prevent its regulatory approval, limit the commercial profile of an approved label, or result in significant negative consequences following marketing approval, if any.

We completed two Phase 1 clinical trials.

As a result of certain mortalities in a non-clinical study of non-human primates, the FDA issued a clinical hold in May 2021.

We responded to the clinical hold in January 2022.

Following review of our response, the FDA declined to lift the clinical hold.

We are continuing our efforts to address the issues raised by the FDA.

Clinical development of CTI-1601 cannot continue until the clinical hold is lifted by the FDA.

CTI-1601 may cause adverse events or undesirable side effects in non-clinical or clinical trials that could delay or prevent its regulatory approval, limit the commercial profile of approved labeling, or result in significant negative consequences following regulatory approval, if any.

Any adverse events or undesirable side effects caused by, or other unexpected properties of, CTI-1601 in non-clinical or clinical studies could cause us, any future collaborators, an IRB or ethics committee or regulatory authorities to interrupt, delay or halt clinical trials of our product candidate and could result in a more restrictive label or the delay or denial of regulatory approval by the FDA or other regulatory authorities.

If the clinical hold is lifted, it is possible that as we progress CTI-1601 through clinical trials and toxicology studies, or as the use of CTI-1601 becomes more widespread if it receives regulatory approval, illnesses, injuries, discomforts and other adverse events that were not observed in earlier trials, as well as conditions that did not occur or went undetected in previous trials, may be reported by patients.

Should the FDA permit us to continue with the clinical development of CTI-1601, it is possible that as we progress CTI-1601 through clinical trials and toxicology studies, or as the use of CTI-1601 becomes more widespread if it receives regulatory approval, illnesses, injuries, discomforts and other adverse events that were not observed in earlier trials, as well as conditions that did not occur or went undetected in previous trials, may be reported by patients.

If such side effects become known later in development or after approval, such findings may harm our business, financial condition and prospects significantly.

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regulatory authorities may request that we recall or withdraw the product from the market or may limit the approval of the product through labeling or other means;

regulatory authorities may require the addition of labeling statements, such as a “black box”

regulatory authorities may require the addition of labeling statements, such as a “boxed”

warning or a contraindication or a precaution, or labeling restrictions based on patient population;

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we could be required to conduct expensive post-marketing studies;

we could lose commercial market opportunity and our revenues could decrease substantially;

we could lose our commercial market opportunity and our revenues could decrease substantially;

damage to the public perception of the safety of CTI-1601;

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Any of these events could prevent us from achieving or maintaining market acceptance of the affected product candidate and could substantially increase the costs of commercializing our product candidates and significantly impact our ability to successfully commercialize our product candidates and generate revenues, all of which would materially adversely affect our business, financial condition and results of operations.

Our approach to discover and develop fusion proteins for delivering proteins is nove l and may never lead to marketable products.

Interim, “top-line,”

and preliminary data from our clinical trials that we announce or publish from time to time may change as more patient data become available or as additional analyses are conducted, and as the data 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 data from our clinical trials.

Interim data 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.

Preliminary or “top-line”

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

As a result, interim and preliminary data should be viewed with caution until the final data are available.

Material adverse changes between preliminary, “top-line”

or interim data and final data could significantly harm our business, financial condition, results of operations and prospects.

Our approach to discover and develop fusion proteins for delivering proteins is novel and may never lead to marketable products.

We have concentrated our efforts and research and development activities on delivering proteins (FXN or other) to intracellular targets.

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The scientific discoveries that form the basis for our research are relatively new.

CTI-1601 uses a novel and unproven approach and mechanism to treat Friedreich’s ataxia and therefore its efficacy and safety are difficult to predict, and there is no guarantee that CTI-1601 will be approved by the FDA, the EMA, or any other regulatory authorities.

CTI-1601 uses a novel and unproven approach and mechanism to treat FA and therefore its efficacy and safety are difficult to predict, and there is no guarantee that CTI-1601 will be approved by the FDA, the EMA, or any other regulatory authorities.

If CTI-1601 proves to be ineffective, unsafe or commercially unviable, it is possible that our platform and pipeline would have little, if any, value, which would substantially harm our business, financial condition, results of operations and prospects.

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We may not be able to have such products reliably manufactured in accordance with the applicable regulatory requirements in sufficient quantities to support our development programs and, if ultimately approved, commercial supply.

We currently contract with third parties for the manufacturing of program materials for CTI-1601.

There are a limited number of contract manufacturers who specialize in the manufacture of biologic products and those that do may still be developing appropriate processes, controls and facilities for large-scale production.

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Any failure by us or our contract manufacturing organizations to adhere to or document compliance to such regulatory requirements could lead to a delay or interruption in the availability of our program materials for clinical trials or commercial use, among other consequences.

If we or our manufacturers fail to comply with the FDA, EMA, or other regulatory authorities, it could result in sanctions being imposed on us, including fines, injunctions, civil penalties, delays, suspension or withdrawal of approvals, clinical holds or termination of clinical trials, Form 483s, warning or untitled letters, regulatory communications warning the public about safety issues with a product, import or export refusals, license revocation, seizures, detentions, or recalls of product candidates or product, operating restrictions, criminal

prosecutions or debarment, suits under the civil False Claims Act, corporate integrity agreements, or consent decrees any of which could significantly and adversely affect supplies of our product candidates and our business, financial conditions and results of operations could be materially adversely affected.

refusals, license revocation, seizures, detentions, or recalls of product candidates or product, operating restrictions, criminal prosecutions or debarment, suits under the civil False Claims Act, corporate integrity agreements, or consent decrees any of which could significantly and adversely affect supplies of our product candidates and our business, financial conditions and results of operations could be materially adversely affected.

Our current dependence upon others for the manufacture of our product candidates may also adversely affect our business, results of operations, financial condition, and our ability to commercialize any product candidates that receive regulatory approval on a timely and competitive basis.

Fast track designation by the FDA or any future designations may not lead to a faster development, regulatory review or approval process and it does not increase the likelihood that any of our product candidates will receive marketing approval.

We have received Fast Track therapy designation for CTI-1601 for the treatment of Friedreich’s ataxia.

We may, in the future, apply for other accelerated programs from the FDA (such as breakthrough therapy or accelerated approval) for CTI-1601 or future product candidates.

We have received fast track therapy designation for CTI-1601 for the treatment of FA.

We may, in the future, apply for other designations from the FDA (such as breakthrough therapy or accelerated approval) for CTI-1601 or future product candidates.

Designation for these programs is within the discretion of the FDA.

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In any event, the receipt of a designation may not result in a faster development process, review or approval compared to products considered for approval under conventional FDA procedures and, in any event, does not assure ultimate approval by the FDA.

In addition, even though CTI-1601 has been designated as Fast Track, the FDA may later decide that it no longer meets the criteria for designation and revoke it.

If we apply for designation to additional accelerated programs from the FDA for CTI-1601 or future product candidates, the FDA might not grant the designation.

In addition, even though CTI-1601 has obtained fast track designation, the FDA may later decide that it no longer meets the criteria for designation and revoke it.

Approval of other therapies for the treatment Friedreich’s ataxia could negatively impact our continued fast track therapy designation for CTI-1601 for the treatment of FA.

In addition, if we apply to the FDA for other designations for CTI-1601 or future product candidates, the FDA might not grant such designations.

If we apply for any similar programs in foreign countries for CTI-1601 or future product candidates, those designations also might not be granted by the regulatory authorities of those countries.

Any of the above could adversely affect our business, financial condition and results of operations.

If we decide to pursue accelerated approval for any of our product candidates, it may not lead to a faster development or regulatory review or approval process and does not increase the likelihood that it will receive marketing approval.

If we are unable to obtain approval under an accelerated pathway, we may be required to conduct additional clinical trials beyond those that we contemplate, which could increase the expense of obtaining, reduce the likelihood of obtaining, and/or delay the timing of obtaining, necessary marketing approvals.

In the future, we may decide to pursue accelerated approval for one or more of our product candidates.

Under the FDA’s accelerated approval program, the FDA may approve a drug or biologic for a serious or life-threatening illness that provides meaningful therapeutic benefit to patients over existing treatments based upon a surrogate endpoint that is reasonably likely to predict clinical benefit, or on a clinical endpoint that can be measured earlier than irreversible morbidity or mortality, that is reasonably likely to predict an effect on irreversible morbidity or mortality or other clinical benefit, taking into account the severity, rarity, or prevalence of the condition and the availability or lack of alternative treatments.

Approval of other therapies for the treatment Friedreich’s ataxia, including the recent approval of omaveloxolone for the treatment of FA, could negatively impact our ability to demonstrate a benefit over existing treatments and therefore utilize the accelerated approval pathway.

For drugs or biologics granted accelerated approval, post-marketing confirmatory trials are required to describe the anticipated effect on irreversible morbidity or mortality or other clinical benefit.

These confirmatory trials must be completed with due diligence and, in some cases, the FDA may require that the trial be designed, initiated and/or fully enrolled prior to approval.

Moreover, the FDA may withdraw approval of any product candidate approved under the accelerated approval pathway if, for example:

the trial or trials required to verify the predicted clinical benefit of the product candidate fails to verify such benefit or do not demonstrate sufficient clinical benefit to justify the risks associated with such product;

other evidence demonstrates that the product candidate is not shown to be safe or effective under the conditions of use;

we fail to conduct any required post-approval trial of our product candidate with due diligence;

we disseminate false or misleading promotional materials relating to the relevant product candidate.

In addition, the FDA may terminate the accelerated approval program or change the standards under which accelerated approvals are considered and granted in response to public pressure or other concerns regarding the accelerated approval program.

Changes to or termination of the accelerated approval program could prevent or limit our ability to obtain accelerated approval of any of our clinical development programs.

Recently, the accelerated approval pathway has come under scrutiny within the FDA and by Congress.

The FDA has put increased focus on ensuring that confirmatory studies are conducted with diligence and, ultimately, that such studies confirm the benefit.

In addition, Congress recently enacted the Food and Drug Omnibus Reform Act (“FDORA”), which included provisions related to the accelerated approval pathway.

Pursuant to FDORA, the FDA is authorized to require a post-approval study to be underway prior to approval or within a specified time period following approval.

FDORA also requires the FDA to specify conditions of any required post-approval study and requires sponsors to submit progress reports for required post-approval studies and any conditions required by the FDA.

FDORA enables the FDA to initiate enforcement action for the failure to conduct with due diligence a required post-approval study, including a failure to meet any required conditions specified by the FDA or to submit timely reports.

If we fail to maintain orphan drug designation or other regulatory exclusivity for CTI-1601 or obtain such exclusivity for any of our other product candidates in the future, our competitive position would be harmed.

We received orphan drug designation from the FDA for CTI-1601 in July 2017.

We received orphan drug designation from the FDA for CTI-1601 for the treatment of FA in July 2017.

In the United States, orphan drug designation entitles a party to financial incentives such as tax advantages and user-fee waivers.

In addition, if a product candidate that has orphan drug designation subsequently receives the first FDA approval for the disease for which it has such designation, the product is entitled to orphan drug exclusivity, which means that the FDA may not approve any other applications, including an NDA or BLA, to market the same drug for the same indication for seven years, except in limited circumstances, including if the FDA concludes that the later drug is clinically superior to, or safer than, the approved drug.

A drug is clinically superior if it is safer, more effective, or makes a major contribution to patient care.

In the case of a biological product, whether a drug is the same drug is based on the principal molecular structural features of the product.

Orphan drug designation neither shortens the development time or regulatory review time of a drug nor gives the drug any advantage in the regulatory review or approval process.

We could lose orphan drug designation in this scenario.

Additionally, we may lose orphan drug exclusivity if we are unable to assure sufficient quantity of the drug to meet the needs of patients with the rare disease or condition.

Moreover, orphan drug exclusivity may not effectively protect our product candidates from competition because different drugs can be approved for the same condition.

For example, in January 2022, Reata Pharmaceuticals,Inc.

announced that it had initiated a rolling submission of an NDA to the FDA for omaveloxolone for the treatment of patients with Friedreich’s ataxia.

Our orphan drug designation for CTI-1601 will not prohibit the FDA from potentially approving a competitor’s NDA for omaveloxolone.

Further, even after an orphan drug is approved, the FDA or comparable foreign regulatory authority can subsequently approve another drug for the same condition if such regulatory authority concludes that the later drug is clinically superior, if it is shown to be safer, more effective or makes a major contribution to patient care.

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In the European Union, orphan drug designation also entitles a party to financial incentives such as reduction of fees or fee waivers and ten years of market exclusivity following drug approval.

This period may be reduced to

six years if the orphan drug designation criteria are no longer met, including where it is shown that the product is sufficiently profitable so that market exclusivity is no longer justified.

This period may be reduced to six years if the orphan drug designation criteria are no longer met, including where it is shown that the product is sufficiently profitable so that market exclusivity is no longer justified.

Loss of orphan drug designation for CTI-1601 or the failure to obtain such designation in other countries or for any future product candidates could adversely affect our business, financial condition and results of operation.

If another product has received approval in the indications for which we have received orphan drug designation, we may still receive approval in that indication if we can demonstrate that our product candidate is clinically superior to the existing orphan product.

This demonstration of clinical superiority may be done at the time of initial approval or in post-approval studies, depending on the type of marketing authorization granted.

Having to comply with these additional requirements to obtain orphan drug exclusivity could adversely affect our business, financial condition and results of operation.

Although we have obtained rare pediatric disease designation for CTI-1601, we may not be eligible to receive a priority review voucher in the event the FDA determines we no longer meet the criteria for designation, revokes the designation or that FDA approval does not occur prior to September 30, 2026.

The sponsor of an application for a rare pediatric disease drug product may be eligible for a voucher that can be used or sold to obtain a priority review for a subsequent application submitted under section 505(b)(1) of the FDCA or section 351 of the PHS Act.

The rare pediatric disease priority review voucher program was most recently reauthorized by Congress through September 30, 2024, with the potential for priority review vouchers to be granted through September 30, 2026.

We received rare pediatric disease designation from the FDA for CTI-1601 in 2019.

We may, in the future, apply for rare pediatric disease designation from the FDA for future product candidates that may qualify for designation.

Vouchers for rare pediatric disease drugs are awarded when the designated drug receives approval.

CTI-1601 may not receive approval, or we may receive approval in adults, but not pediatric patients, and therefore, we may not receive a voucher.

In addition, even though CTI-1601 has been designated as a drug for a rare pediatric disease, the FDA may later decide that it no longer meets the criteria for designation, the designation may be revoked, or we could not be awarded the voucher.

Vouchers for rare pediatric disease drugs are awarded for qualifying applications when the drug receives approval.

Although CTI-1601 has received rare pediatric disease designation, CTI-1601 may not receive a priority review voucher for a number of reasons:

CTI-1601 may not receive approval;

CTI-1601 may receive approval in adults, but not pediatric patients;

CTI-1601 may not meet the eligibility requirements for a priority voucher at the time we seek approval for CTI-1601;

or we may not meet the current deadline for receiving a priority review voucher (September 30, 2026), in which case we would not be able to obtain a voucher unless Congress further reauthorizes the program.

Finally, a rare pediatric disease designation does not necessarily lead to faster development or regulatory review of the product or increase the likelihood that it will receive marketing approval.

If we apply for designation for future product candidates as drugs for rare pediatric diseases, the FDA may not grant the designation.

The failure to maintain rare pediatric disease designation for CTI-1601 or if FDA approval does not occur prior to September 30, 2026 could result in the inability to receive a rare pediatric disease designation voucher which could adversely affect our business, financial condition and results of operations.

The failure to maintain rare pediatric disease designation for CTI-1601 or if FDA approval does not occur prior to September 30, 2026 could result in the inability to receive a priority review voucher which could adversely affect our business, financial condition and results of operations.

If we fail to maintain PRIME designation in the European Union for CTI-1601, our competitive position would be harmed.

The PRIME scheme is open to medicines under development and for which the applicant intends to apply for an initial marketing authorization application through the centralized procedure.

The PRIME scheme is open to medicines under development and for which the applicant intends to apply for an initial MAA through the centralized procedure.

Eligible products must target conditions for which where is an unmet medical need (there is no satisfactory method of diagnosis, prevention or treatment in the European Union or, if there is, the new medicine will bring a major therapeutic advantage) and they must demonstrate the potential to address the unmet medical need by introducing new methods or therapy or improving existing ones.

Applicants will typically be at the exploratory clinical trial phase of development and will have preliminary clinical evidence in patients to demonstrate the promising activity of the medicine and its potential to address to a significant extent an unmet medical need.

In exceptional cases, applicants from the academic sector or SMEs (small and medium sized enterprises) may submit an eligibility request at an earlier stage of development if compelling non-clinical data in a relevant model provide early evidence of promising activity, and first in man studies indicate adequate exposure for the desired pharmacotherapeutic effects and tolerability.

If a medicine is selected for the PRIME scheme, EMA:

Appoints a rapporteur from the Committee for Medicinal Products for Human Use ("CHMP") or from the Committee for Advanced Therapies ("CAT") to provide continuous support and to build up knowledge of the medicine in advance of the filing of a marketing authorization application;

In exceptional cases, applicants from the academic sector or SMEs may submit an eligibility request at an earlier stage of development if compelling non-clinical data in a relevant model provide early evidence of promising activity, and first in man studies indicate adequate exposure for the desired pharmacotherapeutic effects and tolerability.

If a medicine is selected for the PRIME scheme, the EMA:

appoints a rapporteur from the CHMP or from the CAT to provide continuous support and to build up knowledge of the medicine in advance of the filing of an MMA;

issues guidance on the applicant’s overall development plan and regulatory strategy;

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Medicines that are selected for the PRIME scheme are also expected to benefit from EMA’s accelerated assessment procedure at the time of application for marketing authorization.

Where, during the course of development, a medicine no longer meets the eligibility criteria, or if a medicine granted early access to the PRIME scheme cannot later demonstrate proof of concept, support under the PRIME scheme may be withdrawn.

Where, during the course of

development, a medicine no longer meets the eligibility criteria, or if a medicine granted early access to the PRIME scheme cannot later demonstrate proof of concept, support under the PRIME scheme may be withdrawn.

Approval of other therapies for the treatment Friedreich’s ataxia, including the recent approval of omaveloxolone could negatively impact our continued access to this and similar programs.

Loss of PRIME designation for CTI-1601 or the failure to obtain such designation for any future product candidates could adversely affect our business, financial condition and results of operation.

Changes in regulatory requirements, FDA guidance, guidance from other regulatory authorities or unanticipated events during our non-clinical or clinical trials of CTI-1601 or future product candidates may result in changes to clinical trial protocols or additional non-clinical or clinical trial requirements, which could result in increased costs to us and could delay our development timeline.

Changes in regulatory requirements, FDA guidance or guidance from EMA or unanticipated events during our non-clinical or clinical trials may force us to terminate or adjust our clinical program.

The FDA, or the applicable regulatory authorities may impose additional clinical trial and/or non-clinical study requirements.

Changes in regulatory requirements, FDA guidance or guidance from EMA or unanticipated events during our non-clinical or clinical trials may force us to terminate or adjust our clinical programs.

The FDA, or other applicable regulatory authorities may impose additional clinical trial and/or non-clinical study requirements.

Amendments to our clinical trial protocols would require resubmission to the FDA, or the applicable regulatory authorities as well as IRBs and ethics committees for review and approval, which may adversely impact the cost, timing or successful completion of a clinical trial.

If we experience delays completing, or if we terminate, any of our clinical trials, or if we are required to conduct additional clinical trials, or non-clinical studies and/or post-market studies, the commercial prospects for CTI-1601 or any other potential product candidates may be harmed and our ability to generate product revenue will be delayed, and it would materially adversely affect our business, financial condition and results of operations.

If we experience delays completing, or if we terminate, any of our clinical trials, or if we are required to conduct additional clinical trials, or non-clinical studies and/or post-market studies, the commercial prospects for CTI-1601 or any other potential product candidates may be harmed and our ability to generate product revenue will be delayed or eliminated, and it would materially adversely affect our business, financial condition and results of operations.

In order to market any product outside of the United States, we must comply with numerous and varying regulatory requirements of other countries regarding drug development and commercialization.

The approval process varies from country to country and can involve additional product testing and additional administrative review periods.

The approval processes varies from country to country and can involve additional product testing and additional administrative review periods.

The time required to obtain approval in other countries might differ from and be longer than that required to obtain FDA approval.

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The ability of the FDA to review and/or approve new products can be affected by a variety of factors, including government budget and funding levels, statutory, regulatory, and policy changes, the FDA’s ability to hire and retain key personnel, and accept the payment of user fees, and other events that may otherwise affect the FDA’s ability to perform routine functions.

Average review times at the FDA have fluctuated in recent years as a result.

In addition, government funding of other government agencies that fund research and development activities is subject to the political process, which is inherently fluid and unpredictable.

Disruptions at the FDA and other agencies may also slow the time necessary for new drugs to be reviewed and/or approved by necessary government agencies, which would adversely affect our business.

On March 18, 2020, the FDA announced its intention to temporarily postpone routine surveillance inspections of domestic manufacturing facilities.

Regulatory authorities outside the United States may adopt similar restrictions or other policy measures in response to the COVID-19 pandemic.

If a prolonged government shutdown occurs, or if global health concerns continue to prevent the FDA or other regulatory authorities from conducting their regular inspections, reviews, or other regulatory activities, it could significantly impact the ability of the FDA or other regulatory authorities to timely review and process our regulatory submissions, which could have a material adverse effect on our business.

For example, since March 2020 when foreign and domestic inspections of facilities were largely placed on hold, the FDA has been working to resume routine surveillance, bioresearch monitoring and pre-approval inspections on a prioritized basis.

Since April 2021, the FDA has conducted limited inspections and employed remote interactive evaluations, using risk management methods, to meet user fee commitments and goal dates.

Ongoing travel restrictions and other uncertainties continue to impact oversight operations both domestic and abroad and it is unclear when standard operational levels will resume.

Regulatory authorities outside the United States may adopt similar restrictions or other policy measures in response to a resurgence of COVID-19, and/or other outbreaks of communicable diseases.

If a prolonged government shutdown occurs, or if global health concerns prevent the FDA or other regulatory authorities from conducting their regular inspections, reviews, or other regulatory activities, it could significantly impact the ability of the FDA or other regulatory authorities to timely review and process our regulatory submissions, which could have a material adverse effect on our business.

Regulatory requirements governing biologic products have changed frequently and may continue to change in the future.

Such requirements may lengthen the regulatory review process, require us to perform additional non-clinical studies or clinical trials, and increase our costs, or may force us to delay, limit or terminate certain of our programs.

Regulatory requirements governing biologic drug products are still evolving and may continue to change in the future.

As a result, it is difficult to determine how long it will take or how much it will cost to obtain regulatory approvals for CTI-1601 for the treatment of Friedreich’s ataxia or any other future protein replacement therapy product candidates in any indication, if at all.

Regulatory requirements governing biologic drug products are evolving and may continue to change in the future.

As a result, it is difficult to determine how long it will take or how much it will cost to obtain regulatory approvals for CTI-1601 for the treatment of FA or any other future protein replacement therapy product candidates in any indication, if at all.

Regulatory review agencies and the new requirements and guidelines they promulgate may lengthen the regulatory review process, require us to perform additional or larger studies, increase our development costs, lead to changes in regulatory positions and interpretations, delay or prevent approval and commercialization of our product candidates or lead to significant post-approval studies, limitations or restrictions.

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The regulatory approval process for novel product candidates such as ours can be more expensive and take longer than for other, better known or more extensively studied product candidates.

The clinical trials of CTI-1601 and any future product candidates are, and the manufacturing and marketing of CTI-1601 and any future product candidates will be subject to extensive and rigorous review and regulation by numerous government authorities in the United States and in other countries, such as within the European Union, where we intend to seek regulatory approval of, and market, any product candidate.

The clinical trials of CTI-1601 and any future product candidates are, and the manufacturing and marketing of CTI-1601 and any future product candidates, will be subject to extensive and rigorous review and regulation by numerous government authorities in the United States and in other countries, such as within the European Union, where we intend to seek regulatory approval of, and market, any product candidates.

Before obtaining regulatory approvals for the commercial sale of any product candidate, we must demonstrate through non-clinical testing and clinical trials that the product candidate is safe and effective for use in each target indication.

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In addition, approval policies, regulations, or 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, which may cause delays in the approval of or may result in the decision not to approve our product candidates.

We have not obtained regulatory approval for CTI-1601, and it is possible that our product candidate or any product candidates we may seek to develop in the future will never obtain regulatory approval.

If marketing approval is obtained, it will likely include post-marketing studies, and other post-marketing requirements, and surveillance such as Risk Evaluation and Mitigation Strategies ("REMS") which will require the expenditure of substantial resources beyond the proceeds we currently have on hand.

We have not obtained regulatory approval for CTI-1601, and it is possible that this product candidate or any product candidates we may seek to develop in the future will never obtain regulatory approval.

If marketing approval is obtained, it will likely include post-marketing studies, and other post-marketing requirements, and surveillance such as REMS which will require the expenditure of substantial resources beyond the proceeds we currently have on hand.

Furthermore, we are not permitted to market CTI-1601 in the United States or the European Union until we receive approval of a BLA from the FDA or a MAA from the EMA, or in any other foreign countries until we receive the requisite marketing approval from such countries.

The development of drugs for Friedreich’s ataxia or other rare diseases may require initial non-clinical studies, early and usually smaller, clinical trials and randomized, double-blind placebo controlled long-term safety and efficacy trials in order to test the safety and efficacy of the drug.

We have completed two Phase 1 clinical trials in patients with Friedreich’s ataxia in the United States but clinical development is currently subject to clinical hold.

If we are successful in our efforts to have the clinical hold lifted, CTI-1601 requires substantial further clinical development before we can submit a BLA to the FDA.

Development and/or regulatory programs for CTI-1601 in any countries other than the United States (such as a MAA to the EMA) is only in very preliminary stages and may require substantial further development in those countries prior to regulatory submissions seeking regulatory approval for marketing.

The development of drugs for FA or other rare diseases may require initial non-clinical studies, early and usually smaller, clinical trials and randomized, double-blind placebo controlled long-term safety and efficacy trials in order to test the safety and efficacy of the drug.

CTI-1601 requires substantial further clinical development before we can submit a BLA to the FDA.

Development and/or regulatory programs for CTI-1601 in any countries other than the United States (such as a MAA to the EMA) are only in very preliminary stages and may require substantial further development in those countries prior to regulatory submissions seeking regulatory approval for marketing.

Even after successful completion of clinical trials, there is a risk that the FDA or other regulatory agencies may request further information from us, disagree with our findings or otherwise undertake a lengthy review of our submission.

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the FDA or the EMA may disagree with the number, design, size, duration, conduct or implementation of our clinical trials;

the FDA or the EMA may require that we conduct additional non-clinical studies or clinical trials;

the FDA or the EMA may require that we conduct additional non-clinical studies and/or clinical trials;

the FDA or the EMA may not approve the formulation, manufacturing, labeling or specifications of CTI-1601;

the contract research organizations ("CROs"), that we retain to conduct our clinical trials may take actions outside of our control that materially adversely impact our clinical trials;

the CROs that we retain to conduct and/our clinical trials may take actions outside of our control that materially adversely impact our clinical trials;

the FDA or the EMA may find the data from non-clinical studies and clinical trials insufficient to demonstrate that CTI-1601’s clinical and other benefits outweigh its safety risks;

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if and when our BLA is submitted, the FDA could require an FDA advisory committee assessment, or the advisory committee may recommend against approval of our application or may recommend that the FDA require, as a condition of approval, additional non-clinical studies or clinical trials, limitations on approved labeling or distribution and use restrictions;

the FDA could require development of a REMS as a condition of approval or post-approval, or may not agree with our proposed REMS, or may impose additional requirements, including requirements that limit the promotion, advertising, distribution, or sales of CTI-1601;

the FDA or the EMA could require development of a REMS as a condition of approval or post-approval, or may not agree with our proposed REMS, or may impose additional requirements, including requirements that limit the promotion, advertising, distribution, or sales of CTI-1601;

the FDA or the EMA may find deficiencies with or not approve the manufacturing processes or facilities of third-party manufacturers with which we contract;

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It is possible that our product candidates may not obtain appropriate regulatory approvals necessary for us to commence clinical trials for our product candidates.

Accordingly, even if we are able to obtain the requisite financing to continue to fund our development and clinical trials, we cannot assure that CTI-1601, or any other of our potential product candidates will be successfully developed or commercialized.

Accordingly, even if we are able to obtain the requisite financing to continue to fund our development and clinical trials, we cannot ensure that CTI-1601, or any other of our potential product candidates will be successfully developed or commercialized.

We are subject to healthcare laws and regulations, and health information privacy and security laws, which could expose us to criminal sanctions, civil penalties, contractual damages, reputational harm and diminished profits and future earnings.

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Restrictions under applicable federal and state healthcare laws and regulations include the following:

the federal Anti-Kickback Statute prohibits, among other things, persons from knowingly and willfully soliciting, offering, receiving or paying remuneration, directly or indirectly, in cash or in kind, to induce or reward either the referral of an individual for, or the purchase, order or recommendation of, any good or service, for which payment may be made under federal healthcare programs such as Medicare and Medicaid;

service, for which payment may be made under federal healthcare programs such as Medicare and Medicaid;

the federal false claims laws impose criminal and civil penalties, including those from civil whistleblower or qui tam actions pursuant to the federal False Claims Act, against individuals or entities for knowingly presenting, or causing to be presented, to the federal government, claims for payment that are false or fraudulent or making a false statement to avoid, decrease, or conceal an obligation to pay money to the federal government;

the federal Health Insurance Portability and Accountability Act of 1996, as amended by the Health Information Technology for Economic and Clinical Health Act ("HIPAA") imposes criminal and civil liability for executing a scheme to defraud any healthcare benefit program and also imposes obligations, including mandatory contractual terms, with respect to safeguarding the privacy, security and transmission of individually identifiable health information;

HITECH imposes criminal and civil liability for executing a scheme to defraud any healthcare benefit program and also imposes obligations, including mandatory contractual terms, with respect to safeguarding the privacy, security and transmission of individually identifiable health information;

the federal false statements statute prohibits knowingly and willfully falsifying, concealing or covering up a material fact or making any materially false statement in connection with the delivery of or payment for healthcare benefits, items or services;

the federal transparency requirements, sometimes referred to as the “Sunshine Act,”

under the Patient Protection and Affordable Care Act, as amended by the Health Care and Education Affordability Reconciliation Act ("ACA") require manufacturers of drugs, devices, biologics, and medical supplies to report to the Department of Health and Human Services information related to physician payments and other transfers of value and physician ownership and investment interests.

Beginning in 2022, applicable manufacturers are also required to report such information regarding payments and transfers of value provided, as well as ownership and investment interests held, during the previous year to physician assistants, nurse practitioners, clinical nurse specialists, certified nurse anesthetists and certified nurse-midwives;

under the Affordable Care Act, require manufacturers of drugs, devices, biologics, and medical supplies to report to CMS information related to payments and other transfers of value provided to physicians (defined to include doctors, dentists, optometrists, podiatrists and chiropractors), physician assistants, nurse practitioners, clinical nurse specialists, certified nurse anesthetists, certified nurse-midwives and teaching hospitals, as well as ownership and investment interests held by physicians and their immediate family members;

federal consumer protection and unfair competition laws, which broadly regulate marketplace activities and activities that potentially harm consumers;

analogous state laws and regulations, such as state anti-kickback and false claims laws and transparency laws, may apply to sales or marketing arrangements and claims involving healthcare items or services reimbursed by non-governmental third-party payors, including private insurers, and some state laws require pharmaceutical companies to comply with the pharmaceutical industry’s voluntary compliance guidelines and the relevant compliance guidance promulgated by the federal government in addition to requiring drug manufacturers to report information related to payments to physicians and other healthcare providers or marketing expenditures and drug pricing.

Some state laws require pharmaceutical companies to comply with the pharmaceutical industry’s voluntary compliance guidelines and the relevant compliance guidance promulgated by the federal government in addition to requiring drug manufacturers to report information related to payments to physicians and other healthcare providers or marketing expenditures and drug pricing.

Ensuring that our future business arrangements with third parties comply with applicable healthcare laws and regulations could be costly.

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If our operations, including anticipated activities to be conducted by our sales team, were found to be in violation of any of these laws or any other governmental regulations that may apply to us, we may be subject to significant civil, criminal and administrative penalties, damages, fines and exclusion from government funded healthcare programs, such as Medicare and Medicaid, any of which could substantially disrupt our operations and would materially adversely affect our business, financial condition and results of operations.

If any of the physicians or other providers or entities with whom we expect to do business is found not to be in compliance with applicable laws, they may be subject to criminal, civil or administrative sanctions, including exclusions from government funded healthcare programs.

Healthcare legislation, including potentially unfavorable pricing regulations or other healthcare reform initiatives may increase the difficulty and cost for us to obtain marketing approval of and commercialize our product candidates.

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The United States and many foreign jurisdictions have enacted or proposed legislative and regulatory changes affecting the healthcare system that may affect our ability to profitably sell our product and product candidates, if approved.

The United States government, state legislatures and foreign governments also have shown significant interest in implementing cost-containment programs to limit the growth of government-paid

healthcare costs, including price controls, restrictions on reimbursement and requirements for substitution of generic products for branded prescription drugs.

The United States government, state legislatures and foreign governments also have shown significant interest in implementing cost-containment programs to limit the

growth of government-paid healthcare costs, including price controls, restrictions on reimbursement and requirements for substitution of generic products for branded prescription drugs.

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

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Other legislative changes have been proposed and adopted since the passage of the Affordable Care Act.

The Budget Control Act of 2011, among other things, created the Joint Select Committee on Deficit Reduction to recommend proposals in spending reductions to Congress.

The Joint Select Committee did not achieve its targeted deficit reduction of an amount greater than $1.2 trillion for the fiscal years 2012 through 2021, triggering the legislation’s automatic reductions to several government programs.

These reductions included aggregate reductions to Medicare payments to healthcare providers of up to 2.0% per fiscal year, which went into effect in April 2013.Subsequent legislation extended the 2% reduction, on average, to 2030 unless additional Congressional action is taken, However, pursuant to the Coronavirus Aid, Relief and Economic Security Act ("CARES Act") the 2% Medicare sequester reductions have been suspended from May 1, 2020 through December 31, 2021 due to the COVID-19 pandemic.

On January 2, 2013, the American Taxpayer Relief Act was signed into law, which, among other things, reduced Medicare payments to several types of providers, including hospitals, imaging centers and cancer treatment centers, and increased the statute of limitations period for the government to recover overpayments to providers from three to five years.

The Affordable Care Act has also been subject to challenges in the courts.

On December 14, 2018, a Texas U.S.

District Court Judge ruled that the Affordable Care Act is unconstitutional in its entirety because the “individual mandate”

was repealed by Congress.

On December 18, 2019, the Fifth Circuit U.S.

Court of Appeals held that the individual mandate is unconstitutional and remanded the case to the Texas District Court to reconsider its earlier invalidation of the entire Affordable Care Act

An appeal was taken to the U.S.

Supreme Court.

On June 17, 2021.

, the Supreme Court ruled that the plaintiffs lacked standing to challenge the law as they had not alleged personal injury traceable to the allegedly unlawful conduct.

As a result, the Supreme Court did not rule on the constitutionality of the ACA or any of its provisions.

Further changes to and under the Affordable Care Act remain possible, but it remains unknown what form any such changes or any law proposed to replace or revise the Affordable Care Act would take, and how or whether it may affect our business in the future.

The Budget Control Act of 2011,and subsequent legislation triggered reductions to Medicare payments to healthcare providers of up to 2.0% per fiscal year, which will remain in effect through 2031 unless additional Congressional action is taken.

The American Taxpayer Relief Act was signed into law in 2013, which, among other things, reduced Medicare payments to several types of providers, including hospitals, imaging centers and cancer treatment centers, and increased the statute of limitations period for the government to recover overpayments to providers from three to five years.

Most recently, the IRA includes several provisions that will impact our business to varying degrees, including provisions that reduce the out-of-pocket cap for Medicare Part D beneficiaries to $2,000 starting in 2025;

impose new manufacturer financial liability on certain drugs in Medicare Part D, allow the U.S.

government to negotiate Medicare Part B and Part D price caps for certain high-cost drugs and biologics without generic or biosimilar competition, require companies to pay rebates to Medicare B and Part D for certain drug prices that increase faster than inflation, and delay the rebate rule that would limit the fees that pharmacy benefit managers can charge.

We expect that changes to the Affordable Care Act, the Medicare and Medicaid programs, changes allowing the federal government to directly negotiate drug prices and changes stemming from other healthcare reform measures, especially with regard to healthcare access, financing or other legislation in individual states, could have a material adverse effect on the healthcare industry.

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Government authorities and third-party payors, such as private health insurers and health maintenance organizations, decide which medications they will pay for and establish reimbursement levels for those medications.

Cost containment is a

primary concern in the U.S.

Cost containment is a primary concern in the U.S.

healthcare industry and elsewhere.

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To obtain favorable reimbursement for the indications sought or pricing approval in some countries, we may be required to conduct a clinical trial that compares the cost-effectiveness of product candidates that we elect to sell on our own with other available therapies.

If reimbursement for product candidates that we elect to sell on our own is unavailable in any country in which we seek reimbursement, if it is limited in scope or amount, if it is conditioned upon our completion of additional clinical trials, or if pricing is set at unsatisfactory levels, our business, financial conditions and results of operations could be materially adversely affected.

If reimbursement for product candidates that we elect to sell on our own is

unavailable in any country in which we seek reimbursement, if it is limited in scope or amount, if it is conditioned upon our completion of additional clinical trials, or if pricing is set at unsatisfactory levels, our business, financial conditions and results of operations could be materially adversely affected.

Even if we obtain regulatory and marketing approval for a product candidate, our product candidates will remain subject to regulatory oversight.

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In addition, product manufacturers and their facilities are subject to payment of user fees and continual review and periodic inspections by the FDA and other regulatory authorities for compliance with cGMP requirements and adherence to commitments made in the BLA or NDA or foreign marketing application.

If we, or a regulatory authority, discover(s) previously unknown problems with a product, such as adverse events of unanticipated severity or frequency, or problems with the facility where the product is manufactured or disagrees with the promotion, marketing or labeling of that product, a regulatory authority may impose restrictions relative to that product, the manufacturing facility or us, including requiring recall or withdrawal of the product from the market or suspension of manufacturing.

If we, or a regulatory authority, discover(s) previously unknown problems with a product, such as adverse events of unanticipated severity or frequency, or problems with the facility where the product is manufactured or if a regulatory authority disagrees with the promotion, marketing or labeling of that product, a regulatory authority may impose restrictions relative to that product, the manufacturing facility or us, including requiring recall or withdrawal of the product from the market or suspension of manufacturing.

If we or our contractors fail to comply with applicable regulatory requirements following approval of CTI-1601, a regulatory authority may:

issue a warning letter, untitled letter, or Form 483 asserting that we are in violation of the law;

issue a warning letter, or untitled letter asserting that we are in violation of the law;

require us to enter into a consent decree, which can include imposition of various fines, reimbursements for inspection costs, required due dates for specific actions and penalties for non-compliance;

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suspend any ongoing clinical trials;

refuse to approve a pending BLA or NDA or comparable foreign marketing application (or any supplements thereto) submitted by us or our strategic partners;

refuse to approve a pending BLA or NDA or comparable foreign marketing application (or any supplements thereto) submitted by us;

restrict the marketing or manufacturing of the product;

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

The occurrence of any event or penalty described above may inhibit our ability to commercialize CTI-1601, if approved, and adversely affect our business, financial condition, results of operations and prospects.

The occurrence of any event or penalty described above

may inhibit our ability to commercialize CTI-1601, if approved, and adversely affect our business, financial condition, results of operations and prospects.

In addition, the FDA’s policies, and those of equivalent foreign regulatory agencies, may change and additional government regulations may be enacted that could prevent, limit or delay regulatory approval of CTI-1601.

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Our future growth depends, in part, on our ability to penetrate foreign markets, where we would be subject to additional regulatory burdens and other risks and uncertainties.

The prevalence of Friedreich's ataxia is estimated to be approximately three times greater in the European Union than in the United States, and, therefore, represents our largest potential market for CTI-1601.

The prevalence of FA is estimated to be approximately three times greater in the European Union than in the United States, and, therefore, represents our largest potential market for CTI-1601.

Our future profitability will depend, in part, on our ability to commercialize CTI-1601 and future product candidates in the European Union and other foreign markets for which we may rely on collaborations with third parties.

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ability to obtain reimbursement for a product candidate in foreign markets;

compliance with the Foreign Corrupt Practices Act of 1977 ("FCPA");

compliance with the FCPA;

our inability to directly control commercial activities because we may need to rely on third parties;

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Even if we receive marketing approval for CTI-1601, we may not achieve broad market acceptance, which would limit the revenue that we generate from our sales.

CTI-1601 among the medical community, including physicians, patients, advocacy groups and healthcare payors.

The commercial success of CTI-1601, if developed and approved for marketing by the FDA or EMA or other applicable regulatory authorities, will depend upon the market size for, and the awareness and acceptance of CTI-1601 among the medical community, including physicians, patients, advocacy groups and healthcare payors.

Market acceptance of CTI-1601, if approved, will depend on a number of factors, including, among others:

if the actual number of patients with Friedreich’s ataxia is lower than we believe;

if the actual number of patients with FA is lower than we believe;

the relative convenience and ease of subcutaneous injections as the necessary method of administration;

the prevalence and severity of any adverse side effects associated with CTI-1601;

limitations or warnings contained in the labeling approved for CTI-1601 by the FDA, EMA, or other regulatory authorities, such as a “black box”

limitations or warnings contained in the labeling approved for CTI-1601 by the FDA, EMA, or other regulatory authorities, such as a “boxed”

warning or if any approval that we obtain is based on a narrower definition of possible patient populations;

availability of alternative treatments, including any competitive Friedreich’s ataxia therapies in development that could be approved or commercially launched prior to approval of CTI-1601;

availability of alternative treatments, including any competitive FA therapies approved or in development that have been or could be approved or commercially launched prior to approval of CTI-1601;

the willingness of the target patient population to try new therapies and of physicians to prescribe these therapies;

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the impact of any future changes in U.S.

healthcare, including medical financial assistance or a transition to a single-payer system;

healthcare, including medical financial assistance or a transition to a single-payor system;

the effectiveness of our sales and marketing strategies;

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If we cannot successfully manage the promotion of CTI-1601 or any potential product candidates, if approved, we could become subject to significant liability, which would materially adversely affect our business, financial condition and results of operations.

Competing technologies could emerge, adversely affecting our opportunity to generate revenue from the sale of CTI-1601, if approved.

Additional competing technologies could emerge, adversely affecting our opportunity to generate revenue from the sale of CTI-1601, if approved.

The biotechnology and pharmaceutical industries are intensely competitive and subject to rapid and significant technological change.

Any new product that competes with an approved product may need to demonstrate compelling advantages in efficacy, convenience, tolerability and safety to be commercially successful.

For example, the FDA recently approved omaveloxolone for the treatment of FA in adults and adolescents aged 16 and older.

CTI-1601 will compete with omaveloxolone and other new, future approved products and may need to demonstrate compelling advantages in efficacy, convenience, tolerability and safety to be commercially successful.

Other competitive factors, including biosimilar and gene therapy competition, could force us to lower prices or could result in reduced sales.

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If these or other companies enact pricing strategies that impact the price we can charge for our product candidate, if approved, we may reduce our prices and our revenue and results of operations could be affected.

Any new product could also affect our ability to recruit and retain clinical trial patients, to obtain and maintain potential expedited regulatory pathways, and to commercialize current and future product candidates (including the impact of potential barriers to entry if a competitor is able to establish a strong market position before we are able to commercialize our products).

For example, in January 2022, a pharmaceutical company announced that it had initiated a rolling submission of an NDA to the FDA for omaveloxolone for the treatment of patients with Friedreich’s ataxia, which if approved, would compete directly with CTI-1601.

Given that we are still in a relatively early phase of development for CTI-1601, the successful approval and commercialization of omaveloxolone could provide a competitor with a significant competitive advantage and may create an additional barrier to market acceptance of CTI-1601, if approved.

Any new product could also affect our ability to recruit and retain clinical trial patients, to obtain and maintain designations or eligibility for expedited regulatory pathways, and to commercialize current and future product candidates.

Given that we are still in a relatively early phase of development for CTI-1601, the recent approval and commercialization of omaveloxolone and the approval of any future competing technologies could provide competitors with a significant competitive advantage and may create an additional barrier to market acceptance of CTI-1601.

If we are not able to compete effectively against our current and future competitors, our business will not grow and our financial condition and results of operations will be adversely affected.

Mergers and acquisitions in the pharmaceutical and biotechnology industries may result in even more resources being concentrated among a smaller number of our competitors.

Smaller or early-stage companies may also prove to be significant competitors, particularly through collaborative arrangements with large and established companies.

Smaller or early-stage companies may also prove to be significant competitors, particularly through collaborative arrangements with large and established

These competitors also compete with us in recruiting and retaining qualified scientific and management personnel and establishing clinical trial sites and patient registration for clinical trials, as well as in acquiring technologies complementary to, or necessary for, our programs.

Our commercial opportunity could be reduced or eliminated if our competitors develop and commercialize products that are safer, more effective, have fewer or less severe side effects, are more convenient, or are less expensive than any products that we may develop.

Furthermore, currently approved products could be discovered to have application for treatment of age-related degenerative diseases and disorders, which could give such products significant regulatory and market timing advantages over any of our product candidates.

Our competitors also may obtain FDA, EMA or other regulatory approval for their products more rapidly than we may obtain approval for ours and may obtain orphan product exclusivity from the FDA for indications our product candidates are targeting, which could result in our competitors establishing a strong market position before we are able to enter the market.

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Some countries in the European Union may impose automatic price reductions upon market entry of the second or third biosimilar competitor.

In the United States, the ACA authorized the FDA to approve biosimilars via a separate, abbreviated pathway.

In the United States, the Affordable Care Act authorized the FDA to approve biosimilars via a separate, abbreviated pathway.

A growing number of companies have announced that they are in varying stages of development of biosimilar versions of existing biotechnology products.

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We may not be able to attract and retain quality personnel on acceptable terms, or at all.

In addition, to the extent we hire personnel from competitors, we may be subject to allegations that they have been improperly solicited or that they have divulged proprietary or other confidential information, or that their former employers own their research output.

In addition, to the extent we hire personnel from competitors, we may be subject to

allegations that they have been improperly solicited or that they have divulged proprietary or other confidential information, or that their former employers own their research output.

We rely on consultants and advisors, including scientific, non-clinical, manufacturing and clinical advisors, to assist us in formulating our development and commercialization strategy.

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The loss of the services of our executive officers or other key employees could impede the achievement of our research, development and commercialization objectives and seriously harm our ability to successfully implement our business strategy.

Furthermore, replacing executive officers and key

employees may be difficult and may take an extended period of time because of the competition for talent, particularly with the limited number of individuals in our industry with the breadth of skills and experience required to successfully develop, gain regulatory approval of and commercialize products.

In addition, COVID-19 poses a risk to our ability to retain and rely on our executive officers and key employees, including the potential that one or more of such employees or members of their families may contract the virus, which could impact the ability of such employees to perform as expected, which in turn would adversely impact our current and planned operations.

Furthermore, replacing executive officers and key employees may be difficult and may take an extended period of time because of the competition for talent, particularly with the limited number of individuals in our industry with the breadth of skills and experience required to successfully develop, gain regulatory approval of and commercialize products.

In addition, a possible resurgence of vaccine resistant or more highly contagious or deadly variants of COVID-19 or other health epidemics may pose a risk to our ability to retain and rely on our executive officers and key employees, including the potential that one or more of such employees or members of their families may contract the virus, which could impact the ability of such employees to perform as expected, which in turn would adversely impact our current and planned operations.

Recruiting and retaining qualified scientific, medical clinical, manufacturing, quality assurance, regulatory, legal, public company financial, business, sales, marketing and commercial personnel and implementing and improving our operational, financial and management systems will be critical to our ability to grow and succeed.

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In addition, we may not be able to attract and retain these personnel on acceptable terms given the competition among numerous pharmaceutical companies for similar personnel.

The ongoing COVID-19 pandemic may also affect our ability to attract and successfully recruit these personnel, for one or more reasons.

A possible resurgence of vaccine resistant, more contagious or more highly contagious variants of COVID-19 or other health epidemics may pose may also affect our ability to attract and successfully recruit these personnel, for one or more reasons.

We also experience competition for the hiring of scientific personnel from universities and research institutions.

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We may be unable to successfully implement these tasks on a larger scale and, accordingly, may not achieve our research, development, business and growth goals.

Our internal computer systems, or those of any contractors or consultants, may fail or suffer security breaches, which could result in a material disruption of our product development programs.

Our internal computer systems, or those of any vendors, contractors or consultants, may fail or suffer security breaches, which could result in a material disruption of our product development programs.

Despite the implementation of security measures, our internal computer systems and those of third parties with which we contract are vulnerable to damage from cyber-attacks, computer viruses, unauthorized access, natural disasters, terrorism, war and telecommunication and electrical failures.

The prevalent use of mobile devices that access confidential information also increases the risk of lost or stolen devices, security incidents and data security breaches, which could lead to the loss of confidential information or other intellectual property.

As a result of the COVID-19 pandemic, we may face increased risks of a security breach or disruption due to our reliance on internet technology and the number of our employees who are working remotely, which may create additional opportunities for cybercriminals to exploit vulnerabilities.

Any system failure, accident or security breach that causes interruptions in our operations could result in a material disruption of our product development programs and business operations, in addition to possibly requiring substantial expenditures of resources to remedy.

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In addition, outside parties may attempt to penetrate our systems or those of our vendors or fraudulently induce our employees or employees of our vendors to disclose sensitive information in order to gain access to our data.

Like other companies, we may experience threats to our data and systems, including malicious codes and viruses, and other cyber-attacks.

Like other companies, we may experience threats to our data and

systems, including malicious codes and viruses, and other cyber-attacks.

The number and complexity of these threats continue to increase over time.

If a material breach of our security or that of our vendors occurs, the market perception of the effectiveness of our security measures could be harmed, we could lose business and our reputation and credibility could be damaged, all of which would materially adversely affect our business, financial condition and results of operations.

If a material breach of our security or that of one or more of our vendors, contractors or consultants occurs, the market perception of the effectiveness of our security measures could be harmed, we could lose business and our reputation and credibility could be damaged, all of which would materially adversely affect our business, financial condition and results of operations.

We could be required to expend significant amounts of money and other resources to repair or replace information systems or networks.

Although we develop and maintain systems and controls designed to prevent these

events from occurring, the development and maintenance of these systems, controls and processes is costly and requires ongoing monitoring and updating as technologies change and efforts to overcome security measures become more sophisticated.

Although we develop and maintain systems and controls designed to prevent these events from occurring, the development and maintenance of these systems, controls and processes is costly and requires ongoing monitoring and updating as technologies change and efforts to overcome security measures become more sophisticated.

Moreover, despite our efforts, the possibility of these events occurring cannot be eliminated entirely.

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Our development programs and the potential commercialization of our product candidates will require substantial additional cash to fund expenses.

For CTI-1601, and any future product candidates, we may decide to collaborate with pharmaceutical and biotechnology companies for the development and potential commercialization of those product candidates in some or all markets.

For CTI-1601, and any future product candidates, we may decide to collaborate with pharmaceutical and/or biotechnology companies for the development and potential commercialization of those product candidates in some or all markets.

We face significant competition in seeking appropriate collaborators.

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If we are unable or unwilling to do so, we may have to curtail the development potential product candidates for which we are seeking to collaborate, reduce or delay our development program or one or more of our other development programs, delay potential commercialization in some or all markets or reduce the scope of any sales or marketing activities, or increase our expenditures and undertake development or commercialization activities at our own expense, including potentially increasing our infrastructure and investment outside the United States.

If we elect to increase our expenditures to fund development or commercialization activities on our own, we will need to obtain additional capital, which may not be available to us on acceptable terms or at all.

If we do not have sufficient funds, we may not be able to further develop our product candidates or bring them to market and generate product revenue.

If we do not have sufficient funds,

we may not be able to further develop our product candidates or bring them to market and generate product revenue.

In addition, such efforts may require diversion of a disproportionate amount of our attention away from other day-to-day activities and require devotion of a substantial amount of our time to managing these activities.

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Any such termination or expiration could adversely affect our business, financial condition, results of operations and could harm our business reputation.

We face risks related to health epidemics, including the ongoing COVID-19 pandemic, and other outbreaks of communicable diseases, which could significantly disrupt our operations and may materially and adversely affect our business and financial conditions.

Our business could be adversely impacted by the effects of the ongoing COVID-19 pandemic and the efforts to mitigate it.

The extent to which the COVID-19 pandemic and global efforts to contain its spread will impact our operations will depend on future developments, which are highly uncertain and cannot be predicted at this time, and include the duration, severity and scope of the outbreak and the actions taken to contain or treat the coronavirus outbreak.

The continued spread of the coronavirus globally could materially and adversely impact our operations, including without limitation, our manufacturing and supply chain for CTI-1601 and our planned clinical trials, which have faced, and could continue to face, enrollment difficulties as hospitals or clinical trials sites experience closures.

Because Friedreich’s ataxia is a rare disease, there are a limited number of patients in close proximity to clinical trial sites and clinical trial patients travel from throughout the United States to clinical trial sites to participate.

The travel advisories and risk of infection related to Covid-19 present increased risks to patients traveling to a clinical trial site for dosing, if clinical trials are allowed to continue.

Further, there is currently a global shortage of non-human primates available for drug development, due in part to an increase in demand from companies and other institutions developing vaccines and treatments for COVID-19.

If the shortage continues, this could substantially increase the cost of conducting our non-clinical development and could also result in delays to our development timelines.

We face risks related to health epidemics, and/or other outbreaks of communicable diseases, which could significantly disrupt our operations and may materially and adversely affect our business and financial conditions.

Our business could be adversely impacted by the effects of a global health epidemics, such as, for example, a possible resurgence of vaccine resistant or more highly contagious or deadly variants of COVID-19 and the efforts to mitigate such outbreaks.

Such global outbreaks of communicable diseases globally could materially and adversely impact our operations, including without limitation, our manufacturing and supply chain for CTI-1601 and our planned clinical trials, which have faced, and could continue to face, enrollment difficulties as hospitals or clinical trials sites experience closures.

Because FA is a rare disease, there are a limited number of patients in close proximity to clinical trial sites and clinical trial patients travel from throughout the United States to clinical trial sites to participate.

Any travel advisories or infection risks could present increased risks to patients traveling to a clinical trial site for dosing if clinical trials are allowed to continue.

These events could delay our clinical trials, increase the cost of completing our clinical trials and negatively impact the integrity, reliability or robustness of the data from our clinical trials.

In addition, employee health and availability could be impacted, which may have a material and adverse effect on our business, financial condition and results of operations.

The ongoing pandemic or future pandemics could adversely affect global economies and financial markets resulting in an economic downturn that could have a material adverse effect on our business and prospects.

Future pandemics could adversely affect global economies and financial markets resulting in an economic downturn that could have a material adverse effect on our business and prospects.

Compliance with global privacy and data security requirements could result in additional costs and liabilities to us or inhibit our ability to collect and process data globally, and the failure to comply with such requirements could expose us to criminal sanctions, civil penalties, contractual damages, reputational harm, administrative burdens and diminished profits and future earnings.

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Globally, virtually every jurisdiction in which we may operate has established its own data security and privacy frameworks with which we must comply.

For example, the European Union’s General Data Protection Regulation 2016/679 ("GDPR") imposes strict obligations on the processing of personal data, including personal health data, and the free movement of such data.

The GDPR applies to any company established in the European Union as well as any company outside the European Union that processes personal data in connection with the offering of goods or services to individuals in the European Union or the monitoring of their behavior.

For example, the European Union’s General Data Protection Regulation 2016/679 ("EU GDPR"), the UK General Data Protection Regulation (“UK GDPR”, together with the EU GDPR, the “GDPR”) and UK Data Protection Act 2018, which impose strict obligations on the processing of personal data, including personal health data, and the free movement of such data.

The GDPR applies to any company established in the European Economic Area/ United Kingdom ("EEA/UK") as well as any company outside the EEA/UK Union that processes personal data in connection with the offering of goods or services to individuals in the EEA/UK or the monitoring of their behavior.

The GDPR enhances data protection obligations for processors and controllers of personal data, including, for example, obligations relating to:

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implementing safeguards to protect the security and confidentiality of personal data;

and transferring personal data to countries outside the European Union, including the United States.

and strict rules and restrictions on the international transfers of personal data.

The GDPR prohibits the transfer of personal data to countries outside the EEA/UK, which are not considered by the European Commission and UK government as providing an “adequate”

protection of personal data, including the United States, unless a valid GDPR transfer mechanism (for example, the European Commission approved Standard Contractual Clauses (“SCCs”) and the UK International Data Transfer Agreement/Addendum (“UK

IDTA”)) has been put in place.

Where relying on the SCCs /UK IDTA for data transfers, we may also be required to carry out transfer impact assessments to assess whether the recipient is subject to local laws which allow public authority access to personal data.

The international transfer obligations under the EEA/UK data protection regimes will require significant effort and cost and may result in us needing to make strategic considerations around where EEA/UK personal data is transferred and which service providers we can utilize for the processing of EEA/UK personal data.

Although the UK is regarded as a third country under the EU GDPR, the European Commission has issued a decision recognizing the UK as providing adequate protection under the EU GDPR (“Adequacy Decision”) and, therefore, transfers of personal data originating in the EEA to the UK remain unrestricted.

The UK government has confirmed that personal data transfers from the UK to the EEA remain free flowing.

The UK Government has also introduced a Data Protection and Digital Information Bill (“UK Bill”) into the UK legislative process.

The aim of the UK Bill is to reform the UK’s data protection regime following Brexit.

If passed, the final version of the UK Bill may have the effect of further altering the similarities between the UK and EEA data protection regime and threaten the UK Adequacy Decision from the EU Commission.

This may lead to additional compliance costs and could increase our overall risk.

The respective provisions and enforcement of the EU GDPR and UK GDPR may further diverge in the future and create additional regulatory challenges and uncertainties.

The GDPR imposes additional obligations and risks upon our business and substantially increases the penalties to which we could be subject in the event of any non-compliance, including fines of up to €20 million or 4% of total worldwide annual revenue, whichever is higher.

The GDPR also confers a private right of action on data subjects and consumer associations to lodge complaints with supervisory authorities, seek judicial remedies and obtain compensation for damages.

Given the breadth and depth of changes in data protection obligations, if we are

required to comply with the GDPR’s requirements, we will be required to spend significant time and resources to review our technologies, systems and practices, as well as those of any third-party service providers, contractors or consultants that process or transfer personal data collected in the European Union.

Given the breadth and depth of changes in data protection obligations, if we are required to comply with the GDPR’s requirements, we will be required to spend significant time and resources to review our technologies, systems and practices, as well as those of any third-party service providers, contractors or consultants that process or transfer personal data collected in the EEA/UK.

The GDPR and other changes in laws or regulations associated with the enhanced protection of certain types of sensitive data, such as healthcare data or other personal information from our clinical trials, could require us to change our business practices or lead to government enforcement actions, private litigation or significant fines and penalties against us, reputational harm and could have a material adverse effect on our business, financial condition or results of operations.

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Despite the implementation of security measures in an effort to protect systems that store our information, given their size and complexity and the increasing amounts of information maintained on our internal information technology systems, and those of our third-party CROs, other contractors (including sites performing our clinical trials) and consultants, these systems are potentially vulnerable to breakdown or other damage or interruption from service interruptions, system malfunction, natural disasters, terrorism, war and telecommunication and electrical failures, as well as security breaches from inadvertent or intentional actions by our employees, contractors, consultants, business partners, and/or other third parties, or from cyber-attacks by malicious third parties (including supply chain cyber-attacks or the deployment of harmful malware, ransomware, denial-of-service attacks, social engineering and other means to affect service reliability and threaten the confidentiality, integrity and availability of information), which may compromise our system infrastructure or lead to the loss, destruction, alteration, prevention of access to, disclosure, or dissemination of, or damage or unauthorized access to, our data (including trade secrets or other confidential information, intellectual property, proprietary business information, and personal information) or data that is processed or maintained on our behalf, or other assets, which could result in financial, legal, business and reputational harm to us.

Companies have, in general, experienced an increase in phishing and social engineering attacks from third parties in connection with the COVID-19 pandemic, and the increase in remote working further increases security threats.

Companies have, in general, experienced an increase in phishing and social engineering attacks from third parties, and the increase in remote working further increases security threats.

To the extent that any disruption or security incident were to result in any loss, destruction, unavailability, alteration, disclosure, or dissemination of, or damage or unauthorized access to, our applications, any other data processed or maintained on our behalf or other assets, or for it to be believed or reported that any of these occurred, we could incur liability, financial harm and reputational damage and the development and commercialization of our product candidates could be delayed.

We cannot assure you that our data protection efforts and our investment in information technology, or the efforts or investments of CROs, consultants or other third parties, will prevent significant breakdowns or breaches in systems or other cyber incidents that cause loss, destruction, unavailability, alteration or dissemination of, or damage or unauthorized access to, our data and other data processed or maintained on our behalf or other assets that could have a material adverse effect upon our reputation, business, operations or financial condition.

We cannot ensure that our data protection efforts and our investment in information technology, or the efforts or investments of CROs, consultants or other third parties, will prevent significant breakdowns or breaches in systems or other cyber incidents that cause loss, destruction, unavailability, alteration or dissemination of, or damage

or unauthorized access to, our data and other data processed or maintained on our behalf or other assets that could have a material adverse effect upon our reputation, business, operations or financial condition.

For example, if such an event were to occur and cause interruptions in our operations, it could result in a material disruption of our programs and the development of our product candidates could be delayed.

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We also rely on third parties to manufacture our product candidates, and similar events relating to their computer systems could also have a material adverse effect on our business.

investigations, the further development and commercialization of our product candidates could be delayed, and we could be subject to significant fines or penalties for any noncompliance with certain state, federal and/or international privacy and security laws.

To the extent that any disruption or security incident were to result in any loss, destruction, or alteration of, or damage or unauthorized access to, our data or other information that is processed or maintained on our behalf, or inappropriate disclosure of or dissemination of any such information, we could be exposed to litigation and governmental investigations, the further development and commercialization of our product candidates could be delayed, and we could be subject to significant fines or penalties for any noncompliance with certain state, federal and/or international privacy and security laws.

Our insurance policies may not be adequate to compensate us for the potential losses arising from any such disruption in or, failure or security breach of our systems or third-party systems where information important to our business operations or commercial development is stored.

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distraction of management’s attention from our primary business;

increased product liability costs;

loss of revenue;

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As a result, we expect to continue to rely on CROs, clinical data management organizations and consultants to design, conduct, supervise and monitor our non-clinical studies and clinical trials.

We and our CROs are required to comply with various regulations, including the FDA’s regulations commonly referred to as good clinical practices ("GCPs") which are enforced by regulatory agencies, including the FDA, and comparable foreign regulatory authorities to ensure the health, safety and rights of patients are protected in clinical development and clinical trials, and that trial data integrity is assured.

We and our CROs are required to comply with various regulations, including the FDA’s regulations regarding current Good Clinical Practices ("cGCPs") which are enforced by regulatory agencies, including the FDA, and comparable foreign regulatory authorities to ensure the health, safety and rights of patients are protected in clinical development and clinical trials, and that trial data integrity is assured.

Regulatory authorities ensure compliance with these requirements through periodic inspections of trial sponsors, principal investigators and clinical trial sites.

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If we or any of our CROs fail to comply with applicable requirements, the clinical data generated in our clinical trials may be deemed unreliable and the FDA, EMA or other comparable foreign regulatory authorities may require us to perform additional clinical trials before approving our marketing applications.

We cannot assure you that upon inspection by a given regulatory authority, such regulatory authority will determine that any of our clinical trials comply with such requirements.

We cannot ensure that upon inspection by a given regulatory authority, such regulatory authority will determine that any of our clinical trials comply with such requirements.

In addition, our clinical trials must be conducted with products produced under cGMP requirements, which mandate, among other things, the methods, facilities and controls used in manufacturing, processing and packaging of a drug product to ensure its safety and identity.

Failure to comply with these regulations may require us to repeat non-clinical studies and/or clinical trials, which would delay the regulatory approval process, and could also subject us to enforcement action, up to and including, civil and criminal penalties, which would materially adversely affect our business, financial condition and results of operations.

Our CROs are not our employees, and except for remedies available to us under our agreements with such CROs, we cannot control whether or not they devote sufficient time and resources to our ongoing clinical and non-clinical programs.

non-clinical programs.

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

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Communicating with outside parties can also be challenging, potentially leading to mistakes as well as difficulties in coordinating activities.

These factors may materially adversely affect the willingness or ability of third parties to

conduct our clinical trials and may subject us to unexpected cost increases that are beyond our control.

These factors may materially adversely affect the willingness or ability of third parties to conduct our clinical trials and may subject us to unexpected cost increases that are beyond our control.

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

Because we rely on third parties to develop and manufacture our product candidate, we must, at times, share confidential information with such third parties.

In addition, we must, at times, share confidential information with third parties.

We seek to protect our proprietary technology in part by entering into confidentiality agreements and, if applicable, material transfer agreements, collaborative research agreements, consulting agreements, or other similar agreements with our collaborators, advisors, employees and consultants prior to beginning research or disclosing proprietary information.

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Given that our proprietary position is based, in part, on our confidential information, a competitor’s discovery of our confidential information or other unauthorized use or disclosure would impair our competitive position and may have an adverse effect on our business.

In addition, because we have relied on third parties, our internal capacity to perform these functions is limited.

Moreover, because we have relied on third parties, our internal capacity to perform these functions is limited.

Outsourcing these functions involves risk that third parties may not perform to our standards, may not produce results in a timely manner or may fail to perform at all.

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We rely on third-party supply and manufacturing partners for drug supplies for our research and development, non-clinical activities, and clinical activities, and may do the same for any commercial supplies of our product candidates.

We rely on third-party supply and manufacturing partners to supply the materials and components for, and manufacture, our research and development, non-clinical and clinical study drug substance and product.

We have not yet manufactured or formulated any product candidate on a commercial scale and may not be able to do so for any of our product candidates.

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There can be no assurance that our supply of research and development, non-clinical and clinical development of drugs and other materials will not be limited, interrupted, restricted in certain geographic regions or will be of satisfactory quality or continue to be available at acceptable prices.

In particular, replacement of any product formulation manufacturer we may engage could require significant effort and expertise because there may be a limited number of qualified replacements.

For example, we rely and expect to continue to rely on a small number of manufacturers to supply us with our requirements for drug substance and formulated drugs related to our CTI-1601 clinical program.

In particular,

replacement of any product formulation manufacturer we may engage could require significant effort and expertise because there may be a limited number of qualified replacements.

For example, we rely and expect to continue to rely on a small number of manufacturers to supply us with our requirements for drug substance and formulated drug product related to our CTI-1601 clinical program.

The drug substance which is in frozen liquid form for CTI-1601 is currently manufactured for us by a third-party manufacturer, and the frozen liquid form of drug product is made at another manufacturer.

We are undertaking a program with a third manufacturer to begin to produce a lyophilized version of the drug product from the same drug substance, that, once available, we intend to use in certain of our future planned clinical trials.

We are undertaking a program with a third party manufacturer to begin to produce a lyophilized version of the drug product from the same drug substance, that, once available, we intend to use in certain of our future planned clinical trials.

Our research and development programs could be adversely affected by a significant interruption in these manufacturing services or in the supply of drug substance and formulated drugs.

In addition, because we rely on multiple manufacturers for our CTI-1601 clinical program, termination of our agreements with any of these manufacturers could significantly adversely impact our current and planned operations.

In the event that any of our suppliers or manufacturers fails to perform its obligations to us in relation to quality, timing or otherwise, or if our supply of components or other materials becomes limited or interrupted for other reasons, we may be forced to manufacture the materials ourselves, for which we currently do not have the capabilities or resources, or enter into an agreement with another third party, which we may not be able to do on reasonable terms, if at all.

In the event that any of our suppliers or manufacturers fails to perform their obligations to us in relation to quality, timing or otherwise, or if our supply of components or other materials becomes limited or interrupted for other reasons, we may be forced to manufacture the materials ourselves, for which we currently do not have the capabilities or resources, or enter into an agreement with another third party, which we may not be able to do on reasonable terms, if at all.

In some cases, the technical skills or technology required to manufacture our product candidates may be unique or proprietary to the original manufacturer and we may have difficulty, or there may be contractual restrictions prohibiting us from, transferring such skills or technology to another third party and a feasible alternative may not exist.

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If we are unable to obtain or maintain third party manufacturing for product candidates, or to do so on commercially reasonable terms, we may not be able to develop and commercialize our product candidates successfully.

Our or a third party’s failure to execute on our

manufacturing requirements could adversely affect our business, financial condition and results of operations in a number of ways, including:

Our or a third party’s failure to execute on our manufacturing requirements could adversely affect our business, financial condition and results of operations in a number of ways, including:

an inability to initiate or continue clinical trials of product candidates under development;

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Poor control of production processes can lead to the introduction of adventitious agents or other contaminants, or to inadvertent changes in the properties or stability of our product candidates that may not be detectable in final product testing.

We or our contract manufacturers must supply all necessary documentation in support of a BLA or NDA on a timely basis and where required, must adhere to the FDA’s or other regulator’s good laboratory practices ("GLPs") and cGMP regulations enforced by the FDA or other regulator through facilities inspection programs.

We or our contract manufacturers must supply all necessary documentation in support of a BLA or NDA on a timely basis and where required, must adhere to the FDA’s or other regulator’s GLPs and cGMP regulations enforced by the FDA or other regulator through facilities inspection programs.

The facilities and quality systems of some or all of our third party contractors must pass a pre-approval inspection for compliance with the applicable regulations as a condition of regulatory approval of CTI-1601 or any of our other potential products.

In addition, the regulatory authorities may, at any time, audit or inspect a manufacturing facility involved with the preparation of CTI-1601 or our other potential products or the associated quality systems for compliance with the regulations applicable to the activities being conducted.

If these facilities do not pass a pre-approval plant inspection, FDA or other regulatory approval of the products will not be granted.

If these facilities do not pass a pre-approval plant inspection, the FDA or other regulatory approval of the products will not be granted.

The regulatory authorities also may, at any time following approval of a product for sale, audit the manufacturing facilities of our third party contractors.

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In addition, an alternative manufacturer would need to be qualified through a BLA or NDA supplement or similar regulatory submission which could result in further delay.

The regulatory agencies may also require additional

studies if a new manufacturer is relied upon for commercial production.

The regulatory agencies may also require additional studies if a new manufacturer is relied upon for commercial production.

The delays associated with the verification of a new manufacturer could negatively affect our ability to develop product candidates in a timely manner or within budget.

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Any of the above would materially adversely affect our business, financial condition and results of operations.

Changes in methods of product candidate manufacturing may result in additional costs or delays.

Changes in methods of product candidate manufacturing may result in additional costs and/or delays.

As product candidates progress through clinical to late-stage clinical trials to marketing approval and commercialization, it is common that various aspects of the development program, such as manufacturing methods, are altered along the way in an effort to optimize yield, manufacturing batch size, change drug product dosage form, minimize costs and achieve consistent quality and results.

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Should our obligation under an indemnification provision exceed applicable insurance coverage or should we be denied insurance coverage, our business, financial condition and results of operations could be adversely affected.

Similarly, if we are relying on a collaborator to indemnify us and the collaborator is denied insurance coverage or the indemnification obligation exceeds the applicable insurance coverage, and if the collaborator does not have other assets available to indemnify us, our business, financial condition and results of operations could be adversely affected.

Similarly, if we are relying on a collaborator to indemnify us and the collaborator is denied insurance coverage or the indemnification obligation exceeds their applicable insurance coverage, and if the collaborator does not have other assets available to indemnify us, our business, financial condition and results of operations could be adversely affected.

To the extent we are able to enter into collaborative arrangements or strategic alliances, we may be exposed to risks related to those collaborations and alliances.

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Risks Related to Our Intellectual Property Rights

If we are unable to adequately protect our proprietary technology or maintain issued patents which are sufficient to protect CTI-1601 or potential product candidates, third parties could compete against us more directly, which would have a material adverse impact on our business, results of operations, financial condition and prospects.

If, in the United States and other countries, we are unable to adequately protect our proprietary technology or maintain issued patents which are sufficient to protect CTI-1601 or potential product candidates, third parties could compete against us more directly, which would have a material adverse impact on our business, results of operations, financial condition and prospects.

Our commercial success will depend in part on our success in obtaining and maintaining issued patents and other intellectual property rights in the United States and elsewhere and protecting our proprietary technology.

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

With respect to our patent portfolio, we in-license from Wake Forest University Health Sciences ("WFUHS") certain issued U.S.

patents that relate to CTI-1601 and its use for treating Friedreich’s ataxia.

We also in-license from Indiana University ("IU") a pending international and a United States non-provisional application that relates to the composition of CTI-1601 and methods of use, and certain U.S.

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

With respect to our patent portfolio, we in-license from WFUHS certain issued U.S.

patents that relate to CTI-1601 and its use for treating FA.

We also in-license from IU a United States patent and pending non-provisional applications in the United States and certain foreign countries that relate to the composition of CTI-1601 and methods of use, and certain U.S.

patents relating to materials and methods of use relating to the development of CTI-1601.

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Other parties have developed technologies that may be related or competitive to our approach and may have filed or may file patent applications and may have received or may receive patents that may overlap or conflict with our patent applications, either by claiming the same methods or formulations or by claiming subject matter that could dominate our patent position.

The patent positions of biotechnology and pharmaceutical companies, including our patent position,

involve complex legal and factual questions, and, therefore, the issuance, scope, validity and enforceability of any patent claims that we may obtain cannot be predicted with certainty.

The patent positions of biotechnology and pharmaceutical companies, including our patent position, involve complex legal and factual questions, and, therefore, the issuance, scope, validity and enforceability of any patent claims that we may obtain cannot be predicted with certainty.

Patents, if issued, may be challenged, deemed unenforceable, invalidated, or circumvented.

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Such proceedings could also provoke third parties to assert claims against us, including that some or all of the claims in one or more of our patents are invalid or otherwise unenforceable.

If any of our patents covering CTI-1601 are invalidated or found unenforceable, our financial position and results of operations would be materially and adversely impacted.

If any of our patents covering CTI-1601 are invalidated or found unenforceable, our financial

position and results of operations would be materially and adversely impacted.

In addition, if a court found that valid, enforceable patents held by third parties covered CTI-1601, our financial position and results of operations would also be materially and adversely impacted.

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If we are unable to adequately protect our proprietary technology or maintain issued patents which are sufficient to protect CTI-1601 or potential future product candidates, third parties could compete against us more directly, which would have a material adverse impact on our business, results of operations, financial condition and prospects.

Certain of the patents we license relating to CTI-1601 will expire by 2025 and we will lose our ability to rely upon these patents to prevent competing products, which may impair our ability to generate revenue.

Our key patent, which we license relates to CTI-1601 will expire in 2040 and we will lose our ability to rely upon this patent to prevent competing products from entering the market, which may impair our ability to generate revenue.

We have in-licensed certain patents relating to CTI-1601 from WFUHS.

patents relating to CTI-1601 and its use for the treatment of Friedreich’s ataxia expire in 2024 and 2025, respectively.

When these patents expire, we will be unable to use these patents to try to block others from marketing CTI-1601 in the United States We have also in-licensed an international and a United States non-provisional patent application relating to the composition of CTI-1601 and methods of use from IU, which, if issued as a patent, would expire at the earliest in 2040.

patents relating to CTI-1601 and its use for the treatment of FA expire in 2024 and 2025, respectively.

When these patents expire, we will be unable to use these patents to try to block others from marketing CTI-1601 in the United States We have also in-licensed an issued United State patent and pending non-provisional United States patent applications in the United States and certain foreign countries relating to the composition of CTI-1601 and methods of use from IU.

This United States patent will expire in 2040 at the earliest.

Pending applications if issued as patents, would also expire in 2040 at the earliest.

We cannot predict whether these patent applications we and our licensors are currently pursuing will issue as patents in any particular jurisdiction or whether the claims of any issued patents will provide sufficient protection from competitors or other third parties.

When these various patents, if issued, expire, we will be unable to use the patents to try to block others from marketing CTI-1601 in the United States.

We own certain United States provisional applications and United States and international non-provisional applications relating to our platform technology which, if issued as patents, would be expected to expire in 2040-2041.

The provisional applications may not be timely converted into non-provisional applications, and we cannot predict whether these provisional applications and non-provisional patent applications will issue as patents in any particular jurisdiction, or whether the claims of any issued patents will provide sufficient protection from competitors or third parties for potential product candidates.

We own a certain United States provisional application and certain United States and foreign non-provisional applications relating to our platform technology which, if issued as patents, would be expected to expire in 2041-2043.

The provisional application may not be timely converted into a non-provisional application, and we cannot predict whether these provisional applications and non-provisional patent applications will issue as patents in any particular jurisdiction, or whether the claims of any issued patents will provide sufficient protection from

competitors or third parties for potential product candidates.

When these various patents expire, we will be unable to use the patents to try to block others from marketing products pertaining to our platform technology.

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Once our patents expire, we will be subject to competition from third parties who will be able to use the intellectual property covered by these patents, which could impair our ability to generate revenue and could adversely affect our business, financial condition and results of operations.

We may infringe the intellectual property rights of others, which may prevent or delay our product development efforts and stop us from commercializing or increase the costs of commercializing CTI-1601 or other potential product candidates, if approved.

We may infringe the intellectual property rights of others, which may prevent or delay our product development efforts and stop us from commercializing or may increase the costs of commercializing CTI-1601 or other potential product candidates, if approved.

Our success will depend in part on our ability to operate without infringing the intellectual property and proprietary rights of third parties.

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Litigation may be necessary to defend against these and other claims challenging inventorship or ownership.

If we fail in defending any such claims, in addition to paying monetary damages, we may lose valuable intellectual property rights, such as exclusive ownership of, or right to use, valuable intellectual property.

If we fail in defending any such claims, in addition to paying monetary

damages, we may lose valuable intellectual property rights, such as exclusive ownership of, or right to use, valuable intellectual property.

Such an outcome could have a material adverse effect on our business, financial condition and results of operations.

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Third parties may also raise similar claims before administrative bodies in the United States or abroad, even outside the context of litigation.

Such mechanisms include re-examination, post grant review and equivalent proceedings in foreign jurisdictions, e.g., opposition proceedings.

Such mechanisms include re-examination, post grant review and equivalent proceedings in foreign jurisdictions, e.g.

opposition proceedings.

Such proceedings could result in revocation or amendment of our patents in such a way that they no longer cover our product candidates or competitive products.

The outcome following legal assertions of invalidity and unenforceability is unpredictable.

The outcome following

legal assertions of invalidity and unenforceability is unpredictable.

With respect to validity, for example, we cannot ensure that there is no invalidating prior act, of which we and the patent examiner were unaware during prosecution.

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

patent protection on our product candidates.

If a defendant were to prevail on a legal assertion of invalidity and/or unenforceability, we would lose at least part, and perhaps all, of the patent protection on our product candidates.

Such a loss of patent protection would have a material adverse impact on our business, financial condition, and results of operations.

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Any future trademark applications may be rejected during trademark registration proceedings.

we would be given an opportunity to respond to those rejections, we may be unable to overcome such rejections.

Although we would be given an opportunity to respond to those rejections, we may be unable to overcome such rejections.

In addition, the U.S.

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The FDA typically conducts a review of proposed product names, including an evaluation of potential for confusion with other product names.

If the FDA objects to any of our proposed proprietary product names, we may be required to expend significant additional resources in an effort to identify a suitable substitute name that would qualify under applicable trademark laws, not infringe the existing rights of third parties and be acceptable to the FDA.

the FDA objects to any of our proposed proprietary product names, we may be required to expend significant additional resources in an effort to identify a suitable substitute name that would qualify under applicable trademark laws, not infringe the existing rights of third parties and be acceptable to the FDA.

Any trademarks we have obtained or may obtain may be infringed or successfully challenged, resulting in harm to our business.

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Depending upon the timing, duration and specifics of development and FDA marketing approval of CTI-1601 or our other potential product candidates, one or more of our U.S.

patents may be eligible for limited patent term restoration under the Drug Price Competition and Patent Term Restoration Act of 1984, or the Hatch-Waxman Amendments.

patents may be eligible for limited patent term restoration under the Drug Price Competition and Patent Term Restoration Act of 1984, (the "Hatch-Waxman Amendments").

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

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Enforcement of claims that a third party has illegally obtained and is using trade secrets is expensive, time consuming and uncertain.

If our competitors independently develop equivalent

knowledge, methods and know-how, we would not be able to assert our trade secrets against them and our business, financial condition and results of operations could be harmed.

If our competitors independently develop equivalent knowledge, methods and know-how, we would not be able to assert our trade secrets against them and our business, financial condition and results of operations could be harmed.

Changes in U.S.

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patent law system.

These include provisions that affect the way patent applications are prosecuted and may affect patent litigation.

These include provisions that affect the

way patent applications are prosecuted and may affect patent litigation.

The United States Patent Office continues to develop and implement new regulations and procedures to govern administration of the Leahy Smith Act, and many of the substantive changes to patent law associated with the Leahy Smith Act became effective on March 16, 2013.

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former employers.

Our employees have been previously employed at other biotechnology or pharmaceutical companies, including our competitors or potential competitors.

Many of our employees have been previously employed at other biotechnology or pharmaceutical companies, including our competitors or potential competitors.

Although we are not aware of any claims currently pending against us, we may be subject to claims that we or our employees inadvertently or otherwise used or disclosed the trade secrets or other proprietary information of our employees’

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

If we fail in defending such claims, in addition to paying money claims, we may lose valuable intellectual property rights or personnel.

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

A loss of key personnel or their work product could hamper or prevent our ability to develop and commercialize CTI-1601 or our other potential product candidates, which would materially adversely affect our business, financial condition and results of operations.

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our ability to obtain regulatory approvals for product candidates, and delays or failures to obtain such approvals;

the results of, and delays in, current, and any future, non-clinical or clinical trials of CTI-1601 or any of our future product candidates, including any delays related to the COVID-19 pandemic;

geopolitical unrest including the potential impact of the Russian invasion of Ukraine and the possibility that the conflict could expand beyond eastern Europe,

the results of, and delays in, current, and any future, non-clinical or clinical trials of CTI-1601 or any of our future product candidates, including any delays related to a resurgence of COVID-19 or other health crises;

geopolitical unrest including the potential impact of the war in Ukraine and the possibility that the conflict could expand beyond eastern Europe,

the entry into, or termination of, key agreements, including key licensing or collaboration agreements;

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general and industry-specific economic conditions potentially affecting our research and development expenditures;

general economic conditions in the United States and abroad;

general economic conditions in the United States and abroad (including the potential failure of the United States Congress to raise the debt ceiling);

changes in the structure of health care payment systems;

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Our management may not be able to effectively and timely implement controls and procedures which respond to the increased regulatory compliance and reporting requirements that are applicable to us as a public company.

If we fail to staff our accounting, finance and information technology functions adequately or maintain internal control over financial reporting adequate to meet the demands that are placed upon us as a public company, including the requirements of the Sarbanes-Oxley Act, or to otherwise prevent material weaknesses in internal control over financial reporting, or identify any additional material weaknesses, our business and reputation may be harmed and our stock price may decline.

If we fail to staff our accounting, finance and information technology functions adequately or maintain internal control over financial reporting adequate to meet the demands that are placed upon us as a public company, including the requirements of the Sarbanes-Oxley Act, or to otherwise prevent material weaknesses in internal control over financial reporting, our business and reputation may be harmed and our stock price may decline.

Furthermore, investor perceptions of us may be adversely affected, which could cause a decline in the market price of our common stock.

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Entities affiliated with Deerfield Management Company beneficially own or control approximately 38.6% of our outstanding common stock (assuming full exercise of our outstanding pre-funded warrants and no exercise of outstanding options) as of December 31, 2022, on a fully-diluted basis.

Accordingly, such entities have substantial influence over the outcome of a corporate action by us requiring stockholder approval, including the election of directors, any merger, consolidation or sale of all or substantially all of our assets or any other significant corporate transaction.

These stockholders also may exert influence in delaying or preventing a change in control of the combined company, even if such change in control would benefit our other stockholders.

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We are currently a “smaller reporting company”

as defined in the Securities Exchange Act of 1934, as amended, or the Exchange Act, and have elected to take advantage of certain of the scaled disclosures available to smaller reporting companies, including simplified executive compensation disclosures in our filings, exemption from the provisions of Section 404(b) of the Sarbanes-Oxley Act requiring that an independent registered accounting firm provide an attestation report on the effectiveness of internal control over financial reporting and certain other decreased disclosure obligations in our SEC filings, including, among other things, only being required to provide two years of audited financial statements in annual reports.

as defined in the Exchange Act of 1934 and have elected to take advantage of certain of the scaled disclosures available to smaller reporting companies, including simplified executive compensation disclosures in our filings, exemption from the provisions of Section 404(b) of the Sarbanes-Oxley Act requiring that an independent registered accounting firm provide an attestation report on the effectiveness of internal control over financial reporting and certain other decreased disclosure obligations in our SEC filings, including, among other things, only being required to provide two years of audited financial statements in annual reports.

Reduced disclosure in our SEC filings due to our status as a smaller reporting company may make it harder for investors to analyze our results of operations and financial prospects.

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Provisions in our certificate of incorporation and bylaws may delay or prevent an acquisition or a change in management.

These provisions include a classified board of directors, a prohibition on actions by written consent of

our stockholders, and the ability of the board of directors to issue preferred stock without stockholder approval.

In addition, because we are in Delaware, we are governed by the provisions of Section 203 of the Delaware General Corporations Law ("DGCL") which prohibits stockholders owning in excess of 15% of our outstanding voting stock from merging or combining with us.

These provisions include a classified board of directors, a prohibition on actions by written consent of our stockholders, and the ability of the board of directors to issue preferred stock without stockholder approval.

In addition, because we are in Delaware, we are governed by the provisions of Section 203 of the Delaware General Corporation Law ("DGCL") which prohibits stockholders owning in excess of 15% of our outstanding voting stock from merging or combining with us.

Although we believe these provisions collectively will provide for an opportunity to receive higher bids by requiring potential acquirers to negotiate with our board of directors, they would apply even if the offer may be considered beneficial by some stockholders.

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sole source of gain, if any, for the foreseeable future.

General Risk Factors

Our failure to meet the continued listing requirements of The Nasdaq Stock Market LLC could result in a delisting of our Common Stock.

If we fail to satisfy the continued listing requirements of The Nasdaq Stock Market LLC ("Nasdaq") such as the corporate governance requirements or the minimum closing bid price requirement, Nasdaq may take steps to delist our common stock.

Such a delisting would likely have a negative effect on the price of our common stock and would impair your ability to sell or purchase shares of common stock when you wish to do so.

Such a delisting would likely have a negative effect on the price of our common stock and would impair a stockholders ability to sell or purchase shares of common stock when they wish to do so.

In the event of a delisting, we can provide no assurance that any action taken by us to restore compliance with listing requirements would allow the common stock to become listed again, stabilize the market price or improve the liquidity of the common stock, prevent the common stock from dropping below the Nasdaq minimum bid price requirement or prevent future noncompliance with Nasdaq’s listing requirements.

General Risk Factors

Financial reporting obligations of being a public company in the United States are expensive and time-consuming, and our management will be required to devote substantial time to new compliance matters.

The obligations of being a public company in the United States requires significant expenditures and will place significant demands on our management and other personnel, including costs resulting from public company reporting obligations under the Securities Exchange Act of 1934, as amended, and the rules and regulations regarding corporate governance practices, including those under the Sarbanes-Oxley Act, the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 ("the Dodd-Frank Act") and the listing requirements of Nasdaq on which our securities are listed.

These rules require the establishment and maintenance of effective disclosure and financial controls and procedures, internal control over financial reporting and changes in corporate governance practices, among many other complex rules that are often difficult to implement, monitor and maintain compliance with.

Moreover, despite recent reforms made possible by the Tax Act, the reporting requirements, rules, and regulations will make some activities more time-consuming and costly.

As a result, our management and other personnel will need to devote a substantial amount of time to remedy the identified material weaknesses and otherwise ensure that we comply with all of these requirements and to keep pace with new regulations, otherwise we may fall out of compliance and risk becoming subject to litigation or being delisted, among other potential problems.

The obligations of being a public company in the United States require significant expenditures and place significant demands on our management and other personnel, including costs resulting from public company reporting obligations under the Securities Exchange Act of 1934, as amended, and the rules and regulations regarding corporate governance practices, including those under the Sarbanes-Oxley Act, the Dodd-Frank Wall

Street Reform and Consumer Protection Act of 2010 (the "Dodd-Frank Act") and the listing requirements of Nasdaq on which our securities are listed.

These rules require the maintenance of effective disclosure and financial controls and procedures, internal control over financial reporting and strong corporate governance practices, among many other complex rules that are often difficult to implement, monitor and maintain compliance with.

Our management and other personnel devote a substantial amount of time to ensure that we comply with all of these requirements and to keep pace with new regulations, otherwise we may fall out of compliance and risk becoming subject to litigation or being delisted, among other potential problems.

Our employees may engage in misconduct or other improper activities, including violating applicable regulatory standards and requirements or engaging in insider trading, which could significantly impact our business.

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regulators, comply with healthcare fraud and abuse laws and regulations in the United States and abroad, report financial information or data accurately or disclose unauthorized activities to us.

Employees may also unintentionally or willfully disclose our proprietary

and/or confidential information to competitors.

Employees may also unintentionally or willfully disclose our proprietary and/or confidential information to competitors.

In particular, sales, marketing and business arrangements in the healthcare industry are subject to extensive laws and regulations intended to prevent fraud, misconduct, kickbacks, self-dealing and other abusive practices.

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Our results of operations could be adversely affected by general conditions in the global economy, geopolitical events and general conditions in the global financial markets.

A severe or prolonged economic downturn due to geopolitical unrest resulting from the Russian invasion of Ukraine, the possibility that the conflict could expand beyond eastern Europe as well as the impact of any potential new outbreaks related to the COVID-19 pandemic or other health crises, co uld result in a variety of risks to our business, including, weakened demand for our product candidates and our ability to raise additional capital when needed on acceptable terms, if at all.

A weak or declining economy could also strain our suppliers, possibly resulting in supply disruption, or cause our customers to delay making payments for our services.

A severe or prolonged economic downturn due to geopolitical unrest resulting from the Russian invasion of Ukraine, the possibility that the conflict could expand beyond eastern Europe as well as the impact of the resurgence of more vaccine resistant or more highly contagious variants of COVID-19 or other health crises, or other factors could result in a variety of risks to our business, including, weakened demand for our product candidates and our ability to raise additional capital when needed on acceptable terms, if at all.

A weak or declining economy could also strain our suppliers, possibly resulting in supply disruption, or cause our customers to delay making payments for our products.

Any of the foregoing could harm our business and we cannot anticipate all of the ways in which the current economic climate and financial market conditions could adversely impact our business.

Adverse developments affecting the financial services industry, including events or concerns involving liquidity, defaults or non-performance by financial institutions or transactional counterparties, could adversely affect our business, financial condition or results of operations.

Events involving limited liquidity, defaults, non-performance or other adverse developments that affect financial institutions, transactional counterparties or other companies in the financial services industry or the financial services industry generally, or concerns or rumors about any events of these kinds or other similar risks, have in the past and may in the future lead to market-wide liquidity problems.

Most recently, on March 10, 2023, Silicon Valley Bank (“SVB”) was closed by the California Department of Financial Protection and Innovation, which appointed the Federal Deposit Insurance Corporation (“FDIC”) as receiver.

Similarly, on March 12, 2023, Signature Bank and Silvergate Capital Corp.

were each swept into receivership.

Although we assess our banking and customer relationships as we believe necessary or appropriate, our access to funding sources and other credit arrangements in amounts adequate to finance or capitalize our current and projected future business operations could be significantly impaired by factors that affect us, the financial services industry or economy in general.

These factors could include, among others, events such as liquidity constraints or failures, the ability to perform obligations

under various types of financial, credit or liquidity agreements or arrangements, disruptions or instability in the financial services industry or financial markets, or concerns or negative expectations about the prospects for companies in the financial services industry.

In addition, investor concerns regarding the U.S.

or international financial systems could result in less favorable commercial financing terms, including higher interest rates or costs and tighter financial and operating covenants, or systemic limitations on access to credit and liquidity sources, thereby making it more difficult for us to acquire financing on acceptable terms or at all.

Any decline in available funding or access to our cash and liquidity resources could, among other risks, adversely impact our ability to meet our operating expenses, financial obligations or fulfill our other obligations, result in breaches of our contractual obligations or result in violations of federal or state wage and hour laws.

Any of these impacts, or any other impacts resulting from the factors described above or other related or similar factors not described above, could have material adverse impacts on our liquidity and our business, financial condition or results of operations.

UNRESOLVED STAFF COMMENTS

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1A. Risk Factors